Fudlovski v JGC Accounting & Financial Services Pty Ltd [No 2] - [2013] WASC 301

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: FUDLOVSKI -v- JGC ACCOUNTING & FINANCIAL SERVICES PTY LTD [No 2] [2013] WASC 301

CORAM: KENNETH MARTIN J

HEARD: 5 JULY 2013

DELIVERED : 16 AUGUST 2013

FILE NO/S: CIV 2239 of 2012

BETWEEN: NIKOLA FUDLOVSKI
First Plaintiff
ROSEMARY FUDLOVSKI
Second Plaintiff
FUDLOVSKI INVESTMENTS PTY LTD
Third Plaintiff
BLUECHIP ENTERPRISES PTY LTD
Fourth Plaintiff
AND
JGC ACCOUNTING & FINANCIAL SERVICES PTY LTD
First Defendant
JUSTIN GEORGE COPPIN
Second Defendant
NIGEL WILLIAM HART
Third Party

Catchwords:

Torts - Negligence - Statutes and regulations - Scheme of proportionate liability in actions for economic loss or damage - Whether concurrent wrongdoer can seek contribution from another concurrent wrongdoer in third party action

Legislation:

Civil Liability Act 2002 (WA), pt 1F
Civil Liability Amendment Act 2003 (WA), s 14
Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1947 (WA), s 7
Rules of the Supreme Court 1971 (WA), O 19 r 6

Result:

Application granted

Category: A

Representation:

Counsel:

First Plaintiff                :     No appearance
Second Plaintiff            :     No appearance
Third Plaintiff               :     No appearance
Fourth Plaintiff             :     No appearance
First Defendant             :     Mr T J Carmady
Second Defendant         :     Mr T J Carmady
Third Party                   :     Mr H M Reynoldson

Solicitors:

First Plaintiff                :     Solomon Brothers
Second Plaintiff            :     Solomon Brothers
Third Plaintiff               :     Solomon Brothers
Fourth Plaintiff             :     Solomon Brothers
First Defendant             :     Williams & Hughes
Second Defendant         :     Williams & Hughes
Third Party                   :     Corser & Corser

Case(s) referred to in judgment(s):

Aquagenics Pty Ltd v Break O'Day Council [2010] TASFC 3
BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 2) [2008] FCA 1656
Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 87 ALJR 505
Woods v de Gabriele [2007] VSC 177

KENNETH MARTIN J: This is an application by the third party (Mr Hart) pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 19 r 6 seeking to have set aside third party proceedings which have been brought against him by the two defendants in this action. In short, Mr Hart contends the conceptual basis of the claim for contribution presently made against him by the defendants as an alleged concurrent wrongdoer, has been destroyed ‑ by pt 1F of the Civil Liability Act 2002 (WA) (the WA Act), which applies to tortious and other causes of action for economic loss that accrue after 1 December 2003. The defendants resist this core contention of Mr Hart.
It is convenient at the outset to reflect upon some observations about proportionate liability legislation in the recent High Court decision, Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 87 ALJR 505 (French CJ, Hayne & Kiefel JJ). These observations concern substantially equivalent provisions in pt 4 of the Civil Liability Act 2002 (NSW) (the NSW Act), dealing with proportionate liability and concurrent wrongdoers. The plurality observed of the legislation:
Part 4 of the Civil Liability Act represents a departure from the regime of liability for negligence at common law (solidary liability), where liability may be joint or several but each wrongdoer can be treated as the effective cause and therefore bear the whole loss. Under that regime, a plaintiff can sue and recover his or her loss from one wrongdoer, leaving that wrongdoer to seek contribution from other wrongdoers. The risk that any of the other wrongdoers will be insolvent or otherwise unable to meet a claim for contribution lies with the defendant sued. By comparison, under a regime of proportionate liability, liability is apportioned to each wrongdoer according to the court's assessment of the extent of their responsibility. It is therefore necessary that the plaintiff sue all of the wrongdoers in order to recover the total loss and, of course, the risk that one of them may be insolvent shifts to the plaintiff [10].
The history underlying the introduction around Australia of various regimes of proportionate liability legislation is also summarised by Finkelstein J in BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 2) [2008] FCA 1656 [4] - [5].
In Hunt & Hunt Lawyers, after referring to the final report of the inquiry into the law of joint and several liability completed by Professor Davis in 1995 - namely, Commonwealth of Australia, Inquiry into the Law of Joint and Several Liability: Report of Stage Two (1995) ‑ the plurality observed at [15], there was a 'clear connection' between the Davis Report and pt 4 of the NSW Act. The plurality further observed:
[16]The evident purpose of Pt 4 is to give effect to a legislative policy that, in respect of certain claims such as those for economic loss or property damage, a defendant should be liable only to the extent of his or her responsibility. The court has the task of apportioning that responsibility where the defendant can show that he or she is a 'concurrent wrongdoer', which is to say that there are others whose acts or omissions can be said to have caused the damage the plaintiff claims, whether jointly with the defendant's acts or independently of them. If there are other wrongdoers they, together with the defendant, are all concurrent wrongdoers.
[17]The purpose of Pt 4 is achieved by the limitation on a defendant's liability, effected by s 35(1)(b), which requires that the court award a plaintiff only the sum which represents the defendant's proportionate liability as determined by the court. For that purpose, it is not necessary that orders are able to be made against the other wrongdoers in the proceedings. Section 34(4) that it does not matter, for the purposes of Pt 4, that a concurrent wrongdoer is insolvent, is being wound up, has ceased to exist or has died. Thus under Pt 4 the risk of a failure to recover the whole of the claim is shifted to the plaintiff.
Section 34(4) and s 35(1)(b) of the NSW Act, as referred to by the High Court in Hunt & Hunt Lawyers, are substantially equivalent to s 5AJ(1) and s 5AK(1)(b) in the WA Act.
The observations as to underlying principle emerging from Hunt & Hunt Lawyers dictate the outcome on this application by Mr Hart.

Some common ground

The plaintiffs proceed against the defendants on a claim for damages based upon causes of action for (alleged) breach of contract, breach of a common law duty of care, breach of alleged fiduciary duties and breach of statutory obligations, including against pt V of the former Trade Practices Act 1974 (Cth).
On this application by Mr Hart it was accepted that the defendants' claim against him is not excluded from the reach of pt 1F of the WA Act. (See in that respect s 5AJ(2), which by reference to s 3A and s 4A, excludes certain classes of personal injury damages and also allows a limited degree of contracting out by written agreement.)
The contention of the defendants is that the claim for economic loss against them by the plaintiffs, meets a description of being an 'apportionable claim', for the purposes of s 5AI of pt 1F. The same is true of contentions the defendants wish to advance against Mr Hart, concerning his alleged responsibility for the plaintiffs' economic loss. The defendants wish to contend that loss is predominantly the responsibility of Mr Hart (by reason of acts of common law negligence in breach of an asserted duty of care owed to the plaintiffs). A description of 'concurrent wrongdoers' in pt 1F, is thus engaged, as between the defendants and the third party.

Key point in dispute

The fundamental issue of disagreement distils to the defendants' contention that notwithstanding pt 1F's introduction for Western Australia of principles of proportionate liability in certain causes of action arising post 1 December 2003, the defendants still retain a statutory right to contribution against Mr Hart, from s 7(1)(c) of the Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1947 (WA) (Law Reform Act), as amended.
It was contended by the defendants that their entitlement to pursue a statutory contribution from Mr Hart subsists until the time of an entry of judgment against the defendants in favour of the plaintiffs. That is so, it is put, notwithstanding that s 7(1) of the Law Reform Act was amended in 2003 by the Civil Liability Amendment Act 2003 (WA) s 14(2) so as to add its introductory preface concerning pt 1F. The amended section now reads as I have highlighted in bold, below. Section 7(1)(c) relevantly provides:
(1)Subject to Part 1F of the Civil Liability Act 2002, where damage is suffered by any person as the result of a tort ‑
…
(c)any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect of the same damage whether as a joint tortfeasor or otherwise but so that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability for which contribution is sought.
Still the defendants contend their rights of statutory contribution against other wrongdoers who can be shown to be liable to the plaintiff, in respect of the same damage sustained by the plaintiff, remain wholly unaffected by the amendments to s 7(1), the words in bold.
For reasons which follow below, I cannot accept that fundamental proposition. There remain, of course, scenarios where there will be concurrent wrongdoers in respect of tortious damage ‑ but which is not an 'economic loss or damage' situation. Such situations then fall outside the scenario of 'apportionable claim' (which is needed to enliven the operation of pt 1F). For those unaffected situations, the contribution and indemnity provisions of s 7 of the Law Reform Act still apply unconstrained. But Mr Hart's position is captured by the new regime – as I explain.
I set out below a number of the provisions from pt 1F of the WA Act which bear upon the core issue. Before that, however, I observe two relatively unusual features which manifest around the present application, namely:
(a)The plaintiffs have openly eschewed any claim against or any intention to proceed upon causes of action against Mr Hart, by pursuing any further or alternative claim to recover any of their economic loss and damage which they presently pursue wholly against the defendants. At a previous directions hearing Ms Retallack, who appeared as counsel on behalf of the plaintiffs, advised me of that position in very explicit terms. Hence, there is an avowed disinterest of the plaintiffs in any pursuit of Mr Hart as a defendant towards any component of their losses or for their damages, wholly pursued against the present defendants; and
(b)Mr Hart wishes to be removed as a third party from the action, notwithstanding, it is crystal clear the defendants, come what may, will be contending at a trial (in answer to the plaintiffs' claims against them) that the greater measure of tortious responsibility for the plaintiffs' losses (if not all responsibility) should be laid at the doorstep of Mr Hart.

Provisions of the Civil Liability Act 2002 (WA)

Within pt 1F of the WA legislation I note the provisions below. I will also note in parenthesis NSW counterpart provisions:
Part 1F - Proportionate liability
5AI.Terms used
In this Part -
apportionable claim means -
(a)a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care (but not including any claim arising out of personal injury); or
(b)a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 2010 based on misleading or deceptive conduct;
concurrent wrongdoer, in relation to a claim, means a person who is one of 2 or more persons whose act or omission caused, independently of each other or jointly, the damage or loss that is the subject of the claim.
5AJ.Application of Part
(1)For the purpose of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.
(2)This Part does not apply -
(a)to a claim for damages of a class that is excluded from the operation of this Part by section 3A; or
(b)to the extent that its operation is excluded, modified or restricted in accordance with section 4A.
(3)This Part applies only to causes of action that accrue after the commencement of the Civil Liability Amendment Act 2003 section 9.
(4)For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).
5AK.   Proportionate liability for apportionable claims [NSW Act s 35]
(1)In any proceedings involving an apportionable claim -
(a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and
(b)the court may give judgment against the defendant for not more than that amount.
(2)If proceedings involve both an apportionable claim and a claim that is not an apportionable claim -
(a)liability for the apportionable claim is to be determined in accordance with the provisions of this Part; and
(b)liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.
(3)In apportioning responsibility between defendants in the proceedings -
(a)the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and
(b)the court is to have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.
(4)This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.
(5)A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise.
5AKA.   Duty of defendant to inform plaintiff about concurrent wrongdoers [NSW Act s 35A]
(1)If -
(a)a defendant in proceedings involving an apportionable claim has reasonable grounds to believe that a particular person (the other person) may be a concurrent wrongdoer in relation to the claim;
(b)the defendant fails to give the plaintiff, as soon as practicable, written notice of the information that the defendant has about -
(i)the identity of the other person; and
(ii)the circumstances that may make the other person a concurrent wrongdoer in relation to the claim; and
(c)the plaintiff unnecessarily incurs costs in the proceedings because the plaintiff was not aware that the other person may be a concurrent wrongdoer in relation to the claim,
the court hearing the proceedings may order that the defendant pay all or any of those costs to the plaintiff.
(2)The court may order that the costs to be paid by the defendant be assessed on an indemnity basis or otherwise.
5AL.   Contribution not recoverable from defendant [NSW Act s 36]
(1)A defendant against whom judgment is given under this Part as a concurrent wrongdoer in relation to an apportionable claim -
(a)cannot be required to contribute to the damages or contribution recovered from another concurrent wrongdoer in respect of an apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant); and
(b)cannot be required to indemnify any such wrongdoer.
(2)Subsection (1) does not affect an agreement by a defendant to contribute to the damages recoverable from or to indemnify another concurrent wrongdoer in relation to an apportionable claim.
5AM. Subsequent actions [NSW Act s 37]
(1)In relation to an apportionable claim, nothing in this Part or any other law prevents a plaintiff who has previously recovered judgment against a concurrent wrongdoer for an apportionable part of any damage or loss from bringing another action against any other concurrent wrongdoer for that damage or loss.
(2)In any proceedings in respect of any action referred to in subsection (1) the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the damage or loss, would result in the plaintiff receiving compensation for damage or loss that is greater than the damage or loss actually sustained by the plaintiff.
5AN. Joining non‑party concurrent wrongdoers in the action [NSW Act s 38]
(1)The court may give leave for any one or more persons to be joined as defendants in proceedings involving an apportionable claim.
(2)The court is not to give leave for the joinder of any person who was a party to any previously concluded proceedings in respect of the apportionable claim.
5AO.   Part does not prevent other liability or operation of other Act [NSW Act s 39]
Nothing in this Part -
(a)prevents a person from being held vicariously liable for a proportion of any apportionable claim for which another person is liable;
(b)prevents a partner from being held severally liable with another partner for that proportion of an apportionable claim for which the other partner is liable; or
(c)affects the operation of any Act to the extent that it imposes several liability on any person in respect of what would otherwise be an apportionable claim.

The contention of the defendants

The defendants were served with the plaintiffs' statement of claim on or shortly after 20 July 2012. On 12 November 2012, the defendants filed a defence, but additionally, they also filed a notice to Mr Hart as an asserted third party, pursuant to RSC O 19 r 1(2). In part, this notice to Mr Hart read:
The defendants claim against you to be indemnified against the Plaintiffs' claim and the costs of the action, further or, alternatively, a contribution in relation to any amount that may be determined that the Defendants are liable to the Plaintiffs for, on the grounds that:
1.At all material times the third party (Mr Hart) was an authorised representative of SAS Global.
2.Mr Hart was engaged by the Plaintiffs to provide, for reward, financial planning and investment advice in relation to, inter alia, investments promoted by SAS Global … (SAS Global Advice).
3.In giving the SAS Global Advice Mr Hart owed the Plaintiffs a duty of care and/or a contractual obligation to exercise due care and skill.
4.In giving the SAS Global Advice Mr Hart breached the duty of care owed to the Plaintiffs and/or his contractual obligation to exercise due care and skill.
5.In reliance on the SAS Global Advice the Plaintiffs made the SAS Global Property Investments.
6.As a consequence of Mr Hart's breach of duty of care and/or breach of his contractual obligation to exercise due care and skill the Plaintiffs have suffered loss and damage.
On 29 January 2013, Mr Hart filed a summons to set aside the third party notice, pursuant to RSC O 19 r 6. His application sought an order that 'the third party notice by the defendants against the third party be set aside on the ground that it discloses no cause of action'.

The action was admitted to my CMC list for case management purposes on 18 February 2013.
On 12 March 2013, the plaintiffs filed a minute of amended statement of claim. The amendment introduced the fourth plaintiff, Bluechip Enterprises Pty Ltd. The plaintiffs' minute of amended statement of claim runs to over 70 pages.
On 14 March 2013, I issued directions as regards the third party proceeding, including that the defendants should file and serve a third party statement of claim. I took that course to require the defendants to formulate in more precise terms by a pleading, the basis of the contribution relief they were pressing for, as against Mr Hart.
A third party pleading between the defendants and Mr Hart, was filed on 19 April 2013. Its prayer concludes:
AND THE DEFENDANTS CLAIM:
1.Pursuant to s 7 of the Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1945, contribution amounting to an indemnity or contribution in respect of the Plaintiffs' claim any costs which the Defendants may be ordered to pay to the Plaintiffs, and any costs incurred by the Defendants in defending the Plaintiff's claim.
2....
It is unnecessary to dwell further upon the terms of that third party pleading, save I note at various places it contends (see par 16) that if matters pleaded at various paragraphs of the plaintiffs' amended statement of claim, as against the defendants, do 'constitute a breach by [the first defendant] of its duty of care and/or contractual duty of care to the Plaintiffs, then, on the material facts pleaded [at various paragraphs within the third party's statement of claim], it is asserted that Mr Hart has also breached his duty of care to the Plaintiffs'.
The defendants' position as to their entitlement to a statutory contribution vis-à-vis Mr Hart is articulated at pars 17 ‑ 20 of the defendants' written outline of submissions of 28 June 2013, in terms (noting that CLA refers to the WA Act):
17.The Defendants say that, on a proper construction, the CLA does not operate to remove or otherwise abrogate the statutory rights provided by s 7 of the Contribution Act. The two Acts can operate consistently together in relation to apportionable claims without this (apparently) drastic consequence. Especially where there are no clear words used to demonstrate such an intention.
18.The defendants say that the effect of Part 1F CLA is to limit the relief that may be ordered against a concurrent wrongdoer and it does not operate to remove any substantive cause of action afforded by the Contribution Act. Accordingly it remains open to the defendants to issue third party proceedings in reliance on section 7 of the Contribution Act.
19.This construction, that Part 1F CLA deals with questions of relief rather than causes of action, is supported by the terms of section 5AK(5) CLA. This section provides that a reference in Part 1F CLA to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as plaintiff) whether joined under pt 1F under the rules of court or otherwise. The expression 'defendant' is given the widest possible meaning and includes a party joined to the proceedings as a third party. Section 5AK(5) acknowledges that parties may be joined to proceedings in a multiple of ways, however they all fall within the rubric of 'defendant'.
20.Section 5AN CLA provides that the court may give leave to join persons as a defendant in proceedings involving apportionable claims.
In amplification of the defendants' written submissions, at the hearing counsel for the defendants told me that there had been no parallel amendment to the New South Wales counterpart legislation, see s 7(1)(c) of the Law Reform Act. I was also referred to the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) No 33, in particular s 5(1). The New South Wales provision has not been amended to expressly render s 5(1)(c) subject to any part of the Civil Liability Act 2002 (NSW).
My attention was also drawn to several recent Supreme Court of Victoria case authorities, in reference to that State's (somewhat different) proportionate liability amendments, there introduced under the Wrongs Act 1958 (Vic) (Wrongs Act). In particular, I was directed to s 24AI of the Wrongs Act (Vic), which provides:
24AI Proportionate Liability for Apportionable Claims
(1)In any proceeding involving an apportionable claim ‑
(a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just having regard to the extent of the defendant's responsibility for the loss or damage; and
(b)judgment must not be given against the defendant for more than that amount in relation to that claim.
(2)If the proceeding involves both an apportionable claim and a claim that is not an apportionable claim ‑
(a)liability for the apportionable claim is to be determined in accordance with this Part; and
(b)liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.
(3)In apportioning responsibility between the defendants in the proceeding the court must not have regard to the comparative responsibility of any person who is not a party to the proceeding unless the person is not a party to the proceeding because the person is dead or, if the person is a corporation, the corporation has been wound‑up.
My attention was drawn to the express Victorian requirement for joinder as a party in s 24AI(3), discussed by Hollingworth J in Woods v de Gabriele [2007] VSC 177 [62] - [63]. That Victorian joinder scenario effectively presents as the reverse of the Western Australian and New South Wales provisions, compare WA Act s 5AK(3)(b) and (4) and NSW Act s 35(3)(b) and (4).
The Western Australian and New South Wales provisions, unlike for Victoria, expressly countenance the scenario of 'comparative responsibility' being attributed to a concurrent wrongdoer in circumstances where the alleged concurrent wrongdoer is not a party to the proceedings. The Victorian position, by s 24AI(3), is explicitly to contrary for joinder, unless a pragmatic reason for party non‑participation by the entity is self‑evident, such as death, or (in the case of a corporation) winding up. In this respect, I mention the observations of Evans J of the Full Court of the Supreme Court of Tasmania in Aquagenics Pty Ltd v Break O'Day Council [2010] TASFC 3 [11]. His Honour pointed out this 'important distinction' between the NSW legislation and s 43B(3)(b) of the Civil Liability Act 2002 (Tas) on the one hand, and the Victorian Wrongs Act on the other [11].
There is a curiosity, however, arising out of WA Act s 5AK(3)(b) (see NSW Act s 35(3)). The chapeau to s 5AK(3) is predicated on the court being engaged in 'apportioning responsibility between defendants in the proceedings'. But, if an alleged concurrent wrongdoer to whom some comparative responsibility is to be potentially attributed is not a party to the proceedings, (it is axiomatically not a defendant), an inconsistency arises with the exercise contemplated under s 5AK(3)(b). Perhaps the s 5AK(3) chapeau might have been better drawn to read 'in apportioning responsibility between "alleged concurrent wrongdoers" in the proceedings' rather than using its terminology of 'between defendants'. That revision would cater for an alleged concurrent wrongdoer not participating in the action as a party, if that scenario (plainly contemplated by s 5AK(3)(b), (4) and (5) as open) was unavoidable.
In any event, s 5AN of the WA Act and s 38 of the NSW Act, expressly envisage leave being granted for persons to be joined as defendants as appropriate, in proceedings involving apportionable claims.
I return to s 5AN from a forensic perspective, later in the reasons.

Contribute to what?

The effect of s 5AK(1)(b) is, as the plurality in Hunt & Hunt Lawyers [17] observed, (by reference to s 35(1)(b) of the NSW legislation), to limit a defendant's liability, (where there is an apportionable claim), to a delineated amount. By reference to s 5AK(1)(a), where a defendant is a concurrent wrongdoer, its liability to a plaintiff is now limited to the amount reflecting the proportion of the damage or loss claimed by the plaintiff which the court considers just, having regard to the extent of that defendant's responsibility for the plaintiff's damage or loss.
Section 5AK(1)(a) is conjoined with s 5AK(1)(b). The consequence via (b) is that, a court may only give judgment against a defendant, 'for not more than' the amount defined by (a). That judgment amount is the proportion of the damage or loss under (a) the court considers just, having regard to the extent of that defendant's responsibility for the damage. That result embodies a statutory implementation of the principle of proportionate responsibility. And as was observed by the Panel of Eminent Persons, Review of the Law of Negligence, Final Report (2002) at par 12.24 (page 179):
Under a system of proportionate liability, there are, necessarily, no rights to contribution.
Other provisions within pt 1F lead to the same negative conclusion against contribution. The notion is inherent in s 5AL(1)(a) and (b), provisions which in application have relevance once a judgment has been given in favour of a plaintiff against a defendant who is a concurrent wrongdoer. Seen to emerge then is the basal premise that a defendant, once found liable, bears no further responsibility after judgment has been recovered against it for that defendant's apportioned amount. This is implicit in the notion that there cannot be a requirement for contribution recovered from another concurrent wrongdoer in respect of an apportionable claim under 5AL(1)(a), AND that the same person cannot be required to indemnify that other concurrent wrongdoer under (b).
Hence the amendments introducing pt 1F to WA have, in effect, limited the measure of exposure of a concurrent wrongdoer defendant ‑ from a former potential level of 100% responsibility, as between all the concurrent tortfeasors down to a lesser exposure. The amendments, in implementation, shift the risk of being unable to fully recover upon a judgment obtained against any particular wrongdoer to a plaintiff. In their implementation, the amendments, in effect, require a plaintiff to sue all concurrent wrongdoers, if the plaintiff is to recover all its loss: again see the plurality in Hunt & Hunt Lawyers [10], cited above.
If recovery cannot be achieved upon a judgment against a concurrent wrongdoer for the proportion of its assessed responsibility, the plaintiff will bear that negative non‑recoverability consequence.
Amendment to s 7(1) of the Law Reform Act (WA), rendering its provisions subject to pt 1F, is wholly consistent with this outcome. Where the phenomenon of inconsistent statutory provisions arises, usually the more specific provision that is enacted later in time would prevail, to the extent of any inconsistency. On that principle of statutory interpretation, the amended preface introduced to s 7(1) may strictly have been unnecessary. That principle might explain why no parallel preface amendment looks to have been made to the New South Wales Wrongs Act.
But for Western Australia the precatory amendment to s 7 renders it absolutely explicit there has now been a subjugation of s 7(1) to pt 1F of the WA Act, where the apportionable claims provisions of the latter Act has been engaged.
In my view, these considerations dictate a conclusion that Mr Hart's contention that the defendants now hold no valid statutory cause of action against him for contribution or indemnity arising out of s 7 of the Law Reform Act, must be accepted.

Forensic implications

Earlier, I identified two somewhat unusual features arising in the present case, namely (a) a complete disinterest by the plaintiffs in pursuing Mr Hart as a defendant in respect of their loss and damage, and (b) Mr Hart's strong resistance to participation as a third party at the behest of the defendants seeking contribution or indemnity from him notwithstanding the defendants seem determined to argue at trial that Mr Hart should be assessed to bear the greater measure of tortious responsibility for the plaintiffs' losses. This leads me to render some further observations regarding forensic considerations vis-à-vis s 5AK(3)(b), s 5AK(4) and s 5AN(1).
Given the outcome reached, favouring Mr Hart on this application, it now presents as an open possibility in Western Australia (unlike for Victoria) that an action against the defendants could proceed to a trial on the basis of the defendants contending Mr Hart, albeit absent as a party, is nonetheless to be assessed by the court as the predominant concurrent wrongdoer in respect of an apportionable claim. Hypothetically, the defendants may at the trial seek to show Mr Hart is to carry a 99% responsibility, by contrast to their far lesser responsibility, at a trial running without any participation at all by Mr Hart.
But scenarios of courts reaching liability conclusions adverse to someone, without that person having an opportunity to participate to defend their position or reputation, are unusual. Even in civil proceedings, courts are normally hesitant against reaching liability findings adverse to persons not before it. They, axiomatically, do not in such a situation have the opportunity to put their position. An absentee fault attribution defence by the defendants may also effectively raise something of a forensic burden upon the plaintiffs at the trial, to resist the attempted tactical allocation of responsibility to the person who is absent, by seeking, in effect, to defend that absentee person's exposure position. Here, Mr Hart might not even be called as a witness at a trial confined to a battle only as between the plaintiffs and the defendants. Or questions might arise as to who calls Mr Hart as a witness or who would cross‑examine him at a trial. Issues may also arise as to what inferences, if any, are to be drawn in terms of responsibility as an alleged concurrent wrongdoer, in the absence of the person being called to give evidence at a trial.
More concerning is a scenario in which the court might assess a measure of responsibility against an alleged concurrent wrongdoer like Mr Hart, in his absence, only to see subsequent litigation directly against Mr Hart by the plaintiff. That hypothesis assumes, for the sake of argument, there arises no Anshun estoppel considerations. Such considerations could possibly arise from a plaintiff's explicit disavowal of the intention to pursue the absentee party in the proceedings despite ample opportunity; although the subsequent litigation scenario is recognised by s 5AM(1).
Absent Anshun estoppel considerations, liability findings at a civil trial reached against the non‑participant non‑party, seem to escape the reach of an issue estoppel, leaving open the possibility of subsequent litigation ‑ at which inconsistent findings may be reached, as the alleged concurrent wrongdoer now does participate and defend the same arguments as a party. The concurrent wrongdoer could successfully resist a plaintiff's claim, or achieve a different allocation of responsibility at a subsequent trial. If at all possible, the scenario of inconsistency of outcome considerations in distinct actions should be avoided from a policy respective.
These potentially unsettling forensic outcomes seem to be better addressed in Victoria, by s 24AI(3) ‑ which requires an alleged concurrent wrongdoer to be made a party, if that course is logistically possible.
The preface to s 5AK(3) of the WA Act speaks of apportioning responsibility 'between defendants' in proceedings. This may be thought at first blush to carry an implied premise that the alleged concurrent wrongdoer be a defendant. However, such an implication is immediately contradicted by s 5AK(3)(B) and s 5AK(4), which obviate a need for participation by 'any' or 'all' concurrent wrongdoers, as parties to the proceedings.
In my view, many of these potential forensic headaches could be ameliorated by the mechanism of a defendant's application to have an alleged concurrent wrongdoer joined as a defendant, as s 5AN(1). Such a process of joinder (as a defendant) would be conceptually distinct and different from the scenario of joinder as a third party, as attempted against Mr Hart here. Joinder as a defendant lies at the option the court – and may be invoked at any stage if, that result is seen as a just or convenient outcome: see RSC O 18 r 4(1). A plaintiff may of course not wish to take the step of adding a party on extra defendants by reason of forensic considerations, including the incurring extra costs exposure in the litigation.
If a defendant intends to defend a claim by seeking to have a court assess its comparative fault responsibility as being diminished by fault being apportioned elsewhere to a non‑party concurrent wrongdoer, then my view is the alleged concurrent wrongdoer, ordinarily, ought to be joined as an extra defendant, absent any interrupting pragmatic circumstances such as those enumerated under s 5AJ(1).
Where a joinder as an extra defendant is ordered, then case management directions may then be given to address the basis for that added defendant's participation. The action can then be case managed accordingly. There may, for instance, need to be a regime of pleadings and limited discovery exchanged as between the alleged concurrent wrongdoer defendants.
More generally, it would seem, at minimum as a matter of overall fairness to a plaintiff, to be necessary and appropriate for a defendant's pleaded defence put forward in answer to a plaintiff's statement of claim, to display explicit notice and proper particulars of any asserted basis for alleged shared comparative responsibility being found against any other alleged concurrent wrongdoer. That extra wrongdoer ought be properly identified in the pleading process by the defendant. That outcome looks wholly compatible with the underlying philosophy of s 5AK(1)(a) of the WA Act.

Conclusion

In present circumstances the application of Mr Hart to dismiss the third party proceedings must be upheld.
A question arises then as to the appropriateness of any future application by the defendants for Mr Hart to be incorporated in the proceedings not as a third party, but as a further defendant, by s 5AN(1). I make it explicit that in setting aside the third party action, that this is without prejudice to the rights of the defendants to apply to add Mr Hart (in due course) as an extra defendant to the action. There will be liberty to apply in that respect.
As to costs, a successful application by Mr Hart to be removed as a third party, on the basis that there was no valid claim in the defendants for contribution or indemnity against him, by reason of s 7(1) of the Law Reform Act, carries a correlative consequence that Mr Hart should have his costs of this application to be taxed and paid immediately. That is a prima facie view. To the extent the parties seek to persuade me to a contrary view as to costs, they are at liberty to file written submissions, with first opportunity to the defendants within 14 days through their solicitors and thereafter a further 14 days hence to Mr Hart, through his solicitors.