Burke v Tabe and Lees Pty Ltd
[2000] TASSC 104
•28 July 2000
[2000] TASSC 104
CITATION: Burke v Tabe & Lees Pty Ltd & Ors [2000] TASSC 104
PARTIES: BURKE, Anthony J
BURKE, Sonia A
v
TABE & LEES PTY LTD
OLDER, David Allan
OLDER, Maxine Joy
BISHOP, Steven Paul
WEST TAMAR COUNCIL
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: M15/1999
DELIVERED ON: 28 July 2000
DELIVERED AT: Hobart
HEARING DATES: 14 April, 21 July 2000
JUDGMENT OF: Master S J Holt
CATCHWORDS:
Limitation of Actions - Extension of time - Arguable case - General prejudice - Explanation for delay - Exercise of discretion.
Wrongs Act 1954 (Tas), s3(6).
Crockett v Roberts & Ors 29/1992; Williams v The Minister, Aboriginal Lands Rights Act 19833 & Anor (1994) 35 NSWLR 497; Butt v Comalco Aluminium (Bell Bay) Ltd B9/1996; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, referred to.
Aust Dig Limitation of Actions [55]
Negligence - Municipal Council - House built in landslip area - Damage suffered by subsequent owner - Failure to warn.
Armidale City Council v Alec Finlayson Pty Ltd (1999) 104 LGRA 9; Shaddock v City of Parramatta (1980 - 1981) 150 CLR 225; Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1, referred to.
Aust Dig Negligence [38]
REPRESENTATION:
Counsel:
Applicants: P E Barker
Respondents: R W Pearce
Solicitors:
Applicants: Butler McIntyre & Butler
Respondents: Douglas & Collins
Judgment Number: [2000] TASSC 104
Number of Paragraphs: 14
Serial No 104/2000
File No M15/1999
ANTHONY J BURKE, SONIA A BURKE v TABE & LEES PTY LTD,
DAVID ALLAN OLDER, MAXINE JOY OLDER,
STEVEN PAUL BISHOP, WEST TAMAR COUNCIL
REASONS FOR JUDGMENT THE MASTER
28 July 2000
The fourth-named defendant in an action commenced in August 1994, has applied for an extension of time to institute third party proceedings against the West Tamar Council ("the Council"). I was told by counsel for the parties that the writ was served on the fourth-named defendant on 23 September 1994.
The Wrongs Act 1954 ("the Act"), s3 provides in its relevant part:
"3 ¾ (1) Where damage is suffered by a person as the result of a wrongful act ¾
…
(c) a person who is liable in respect of that damage may recover contribution from any other person who is, or would, if sued by the person by whom the damage was suffered at the time when the cause of action arose, have been, liable in respect of the same damage but so that no person is entitled to recover contribution under this section from a person who is entitled to be indemnified by him in respect of the liability in respect of which the contribution is payable;
…
(5) Notwithstanding any provisions of any enactment requiring notice of damage or injury to be given, or notice of an intended action to be given, or limiting the time within which an action may be brought, proceedings for contribution under this section may, although notice of damage or injury, or notice of an intended action, as the case may be, has not been given, or the time so limited has expired, be commenced at any time within the period of twelve months (or within such extended period as may be allowed pursuant to subsection (6) of this section) after the writ in the original action was served on the person seeking to recover contribution.
(6) A judge, magistrate or any other person constituting or presiding over a court of competent jurisdiction, on the application of a person seeking to recover contribution under this section, may, in his discretion and subject to such conditions (if any) as he may impose, extend the period within which proceedings for recovery of contribution shall be commenced, notwithstanding that the period prescribed in subsection (5) of this section may have expired, if he is satisfied that the person from whom contribution is sought to be recovered will not be prejudiced in his defence by reason of the extension."
Just as is the case when dealing with extension of time applications under the Limitation Act 1974, s5(3) and the Workers Rehabilitation and Compensation Act 1988, s135(2), the discretion under the Act is to be exercised in accordance with the requirements of the justice of the case. Crockett v Roberts & Ors 29/1992. Of course, no entitlement to even call for an exercise of the discretion will arise under the Act, s3(6) unless the court "is satisfied that the person from whom contribution is sought to be recovered will not be prejudiced in his defence by reason of the extension".
Firstly, it is for the fourth-named defendant to demonstrate in an appropriately preliminary way the apparent viability of the claim. If this is not done, then allowing the claim to proceed would be to condone the harassment of the person against whom the claim is made, being a person otherwise protected by time bar. This would be neither just nor reasonable. Williams v The Minister, Aboriginal Lands Rights Act 1983 & Anor (1994) 35 NSWLR 497.
Has the fourth-named defendant demonstrated the apparent viability of a claim against the Council? That is to say, has the fourth-named defendant shown that had the plaintiffs proceeded against the Council at the time their cause of action arose, they might have succeeded? I commence with a consideration of the plaintiffs' statement of claim. The plaintiffs, husband and wife, assert that on 3 December 1990, they purchased a house at 82 Beach Road, Legana. The purchase was settled on 21 January 1991. The plaintiffs, at about the time of entering into the contract, were aware that a crack existed in the brickwork of the house and that a corner of the house had been underpinned. They allege that they were given information by the real estate agent and the vendors which led them to believe that despite these matters the house was structurally sound. They claim that they relied upon the information given to them in proceeding to complete the purchase. In fact, the house had been constructed on land which was subject to landslip. The land had been so identified by the Mines Department of Tasmania. In the particulars of special damage delivered by the plaintiffs, it is asserted that the structural condition of the house had deteriorated to such an extent by March 1993 that it was no longer habitable and had to be abandoned. It is claimed that the damage was so extensive as to render the house valueless. The plaintiffs have sued the real estate agent; the vendors, and their solicitor, the fourth-named defendant, who acted for them in settling the purchase. The complaint against the fourth-named defendant is that he negligently and in breach of his contractual obligations to the plaintiffs failed to inform them that it would be prudent to obtain advice about the structural integrity of the house prior to completing the contract.
There were several affidavits read into evidence on behalf of the fourth-named defendant in support of the extension of time application. In none of these was there information to the effect that the Council's predecessor, the Corporation of the Municipality of Beaconsfield, had been negligent or had acted in breach of its statutory duty in approving the subdivision of the land upon which the house was built; in approving the construction of the house or in the performance of its statutory functions relating to the construction process. I do not even have evidence that the Corporation of the Municipality of Beaconsfield approved the subdivision or the house construction. What is asserted is that the Council's predecessor had a duty to inform the plaintiffs that the house had been constructed on land subject to landslip, because it knew that that was the fact and had so advised in the past. The Corporation of the Municipality of Beaconsfield knew that the plaintiffs were prospective purchasers of the house because the plaintiffs, through their solicitor, the fourth-named defendant, requested a certificate pursuant to the Local Government Act 1962, s695. The evidence showed that the Corporation of the Municipality of Beaconsfield had had in its possession since at least the mid-1970s advisory maps supplied by the Department of Mines designating the land upon which the house was built as susceptible to landslip. The evidence shows that prior to the purchase by the plaintiffs, it had been the practice of the Corporation of the Municipality of Beaconsfield to advise prospective purchasers in the s695 certificates that the land at Beach Road, Legana was subject to landslip. That practice was abandoned in about 1987.
The relevant question in the s695 certificate was:
"Have you any and, if so, what rights in or powers over the land under s431A"
The Local Government Act, s431A provided that land may be declared by the Governor by Order in Council made on the recommendation of the Director of Mines as "A landslip" or "B landslip". Where land was declared "A landslip", only marine board buildings or insubstantial buildings such as sheds could be erected on the land. Where the land had been declared "B landslip", buildings, other than insubstantial buildings or marine board buildings, could only be erected on the land in compliance with special restrictions and precautions imposed by building regulations made under the Local Government Act. It was common ground that the land in question in this case was not the subject of a declaration under s431A.
In the s695 certificate supplied to the vendors when they purchased the property in 1986, the relevant question was answered:
"Yes 'A landslip'. Refer to Mines Department"
This answer was incorrect because, as I have said, no declaration had been made under s431A. Nonetheless, the information served as a warning to the prospective purchaser. In the s695 certificate supplied to the fourth-named defendant when the plaintiffs purchased the land, the answer given was simply "No".
If the Corporation of the Municipality of Beaconsfield had approved the subdivision and had approved the construction of the house, the fourth-named defendant would clearly have an arguable case that the Council had contributed to the creation of the hazard and so, at the very least, had a duty to warn prospective purchasers of the risk, eg Armidale City Council v Alec Finlayson Pty Ltd (1999) 104 LGRA 9. I have no evidence that this is the case, however. The fourth-named defendant in his affidavit in support of the application, has not even asserted that he or his clients were influenced to believe by the contents of the s695 certificate that the house was suitable for residential use and structurally sound. He has not asserted that he knew of the pre-1987 practice of the Council in relation to s695 certificates and was influenced by it. (Shaddock v City of Parramatta (1980 - 1981) 150 CLR 225). It is not, however, necessarily fatal to an extension of time application that insufficient evidence has been adduced to establish a prima facie case. Butt v Comalco Aluminium (Bell Bay) Ltd B9/1996.
As a matter of law, a municipal council may be liable, depending upon the circumstances of the case, for failure to advise or warn a purchaser about a feature of property known to it, but not otherwise readily apparent, which may affect its value or suitability for a particular purpose. I refer in particular to the observations of Priestly JA in Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1 at 5 - 9, and particularly at 8, where he said:
"It would not now be difficult for Lord Atkin to find in the English (and Australian) authorities statements of general application defining the relations between parties that give rise to a duty of care. I will mention only a few of the best known examples.
In England, Anns v Merton London Borough Council [1978] AC 728 laid down a general approach, which I call for short foreseeability subject to policy. In Australia, in one line of authority, the High Court examined the idea of general reliance, a high point of which was Bryan v Maloney (1995) 182 CLR 609. Another line of authority elaborated the idea of 'proximity' prominent in Lord Atkin's speech in Donoghue v Stevenson. This concept, in a refined form, was taken, for a time, to be the touchstone of a duty of care: see Gala v Preston (1991) 172 CLR 243, and a note of the sequence of cases in Northern Territory of Australia v Deutscher Klub (Darwin) (1994) ATR [81-275] 61,328 at 61,344.
The modern abundance of authority would not however make Lord Atkin much wiser. The statements of general application have relied on different ideas. In Bardsley v Batemans Bay Bowling Club (Court of Appeal, unreported, 25 November 1996) Mahoney JA described the difficulties in the law of negligence as it stood in November 1996. By that time, the Anns approach had been abandoned in Australia (Sutherland Shire Council v Heyman (1985) 157 CLR 424) and in England (see eg Murphy v Brentwood District Council [1991] AC 398). Since 1996 two cases in the High Court, Pyrenees Shire Council v Day (1998) 72 ALJR 152 and Romeo v Conservation Commission of the Northern Territory (1998) 72 ALJR 208 appear to have undermined both general reliance and proximity as possible criteria. I think it can now be said that no single formulation has gained general acceptance other than what Lord Atkin said (as set out at page 3 above) which for reasons earlier given I think resolves into the question, 'is the contemplated relationship so close that the duty arises?' (page 4 above). As Lord Atkin foresaw, cases continually arise where it is difficult to determine how that question should be answered. Of these cases it has been said, in the ninth edition of Fleming, The Law of Torts (1998), at 151: 'No generalisation can solve the problem upon what basis the courts will hold that a duty of care exists.'
Courts nevertheless decide, in case after case, whether or not a duty of care exists in new situations. Consideration of all the cases of authority to date leads me to the view that the position in Australia, at least in May 1998, has returned to (or recognised the continuing applicability of) what it was immediately after the decision in Donoghue v Stevenson; that is, that the courts make decisions by first asking the question 'is the relationship between plaintiff and defendant in the instant case so close that a duty arose?' and then answering 'yes' or 'no' in light of the court's own experience-based judgment. It is the difference in the experience base of each deciding judge and the further differences of view judges inevitably have about how much of that experience base should be taken into account in a particular case that lead to Fleming's statement on the previous page. I think that what he says is true, except that I do not think what he is describing is a problem to be solved; rather that it is a situation to be recognised."
I conclude that it is arguable, notwithstanding the paucity of information available to me, that the Corporation of the Municipality of Beaconsfield, knowing that the land to be purchased was susceptible to landslip, had a duty to warn the plaintiffs of the potential hazard. It would be reasonable for the plaintiffs to contend at trial that with such a warning they would have commissioned a check of the structural integrity of the house and thereby have been afforded an opportunity to avoid or mitigate the loss which they subsequently suffered. On the evidence before me, no such warning was given. The potential liability of the Corporation of the Municipality of Beaconsfield has now transferred to the West Tamar Council. Local Government Act 1993, s13. The claim against the prospective third party is, in my opinion, viable.
No assertion was made that any specific identifiable prejudice would be suffered by the Council if the extension of time sought is granted. It was submitted, however, that I should have regard to the general prejudice which ordinarily follows delay, particularly in light of the length of the delay. In this case, the Council's breach, if any, occurred in late 1990 or early 1991, the damage is alleged to have been suffered by March 1993, and the writ was served in September 1994. The application to join the Council was not made until March 1999. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, McHugh J said, at 551 and following:
"Prejudice may exist without the parties or anybody else realising that it exists. … So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now 'knowing' that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. ...
The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.
…
The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. … as time goes by, relevant evidence is likely to be lost. …"
I have regard to these matters in considering the application.
In deciding whether or not to exercise the discretion to grant an extension of time, I must also have regard to the explanation for delay. The fourth-named defendant said in his affidavit that he had professional indemnity insurance and so left the conduct of the litigation up to his insurers and the solicitors engaged by those insurers. The evidence is that the solicitor having carriage of the matter had given some thought to joining the Council in 1995, but had formed the view that a claim against the Council seemed "a bit remote", and gave no advice about the matter to his client. It appears that no further consideration was given to the prospective liability of the Council until a new solicitor took over carriage of the file in about 1998. Regardless of whether or not the client of the solicitors was the fourth-named defendant or his insurer, I do not consider that the client is without responsibility in relation to the delay. A house had been built in the municipal area of the Council on land subject to landslip and the house had structurally failed, resulting in the plaintiffs' claim against the fourth-named defendant. There was sufficient in the circumstances of the case for the client to accept some responsibility in relation to the matter of whether or not the Council should be made a party, even if the matter had not been specifically adverted to by the solicitors in issuing advice or recommendations.
Taking into account the significant length of the delay and that material prejudice may thereby have resulted, I am not satisfied, in the words of the Act, s3(6) "… that the person from whom contribution is sought to be recovered will not be prejudiced in his defence by reason of the extension". In fact, it is difficult to imagine, having regard to what was said in Brisbane South Regional Health Authority v Taylor (supra) many classes of cases in which an applicant might be able to satisfy the no material prejudice prerequisite when contribution proceedings are sought to be instituted after a very lengthy period of delay, against a person not already a party to the proceedings. In any event, taking into account my finding that the explanation for delay does not entirely free the fourth-named defendant or his insurer of responsibility for the delay, I am not persuaded that the justice of the case would require the extension. The application will be dismissed.
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