Butler v R P Wilson Pty Ltd
[2004] TASSC 133
•15 November 2004
[2004] TASSC 133
CITATION: Butler v R P Wilson Pty Ltd [2004] TASSC 133
PARTIES: BUTLER, Peter Neville
v
R P WILSON PTY LTD trading as
DOCKSIDE PHYSIOTHERAPY CLINIC
WILKINSON, Jillian Mary (Third Party)
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 2015/1997
DELIVERED ON: 15 November 2004
DELIVERED AT: Hobart
HEARING DATES: 13 October 2004
JUDGMENT OF: Blow J
CATCHWORDS:
Procedure – Supreme Court procedure – Tasmania – Practice under Rules of Court – Parties – Third party procedure – Defendant's application for judgment against third party – Before determination of plaintiff's claim.
Supreme Court Rules 2000 (Tas), r208(2)(a).
General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6; Gloucestershire Banking Co Ltd v Phillipps (1884) 12 QBD 533, distinguished.
Aust Dig Procedure [271]
REPRESENTATION:
Counsel:
Defendant: P W Tree SC
Third Party: A J Abbott and M R Chambers
Solicitors:
Defendant: Simmons Wolfhagen
Third Party: Shields Heritage
Judgment Number: [2004] TASSC 133
Number of Paragraphs: 12
Serial No 133/2004
File No 2015/1997
PETER NEVILLE BUTLER v R P WILSON PTY LTD trading as DOCKSIDE PHYSIOTHERAPY CLINIC; JILLIAN MARY WILKINSON (Third Party)
REASONS FOR JUDGMENT BLOW J
15 November 2004
The defendant has applied for directions in the third party proceedings herein. In that context, it has applied for judgment to be entered for it against the third party, relying on the Supreme Court Rules 2000, r208(2)(a). The proceedings between the plaintiff and the defendant have not been determined. However the defendant contends that that is not an obstacle to the giving of the judgment it seeks against the third party. The third party contends otherwise.
In this action the plaintiff is seeking damages in respect of personal injuries said to have been suffered by him as a result of the defendant's negligence and/or breach of contract. According to his statement of claim, he was injured in a motor vehicle accident in April 1994; entered into an agreement with the defendant in December 1994 for the provision by the defendant of supervised physiotherapy and a fitness program; and suffered an injury to his left arm and shoulder in January 1995 while exercising on one or more arm exercise machines at premises of the defendant known as "Dockside". He brought this action in October 1997. The defendant did not institute the third party proceedings herein until March 2003. According to its third party notice, it contends that negligence on the part of the third party was the sole cause of the plaintiff's damage. It is common ground that the third party was working for the defendant at all material times as a physiotherapist. The defendant contends that she was an independent contractor. She contends that she was an employee.
An appearance was filed on behalf of the defendant by its then solicitors, Messrs Murdoch Clarke Cosgrove & Drake, in December 1997. In March 1998 that firm learned that the third party had a policy of professional indemnity insurance. Her insurers instructed a Melbourne legal firm, Messrs Tress Cocks & Maddox. The defendant contends that correspondence between that firm and the defendant's solicitors resulted in an agreement to the effect that the defendant would be required to contribute only 25 per cent of any damages or costs award or settlement in favour of the plaintiff; that the defendant would pay the costs of defending the action to 28 January 1999; that the defendant and the third party would each bear their own costs of negotiating that compromise; that the ongoing costs of defending the action would be apportioned 75:25; that Murdoch Clarke (as that firm had become) would act as the Tasmanian agent of Tress Cocks & Maddox; and that the agency relationship would not be disclosed to the plaintiff's solicitor. Those arrangements were made in correspondence which concluded on 17 February 1999. There was no need for the defendant to institute third party proceedings because those arrangements were in place.
The third party's insurer was a member of the HIH group of companies. It became insolvent. The third party now contends that the agreement reached in the correspondence between the solicitors, if binding on anyone, was binding only on her insurer, and not on her. The defendant contends that it was and is binding on her.
The defendant is seeking an order for judgment against the third party in the following terms:
"1That upon either:-
(a) the entry of any final judgment for the plaintiff against the defendant in this action ('the judgment'); or
(b) the defendant filing an affidavit verifying the terms upon which this action has settled as between the plaintiff and the defendant ('the settlement');
the defendant be at liberty to enter judgment against the third party:-
(i)in a sum being 75 per cent of any damages awarded to the plaintiff under the judgment, or agreed to be paid to the plaintiff pursuant to the settlement; and
(ii)that the third party pay the defendant 75 per cent of any costs which the defendant has either been ordered to pay the plaintiff under the judgment, or agreed to pay the plaintiff pursuant to the settlement."
Mr Tree SC submitted that the Court has power to make the order sought pursuant to r208, which includes the following:
"208 ¾ (1) If a third party files a notice of appearance, the third party, a plaintiff or a defendant may apply to a judge for directions.
(2) On an application for directions, the judge may ¾
(a) if the liability of the third party to the defendant giving the notice is established, give judgment for the defendant; or
(b) order that any claim or question stated in the third party notice be tried in a particular manner; or
(c) grant the third party leave to defend the action, either alone or jointly with any defendant, or to attend and take part at the trial; or
(d) make any orders and give any directions ¾
(i)as are necessary to ensure that all questions in the action are determined; and
(ii)as to the extent to which the third party is to be bound by any judgment or decision in the action.
(3) Any directions given under this rule may be ¾
(a) given either before or after any judgment has been entered or given for the plaintiff against the defendant; and
(b) varied or rescinded."
Clearly the power conferred by r208(2)(a) to give judgment for a defendant against a third party without a trial of the issues between the defendant and the third party is akin to the power to grant summary judgment for a plaintiff against a defendant under r358. No doubt there are cases in which judgment should be granted under r208(2)(a) after the liability of a defendant to a plaintiff has been determined. Since r202(1) permits the third party procedure to be used by a defendant to claim not just contribution or indemnity, but "any relief or remedy relating to, or connected with, the original subject matter of the action", there will no doubt also be cases in which it is appropriate for judgment to be given under r208(2)(a) in respect of a claim when summary judgment would have been given under r358 if that claim had been pursued in a separate action. The giving of judgment under r208(2)(a) is more clearly appropriate in those situations. The difficulty that the defendant faces in the present situation is that the judgment that it seeks is one for contribution that is contingent upon the happening of some future event ¾either the entry of final judgment for the plaintiff against the defendant or the occurrence of some form of settlement between the plaintiff and the defendant.
Mr Tree SC relied on General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6. That case establishes that an agreement for the compromise of an action may be summarily enforced by an application in the action, provided justice can be done under the summary procedure, and that it is not necessary in such a situation for a second action to be instituted in order to enforce the compromise. In my view that case is distinguishable because it concerns a compromise between a plaintiff and a defendant. Here, it is alleged that there was a compromise between a defendant and a person who was subsequently joined as a third party. The critical question is not whether the compromise can be enforced in the third party proceedings, but whether, given that the alleged agreement is one for a contribution, it would be appropriate for orders to be made prior to the plaintiff obtaining judgment against the defendant, or otherwise settling with the defendant.
Although provisions like r208(2)(a) are by no means uncommon, there do not appear to be any reported cases dealing with the present sort of situation. Counsel referred me to Gloucestershire Banking Co Ltd v Phillipps (1884) 12 QBD 533 in which judgment for the defendants against the third party was entered summarily under the then English equivalent of r208(2)(a). The third party was a married woman. The defendants were the executors of a guarantor who had guaranteed the payment of her overdraft debt. The bank had obtained judgment against the defendants. When they applied for third party directions, the third party declined to state any defence. Lord Coleridge CJ was not satisfied that there was any question proper to be tried as to the liability of the third party, and ordered judgment against her. That case is distinguishable from the present because judgment had been given for the plaintiff against the defendants.
If judgment were to be entered for the defendant against the third party in the terms sought, and if the plaintiff and the defendant were subsequently to reach a compromise, the third party would be bound by that compromise, however generous to the plaintiff it might be. Mr Abbott submitted on behalf of the third party that, if the correspondence between the solicitors resulted in an agreement that is binding on the third party (which is not conceded), any such agreement must include an implied term as to the reasonableness of any settlement between the plaintiff and the defendant. In my view the third party has strong grounds for arguing that the implication of such a term in the alleged agreement would be necessary in order to give that agreement business efficacy. See BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. Whatever view I might take as to the correctness of the defendant's arguments as to other points, it would therefore clearly be inappropriate for me to make an order for summary judgment that could be enforced in the event of the plaintiff's claim against the defendant being decided or resolved otherwise than by trial.
Should I therefore proceed to consider making an order for judgment that could operate only in the event of the plaintiff taking his action to trial and succeeding? I think not. I would need to consider submissions as to the nature of the power conferred by r208(2)(a), the question of whether an agreement was reached, the question of whether any such agreement was only one between insurers, the question of the apparent or ostensible authority of the Melbourne firm to make a contract on behalf of the third party, and possibly other difficult questions. The vast majority of personal injuries actions are settled before trial. A judgment in the third party proceedings whose operation was contingent upon the plaintiff's claim being decided by trial might be futile, or might encourage the defendant not to settle with the plaintiff but to take the matter to trial. The wording of r208(2)(a) suggests that it confers a discretionary power. Because of the factors I have referred to, I think it preferable not to exercise that power, even if I have it in the present situation, which I might not.
For these reasons the application for judgment, contained in par1 of the interlocutory application, is refused. I will hear counsel as to what alternative directions should be given in the third party proceedings.
0
1
1