Bilfinger Berger Services (Australia) Pty Ltd v Whitehorse

[2010] VCC 1433

IN THE COUNTY COURT OF VICTORIA Revised

(Not) Restricted

AT MELBOURNE
COMMERCIAL LIST

GENERAL DIVISION

Case No. CI-10-00796

BILFINGER BERGER SERVICES	Plaintiff
(AUSTRALIA) PTY LTD
v.
WHITEHORSE TRUCKS PTY LTD	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	22 October 2010
DATE OF JUDGMENT:	22 October 2010 (revised 25 October 2010)
CASE MAY BE CITED AS:	Bilfinger Berger Services (Australia) Pty Ltd v. Whitehorse Trucks Pty Ltd
MEDIUM NEUTRAL CITATION:	[2010] VCC 1433

REASONS FOR JUDGMENT

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Catchwords:  Practice and procedure – Claim in contract for economic loss arising
from allegedly faulty design and manufacture of truck trailers – Pleading
by the defendant that the plaintiff and a third party (the defendant’s
specialist sub-contractor) were concurrent wrongdoers – Application by
plaintiff to strike out relevant pleading – Whether the plaintiff’s claim
arose out of “a failure to take reasonable care” – Section 24AF Wrongs
Act 1958.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A. Thomas	Norton Rose
For the Defendant	Mr M. Roberts	Moray & Agnew
For the Third Party	Ms C. Bettenay	Wotton & Kearney
HIS HONOUR:

1           The plaintiff makes application to strike out certain paragraphs in the defence and counterclaim by which the defendant alleges contributory negligence on the part of the plaintiff and liability on the part of a third party for some of the plaintiff’s loss, and

in respect of which third party proceedings have now been instituted. The plaintiff says that the defendant could not succeed in establishing at trial that any liability it may have to the plaintiff should be subject to the proportionate liability provisions of

the Wrongs Act, either in respect of the alleged contributory negligence or the actions
of the third party now joined to the proceeding.

2

The plaintiff’s claim against the defendant is a contractual claim. The plaintiff engaged hoists. The defendant entered into an agreement with the third party, which was a specialist sub-contractor in the manufacture of tipper bodies. The plaintiff alleges that the trucks were to be used for the purpose of the transportation of fly ash at a power station and alleges that these facts were made known in discussions between the plaintiff and the defendant. The defendant, in its defence and counterclaim, alleges that there were direct discussions between the plaintiff and the third party in relation to the plaintiff’s specific requirements for the truck bodies.

3           Apparently, the tipper body on one truck detached from the trailer and, in respect of the second truck, it was found upon examination that the rear hinges of the tipper body were cracked and about to fail. As a consequence, the two trucks were removed from service, and damages are claimed by the plaintiff against the defendant for the costs of repairs, the hire of replacement trucks and other consequential losses.

4           The plaintiff’s claim alleges the breach of what is said to be an express term of the agreement between the plaintiff and the defendant that the tipper body of the trucks would have a volumetric carrying capacity of 32 cubic metres. There is an allegation that this term of the agreement was breached, as the trucks did not have a volumetric carrying capacity of 32 cubic metres. This appears to be a pure contract claim, although no specific loss seems to be claimed as flowing from this breach.

5           The other allegations made by the plaintiff are that the problems with the detachment of the tipper body and the cracked hinges on the second vehicle arose as a result of breaches of the defendant’s obligations to supply vehicles of merchantable quality, that the trucks be reasonably fit for the purpose for which they were required and that they be of use to or benefit the plaintiff. The statement of claim alleges that the failure in the tipper body of one vehicle and the cracking of the hinges of the second vehicle arose from defective design and manufacture of the rear pivot assembly and/or the sub-chassis of the trailer of each truck.

6           The critical matter for decision in the present application is whether an argument by the defendant that the plaintiff’s claim could be characterised as “arising from a failure to take reasonable care” for the purposes of s.24AF of the Wrongs Act would have any prospect of success at the trial. The defendant alleges that the plaintiff itself must bear some responsibility for the damages it alleges it has suffered as a result of any breach of obligation by the defendant, in that

a.	it did not properly maintain the vehicles;
b.	it did not advise the defendant as to the purpose for which the trucks would be used;
c.	in operating the trucks, it used a water flushing process which was not appropriate and which may have contributed to the failure; and
d.	for the defects to have occurred in the vehicles, it is likely that some inappropriate force had been used by the operators of the trucks.

7           In relation to the third party, the defendant says that there were circumstances which may give rise to a duty of care owed by the third party to the plaintiff separate and additional to its sub-contract obligations to the defendant as the principal contractor. This duty allegedly arose as a result of discussions between the parties, and in particular, direct meetings between the plaintiff and the third party in which the plaintiff informed the third party of its specific requirements.

8           It is necessary, in considering the provisions of the Wrongs Act to take account of a number of recent decisions of Superior Courts which have made it clear that the scope of the legislative provisions are to be interpreted widely and are not to be constrained by the actual pleading of causes of action by a plaintiff against a defendant. Although claims made by plaintiffs may be pleaded in contract, the legislation itself makes clear that this is not the definitive factor, but rather the nature of the claim itself. What is critical is whether the plaintiff’s claim arises from a failure by the defendant to take reasonable care.

9           I will refer briefly to a number of the authorities:

a.	In Dartberg Pty Ltd v Wealthcare Financial Planning [2007] FCA 1216. Middleton J considered whether a claim for economic loss arising in the context of advice given was covered by the relevant legislative provisions. The test stated by His Honour in paragraph 28 was whether the Court “can conclude that the claims brought against the respondents arise out of a failure to take reasonable care in the sense that they have a close association with or are incidental to a failure to take reasonable care or they spring out of or have their origin in a failure to take reasonable care”;
b.	In the Owners Strata Plan v Rookfield Motorplex Ltd [2010] NSWSC 360, McDougall J considered a claim against a builder in respect of alleged defective work in the construction of strata title developments. The builder alleged that its sub-contractors were concurrent wrongdoers as they were “responsible for various of the acts or omissions on which the plaintiffs rely as having caused their loss or damage”. McDougall J referred to the need for there to be appropriate facts to establish that the sub-contractors would owe a separate actionable duty to the plaintiffs as owners. McDougall J was not prepared to find that the amendments proposed to make these claims by the defendant to raise the issue of concurrent wrongdoing were “hopeless or doomed to fail”;
c.	In Solak v Bank of Western Australia Ltd [2009] VSC 82, Pagone J considered a claim arising out of a mortgage alleged to be a forgery. The defendant, Bank West, had claims against its mortgage brokers, alleging that they had not

followed procedures set out in contracts between Bank West and the brokers,
and specifically, had not obtained appropriate signature identification at the
time the mortgage documents were executed. At paragraph 35, Pagone J
said, “Bank West’s claim for indemnity based upon a failure to sight original
documents (that is, a breach of contract) may aptly be described as a failure

to take reasonable care for the purposes of the apportionment provisions”;

d. In Reinhold v New South Wales Lotteries Corporation [2008] NSWSC 187, Barrett J considered a claim by the disgruntled holder of a lottery ticket against the newsagents who had sold him the ticket and the body responsible for the lotteries, that his ticket had been wrongly cancelled. Although the claims were principally in contract, against the newsagent as the seller of the ticket and against the lottery on whose behalf the newsagent had acted as agent, Barrett J held that the circumstances of that case enlivened the concurrent wrongdoer provisions of the New South Wales legislation. Barrett J said at paragraph 26 that, “on the findings actually made, however, there was a breach of a contractual term because of actions entailing want of care rather than intention to breach or knowing breach”.

10         In relation to the present case, the critical pleading against the defendant relates to the design and manufacture of the rear pivot assembly and sub-chassis of the trailer. It is in respect of that design and manufacture, it is alleged the trailer was not of merchantable quality or was not fit for the purpose for which it was required.

11         In my view, it is probable that at the trial of this matter, the critical evidence in the case will revolve around whether the actions of the defendant in designing and manufacturing the trailers were appropriate in the circumstances. Inevitably, the actions of the defendant’s sub-contractor, the third party, will be examined as being the responsibility of the defendant as the principal contractor. This will involve an evaluation of acts and omissions of the defendant through its sub-contractor which the plaintiff will rely upon as having caused it loss and damage. There will, no doubt, be expert evidence of these matters and reference to appropriate industry standards, which designers and manufacturers in the position of the defendant, would be required to meet in a case such as this.

12         In relation to the allegations of contributory negligence, other factual issues will arise. It is difficult at present, without further particularisation of those matters to determine the extent of those issues, but it seems reasonably clear that they will involve an

examination of whether the acts or omissions of the plaintiff have contributed to the loss and damage claimed by it. The High Court in Astley v Austrust Ltd (1999) 197 CLR 1 determined that contributory negligence was not a defence in that case to a contractual claim and could not give rise to a reduction in the defendant’s liability.

However, different issues arise under the present legislation which involve an examination of the acts and omissions giving rise to the loss and damage claimed and whether they arise from a failure to take reasonable care.

13         The plaintiff has a difficult task to succeed in the present application because the onus upon it is a very stringent one. I am not prepared to find that the defendant’s pleading, both in respect of the allegation of contributory negligence against the

plaintiff and the allegation against the third party are hopeless claims that could not
succeed and therefore entitle the Court to make orders on the basis that both the
plaintiff and the third party were concurrent wrongdoers for the purpose of the Act.

14         In the circumstances, the plaintiff’s application will be dismissed.

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Certificate

I certify that these 5 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 22 October 2010 and revised on 25 October 2010.

Dated: 25 October 2010

Caroline Dawes

Associate to His Honour Judge Anderson