Arrigo D'angelo Superannuation Pty Ltd v Vaughan Constructions Pty Ltd
[2012] VCC 2003
•5 December 2012 (revised)
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION COMMERCIAL LIST | Revised |
Case No. CI-10-00970
| ARRIGO D'ANGELO SUPERANNUATION PTY LTD (as Trustee for Arrigo D’angelo Superannuation Fund) | Plaintiff |
| v | |
| VAUGHAN CONSTRUCTIONS PTY LTD | Defendant |
| and | |
| DAVIS, NAISMITH & McGOVERN PTY LTD | Third Party |
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JUDGE: | HIS HONOUR JUDGE GINNANE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28 November 2012 | |
DATE OF JUDGMENT: | 5 December 2012 (revised) | |
CASE MAY BE CITED AS: | Arrigo D’angelo Superannuation Pty Ltd v Vaughan Constructions Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 2003 | |
REASONS FOR JUDGMENT
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BUILDING CONTRACT – third party claims in contract and tort - amendment sought to claim damages as well as contribution - whether claims statute barred - Limitation of Actions Act 1958 s 5(1)(a); Building Act 1984 s134
PRACTICE – whether third party notice contained inconsistent pleading - County Court Civil Procedure Rules O13 r9
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Shaw | Williams Winter Solicitors |
| For the Defendant | Mr B Laird | Kliger Partners |
| For the First Third Party | Mr R Andrew | Colin Biggers & Paisley |
HIS HONOUR:
1 The defendant seeks an order that it be granted leave to file and serve an Amended Statement of Claim against the third party, Davis, Naismith & McGovern Pty Ltd (“Davis, Naismith & McGovern”). The defendant pleads that it entered into a engineering design contract with Davis, Naismith & McGovern on 13 February 2003. The proposed amendment to the Third Party Notice is to plead as follows (paragraph 14A):
“In the event that Vaughan is found liable to the Plaintiff on the grounds set out in the Statement of Claim identified in paragraph 9 hereof, then Davis, Naismith will have carried out the Engineering Design Works in breach of the terms of the Engineering Design Contract as described at paragraph 11 above and/or negligently as described at paragraph 14 above, and as a result Vaughan will have suffered loss and damage.
Particulars
Vaughan’s loss and damage will be the amounts, if any, it is ordered to pay to the Plaintiff together with costs and interest. Vaughan is unable to provide further particulars of these amounts until the Plaintiff provides such particulars to it.”
2 The proposed pleading also seeks to add a claim for damages to the relief sought.
3 The existing pleading against the third parties sought an order that:
“ if and to the extent that the Plaintiff obtains an award of damages in this proceeding, an order pursuant to the provisions of the Wrongs Act (Vic) 1958 for contribution in respect of any damage found to have been suffered by the Plaintiff for which the Defendant is liable to the extent of each of the First Third Parties’ responsibility for damage.”
4 The amendments seek to limit the relief sought to claims only against the first third party. The proceedings involving the other third parties have been settled.
5 The proposed amendments are opposed by the third party on the basis that the claims contained in the proposed paragraph 14A are statute-barred pursuant to s5(1)(a) of the Limitation of Actions Act 1958.
6 The claim made by the plaintiff is that it engaged the defendant, Vaughan, to construct an office warehouse factory at Laverton North. The plaintiff sues Vaughan alleging that in breach of the design and contract, the building was constructed with defects.
7 It is necessary to refer to two paragraphs of the defendant’s defence to enable the third party’s submissions to be put in context. In the particulars to paragraphs 29 and 30 of the defendant’s defence, it alleges that it had no liability to the plaintiff, that the works reached practical completion on 30 October 2003 and:
“The plaintiff was required by the Limitation of Actions Act 1958 (Vic)(Act) to bring any cause of action in respect of the alleged breaches pleaded in paragraphs 16 and 17 thereof before the expiration of 6 years from when the alleged breaches occurred.”
It is then particularised that the Writ was filed on 10 March 2010 and that the causes of action were outside the limitation period and were time-barred.
8 In respect of the claim in tort, in the particulars to paragraph 30, the defendant states that:
“The plaintiff first became aware of defects in the Works on or about 13 November 2003 by way of a list of defects the plaintiff prepared in respect of the Works.”
9 The particulars then state, in effect, that the plaintiff had six years from when the plaintiff first discovered the defects in the work to bring the action in negligence and that it is also outside the limitation period.
10 As previously stated, the existing claim by the defendant against the third party pleads that it entered into an engineering design contract with Davis, Naismith & McGovern on 13 February 2003. It alleges terms of that agreement and it alleges a duty of care. In respect of the contract claim, it pleads that if the engineering design works were defective, as alleged by the plaintiff, which is not admitted but expressly denied, then Davis, Naismith & McGovern breached its obligations to Vaughan under the engineering design contract. Then in the existing paragraph 14, it is pleaded that if any of the Works were defective, which is denied, then the first third party failed to exercise the skill and professionalism of a reasonably qualified engineer and/or failed to take reasonable care and performed the Engineering Design Works negligently.
11 Davis Naismith contended that the breaches alleged by the plaintiff, if established, would have occurred during the design and construction of the works, which it was pleaded were completed on 30 October 2003.
12 Counsel for the third party referred to relevant facts contained in the pleadings as follows. First, that the Engineering Design Contract was made on or about 13 February 2003. Secondly, that the works reached practical completion on or about 30 October 2003. Thirdly, that the first notification of defects was in May 2005. This third contention was cross-referenced to paragraph 15 of the Statement of Claim, which, in its particulars, refers to a request made around about 2 May 2005 for a meeting to document all faults. It is alleged that that meeting was held in May 2005 and Vaughan attended the site in June 2005 as a consequence of defects identified in that meeting.
13 Counsel for the third party submitted that it was trite law that a cause of action for breach of contract accrues upon the breach of the contract. It argued that the breaches alleged by the plaintiff occurred during the design and construction of the works and they had reached practical completion on or about 30 October 2003. The six year period, therefore, for bringing a claim in contract ended on or about 30 October 2005 and so the defendant’s proposed new claim is three years out of time.
14 Counsel also submitted that the proposed new claim in negligence was also outside the time limit because the damage occurred some time in 2003 and the plaintiff produced a list of defects on or about 13 November 2003. Any claim in tort should have been brought by November 2009 at the latest.
15 The defendant, in its submissions, pointed to the fact that tort and contract claims were already contained in the third party pleading, albeit that no claim for damages was made but rather a claim in contribution. It was also submitted that the question of when the contract had been breached, or when damages were suffered, were matters to be determined after hearing evidence at trial.
16 The defendant also referred to s134 of the Building Act 1993, which is headed “Limitation on time when building action may be brought” and states:
“Despite anything to the contrary in the Limitation of Actions Act 1958 or in any other Act or law, a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied), or if an occupancy permit is not issued, the date of issue under Part 4 of certificate of final inspection of the building work.”
17 Counsel for the third party relied on the decision of Judge Shelton in Brirek Industries Pty Ltd v McKenzie Group Consulting (Vic) Pty Ltd[1], that s134 did not extend the limitation period but:
“Rather, it prevents a building action from being brought in negligence outside the ten year period referred to in the section. Its purpose is to limit the common law position where the limitation period only runs in negligence from when defects in the building works were first known or manifest (see Pullen v Gutteridge).”
[1][2011] VCC 294
18 Counsel for the defendant informed me that that decision is the subject of an appeal to the Court of Appeal. There are apparently, as Judge Shelton notes, decisions of the Victorian Civil and Administrative Tribunal that may purport to give a wider effect to s134 than his Honour determined that it had. The defendant, in effect, said that I should not in this application determine the ambit of s134 as it had not been the subject of a decision of the Supreme Court or the Court of Appeal.
19 Reference was made to the abolition of the rule in Weldon v Neal, which is reflected in s34 of the Limitation of Actions Act and Rule 31.06, which gives the Court a discretion to permit amendments to pleadings, even after the limitation period has expired. When that discretion is exercised, a new cause of action so introduced will operate as if originally included in the proceeding when first commenced. This proceeding was commenced in March 2010, so even if the Court exercised the discretion, that, by itself, would not enable the defendant to overcome the limitation defence.
20 The authorities establish that a Court will ordinarily be cautious in deciding on an application for amendment that the cause of action sought to be introduced by the amendment is statute-barred. In Wardley Australia Ltd v Western Australia[2] four members of the High Court in dealing with a s82 claim for damages under the Trade Practices Act said:
“We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action except in the clearest of cases. Generally speaking, in such proceedings insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.”
[2](1992) 175 CLR at 533
21 Counsel for the third party pointed out that the approach in Wardley still permitted the Court to refuse an amendment because of a limitation defence in a clear case and referred as an example to the judgment of Ashley J in Simplot Australia Pty Ltd v PSL Industries.[3]
[3][2001] VSC 419; on appeal (2003) 7 VR 106
22 I do not consider that this is the appropriate time to determine whether the limitations defence will succeed. In respect of the claim in tort, I do not consider that I should, on the pleadings to which I have referred, make a finding as to when any defects in the building first occurred or were discovered. I consider that to be a matter that should be left to trial.
23 The question of when the contract cause of action accrued does appear clearer. However, I need to take into account the defendant’s arguments about the possible availability of s134 of the Building Act. Without expressing any concluded view on that argument, there appears to be much to be said for Judge Shelton’s conclusion in Brirek Industries Pty Ltd’s case.[4] But there is no decision of the Supreme Court or the Court of Appeal on the issue. If I ruled against the amendment, either in contract or in tort, I would, in effect, be determining on an amendment application that there was no arguable point about the applicability of s134 on which the defendant could rely.
[4](Supra)
24 I also consider that the point raised by the third party about whether the duty of care in tort that is pleaded existed is appropriately to be determined at trial.
25 There were other points relied on by the third party to resist the amendment to which I will now turn.
26 It was argued that the pleadings contained in the third party claim would be inconsistent with existing pleadings in breach of the requirements of Rule 13.09 of the County Court Civil Procedure Rules. The first two sub-rules of that paragraph state that:
(1) A party may in any pleading make inconsistent allegations of fact if the pleading makes it clear that the allegations are pleaded in the alternative.
(2) A party shall not in any pleading make any allegations of fact, or raise any new claim, inconsistent with any allegations made or claim raised in a previous pleading by that party.
27 I was not referred to any authority that supported the view that the proposed amendment was an inconsistent pleading. Third party proceedings are often framed on the basis that the defendant denies the plaintiff’s claims and pleads defences to it, but then seeks to claim relief in the alternative. A fair reading of the defendant’s proposed amended pleading suggests that it is of that character.
28 The third party notice already has claims in the alternative in contract and tort, although the relief claimed is for contribution.
29 The other point raised by the third party was whether the pleading is in the appropriate form. I noted in discussion that paragraph 14A rolls up allegations of breach of contract and tort. Rule 13.01, which is the basic Rule dealing with pleading, states in sub-rule 2:
“A pleading shall be divided into paragraphs numbered consecutively, and each allegation so far as practicable shall be contained in a separate paragraph.”
30 The claims in contract and tort are the subject of separate paragraphs contained elsewhere in the Statement of Claim, which pleads them in the traditional manner. Paragraph 14A contains the pleading which alleges both breach of the contract and breach of the duty care in tort. I consider, in the circumstances, that the pleading in paragraph 14A does not so depart from the requirements of the pleading rules as to make appropriate the refusal of the amendment.
31 The Court has a discretion whether to allow an amendment. This amendment has been sought late. It is true that a form of a pleading was served some months ago but, in reality, it has only been pressed by the summons dated 19 November 2012.
32 The trial is listed for next February. However, the existing Statement of Claim against the third party already raises claims in contract and tort, albeit that contribution, not damages, was sought. I consider in the circumstances that the late point at which the application is being made is not a reason in itself to refuse the amendment.
33 For those reasons, I allow the amendments sought by the defendant.
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