Wintle v Stevedoring Industry Finance Committee and Ors

Supreme Court of Victoria|2002-07-26|Before: Ashley J

Limitation of actions - claim by dependant under Part 3 of Wrongs Act 1958 - successful application under s. 20(2) - desire of defendant to bring contribution proceeding - form of order - discretionary considerations.

On 1 July this year I handed down Reasons on an application by the plaintiff under of the (the Act). I held that the plaintiff had made out the matters set out in sub-ss.2(a) and (b) of that section; and that it was just and reasonable to order that the period within which an action on the cause of action might be brought be extended. In doing so I accepted a submission for CSR, agreed in by the plaintiff, that the wrongful act, neglect or default made pertinent by was the wrongful act, neglect or default of CSR.

In light of a matter foreshadowed in argument by Mr Kaye of Queen's Counsel for CSR on 1 July[3] I did not make an order under s. 20(2).

The matter foreshadowed was argued out yesterday. Mr Kaye, who with Mr Noonan appeared for CSR, sought an order extending time to a date after 25 July so that his client would be within time to bring a contribution proceeding against SIFC. See s. 24(4)(a)(i) of the Act. Mr Gorton of Queen's Counsel, who with Mr Parrish appeared for SIFC, opposed the making of such an order. He submitted that time should be extended to a date shortly after 6 April 2000, on which date the writ was filed. Mr John Gordon, for the plaintiff, adopted a neutral position upon that question. His only concern was that an order be made so that the plaintiff could press ahead with her claim.

At the conclusion of argument I ordered that the period within which the plaintiff might bring an action on the cause of action be extended to 1 August 2002. I now give Reasons with respect to the form of the order which I made. It accorded with the submissions made for CSR.

For the most part, argument yesterday was confined to discretionary considerations. But before addressing those considerations I should briefly refer to actual or potential issues which were not agitated or which, for one reason or another, were unsuitable for disposition yesterday.

First, it was no part of the argument that I did not have power to make an order in the form sought by CSR, notwithstanding that the plaintiff did not need an order in that form. The language of s. 20(2) would not have supported such a submission had it been advanced[4].

Second, the question whether any order I should make under s. 20(2) would affect a limitation - or "extinguishment" - defence taken by SIFC was not addressed. If the order which I made does not have any such effect - Mr Gorton submitted in another connection that s. 20(2) could not avail the plaintiff against his client because the late Mr Wintle commenced a claim against SIFC in his lifetime - then a question would arise whether CSR could proceed by way of notice of contribution rather than by a third party proceeding claiming contribution. That question may arise on another day.

Third, the plaintiff and SIFC reached a settlement in October 2001. It appears that terms of settlement were signed. The parties agreed that there be orders by consent that:

"(a) the plaintiff's claim as against the first defendant is barred by operation of s. 20 of the Wrongs Act 1958 (Vic); (b) there be judgment for the first defendant."

Before any such orders were made CSR intimated a desire to be heard. Its solicitors were evidently concerned that the effect of such orders would or might be to preclude any claim for contribution being pursued by it against SIFC: James Hardie & Co Pty Ltd v Seltsam Pty Ltd[5]. That matter was briefly agitated before Bongiorno J on 9 November 2001. The plaintiff, SIFC and CSR were represented. The question whether consent orders should be made was left over to another day.

Yesterday, Mr Gorton did not ask me to make orders by consent as between his client and the plaintiff. Neither did he submit that the circumstance that such orders might at some time be made provided a reason why I should not exercise my discretion to extend time in the manner contended for by counsel for CSR.

As I presently perceive it, questions whether the orders agreed in by the plaintiff and SIFC should be made, and if so when, need to be resolved. If a contribution notice is on foot and those orders are made, then subject to Hardie v Seltsam being distinguishable[6] the contribution proceeding will be stymied. If, on the other hand, the court altogether refused to make those orders, paragraph 9 of the Terms of Settlement would seem to come into play. The plaintiff would be obliged, relevantly, to discontinue the present proceeding against SIFC. In consequence, I think, CSR would then have to bring any contribution claim against SIFC by way of a third party proceeding. If, again, the court declined to make the orders agreed in between the plaintiff and SIFC until an extant contribution proceeding was finalised, at least the parties should know that such was the case.

Fourth, on 25 July Mr Gorton pursued a submission that it would be futile to make an order in the form sought by CSR because any contribution claim would be doomed to failure. That was because, by s. 23B(3) of the Act, a person's liability to make contribution ceases where that person's liability in respect of the damage ceased "by virtue of the expiry of a period of limitation or prescription which extinguished the right on which the claim against that person in respect of the damage was based". Here, according to Mr Gorton, by s. 20(1) the plaintiff's right against SIFC was extinguished six years after Mr Wintle's death. The plaintiff could not call s. 20(2) in aid vis-à-vis SIFC, so the possible enlargement of time contemplated by s. 20(1) could be of no relevance. Mr Gorton relied upon dicta of Dixon CJ in Maxwell v Murphy[7].

Mr Kaye submitted that this was not the occasion to debate and resolve the futility argument. That should be done, if at all, in circumstances where a contribution proceeding was on foot, and where a pleading summons or a question framed under r.47.04 was before the court. It was enough that the issue was uncertain; and that was clearly so. Section 23B(3) did not assist SIFC. The limitation period set up by s. 20(1) barred the remedy rather than extinguished the right. Dicta of Dixon, CJ. in Maxwell v Murphy[8] assisted CSR's argument. So also did the existence both of the disjunctive second portion of s. 20(1) and s. 20(2). In that connection observations in the joint judgment of Brennan, Dawson, Toohey and McHugh JJ in McKain v R.W. Miller & Company (South Australia) Pty Ltd[9] were relevant. They recognised the potential importance, albeit in another context, of an extension provision[10] in characterising the nature of a limitation provision.

At the conclusion of argument on 25 July I indicated my opinion that the issue which I have been discussing ought be left open for consideration in a setting where there was a contribution proceeding on foot; and where by some mechanism - a pleading summons or a hearing in consequence of an order made under r.47.04 - a proper framework had been set up for a considered analysis of the competing arguments. I add this postscript: it was implicit in what I then said, and I consider it to be the case, that the construction of s. 20(1) advanced by Mr Kaye is at least not unarguable.

I turn to the competing discretionary considerations which were advanced by counsel. Mr Kaye submitted that:

[diamond] A sensible decision had been made by CSR's solicitors not to commence contribution proceedings against SIFC (or, for that matter, Hardie) before it had been determined whether the plaintiff was entitled to an order under s. 20(2). That was so even though a contribution claim could have been made in reliance on s. 24(4)(a)(ii) in the 12-month period after the writ was served on his client.

[diamond] Not to make an order in the form sought would lead to a double prejudice to CSR: prejudice in consequence of the plaintiff obtaining a s. 20(2) order; and prejudice in being unable to bring a contribution claim against SIFC. As to the second of those matters, it has been said that the loss of a right of indemnity or contribution may be pertinent, vis a vis prejudice, in determining a related question - whether a plaintiff should have an order extending time: Wintle v Conaust (Vic) Pty Ltd & Ors[11].

[diamond] There would be no prejudice to SIFC in making an order in the form sought by CSR. It had always been evident that contribution issues existed between the defendants, whether contribution notices had been served - as in the case of the first defendant, which had served notices on Hardie and CSR, and in the case of the second defendant which had served a notice on SIFC - or not. Settlement between the plaintiff and SIFC had been reached in the knowledge by SIFC that CSR sought contribution from it.

[diamond] Having regard to admissions of duty and breach by SIFC vis-à-vis the plaintiff, the contribution claim by CSR was likely to succeed.

[diamond] CSR's solicitors had made a forensic decision not to initiate a contribution proceeding at a time when they had been able to do so. No good reason for that decision had been disclosed. CSR had taken the chance that no order would be made under s. 20(2). The situation being different, it now wished to change its position. It should not be relieved of the consequences of its forensic decision.

[diamond] Section 20(2) operates, in appropriate circumstances, to the benefit of plaintiffs. It could do so in the present case by extension of time to a date shortly after 6 April 2000. As a corollary, s. 20(2) is not intended to operate, in circumstances where an order is to be made, to the advantage of the defendant.

[diamond] An order in the form sought by CSR would be futile - see the submission referred to in paragraphs 12-14 above.

[diamond] To make an order in the form sought by CSR would prejudice SIFC. The latter would face a claim for contribution, and costs. There could be expected to be difficulty in defending a contribution claim founded on events which occurred long ago, akin to the likely, though undefined, prejudice to a defendant which has to face a plaintiff's claim founded on events which occurred at a time long past.

In my opinion the submissions made for CSR were the more persuasive. The following matters were pertinent to that conclusion:

First, there was no doubt, on the material before me, that CSR's solicitors made a forensic decision not to commence contribution proceedings when they could have done so. But I did not consider that this provided a reason why an order should not be made in the form sought by CSR. In the particular circumstances of this long-running and complicated litigation I do not criticise CSR's solicitors for adopting the position that no contribution proceeding should be commenced in the present proceeding unless and until the plaintiff obtained a s. 20(2) order. True it is that they thereby ran a risk that their client might be out of time to bring such a proceeding - that is, if no order as was sought on 25 July was made, and in the event that the hearing and determination of a s. 20(2) application was so long delayed as to make s. 24(4)(a)(ii) inapplicable. But it required each of those events to occur before the right to bring contribution proceedings would be lost; and at least it should not have been supposed, at the outset, that the latter would occur.

Second, I accepted that it was evident to the defendants during the life of the proceeding that contribution issues existed between them. Mr Gorton did not argue to the contrary, notwithstanding the absence of a contribution proceeding between his client and CSR. Understandably so, in light of the contribution notice served by his client on CSR, and in light of the Terms of Settlement between his client and the plaintiff, which reflected an obvious intent on the part of SIFC to place itself beyond the reach of contribution claims by the other defendants. See also the correspondence between the solicitors for the plaintiff, CSR and SIFC in late October and very early November 2001, albeit that this was after settlement had been reached between SIFC and the plaintiff. It may be the case, I add, that orders made pursuant to the Terms of Settlement will in fact place SIFC beyond the reach of CSR contribution proceedings. The position in that connection remains open.

Third, I accepted Mr Gorton's submission that s. 20(2) is intended, in appropriate circumstances, to advantage plaintiffs. But in most cases a s. 20(2) order will not doubly disadvantage a defendant. In every case where a plaintiff successfully makes application under s. 20(2) before commencing a proceeding a defendant will have plenty of time to make a claim for contribution against another defendant; or to bring a third party proceeding claiming contribution. That will also be the case where a plaintiff commences a proceeding, serves a writ, and promptly brings a s. 20(2) application. Only in a case such as the present will a defendant be doubly disadvantaged if a s. 20(2) order is made which extends time only to a date shortly after the date on which the proceeding was commenced.

Fourth, I accepted Mr Gorton's submission that to make an order in the form sought by CSR exposes SIFC to a contribution proceeding which it would not have had to face if time had simply been extended to a date soon after 6 April 2000. I accepted also his contention that SIFC is likely to face some, though undefined, prejudice in defending such a proceeding on the merits - if that becomes necessary. These were matters, in my opinion, proper to be brought into account in determining, in my discretion, the form of order which should be made; and I did take them into account. I also took into account, tending in a contrary direction, the fact that in pursuing a claim for contribution CSR should be thought to face no different problem; and that the difficulties which SIFC may encounter did not persuade it against making a claim for contribution from CSR. I further took into account the fact that SIFC has made admissions, vis-à-vis the plaintiff, concerning duty and breach. Subject to the effect of the s. 20(1) limitation period in the case of SIFC, and to a causation issue which it has raised, I agreed with Mr Kaye's submission that there is good reason to think that a contribution proceeding by CSR against SIFC would be likely to succeed.

In all, as I said a few moments ago, I was satisfied that the balance of considerations lay in favour of me making an order in the form sought by CSR.

[4] Note also, though for reasons which are not quite clear, that an order of such a kind has been made in the past: Todorovski v Petersville Industries Limited & Ors [1999] VSC 213.

[11] [1989] VicRp 84; [1989] VR 951 at 956 per Crockett and Gray JJ. See also at 967 per Phillips J.

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