[1999] HCA 6
Belous v Willetts [1970] VR 45
Boensch v Pascoe (2019) 268 CLR 593
[2001] HCA 29
Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410
[1995] HCA 24
Carmarthenshire County Council v Lewis [1955] AC 549
Commissioner of Police v Estate of Russell (2002) 55 NSWLR 232
[2002] NSWCA 272
Commissioner of Police v Mohamed [2009] NSWCA 432
The Commonwealth v Introvigne (1982) 150 CLR 258
Source
Original judgment source is linked above.
Catchwords
[1999] HCA 6
Belous v Willetts [1970] VR 45
Boensch v Pascoe (2019) 268 CLR 593[2001] HCA 29
Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410[1995] HCA 24
Carmarthenshire County Council v Lewis [1955] AC 549
Commissioner of Police v Estate of Russell (2002) 55 NSWLR 232[2002] NSWCA 272
Commissioner of Police v Mohamed [2009] NSWCA 432
The Commonwealth v Introvigne (1982) 150 CLR 258[1982] HCA 40
Downs v Williams (1971) 126 CLR 61[1971] HCA 45
GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32Gray v Pullen (1864) 122 ER 10915 B&S 970
Hall v A & A Sheiban Pty Ltd (1989) 20 FCR 217
Hole v Sittingbourne and Sheerness Railway Co (1861) 158 ER 2016 H&N 488
House v The King (1936) 55 CLR 499[1936] HCA 40
Leichhardt Municipal Council v Montgomery (2007) 230 CLR 22[2007] HCA 6
Parnaby v Lancaster Canal Co (1839) 11 Ad & E 223[1928] HCA 3
Voli v Inglewood Shire Council (1963) 110 CLR 74[1963] HCA 15
Wicks v State Rail Authority (NSW) (2010) 241 CLR 60[2010] HCA 22
Wilkinson v Rea Ltd (1941) 1 KB 688
Woodhouse v Fitzgerald (2021) 104 NSWLR 475
Judgment (15 paragraphs)
[1]
he King (1936) 55 CLR 499; [1936] HCA 40
Leichhardt Municipal Council v Montgomery (2007) 230 CLR 22; [2007] HCA 6
Parnaby v Lancaster Canal Co (1839) 11 Ad & E 223; 113 ER 400
Seward v The "Vera Cruz" (1884) 10 App Cas 59
Thomson v Cremin [1953] 2 All ER 1185
Victorian Railways Commissioners v Speed (1928) 40 CLR 434; [1928] HCA 3
Voli v Inglewood Shire Council (1963) 110 CLR 74; [1963] HCA 15
Wicks v State Rail Authority (NSW) (2010) 241 CLR 60; [2010] HCA 22
Wilkinson v Rea Ltd (1941) 1 KB 688
Woodhouse v Fitzgerald (2021) 104 NSWLR 475; [2021] NSWCA 54
Texts Cited: K Barker, P Cane, M Lunney, F Trindade, The Law of Torts in Australia (5th ed, 2012, Oxford UP)
J C Campbell, "Contribution, Contributory Negligence and Section 52 of the Trade Practices Act - Part II" (1993) 67 ALJ 177
J Dietrich & I Field "Statutes and Theories of Vicarious Liability" (2019) 43(2) Melb U L Rev 515
P Giliker, Vicarious Liability in Tort: A Comparative Perspective (Cambridge UP, 2010)
J Goudkamp & D Nolan, Winfield & Jolowicz on Tort (20th ed, 2020, Thomson Reuters)
M Leeming, Common Law, Equity and Statute: A Complex Entangled System (The Federation Press, 2023)
M Leeming, The Statutory Foundations of Negligence (The Federation Press, 2019)
P Winfield, "Duty in Tortious Negligence" 34(1) Columbia L Rev 41
P Winfield, The Province of the Law of Tort (Camb UP, 1931)
Review of the Law of Negligence Report (Commonwealth of Australia, 2002)
Category: Principal judgment
Parties: The Owners - Strata Plan No 84674 (Appellant)
Pafburn Pty Limited (First Respondent)
Madarina Pty Limited (Second Respondent)
Representation: Counsel:
D S Weinberger (Appellant)
G A Sirtes SC / A Di Francesco (First and Second Respondents)
[2]
Solicitors:
Grace Lawyers (Appellant)
M&A Lawyers (First and Second Respondents)
File Number(s): 2023/00084603
Decision under appeal Court or tribunal: Supreme Court
Jurisdiction: Equity
Citation: [2023] NSWSC 116
Date of Decision: 23 February 2023
Before: Rees J
File Number(s): 2020/340673
[3]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[4]
HEADNOTE
[This headnote is not to be read as part of the judgment]
The applicant, The Owners - Strata Plan No 84674 ("Owners Corporation"), commenced proceedings in the Equity Division against Pafburn Pty Ltd and Madarina Pty Ltd (the respondents) who were the builder and developer of a building at 197 Walker Street, North Sydney, which has defects. The building is the subject of a residential strata scheme under the Strata Schemes Management Act 2015 (NSW). The duty of care provided under the Design and Building Practitioners Act 2020 (NSW) (Design and Building Act), is a duty that now extends to subsequent owners of the land, including an owners corporation (where the building is a strata development).
In the Equity Division, the respondents pleaded that liability should be apportioned amongst nine independent contractors who were concurrent wrongdoers pursuant to Pt 4 of the Civil Liability Act 2002 (NSW). The applicant sought to strike out the proportionate liability defences. The motion was heard and dismissed by Rees J. The applicant sought leave to appeal from this interlocutory judgment.
The main issues on appeal were whether:
(i) the non-delegable duty created by s 37(1) of the Design and Building Act is a "tort" for the purposes of s 5Q of the Civil Liability Act; and
(ii) the proportionate liability provisions in Pt 4 of the Civil Liability Act apply.
The Court (Adamson JA and Basten AJA, Ward P agreeing), granting leave and allowing the appeal, held:
As to issue (i) - whether breach of non-delegable duty is a "tort"
(1) The terms "liability in tort" and "breach of a non-delegable duty" in s 5Q(1) of the Civil Liability Act are not confined to liability for a common law tort and breach of a common law duty. The legislative intention, which is evident from the deeming provision in s 37(3) of the Design and Building Act, is to extend the scope of the common law duty and to create a new cause of action deriving from statute: [10]-[11] (Adamson JA).
(2) A defendant is liable for any harm caused by a breach of duty by a party also having a duty to take reasonable care with respect to a plaintiff. Through the concept of non-delegation, that liability is not limited to a failure by the defendant to take reasonable care: [45]-[50] (Basten AJA).
Wilkinson v Rea Ltd (1941) 1 KB 688; Voli v Inglewood Shire Council (1963) 110 CLR 74 at 97; [1963] HCA 15, cited.
(3) Section 5Q should not be read down because it would undermine the statutory purpose of the provision. The language of s 5Q was intended to address the full scope of the problem of non-delegable duties. The references to "liability in tort" and "an action in tort" were not intended to exclude some circumstances in which non-delegable duties were imposed, but rather reflected an understanding that the concept only arose with respect to actions in tort: [67] (Basten AJA).
Gray v Pullen (1864) 122 ER 1091; 5 B&S 970, cited.
(4) A claim relying upon s 37 of the Design and Building Act is a claim brought "in tort" because of: the deeming phrase "as if the duty … were established in common law"; to describe the cause of action as one brought in tort is consistent with basic principles; the duty imposed is an extension of an existing duty not a novel one; a cause of action for a breach of a duty imposed by a statute invokes a liability in tort: [70]-[81] (Basten AJA).
As to issue (ii) - entitlement to benefit of proportionate liability provisions
(5) That s 39 of the Design and Building Act provides that the duty imposed by s 37 may not be delegated is sufficient to exclude Pt 4 of the Civil Liability Act. The builder is vicariously liable for breaches by concurrent wrongdoers pursuant to s 5Q of the Civil Liability Act: [11]-[12] (Adamson JA).
(6) The purpose of the proportionate liability provisions is to allow damages for which a defendant would otherwise be liable to be adjusted to reflect the defendants' responsibility for the damage suffered having regard to the responsibilities of concurrent wrongdoers. Where a defendant breaches a non-delegable duty, it is consistent with the purpose of the provision for that wrongdoer to remain liable for the whole of the loss: [13]. The respondents are entitled to a cross-claim against concurrent wrongdoers, but this cannot reduce their liability to the applicant for the whole loss suffered: [14] (Adamson JA).
Woodhouse v Fitzgerald (2021) 104 NSWLR 475; [2021] NSWCA 54, cited.
(7) The application of the Acts should be approached by seeking to read harmoniously two statutes of the same legislature: [42]-[43]. The Design and Building Act imposes a non-delegable duty, which prevents "outflanking" of the rule that a principal is not liable for a breach of duty by its independent contractor: [50]. The Civil Liability Act equates the liability for breach of a non-delegable duty with vicarious liability. But Pt 4 of the Civil Liability Act does not apply to vicarious liability: [51]-[54] (Basten AJA).
(8) The liability owed by the respondents should be treated as a form of vicarious liability which is not subject to any limitation on their liability by apportionment as between them and concurrent wrongdoers under Pt 4 of the Civil Liability Act: [101] (Basten AJA).
[5]
JUDGMENT
WARD P: I have had the advantage of the reasons of each of Adamson JA and Basten AJA and I can therefore be brief. I agree that, for the reasons given by Basten AJA, leave should be granted. I also agree that the appeal should be allowed and that the orders proposed by Basten AJA should be made. I agree that the fact that the duty of care in s 37 of the Design and Building Practitioners Act 2020 (NSW) is non-delegable (see s 39) excludes by necessary implication the provisions of Part 4 of the Civil Liability Act 2002 (NSW) dealing with proportionate liability; and with the conclusion drawn by each of Adamson JA and Basten AJA in that regard.
ADAMSON JA: I have had the benefit of reading the reasons of Basten AJA in draft. I agree with the orders proposed by his Honour and gratefully adopt his Honour's summary of the issues and the submissions made. My reasons for agreeing with the orders proposed by Basten AJA are as follows.
The Owners - Strata Plan No 84674 (the applicant) claimed damages against the respondent Pafburn Pty Ltd (the builder) for breach of the duty of care imposed by s 37 of the Design and Building Practitioners Act 2020 (NSW). In its defence, Pafburn Pty Ltd nominated several alleged "concurrent wrongdoers" and relied on Part 4 of the Civil Liability Act 2002 (NSW) which, if applicable, will have the consequence of excluding from the builder's liability for damages any damage for which a concurrent wrongdoer is responsible, whether joined as a defendant or not.
The applicant sought to strike out the builder's defence on the basis that Part 4 of the Civil Liability Act did not apply to the duty owed to it by the builder, because the duty was non-delegable. The primary judge rejected the submission and dismissed the notice of motion. The applicant seeks leave to appeal against that dismissal.
For the reasons given by Basten AJA, leave to appeal ought be granted. For the reasons which follow, the appeal ought be allowed.
Section 37 of the Design and Building Practitioners Act provides:
"37 Extension of duty of care
(1) A person who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects -
(a) in or related to a building for which the work is done, and
(b) arising from the construction work.
(2) The duty of care is owed to each owner of the land in relation to which the construction work is carried out and to each subsequent owner of the land.
(3) A person to whom the duty of care is owed is entitled to damages for the breach of the duty as if the duty were a duty established by the common law.
(4) The duty of care is owed to an owner whether or not the construction work was carried out -
(a) under a contract or other arrangement entered into with the owner or another person, or
(b) otherwise than under a contract or arrangement."
[6]
Application for leave to appeal
The respondents oppose a grant of leave, but primarily on the basis that the primary judge was correct and the challenge has insufficient merit to warrant a grant of leave. A secondary argument appears to have been that there was an anterior question of fact and law to be decided, namely whether any of the persons listed as independent contractors was a "delegate" of the respondents, and if so which respondent. Arguably the question is misconceived, but in any event, if the defence is not available, that "anterior question" will not need to be decided.
The issue sought to be raised by the applicant is of general public importance with respect to the operation of novel legislation conferring rights on an owners corporation with respect to defective construction work, over a period of 10 years prior to the commencement of the legislation. The answer to the question may have significant impact on the conduct of a trial. In those circumstances, a grant of leave to appeal is appropriate.
Further, it may be noted that in written submissions opposing a grant of leave, the respondents referred to the decision as involving a "discretionary, interlocutory matter". It was said that the principle of restraint in House v The King [3] should be applied. If correct, that principle would no doubt reduce the likelihood of the applicant's success on any appeal. However, that principle should not be applied. In accordance with the reasoning of the High Court in GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore, [4] the constrained standard only applies where there is a range of answers which can be provided, rather than a binary choice. Even where there is a binary choice and the binary choice involves an evaluative judgment, the "correctness standard" applies. [5]
This was not a case involving a discretion with a possible range of outcomes: either the defence was struck out, or it was not. It was also not a case which involved an evaluative judgment: the question whether to strike out the defence depended on the proper construction of the relevant statutory provisions. Accordingly, there can be no doubt that the correctness standard applies.
[7]
Statutory scheme
The relevant operative provision in the Design and Building Act is s 37, which provides as follows:
37 Extension of duty of care
(1) A person who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects -
(a) in or related to a building for which the work is done, and
(b) arising from the construction work.
(2) The duty of care is owed to each owner of the land in relation to which the construction work is carried out and to each subsequent owner of the land.
(3) A person to whom the duty of care is owed is entitled to damages for the breach of the duty as if the duty were a duty established by the common law.
(4) The duty of care is owed to an owner whether or not the construction work was carried out -
(a) under a contract or other arrangement entered into with the owner or another person, or
(b) otherwise than under a contract or arrangement.
The term "construction work" is broadly defined in s 36 to mean any of the following:
(a) building work,
(b) the preparation of regulated designs and other designs for building work,
(c) the manufacture or supply of a building product used for building work,
(d) supervising, coordinating, project managing or otherwise having substantive control over the carrying out of any work referred to in paragraph (a), (b) or (c).
The provisions in Pt 4 were given retrospective effect for a period of up to ten years, pursuant to Sch 1, cl 5 which provides:
5 Application of duty of care provisions to existing buildings and contracts and arrangements
(1) Part 4 of this Act extends to construction work carried out before the commencement of section 37 as if the duty of care under that Part was owed by the person who carried out the construction work to the owner of the land and to subsequent owners when the construction work was carried out.
(2) Subclause (1) only applies to economic loss caused by a breach of the duty of care extended under that subclause if -
(a) the loss first became apparent within the 10 years immediately before the commencement of section 37, or
(b) the loss first becomes apparent on or after the commencement of that section.
(3) Part 4 of the Act as extended by subclause (1) applies regardless of whether an action for breach of a common law duty of care has commenced before the commencement of section 37 and may be taken into account in those proceedings unless the court considers that it would not be in the interests of justice to do so.
(4) Section 40 extends to a contract, agreement or stipulation relating to the construction work whenever made.
(5) For the purposes of this clause, a loss becomes apparent when an owner entitled to the benefit of the duty of care under Part 4 of this Act first becomes aware (or ought reasonably to have become aware) of the loss.
(6) Words and expressions used in this clause have the same meaning as in Part 4 of this Act.
[8]
Issues on appeal
The primary judge identified the Owners Corporation's case as depending upon the combined effects of s 39 of the Design and Building Act and s 5Q and s 39(a) of the Civil Liability Act. Those provisions, it was submitted, precluded the defendants from utilising the proportionate liability provisions where the statutory duty was described as "non-delegable". [6] The contrary submission of the respondents, which was successful in the Court below, was that the statutory duty created by s 37(1) of the Design and Building Act is not a "tort" for the purposes of s 5Q, with the result that there was no conversion of the liability of the respondents into a form of "vicarious liability", without which s 39(a) of the Civil Liability Act was not engaged. The critical step in the respondents' case was that a "tort" was a cause of action arising under the general law, and did not include statute, even if the statute operated by creating a "duty of care".
For reasons explained below, the respondents' construction should not be accepted. That course of reasoning, however, involves a potentially arid consideration of what is meant by a term derived from the general law referring to a "non-delegable duty", and a distinction between that and "vicarious liability". In circumstances where it has been said (with some justification) that a "non-delegable duty" is a misnomer, because the possibility of delegation is inappropriate, and where the term "vicarious liability" is a misnomer because there is no question of the liability of the employer standing in for the liability of the employee, it is desirable not to engage too closely with the precise meanings of those terms, to the extent that it is possible to avoid doing so.
There is an alternative approach which turns on the uncontroversial principle of statutory interpretation that seeks to read harmoniously two statutes of the same legislature. The basic proposition is that for s 36 of the Civil Liability Act to be construed as preventing a defendant who is a concurrent wrongdoer being liable for damages for which another concurrent wrongdoer is liable, is to render the imposition of a non-delegable duty on the former incoherent. That conclusion, it may be accepted, requires an understanding of the concept of a "non-delegable duty", but it does not require engagement with the concept of a "tort", as the term is used in s 5Q of the Civil Liability Act.
[9]
A non-delegable duty
The nature of the duty under s 37(1) of the Design and Building Act requires no analysis for present purposes beyond noting that it is a duty imposed on a person who carries out construction work to exercise reasonable care to avoid economic loss caused by defects in the building. The duty is owed to each owner of the land, including owners subsequent to the owner for whom the construction work was carried out: s 37(2). Section 39 (set out at [28] above) states that the person who owes the duty "is not entitled to delegate that duty".
The concept of non-delegation has long been used in applying the common law. As observed above, it is a term used to indicate that a principal who owes a duty to a third party, but engages an independent contractor to carry out the work, will be vicariously liable for a breach of duty by the independent contractor.
In Wilkinson v Rea Limited [7] Luxmoore LJ stated that the duty of an invitor to an invitee cannot be "escaped by delegating its performance to an independent contractor". Voli v Inglewood Shire Council [8] involved a claim against the Council as occupier and owner of a structure used for entertainment, which was found liable to a person who was injured when a stage in a hall collapsed. In Voli, Windeyer J referred to the judgment of Luxmoore LJ, approved by the House of Lords in Thomson v Cremin, [9] and identified the question as being, "Is the case one of those in which there is vicarious liability for the fault of an independent contractor?".
In The Commonwealth v Introvigne, [10] addressing the liability of a school authority in negligence for an injury suffered by a pupil attending the school, Mason J stated that the liability was "not a purely vicarious liability" and continued:
"A school authority owes to its pupils a duty to ensure that reasonable care is taken of them whilst they are on the school premises during hours when the school is open for attendance."
After referring to the reasons of Lord Reid in Carmarthenshire County Council v Lewis, [11] similarly dealing with the liability of a school authority for an injury to a school pupil, Mason J observed: [12]
"The decision recognises that there is a liability on the part of the school authority for its failure to take reasonable steps to prevent the escape of the child on to the highway. It proceeds on the footing that the duty is not discharged by merely appointing competent teaching staff and leaving it to the staff to take appropriate steps for the care of the children. It is a duty to ensure that reasonable steps are taken for the safety of the children, a duty the performance of which cannot be delegated."
[10]
Application of s 5Q of the Civil Liability Act
The argument accepted by the primary judge approached the matter differently. It assumed that the exclusion of vicarious liability from the operation of Pt 4 of the Civil Liability Act, pursuant to s 39(a), turned on the operation of s 5Q, converting liability for a breach of a non-delegable duty into a vicarious liability by a deeming provision, "as if the liability were the vicarious liability of the defendant". However, so the argument ran, s 5Q was not engaged because the statutory duty imposed under the Design and Building Act was not a liability "in tort" but a liability arising under the statute.
Before addressing the substance of that approach, it is convenient to address the effect of "application" provisions in each Act. Thus, s 41(3) of the Design and Building Act, contained in Pt 4, states that "this Part is subject to the Civil Liability Act 2002". The primary judge noted that that provision had been considered by Stevenson J in Boulus Constructions Pty Ltd v Warrumbungle Shire Council (No 2), [14] in the following terms:
"64 The Act is expressed to be subject to the Civil Liability Act. [15] The proportionate liability regime under Pt 4 of the Civil Liability Act thus applies to actions for breach of the s 37 statutory duty. This enables persons in the position of [the defendants] to identify concurrent wrongdoers and seek to have their liability for breach of the statutory duty limited under s 35 of the Civil Liability Act."
Having set out that passage, the primary judge continued:
"29 That is, the extensive statutory duty is potentially ameliorated by the ability of defendants to call in aid the proportionate liability provisions of the [Civil Liability Act]."
Nevertheless, those statements assume, rather than explain, the manner in which Pt 4 of the Civil Liability Act is engaged. To note that Pt 4 of the Design and Building Act is "subject to" the Civil Liability Act says nothing unless the latter is engaged in circumstances to which the former applies.
The primary judge appears to have found support for her conclusion in the application provision in Pt 4 of the Civil Liability Act, namely s 34(3A), set out at [38] above. That provision excludes from the operation of the proportionate liability provisions a claim for damages for breach of a statutory warranty arising under Pt 2C of the Home Building Act 1989 (NSW). The judge thought it "[n]oteworthy" that s 34(3A) excluded such a claim, but did not exclude a claim for breach of statutory duty under the Design and Building Act. She continued:
"27 … When paired with section 41(3) of the [Design and Building Act], which makes Part 4 of the [Design and Building Act] 'subject to the Civil Liability Act 2002' without limitation, it is clear that the proportionate liability provisions of the [Civil Liability Act] apply to a claim for economic loss in an action for damages arising from a failure to take reasonable care as required by section 37(1) of the [Design and Building Act], whether that claim is an action 'in contract, tort or otherwise'."
[11]
Was the claim brought in tort?
There are five, not entirely independent, reasons for thinking that a claim relying upon s 37 of the Design and Building Act is a claim "in tort" for the purposes of s 5Q of the Civil Liability Act. The first is that s 37(3) provides that a person to whom the duty of care is owed is entitled to damages for breach of the duty "as if the duty were a duty established by the common law". According to the respondents, the deeming phrase, "as if", demonstrates that this is not a common law duty; were it otherwise, the deeming would not be necessary. Accepting the premise, the conclusion does not follow. That is, assuming that it is not in fact a common law duty, the statute requires that it be treated as such: the deeming cannot be ignored. There is nothing in s 37 which restricts the operation of the deeming, nor was any necessary implied restriction identified by the respondents. To give effect to the deeming, the claim must be treated as one brought under the common law for all purposes, including in addressing the application of the Civil Liability Act. The fact that the claim may also be said to be brought "under statute" within s 5A(1), so as to engage Pt 1A of the Civil Liability Act, does not affect the deeming provision. If the cause of action created by Pt 4 of the Design and Building Act is a claim "in tort", it is a claim arising under the common law.
Secondly, to describe the cause of action as one brought in tort accords with basic principles. The meaning of "tort" can only be usefully addressed by understanding the function it plays within the general law. As the authors of Winfield & Jolowicz on Tort explain, it is best to begin with a general description, rather than a definition. [23] They conclude their initial description by stating:
"It is perhaps unkind to call tort the dustbin of the law of obligations, but it is certainly the great residuary category. No one theory explains the whole of the law."
In attempting a definition, Winfield stated: [24]
"Tortious liability arises from the breach of a duty primarily fixed by law; this duty is towards persons generally and its breach is redressable by an action for unliquidated damages."
It is appropriate to talk of "tortious liability" rather than a "tort" because there is no cause of action unless the breach of duty results in harm to an individual to whom the duty is owed. The primary function of the categorisation is to distinguish tortious liability from criminal liability and from other categories within the civil law of obligations, being primarily liability arising from a breach of contract or bailment, which depend upon an agreement between the parties, or at least the consent of the defendant, [25] and breach of trust. [26] Tortious liability does not cease to be tortious liability because the content of the duty, or the circumstances in which the liability may arise, is defined or controlled or regulated by statute. That has been acknowledged since in a plethora of cases, some of which were discussed by J C Campbell 20 years ago. [27] In Downs v Williams, [28] concerning the liability of the State for breach of the Factories, Shops and Industries Act 1962 (NSW) Windeyer J stated:
"Every Act of Parliament alters the law to some degree, unless it is merely a re-enactment of an existing statute as in a consolidation of statute law, or is truly declaratory of common law. And the proposition that Lord Campbell's Act did not make new law will not bear examination against the light of authoritative pronouncements. What it did was to create a cause of action which Lord Blackburn described as 'new in its species, new in its quality, new in its principle, in every way new': Seward v. The 'Vera Cruz' [29] ; see too Victorian Railways Commissioners v. Speed. [30] This new tort became part of the general law of torts in New South Wales in 1847 when, by 11 Vict. No. 32, the provisions of Lord Campbell's Act were enacted by the local legislature. That was ten years before the Act of 1857, the first of the series of statutes by which the Crown in New South Wales became liable in tort. The new rights created by Lord Campbell's Act were a part of the existing law of torts to which the Crown became subject."
[12]
Two other cases
First, it should be noted that this conclusion is consistent with the reasoning in Woodhouse v Fitzgerald, [52] a case dealing with liability of the owners of land on which a fire broke out, following a back-burn undertaken by the Rural Fire Service (RFS), for damage to the property of a neighbour, Mr Woodhouse. In considering the vicarious liability of the owners, on the assumption that there had been negligence, the Court held that the owners would have remained liable for the full amount of the damages, and not merely for their part based on an apportionment under Pt 4 of the Civil Liability Act. In the course of reaching that conclusion, the following reasoning appears:
"98 The owners' duty being non-delegable, Mr Woodhouse challenged the apportionment by the trial judge on the basis that the owners were responsible for any breach by independent contractors such as members of the RFS. As Gleeson CJ noted in Leichhardt Municipal Council v Montgomery a non-delegable duty 'enables a plaintiff to outflank the general principle that a defendant is not vicariously responsible for the negligence of an independent contractor.' Section 5Q of the Civil Liability Act provides that the extent of liability in tort for breach of a non-delegable duty 'is to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work or task'.
99 It is not necessary for present purposes to determine whether s 5Q varies the effect of the general law with respect to duties described as 'non-delegable'. The answer to the question may depend in some circumstances on the proper construction of a statutory scheme which gives rise to such a duty." [Footnote reference omitted.]
The primary judge found that this reasoning was not applicable, stating:
"51 Obiter, Basten JA left open the possibility that a statute may give rise to a non-delegable duty under section 5Q: Woodhouse v Fitzgerald at [99]. That is certainly available as a matter of language. However, having regard to the mischief to which section 5Q was directed, I consider that section 5Q does not apply where a duty is non-delegable as a consequence of statute."
On the basis that the Court in Woodhouse found there was no lack of reasonable care, [53] (and the alternative finding that, if it were necessary, the Court was affirmatively satisfied that reasonable care had been taken [54] ) it could be said that the remaining discussion in Woodhouse was obiter. However, where an intermediate court of appeal deems it appropriate to address all of the issues raised on an appeal, in accordance with the practice discussed in Boensch v Pascoe, [55] a trial judge should be cautious in deciding not to follow a legal principle stated by this Court. Further, the point made in Woodhouse at [99] concerned a question as to whether s 5Q varied the effect of the general law, or whether, as described in the Ipp Report, it merely reflected an established understanding of the general law. To the extent that the answer was said in some circumstances to depend upon the proper construction of a statutory scheme, that statement assumed that a non-delegable duty conferred by statute would be subject to the operation of s 5Q, subject to consideration of the interrelationship between the two statutes. For the reasons discussed above, the assumption was correct.
[13]
Conclusions
Whether as a matter of general law principle, or by operation of s 5Q, the liability of the respondents in the present case should be treated as a form of vicarious liability which is not subject to any limitation on their liability by apportionment as between them and concurrent wrongdoers under Pt 4 of the Civil Liability Act. There are two available pathways, but they reach the same conclusion.
Accordingly, the Court should make the following orders:
1. Grant the appellant leave to appeal from the judgment in the Equity Division given on 23 February 2023.
2. Allow the appeal and set aside the orders in the Equity Division.
3. In place thereof:
1. pursuant to the amended notice of motion filed on behalf of the plaintiff on 15 December 2022, strike out paragraphs 20-24, 27-29A of the first amended technology and construction list response filed by the defendants on 21 September 2022;
2. order that the defendants pay the plaintiff's costs of the motion.
1. Order that the respondents pay the appellant's costs of the proceedings in this Court.
[14]
Endnotes
The Owners - Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWSC 116
Supreme Court Act 1970 (NSW), s 101(2)(e).
(1936) 55 CLR 499 at 504-5; [1936] HCA 40.
[2023] HCA 32.
GLJ at [16] (Kiefel CJ, Gageler and Jagot JJ).
Primary judgment at [13].
(1941) 1 KB 688 at 702.
(1963) 110 CLR 74 at 97; [1963] HCA 15.
[1953] 2 All ER 1185.
(1982) 150 CLR 258 at 269; [1982] HCA 40.
[1955] AC 549 at 563.
Introvigne at pp 269-270.
(2007) 230 CLR 22; [2007] HCA 6.
[2022] NSWSC 1368.
Section 41(3) of the Act.
Primary judgment at [33].
P Giliker, Vicarious Liability in Tort: A Comparative Perspective (2010), Cambridge UP, p 1.
Review of the Law of Negligence Report (Commonwealth of Australia, 2002) ("Ipp Report") at par 11.12.
Ipp Report, par 11.12.
(1861) 158 ER 201; 6 H&N 488 (Pollock CB, Martin B and Wilde B).
(1864) 122 ER 1091; 5 B&S 970.
Gray at 978.
J Goudkamp & D Nolan, Winfield & Jolowicz on Tort (20th ed, 2020, Thomson Reuters) [1-002].
Winfield & Jolowicz on Tort at [1-003]; see also P Winfield, The Province of the Law of Tort (Camb UP, 1931), p 32.
Winfield & Jolowicz on Tort at [1-005].
K Barker, P Cane, M Lunney, F Trindade, The Law of Torts in Australia (5th ed, 2012, Oxford UP), Ch 1, pp 4, 10.
J C Campbell, "Contribution, Contributory Negligence and Section 52 of the Trade Practices Act - Part II" (1993) 67 ALJ 177.
M Leeming, The Statutory Foundations of Negligence (The Federation Press, 2019) at p 16.
The heading is not part of the statute, but may be considered as an extrinsic aid to construing the provision: Interpretation Act 1987 (NSW), ss 34(1) and 35(2).
(1999) 197 CLR 1; [1999] HCA 6 at [48].
[15]
Amendments
03 June 2024 - Par 33 - insert "s" at the end of respondent
Par 37 - delete "and" after "removed"
Par 47 - remove open quote before "the duty" and insert before "escaped"
FN 7 - insert "at 702" at end
Par 65 - change "were" in quote to "are"
Par 69 - change "perennial" in quoted passage to "navigable"
Par 70 - insert full stop at end of paragraph
Par 73 - change "every was" to "every way" in quoted passage
FN 23 - end of footnote change "001" to "002"
Par 75 - change "respondent's" to respondents'
Par 77 - change "AusTrust" to "Austrust"
Par 79 - change "find an action" to "found a tort" in quoted passage
Par 87 - delete coma after "note"
Par 92 - change "Vicarious Liability Act" to read "Law Reform (Vicarious Liability) Act"
Par 93 - change "a holder" to read "the holder"
Par 94 - delete "the" before "purposes"
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 03 June 2024
Parties
Applicant/Plaintiff:
The Owners - Strata Plan No 84674
Respondent/Defendant:
Pafburn Pty Ltd
Legislation Cited (14)
108) Civil Liability Act 2002(NSW)
Wrongs Act 1936(SA)
Factories, Shops and Industries Act 1962(NSW)
See Law Reform (Miscellaneous Provisions) Act 1965(NSW)
Section 39 of the Design and Building Practitioners Act provides that "a person who owes a duty of care under this Part is not entitled to delegate that duty." Section 41(3) provides that the Part is subject to the Civil Liability Act.
Section 5Q of the Civil Liability Act provides:
"5Q Liability based on non-delegable duty
(1) The extent of liability in tort of a person (the defendant) for breach of a non-delegable duty to ensure that reasonable care is taken by a person in the carrying out of any work or task delegated or otherwise entrusted to the person by the defendant is to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work or task.
(2) This section applies to an action in tort whether or not it is an action in negligence, despite anything to the contrary in section 5A."
Section 39(a) of the Civil Liability Act, which is contained in Part 4 of that Act, entitled "Proportionate liability", provides:
"39 Application of Part
Nothing in this Part -
(a) prevents a person from being held vicariously liable for a proportion of any apportionable claim for which another person is liable, or
…"
The primary judge construed the words "liability in tort" and "breach of a non-delegable duty" in s 5Q(1) of the Civil Liability Act, respectively, to be confined to liability for a common law tort and breach of a common law duty. Accordingly, her Honour did not consider that s 5Q of the Civil Liability Act affected breaches of the duty of care imposed by s 37 of the Design and Building Practitioners Act. Her Honour held, accordingly, that there was no impediment to the builder's reliance on Part 4 of the Civil Liability Act in its defence to the applicant's claim.
Section 37 of the Design and Building Practitioners Act evinces a clear legislative intention not only to extend the scope of the common law duty of care to owners and subsequent owners of land on which building work is done but also to create a new cause of action deriving from statute which is to be treated as if it were a cause of action in tort. This intention is evident from the deeming words in s 37(3) that "[a] person to whom the duty of care is owed is entitled to damages for the breach of the duty as if the duty were a duty established by the common law" (emphasis added). Effect must be given to these words. Section 39 provides that the duty may not be delegated: that is, the duty in s 37 is non-delegable. This is sufficient to exclude Part 4 of the Civil Liability Act by necessary implication.
Further, there is no basis for confining the words "tort" and "duty of care" in s 5Q of the Civil Liability Act. The word "tort" is apt to refer to a civil wrong (other than a breach of contract or breach of equitable obligation) for which a remedy of damages to compensate the injured party may be obtained in a court and includes an action for breach of statutory duty: see Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 424 (Brennan CJ, Dawson and Toohey JJ); [1995] HCA 24. The present case does not call for an exhaustive identification of the defining features of a "tort" since the legislature plainly intended to extend common law concepts of duty of care and its breach to actions such as the present brought by the applicant against the builder for breach of the duty of care imposed by the Design and Building Practitioners Act. Thus, breach of the duty in s 37 of that Act is actionable at the suit of the person who suffers loss as a consequence. In these circumstances, s 5Q of the Civil Liability Act applies to the applicant's claim against the builder, which is a claim in tort for breach of a duty of care imposed by statute. The builder is, accordingly, vicariously liable for the breaches of concurrent wrongdoers.
I reject the builder's argument that the consequence of accepting the applicant's argument that it was not entitled to the benefit of the proportionate liability provisions in Part 4 of the Civil Liability Act would be both unfair and contrary to public policy. For the reasons given above, this consequence flows from the character of the duty owed by the builder to the applicant as non-delegable. The purpose of the proportionate liability provisions is to enable the amount for which the named defendant is liable to the plaintiff to be adjusted to reflect the named defendant's responsibility for the damage suffered by the plaintiff, having regard to the responsibility of concurrent wrongdoers for that damage. It is neither unjust nor contrary to public policy for a wrongdoer which breaches a non-delegable duty to remain liable to the injured party for the whole of the loss since this is the purpose and effect of a non-delegable duty. To read Part 4 of the Civil Liability Act as applying to an action for breach of a non-delegable duty, whether imposed by the common law or, as in the present case, imposed by statute, would be entirely inconsistent with the character of the builder's duty as non-delegable. In these circumstances, the proportionate liability provisions of the Act can have no sensible application. While it would have been open to the legislature to expressly exclude causes of action such as the present from Part 4 of the Civil Liability Act, it was not imperative that it do so in terms, since the exclusion arises by necessary implication.
Thus, although the builder is entitled to cross-claim against concurrent wrongdoers, it cannot reduce its own liability to the applicant for the whole loss suffered by the applicant by reference to such wrongdoers: see Woodhouse v Fitzgerald (2021) 104 NSWLR 475; [2021] NSWCA 54 at [100]-[102] (Basten JA).
I reject the builder's submission that there were issues of fact to be tried as to whether the alleged concurrent wrongdoers identified in its defence meet that description. The reason these persons and entities have been identified in the defence is because they are alleged to be concurrent wrongdoers for the purposes of Part 4 of the Civil Liability Act. As such, the builder is vicariously liable for any breaches by them (s 5Q of the Civil Liability Act), since the duty it owed to the applicant is non-delegable (s 39 of the Design and Building Practitioners Act). In these circumstances, there is no relevant issue to be tried relating to proportionate liability on the defence as pleaded (the Technology and Construction List Response filed on 21 September 2022) or the proposed amended list response.
For the reasons given by Basten AJA, there was no discretion to refuse to dismiss those paragraphs of the builder's defence sought to be struck out since, as a matter of law, the proportionate liability defences were not available to the builder.
Accordingly, the orders proposed by Basten AJA ought be made.
BASTEN AJA: Pursuant to the Design and Building Practitioners Act 2020 (NSW) ("Design and Building Act") the duty of care owed by a person carrying out construction work is now extended to subsequent owners of the land, including, in the case of a strata development, an owners corporation. The applicant, The Owners - Strata Plan No 84674 ("Owners Corporation"), has commenced proceedings in the Equity Division against the respondents, being the developer and head contractor responsible for the construction of a building at 197 Walker Street, North Sydney, now the subject of a residential strata scheme under the Strata Schemes Management Act 2015 (NSW).
The respondents have pleaded in their defence that nine independent contractors were "concurrent wrongdoers" for the purposes of Pt 4 of the Civil Liability Act 2002 (NSW) amongst whom liability should be apportioned. By a notice of motion first filed on 11 November 2022, and amended on 15 December 2022, the applicant sought to strike out the proportionate liability defences. The motion was heard by Rees J in the Technology and Construction List on 16 February 2023, judgment being delivered on 23 February 2023, dismissing the strike out application. [1] That being an interlocutory judgment, the applicant requires leave to appeal. [2]
Both Pt 4 and cl 5 of Sch 1 to the Design and Building Act came into operation on the date of assent, namely 10 June 2020. Consistently with the 10-year period referred to in cl 5(2)(a), the limitation period in s 6.20(1) of the Environmental Planning and Assessment Act 1979 (NSW) provides that "[a] civil action for loss or damage arising out of or in connection with defective building work or defective subdivision work cannot be brought more than 10 years after the date of completion of the work". There is, presently, no dispute that the Design and Building Act applies and that the proceedings were commenced within the relevant limitation period.
It is convenient next to set out three further provisions from the Design and Building Act:
39 Duty must not be delegated
A person who owes a duty of care under this Part is not entitled to delegate that duty.
40 No contracting out of Part
(1) This Part applies despite any contracts or stipulations to the contrary made after the commencement of this Part.
(2) No contract or agreement made or entered into, or amended, after the commencement of this Part operates to annul, vary or exclude a provision of this Part.
41 Relationship with other duties of care and law
(1) The provisions of this Part are in addition to duties, statutory warranties or other obligations imposed under the Home Building Act 1989, other Acts or the common law and do not limit the duties, warranties or other obligations imposed under that Act, other Acts or the common law.
(2) This Part does not limit damages or other compensation that may be available to a person under another Act or at common law because of a breach of a duty by a person who carries out construction work.
(3) This Part is subject to the Civil Liability Act 2002.
Note -
Actions under this Part are subject to applicable limitation periods established under the Limitation Act 1969, and section 6.20 of the Environmental Planning and Assessment Act 1979 which relates to civil actions relating to certain work.
Two aspects of these provisions are critical to the determination of the present case.
First, the principle of non-delegation contained in s 39 was relied on by the applicant as a basis upon which the provisions of Pt 4 of the Civil Liability Act, dealing with proportionate liability, were either not engaged or did not have the effect of removing the liability of the defendants for any harm caused by the negligence of their contractors. There was an assumption that s 39 applied to the statutory duty of care contained in s 37 the common law concept of a "non-delegable duty", a term which also appeared in s 5Q of the Civil Liability Act.
Secondly, s 41(3) assumed the possibility of inconsistency between the provisions of Pt 4 of the Design and Building Act and provisions of the Civil Liability Act, and gave priority to the latter. However, a significant dispute arose as to the extent to which the Civil Liability Act applied.
It is necessary then to turn to the relevant provisions in the Civil Liability Act. The submissions treated two provisions as of paramount significance in the present circumstances. First, the title to Pt 1A, Div 7, and s 5Q, read as follows:
Division 7 Non-delegable duties and vicarious liability
5Q Liability based on non-delegable duty
(1) The extent of liability in tort of a person (the defendant) for breach of a non-delegable duty to ensure that reasonable care is taken by a person in the carrying out of any work or task delegated or otherwise entrusted to the person by the defendant is to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work or task.
(2) This section applies to an action in tort whether or not it is an action in negligence, despite anything to the contrary in section 5A.
Two points should be noted with respect to the language of s 5Q.
First, although it referred to breach of a "non-delegable duty" it appeared to assume that the obligation to take reasonable care could be "delegated or otherwise entrusted" to another person. It is apparent that the concept of delegation is a shorthand for the retention of liability in the person subject to the duty, in circumstances where the work is carried out by an independent contractor. The form of liability which retained in the principal is described as a "vicarious liability" of the party subject to such a duty. The language is manifestly inapt: the duty is never delegated; nor is a vicarious liability the liability of a deputy or delegate. To treat these legal labels as if they used words in the ordinary English meaning would be to invite error, which may be seen in the respondents' formulation of the anterior question referred to at [20] above.
Secondly, unlike other provisions in Pt 1A of the Civil Liability Act, s 5Q is expressly limited to "liability in tort" and to "an action in tort", being phraseology used in subs (1) and (2) respectively. That in turn gave rise to a question as to whether a breach of s 37 of the Design and Building Act gives rise to a claim in "tort", the respondents submitting that a claim in tort did not encompass a claim for breach of a duty imposed by statute. That question can only be addressed by identifying the purpose of s 5Q in its statutory context.
Constraints imposed by the Civil Liability Act on claims for civil liability were to apply equally to those primarily responsible for their own negligence and to those vicariously responsible for the negligence of others. To effect that purpose, s 3C provides:
3C Act operates to exclude or limit vicarious liability
Any provision of this Act that excludes or limits the civil liability of a person for a tort also operates to exclude or limit the vicarious liability of another person for that tort.
As discussed below, the purpose, or at least one purpose, of s 5Q is to ensure that the operation of s 3C was not undermined by a claim that liability arose from the imposition of a non-delegable duty, rather than a vicarious liability.
In addressing the meaning of the term "tort", both as a general law term and as used in the Civil Liability Act, it is appropriate to note the statutory context, including s 5A dealing with the application of Pt 1A generally:
5A Application of Part
(1) This Part applies to any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise.
(2) This Part does not apply to civil liability that is excluded from the operation of this Part by section 3B.
The second tranche of relevant provisions are to be found in Pt 4 of the Civil Liability Act dealing with "proportionate liability". The basic principles by which joint and several liability for the whole of any economic loss suffered by the plaintiff is removed may be found in two primary provisions, namely s 35(1) and s 36:
35 Proportionate liability for apportionable claims
(1) 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.
…
36 Contribution not recoverable from defendant
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.
With respect to Pt 4 generally, the application provisions are both restrictive and complex. The first, s 34, states:
34 Application of Part
(1) 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) a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 1987 for a contravention of section 42 of that Act … or under the Australian Consumer Law (NSW) for a contravention of section 18 of that Law.
(1A) For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).
(2) 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.
(3) For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1).
(3A) This Part does not apply to a claim in an action for damages arising from a breach of statutory warranty under Part 2C of the Home Building Act 1989 and brought by a person having the benefit of the statutory warranty.
(4) For the purposes of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.
There is a second provision dealing with the application of Pt 4, namely s 39:
39 Application of Part
Nothing in this Part -
(a) prevents a person from being held vicariously liable for a proportion of any apportionable claim for which another person is liable, or
(b) prevents a partner from being held severally liable with another partner for that proportion of an apportionable claim for which the other partner is liable, or
(c) affects the operation of any other Act to the extent that it imposes several liability on any person in respect of what would otherwise be an apportionable claim.
Inconsistently with the generality of s 3C, s 39 states that a concurrent wrongdoer who is otherwise vicariously liable for the harm done by another remains vicariously liable for any portion of the claim for which the other person is found liable. Thus, the defendant is not limited in its liability (to the extent that the liability is vicarious) to the proportion of the damage for which it is found to be responsible under s 35(1), nor, if s 39 is engaged, can the defendant avoid being required to contribute to the damages of the other concurrent wrongdoer pursuant to s 36.
As the same conclusion is reached on either approach, it will be convenient to note aspects of the various statutory provisions as they arise, but in the context of addressing the harmonious construction approach first.
The language of "non-delegable duty" became commonplace in discussing the liability of road authorities involved in the construction or repair of roads and footpaths. The primary judge referred to the explanation of the concept given by Gleeson CJ in Leichhardt Municipal Council v Montgomery, [13] which it is convenient to set out in full:
"9 In practice, the difference between a duty to take reasonable care and a duty to ensure that reasonable care is taken matters where it is not an act or omission of the defendant, or of someone for whose fault the defendant is vicariously responsible, that has caused harm to the plaintiff, but the act or omission of some third party, for whose fault the defendant would not ordinarily be vicariously responsible. If a negligent act or omission is that of a defendant, or a person for whose fault the defendant is vicariously responsible (such as an employee), no problem arises. Again, if the nature of a defendant's responsibility is such that it can be discharged lawfully or properly only by the defendant personally, an attempted delegation would be irrelevant. Some responsibilities are non-delegable in the sense that it is of their essence that they be performed by a particular person, perhaps because of trust or confidence reposed in that person. In some cases, a duty to take care involves a duty to act personally. That kind of non-delegability should not be confused with a case where the engagement of a third party to perform a certain function is consistent with the exercise of reasonable care by a defendant, but the defendant's legal duty is not merely to exercise reasonable care but also (if a third party is engaged) to ensure that reasonable care is taken. In such a case, the third party's failure to take care will result in breach of the defendant's duty. The legal consequence is that the circumstance that the third party is an independent contractor does not enable the defendant to avoid liability. It is because of its practical effect of outflanking the general rule that a defendant is not vicariously responsible for the fault of an independent contractor that the identification of this special responsibility or duty is important."
The idea of "outflanking" the general rule that a defendant is not vicariously responsible for the fault of an independent contractor envisages that, once the general rule is put aside, the defendant is vicariously liable for the fault of the independent contractor. That is consistent with the description of the duty as one involving strict liability, not in the sense that the defendant is liable to ensure that no harm befalls the plaintiff, but rather is liable for any harm caused by a breach of duty by a party also having a duty to take reasonable care with respect to the plaintiff. Importantly for present purposes, liability is not limited to a failure by the defendant to take reasonable care, for example by engaging a competent and responsible agent.
Turning to Pt 4 of the Civil Liability Act, four provisions are important. First, pursuant to s 34(2), there must be at least two parties, each of which is a "concurrent wrongdoer". That requires two parties whose "acts or omissions … caused, independently of each other or jointly, the damage or loss that is the subject of the claim". That language is not apt to include the liability of one person who undertook no act (and made no omission) which caused the loss the subject of the claim.
Secondly, where there is an apportionable claim, s 35(1) requires the court to consider what proportion of the damage or loss claimed may justly be attributed to the defendant, "having regard to the extent of the defendant's responsibility for the damage or loss". It is at least awkward to construe that provision in such a way as to permit the attribution of responsibility for a tort involving a breach of a duty of care where one defendant has not failed to exercise reasonable care, and whose liability is entirely vicarious.
Thirdly, s 36 precludes a concurrent wrongdoer from being required to contribute to any damages payable by the defendant, or being required to indemnify the defendant. Thus, assuming that some small proportion of the liability were attributed to the defendant in a proceeding, on the ground that it was liable for breach of a non-delegable duty, the plaintiff would be able to recover only that small amount. Such an outcome renders incoherent the concept of a non-delegable duty, which should render the party subject to the duty liable for the whole of the loss or damage caused by a breach of duty by a third party.
Fourthly, and consistently with s 35(1), s 39(a) states that nothing in Pt 4 prevents a person from being held vicariously liable for a proportion of an apportionable claim for which another person is liable. Thus, if a non-delegable duty is understood as a mechanism for rendering a principal liable for the failure of its independent contractor to take reasonable care, the principal owing a non-delegable duty will remain liable for the whole of the loss suffered. In short, s 39(a) reflects a statutory intention that Pt 4 will not affect the imposition of vicarious liability. Accordingly, it will not prevent a person from recovering from an employer the economic loss caused by an employee for whom the employer was vicariously liable. On the basis that the general law concept of a non-delegable duty, as reflected in s 39 of the Design and Building Act, merely places the principal's position with respect to independent contractors in the same position as that of an employer and employee, it follows that Pt 4 will not prevent recovery in full from the principal who is subject to a non-delegable duty.
Finally, as a matter of statutory construction, it should be accepted that in using the concept of a non-delegable duty, in a statute passed in 2020, the Parliament was conscious of the legal significance of that concept and intended it to have the well-established effects reflected in the case law, including the passages set out above by way of example.
That is a sufficient basis on which to conclude that the reasoning of the primary judge was in error and defences based upon Pt 4 of the Civil Liability Act should properly have been struck out. The claims to rely on the apportionment of liability under Pt 4 of the Civil Liability Act could not succeed if Pt 4 was not engaged.
This reasoning draws on an implication arising from an omission. However, the implication assumes the correctness of the conclusion, namely that Pt 4 of the Civil Liability Act would, absent exclusion, apply. If Pt 4 of the Civil Liability Act did not otherwise apply, there would be no need for the exclusion and no inference could be drawn from an omission to exclude it.
It is convenient then to turn to the substantive argument relied on in the court below, disregarding the several bases set out above on which it might have been concluded that Pt 4 of the Civil Liability Act did not, in its terms, apply to a cause of action under s 37 of the Design and Building Act.
The primary judge started with the proposition that "[a] non-delegable duty and vicarious liability are similar but not the same". [16] In fact, the two terms serve different functions. A vicarious liability, as described by Professor Giliker, "represents not a tort, but a rule of responsibility which renders the defendant liable for the torts committed by another". [17] By way of contrast, the "non-delegable duty" is an inelegant label given to circumstances where a form of strict liability is imposed on a principal for the negligence of a person to whom it has in fact "delegated" the performance of a function, without freeing itself from the liability for that performance.
The label is applied to relationships other than that of employer and employee, because the principle developed at a time when strict liability for the negligence of an employee was already established. It was the label, however, which gave rise to a concern on the part of the authors of the Ipp Report [18] that by imposing a duty which was not a duty of care, a plaintiff could invite a court to find liability on a basis which was not subject to the constraints of the proposed legislation. Further, courts were believed to be susceptible to imposing non-delegable duties as if "they are not imposing a form of strict liability … although it is clear that a non-delegable duty is not a duty of care". [19] The Report concluded:
"11.16 In the opinion of the Panel, this problem could be addressed by the enactment of a provision to the effect that for the purposes of the Proposed Act, liability for breach of a non-delegable duty shall be treated as equivalent to vicarious liability for the negligence of the person to whom the doing of the relevant work was entrusted by the person held liable for breach of the non-delegable duty."
This recommendation was effected by two provisions operating in tandem. The first is s 3C which ensures that where the Act excludes or limits civil liability of a person for a tort, it also operates to exclude or limit the vicarious liability of another person for that tort. The second provision is s 5Q, which deems the liability for a breach of a non-delegable duty to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work.
Subject to specific limitations and exclusions, there is little doubt that the drafter of the Civil Liability Act intended the legislation to be comprehensive in its coverage. For example, the purpose of s 5A(1) was not to identify four discrete categories of claim, namely those brought in tort, contract, under statute or otherwise, but to cover all conceivable bases of a claim in negligence. The fact that s 5Q was expressed by reference to claims in tort is unlikely to have been intended to have a limited operation. Rather, viewing the legislative scheme as a whole, and read against the background of the reasoning in the Ipp Report, it is tolerably clear that the language of s 5Q was intended to address the full scope of the problem of non-delegable duties. The references to "liability in tort" and "an action in tort" were not intended to exclude some circumstances in which non-delegable duties were imposed, but rather reflected an understanding that the concept only arose with respect to actions in tort. Furthermore, that understanding was legally correct. To read down the language of s 5Q would undermine the statutory purpose, as revealed by the extrinsic material. In principle, that course is wrong.
History confirms this conclusion. To the extent that the purpose of s 5Q is revealed as the need to prevent judicial sidelining of principles relating to vicarious liability, by imposing a non-delegable duty, in many cases they did so by construing statutes. It would therefore verge on the bizarre to think that s 5Q was not intended to apply to such cases.
By way of example, in Hole v Sittingbourne and Sheerness Railway Co, [20] Cockburn CJ, and then the Court of Exchequer in discharging a rule nisi challenging the judgment of the Chief Justice, concluded that a statute empowering a railway company to construct a railway, including an opening bridge, but making it unlawful for the company to detain beyond a specified period vessels seeking to use the river, was found liable in damages to the owner of a vessel when, due to the negligence of its contractor, the mechanism for opening the bridge failed to operate. The Court found the railway company liable for the omission of the contractor. In Gray v Pullen [21] the defendant had a statutory authority to dig up a public highway in order to make a drain from his premises to a sewer. He employed a contractor who negligently failed to restore the surface as a result of which the plaintiff fell into the trench and was injured. Hole was distinguished, but the principle was described by Cockburn CJ in the following terms: [22]
"There a Company was authorised to construct a bridge across a navigable river, and in order to prevent obstruction to the navigation, they were directed by their statute to make a swing bridge so as to allow the passage of vessels. For this purpose they employed a contractor, who constructed the bridge in such a manner that it would not swing. Where a statutory duty is imposed on a Company, and they have not discharged it, and mischief results, it is no answer that that arose by reason of the manner in which the duty was discharged by their contractor."
Indeed, the liability of the State and the Commonwealth in tort can only be a consequence of statute. Leeming has argued that the duty of care as an element in the tort of negligence generally owes much to English statutes regulating canals, highways, railways and carriers. [31]
The respondents' case is that s 5Q operates with respect to liability in tort under the general law; understandably, they do not submit that s 5Q has no operation because the general law liability for tort is varied in many respects by the Civil Liability Act itself (although arguably not by s 5Q). Nor does defamation cease to be a tort because most of its elements are now found in a statute. In any event, the restriction excluding duties imposed by statute is inconsistent with standard explanations of the scope of torts.
Thirdly, the duty imposed by s 37(1) is, as the heading to the section indicates, not a novel or freestanding duty of care, but an "extension" of an existing duty. [32] Although the duty arises in a contractual context, it does not depend on a contractual term requiring the exercise of reasonable care to avoid economic loss caused by defects, but rather provides that a contractual term which purports to exclude the extended duty will be ineffective: s 40.
Fourthly, the operation of these principles is illustrated by their application with respect to the common form of statutory provision providing for apportionment of liability for contributory negligence. Astley v Austrust Ltd [33] held that there could be concurrent obligations under an implied term in a contract imposing a duty to take reasonable care in the provision of services, and in tort where such a duty is imposed by law. There was a further question as to whether apportionment legislation dealing with contributory negligence applied to a breach of the implied contractual term. The Court held that it did not, a conclusion which has since been overridden by statute in this State. [34] At the time the claim arose in Astley, s 27A of the Wrongs Act 1936 (SA) defined "fault" as "negligence, breach of statutory duty or other act or omission which gives rise to a liability in tort or would, apart from this Act, give rise to the defence of contributory negligence". Despite the breadth of the definition, the reasoning in Astley was replete with comparisons between tortious liability, which was imposed by law, and contractual liability, which turned upon the intention, actual or implied, of the parties to a contract. The Court held that "on any fair reading of the apportionment legislation against the background of the mischief it was intended to remedy, it is clear to the point of near certainty that the legislation does not and was never intended to apply to contractual claims". [35]
The Court in Astley referred to the reasoning in two cases in the Victorian Supreme Court. In the first, Belous v Willetts, [36] Gillard J concluded that "the word 'negligence' should be construed as meaning the tort of negligence, and not mere carelessness, or negligent breach of contract which would not give rise to a liability in tort." The joint reasons in Astley further observed:
"55 In AS James Pty Ltd v Duncan, [37] McInerney J agreed with Gillard J's reasoning … . McInerney J also held that [a contrary construction] of the term 'fault' was strained because [that construction] would logically require the words 'breach of statutory duty' within that definition to mean all breaches of statutory duty, which could not have been intended by the legislation."
Later the majority in Astley stated:
"72 As indicated earlier in these reasons, the definition of 'fault' in s 27A is a key element in determining the applicability of the apportionment mechanism in s 27A(3). For s 27A(3) to apply, the damage must arise partly by reason of the 'fault' of the plaintiff and partly by reason of some other person's fault. Fault is defined to mean 'negligence, breach of statutory duty or other act or omission which gives rise to a liability in tort or would, apart from this Act, give rise to the defence of contributory negligence'. In terms, a breach of contract does not come within the meaning of 'fault'. The solicitors argue that the word 'negligence' should not be limited by the words 'which gives rise to a liability in tort'. However, as McInerney J pointed out in James, to construe negligence as applying to all cases of negligence, whether giving rise to a liability in tort or in contract, would logically require the words 'breach of statutory duty' to be similarly unrestricted, and to be read as meaning all breaches of statutory duty."
It was uncontroversial that a breach of statutory duty could give rise to liability in tort.
Barker et al, in considering the nature of the liability for breach of statutory duty identify three ways in which such a statute may be relevant to an action in tort. The first two will be noted shortly. The third was described as follows: [38]
"Even apart from founding an action in negligence on a breach of statutory duty, it is possible in some cases to found a tort simply on the breach of that duty, regardless of whether or not that breach constitutes negligence. Liability for breach of statutory duty is distinct from liability for negligence. A person may be liable for breach of statutory duty even though not liable in negligence, or in addition to being liable in negligence."
That description is sourced to the reasoning of Windeyer J in Downs v Williams, [39] noting that "a statutory duty may be more rigorous, as well as more precise, than the requirements of reasonable care." Windeyer J continued: [40]
"To succeed in a claim for damages for breach of a statutory duty causing him harm, a plaintiff must show that the defendant was a person on whom the statute cast the duty: that he, the plaintiff, was a person, or one of a class of persons, for whose benefit the duty was created: that the defendant failed to perform the duty: that this failure gave rise to a civil right of action."
Much of the case law regarding breach of statutory duty turns on the last element, namely whether the statute was intended to create a civil right of action in an individual. However, that question cannot arise given the express terms of Pt 4 of the Design and Building Act. The inevitable conclusion of these principles is that a cause of action for a breach of a duty imposed by a statute invokes liability in tort.
Fifthly, to suggest that liability in "tort" is a product of the common law is fundamentally wrong. To the extent that the Civil Liability Act itself does not contradict that assumption, perhaps the best that could be contended is that the duty of care is a concept which owes its origins to judge-made law. However, as Leeming has explained: [41]
"The duties created by statutes, and submissions based upon such statutes, played a significant part in the 'historical accident' to which Winfield referred in the creation of duty of care as an element of negligence."
After referring to the judgment of Tindal CJ in the 1839 decision of Parnaby v Lancaster Canal Co, [42] Leeming referred to the following statements by Winfield (writing in 1934): [43]
"The reports for the succeeding 40 years illustrate the infiltration of the doctrine, and it is remarkable that the cases which are the chief examples of it are those in which the defence was: 'I admit that I was under a duty. But that duty was created by statute and it did not contemplate you, the plaintiff'."
In considering the contemporary role of statute, Leeming describes "[d]uty as a necessary element of a claim for negligence" as "now entrenched by statute". [44] He continued:
"They not only presuppose duty as an element of liability, but go further and modify or some cases preclude the way in which it is to be determined. Thus, express provision is made that a defendant does not owe a duty of care to a plaintiff to warn of an obvious risk, [45] thereby cutting off at an anterior stage consideration of the question whether obviousness of a risk is not determinative of breach." [Original footnotes omitted.] [46]
In addressing statutes which mandate a duty of care, Leeming observes: [47]
"Where statute directly imposes a duty of care, a question may arise whether a common law duty sits alongside the statutory duty, or else has been supplanted by statute."
Barker et al note in a passage referred to above, breach of a duty imposed by a statute or statutory regulation can affect an action in tort in various ways. [48] First, in relation to actions against public authorities, the statute may define "to whom and in what respects the authority is under a common law duty of care". Secondly, "breach of a statutory duty may provide evidence of negligence".
It is not necessary for present purposes to expand the discussion or the examples: it is sufficient to note the statement by Gleeson CJ in Brodie v Singleton Shire Council: [49]
"31 The non-feasance rule provides an example of the way in which statutes and principles of common law, as sources of legal rights and obligations, interact. Legislation and the common law are not separate and independent sources of law; the one the concern of parliaments, and the other the concern of courts. They exist in a symbiotic relationship."
Gleeson CJ pointed out that the immunity of public authorities from tortious liability for non-feasance in the management of highways "itself is a rule of statutory construction". [50] Leeming uses "entanglement" to describe the relationship between legislation and judge made law; most recently he has described it as "a complex entangled system". [51]
It follows that a reference in s 5Q of the Civil Liability Act to an action "in tort" cannot sensibly be construed as excluding tortious liability dependent to some extent, or even in all respects, upon statute.
Secondly, the respondents supported their defence of the primary judgment by reliance on a passage in the reasons of Spigelman CJ in Commissioner of Police v Estate of Russell. [56] That case concerned a claim under the Anti-Discrimination Act 1977 (NSW) arising from the treatment by police of a young Aboriginal man. The Tribunal which heard the claim found in his favour, but a question arose as to whether either the State of New South Wales or the Commissioner of Police was vicariously liable, either pursuant to s 53 of the Anti-Discrimination Act or pursuant to the general law as amended by provisions of the Law Reform (Vicarious Liability) Act 1983 (NSW). The Law Reform (Vicarious Liability) Act deemed a police officer to be a person "in the service of the Crown": s 6. Section 8 relevantly provided:
8 Further vicarious liability of the Crown
(1) Notwithstanding any law to the contrary, the Crown is vicariously liable in respect of the tort committed by a person in the service of the Crown in the performance or purported performance by the person of a function (including an independent function)… .
The term "independent function" was defined to mean "a function conferred or imposed upon the … person, whether or not as the holder of an office by the common law or statute independently of the will of the servant's master or the Crown": s 5(1).
Although, as appears from the reasoning at [62]-[63], a number of aspects of the case were not fully argued in this Court, nor in the Court below, Spigelman CJ held that "proceedings for unlawful discrimination should not be regarded as a 'tort' for purposes of the Law Reform (Vicarious Liability) Act. However, it is not necessary to finally determine this matter in these proceedings." [57]
That conclusion turned on two propositions, neither of which arises in the present case. First, the Chief Justice referred to the definition of tort in Halsbury in the following terms:
"71 I note that the definition of tort in Halsbury, relied on in the prior authorities, refers to 'civil rights of action' and 'rights of action in tort'. In my opinion, it is not accurate to describe proceedings by way of complaint before a Tribunal as a 'right of action'. That terminology is reserved for proceedings in a court of law."
In other words, a claim which could only be pursued in a designated tribunal did not give rise to a cause of action, nor, therefore to tortious liability.
The second referred to the purposes of the Anti-Discrimination Act, addressed in the following passage:
"76 Furthermore, in my opinion, the purposes of the Anti-Discrimination Act are not well served by permitting recovery from employers to whom s 53 does not apply. Vicarious liability serves the tort law purpose of shifting the burden of a loss to a person who is a more efficient distributor of the loss. The purposes of the Anti-Discrimination Act are better served by focussing that burden on the actual perpetrator or perpetrators of the unlawful conduct. I do not believe that loss distribution is a purpose of the Anti-Discrimination Act. Denunciation, punishment and deterrence appear to be the primary considerations. These objectives are better served by joint and several liability under s 53(2) than by shifting the entire burden of an award of damages to the employer, subject to such rights, if any, of indemnity that the employer may have."
The identification of the purpose of the legislation may have been thought surprising in circumstances where the Tribunal was then empowered under s 113(1)(b) [58] to order payment of "damages … by way of compensation for any loss or damage suffered by reason of the respondent's conduct". In Hall v A & A Sheiban Pty Ltd [59] a Full Court of the Federal Court held that the complainants having proved loss and damage as a result of unlawful discrimination, the Human Rights and Equal Opportunity Commission had erred in law in not declaring that the respondent should pay damages, a refusal based on the view that "public exposure of the complaints" was sufficient to give relief to the applicant, and that a "finding of discrimination offered vindication to the plaintiff". [60] Lockhart J held that the approach of the Commission was "untenable and demonstrates an error of law". [61]
French J said in Hall: [62]
"The President also said towards the end of his reasons for decision that 'the public exposure of these complainants and the findings I have made are sufficient relief for the complainants in these matters'. It seems likely that there was a typegraphical [sic] error here and that what his Honour intended to refer to was the public exposure of the complaints and therefore of the conduct alleged against the first and second respondents. Such exposure could not, in my opinion, be treated as any kind of alternative to compensation. Nor could it be regarded as a factor reducing the loss or damage suffered. And in so far as public exposure may be thought to have some punitive impact on the perpetrator of sex discrimination or sexual harassment, that can only be incidental to the purposes of the legislation which are, in essence, remedial."
Nevertheless, accepting Spigelman CJ's reasoning in Estate of Russell, neither of the reasons for his conclusion have any application in the present case. [63] Nor were they to be generalised to other statutory contexts. As the Chief Justice also stated:
"70 There is no doubt that statutes can create new torts and have done so. There is no simple definition of a tort. The elements that can be said to characterise torts are able to be stated at different levels of generality. The fact that all or most torts can be described in a particular way does not mean that everything that can be described in that way constitutes a tort."
Estate of Russell provided no assistance to the respondents.
See Law Reform (Miscellaneous Provisions) Act 1965 (NSW), Pt 3, s 8, wrong.
Astley at [71].
[1970] VR 45 at 48.
[1970] VR 705.
The Law of Torts in Australia, Ch 15, p 674-675.
(1971) 126 CLR 61 at 74.
Ibid at p 75.
The Statutory Foundations of Negligence at [2.3].
(1839) 11 Ad & E 223; 113 ER 400.
P Winfield, "Duty and Tortious Negligence" 34 Col L Rev 41 (1934) at 57.
Statutory Foundations of Negligence, at [2.5], p 22.
Civil Liability Act, s 5H.
See Wicks v State Rail Authority (NSW) (2010) 241 CLR 60; [2010] HCA 22, at [15], [22], [32].
Statutory Foundations of Negligence, p 25.
The Law of Torts in Australia, p 674; see also J Dietrich & I Field "Statutes and Theories of Vicarious Liability" (2019) 43(2) Melb U L Rev 515, 520 (referring to "a nuanced and interesting story of a complex interaction between statute and common law").
(2001) 206 CLR 512; [2001] HCA 29; see Statutory Foundations of Negligence, p 1.
Ibid at [33].
M Leeming, Common Law, Equity and Statute: A Complex Entangled System (The Federation Press, 2023), esp Ch 4.
(2021) 104 NSWLR 475; [2021] NSWCA 54 (Meagher and Payne JJA agreeing with me).
Woodhouse at [72].
Woodhouse at [73].
(2019) 268 CLR 593; [2019] HCA 49 at [7]-[8] (Kiefel CJ, Gageler and Keane JJ); [101] (Bell, Nettle, Gordon and Edelman JJ).
(2002) 55 NSWLR 232; [2002] NSWCA 272 (Davies AJA agreeing, Stein J not decided).
Estate of Russell at [78].
Now s 108(2)(a).
(1989) 20 FCR 217 (Lockhart, Wilcox and French JJ).
Hall at 238.
Hall at 242.
Hall at 284.
See also Commissioner of Police v Mohamed [2009] NSWCA 432 at [47]-[48] (in my reasons, Spigelman CJ agreeing).