Council of the City of Bankstown v St George Air-Conditioning

[2001] NSWSC 128

CITATION:	Council of the City of Bankstown v St George Air-Conditioning [2001] NSWSC 128 revised - 6/06/2001
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 20197/98
HEARING DATE(S):	7 March 2001
JUDGMENT DATE:	9 March 2001
PARTIES :	Council of the City of Bankstown (Plaintiff) v St George Air-Conditioning (NSW) Pty Limited (First Defendant) Francesco De Francesco & Irene De Francesco t/as F & T Demolition Salvage Co (Second Defendants) Denning Constructions Pty Limited (Third Defendant) Curtin Bathgate & Somers Pty Limited (Fourth Defendant) H G Walter & Partners Pty Limited (Fifth Defendant) B C A Logic Pty Limited (Sixth Defendant) Grant Paynter (Cross-Defendant)
JUDGMENT OF:	Master Malpass

COUNSEL :	Mr B Hull (Plaintiff) Mr S Gregory (First Defendant) Mr B McManus (Second Defendants) Mr R Cavanagh (Third Defendant) Mr R Darke (Fourth Defendant) Mr S A Kerr (Sixth Defendant) Mr E.G.Romaniuk (Cross-Defendant)
SOLICITORS:	Malcolm Johns & Company (Plaintiff) Leitch Hasson Dent (First Defendant) Colin Biggers & Paisley (Second Defendants) Henry Davis York (Third Defendant) PricewaterhouseCoopers Legal (Fourth Defendant) Tress Cocks & Maddox (Sixth Defendant) Curwood & Partners (Cross-Defendant)
CATCHWORDS:	application for entry of consent judgment by two of six defendants - discretionary considerations - potential cross-claims for indemnity or contribution which will be defeated by the entry of judgment.
LEGISLATION CITED:	Law Reform (Miscellaneous Provisions) Act 1946, s 5 (1) (c). Supreme Court Rules 1970, Pt 40 r 1.
CASES CITED:	James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53.
DECISION:	See Paragraphs 19-20.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER MALPASS

FRIDAY 9 MARCH 2001
REVISED 6 JUNE 2001 (AS PER CORRECTION IN COURT 4 JUNE 2001)

20197 of 1998 COUNCIL OF THE CITY OF BANKSTOWN v ST GEORGE AIR-CONDITIONING (NSW) PTY LIMITED & ORS

JUDGMENT


1   The plaintiff is a local council. In these proceedings claims are made for damages (inter alia founded on breaches of contract and duty).

2   Presently, there are six defendants. Presently, there are four Cross-Claims.

3   The proceedings arise out of the performance of building work commenced to upgrade the air-conditioning system in the Council’s Civic Centre Administration Building (the building). All of the defendants had some involvement in relation to the building work.

4   The third defendant now wants to file a Cross-Claim (the proposed Fifth Cross-Claim). The first defendant now also wants to file a Cross-Claim (the proposed Sixth Cross-Claim). Both of the proposed Cross-Claims seek to propound a claim for indemnity or contribution (s 5 (1) (c) of the Law Reform (Miscellaneous Provisions) Act 1946 (the Act) ).

5   As the prescribed period for the filing of such Cross-Claims has long expired, both of these defendants now seek an extension of time to file their respective Cross-Claims.

6   The applications for leave to file these Cross-Claims were listed for hearing on the same day that applications were to be made by the fourth and sixth defendants for judgment on the claims brought against them by the plaintiff.

7 The applications for judgment were founded on agreements reached between the parties (on 21 March 2000). In each instance, Terms of Settlement had been signed on behalf of the parties. The Terms of Settlement provided that by consent and without admission of liability there was to be judgment for the respective defendant against the plaintiff. The applications for judgment were made pursuant to Part 40 rule 1 of the Supreme Court Rules 1970.

8 Rule 1 confers a discretionary power upon the court. The discretion is exercised having regard to the relevant circumstances of the particular case before the court and so that justice is best served between the parties. The applicant for relief bears the onus of satisfying the court that the relief sought should be granted.

9   At the outset, there was consensus that the court should first deal with the applications for judgment. It was contemplated that the applications for leave be stood over for determination by a Registrar.

10   Before proceeding further, mention needs to be made of certain other matters. Neither the first nor third defendant have present instructions to proceed with bringing a Cross-Claim for indemnity or contribution against the sixth defendant. The first defendant only wants to press for leave to bring such a Cross-Claim against the fourth defendant. The plaintiff proposes to further amend the Statement of Claim. There has been agreement from most of the defendants as to the form of this document. In the present form neither the fourth or sixth defendants appear as a party. There is also to be an additional defendant.

11   All parties to the proceedings have had the opportunity to appear at the hearing and be heard on the applications. This course was taken (without objection) in the light of what has been said in James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53. In that case, there was dicta to the effect that the appellant had the status of being “directly interested” and a cross-claim was on foot at the time of the entry of judgment.

12   The plaintiff supports the applications. Otherwise, there has been general opposition to them. This opposition has also been founded on what was said in Seltsam . In that case, the court was concerned also with the provisions of s 5 (1) (c) of the Act. It was decided that the entry of a consent judgment would have the effect of defeating any Cross-Claim or potential Cross-Claim for indemnity or contribution against a defendant in whose favour a consent judgment was obtained. The rationale behind the majority decision need not be pursued in this case.

13   The relevant parties have chosen to enter into an agreement which involves the entry of judgment. It may be inferred that this was done for the legitimate purpose of defeating Cross-Claims. An agreement to bring the litigation to an end between the plaintiff and the two defendants could have been implemented in other ways (by release or otherwise) which would not have defeated Cross-Claims.

14   If judgment is not entered, the present agreements cannot be given effect to unless both defendants remain as parties to the proceedings. The enforceability of the agreements may be dependent upon effluxion of time. If the defendants remain as parties to these proceedings, without the entry of judgment, it seems inevitable that further costs will be incurred by the plaintiff and the two defendants. Public policy supports finality in litigation.

15   The court has been informed that the fire took place in July 1997. The proceedings have been on foot since 1 July 1998. There was then two defendants (including the first defendant). An Amended Statement of Claim was filed on 12 October 1999. It added all of the other existing defendants (including the fourth defendant). The prescribed time for the filing of Cross-Claims has well and truly passed.

16   In opposition to the applications, it is said that in the future further investigation and material may reveal the basis of a Cross-Claim and an entry of judgment will preclude such a Cross-Claim being brought. It was stressed that limitation periods are yet to expire.

17   There is a lack of evidence of actual prejudice. Whilst the only present possible prejudice to the applicants may be the incurring of further costs, there is a lack of satisfactory explanation as to why Cross-Claims which are yet to be brought have not been so far filed. There has been more than ample opportunity to investigate and to bring any Cross-Claim that a party genuinely wants to put forward. In the case of the sixth defendant, at present, there is no real possibility of any Cross-Claim being brought against it. The position of the fourth defendant is somewhat different. There is presently an application before the court. The court is not really in a position to form a view as to its prospects of success.

18   Any party proposing to bring a Cross-Claim in the future may not be without remedy. There is a possibility of having the judgment set aside. In the circumstances of this case, it seems to me, to be unrealistic to defer the entry of judgment simply to cater for a possibility that at some time in the unascertainable future a party may come to the view that it has a Cross-Claim which it then desires to propound.

19   In the case of the sixth defendant, I am satisfied that it has demonstrated an entitlement to the entry of judgment. In the case of the fourth defendant, I am not so presently satisfied. It seems to me that the first defendant should be given the opportunity to have its application determined and accordingly I consider that the application of the fourth defendant should at this stage be stood over. It seems to me that the nature of the case requires that the first defendant bear any further costs incurred in that part of the proceedings which relates to the claim brought by the plaintiff against the fourth defendant and which are necessitated by deferral of the entry of judgment.

20   The applications for leave are to be referred to a Registrar for determination on a date to be fixed. I reserve the question of costs. The parties are to prepare short minutes.
**********

Last Modified: 06/07/2001