Hiss v Galea

[2012] VCC 740

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
BUILDING CASES DIVISION

Case No. CI-11-04099

CHRISTIAN HISS and ORS	Plaintiffs
v.
KEN GALEA and ANOR	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	13 June 2012
DATE OF JUDGMENT:	13 June 2012 (revised 14 June 2012)
CASE MAY BE CITED AS:	Hiss & Ors v. Galea & Ors
MEDIUM NEUTRAL CITATION:	[2012] VCC 740

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Defendants’ application for leave to file an amended defence – Amendment raising issue that the claim should be apportioned – Prejudice to plaintiff as right to claim against alleged “concurrent wrongdoers” now statute barred – Plaintiffs aware of proportionate liability issue prior to the expiry of limitation period – Amendment admitted subject to proper particulars being provided – Part IVAA Wrongs Act 1958 – s.134 Building Act 1993.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J. Forrest	TressCox Lawyers
For the Defendants	Mr B. Reid	McMahon Fearnley Lawyers Pty Ltd

HIS HONOUR:

1The defendants make application to file and serve a proposed amended defence dated 6 June 2012, in response to the plaintiffs’ statement of claim, dated 18 April 2011. The proceeding was fixed for trial commencing 12 June 2012. At a directions hearing on 8 June 2012, the defendants foreshadowed their application to file an amended defence. At that stage, the matter had some urgency because the trial was fixed to commence on the following Tuesday. This urgency has, however, passed because the trial could only commence if the parties were prepared to confirm that the trial could be concluded within four days. They had given a revised estimate of four to five days, but on reflection considered that four days would be inadequate and the trial has been refixed to commence in December 2012.

2The defendants’ application to amend their defence has proceeded today. Much of the proposed amendment clarifies matters which the parties have, to a large extent, conceded have been considered during the interlocutory processes as part of the contested issues between the parties. The primary dispute relates to the pleading in paragraph 18, which asserts that the plaintiffs’ claims against the defendants are apportionable claims within the meaning of Part IVAA of the Wrongs Act 1958 and, that there are other concurrent wrongdoers, in respect of whom liability would ordinarily be apportioned.

3In relation to the proposed pleading in paragraph 18, there are essentially three issues which need to be determined:

a.whether the plaintiffs’ claims against the defendants are apportionable claims and the proposed further parties are concurrent wrongdoers;

b.the manner in which the defendants have raised the issue of apportionable claims in respect of those parties and particularly the content of the proposed pleading;

c.whether, by reason of the operation of the limitation period in s.134 of the Building Act 1993, the plaintiff would be prejudiced if the proposed amendment were permitted.

4The plaintiffs and the defendants own adjoining properties. In about 2000 or 2001, the plaintiffs erected units on their property. They allege that trees planted by the defendants close to the common boundary have affected the foundations of two of the units and have caused structural damage. The claim is brought in nuisance and the allegations are that the defendants should have anticipated that damage might result from planting the trees in that location, or, alternatively when made aware that damage was occurring, the defendants should have taken steps to remove the trees to avoid the problem that had arisen.

5The plaintiffs commenced the proceeding in the Magistrates’ Court on 25 August 2009. A defence was filed on 5 October 2009, which effectively contains a bare denial. That is the defendants’ current pleading. Later in June and July 2010, the defendants were given leave to join four parties to the proceeding as the third to sixth parties. These are the parties the defendants allege are concurrent wrongdoers. These parties are as follows:

a.the soil engineer who gave advice to the plaintiffs prior to the construction of the units on their property;

b.the structural engineer who designed the structure and specified the construction processes;

c.the builder who carried out the work;

d.the building surveyor who approved the plans and carried out inspections during construction.

6In my view, the decisions of superior courts, both in Victoria and in other states where there is similar legislation, have made it clear that the legislative provisions relating to proportionate liability are to be interpreeted widely and are not to be constrained by the actual pelading of causes of action by a plaintiff against a defendant. The definitive factor is rather the nature of the claim itself and what is critical is whether the plaintiff’s claim arises from a failure by the defendant to take reasonable care. In my view, there is little doubt in the present case that, as pleaded, the plaintiff’s claim against the defendants is an appportionable claim, because of the nature of the complaint made against the defendants, both in relation to the plainting of the trees and their later refusal to remove the trees.

7The issue of whether the further parties might be regarded as concurrent wrongdoers depends upon wehther the actions of those parties caused the loss and damage that is the subject of the present claim. The leading Victorian authority on this point is the decision of the Court of Appeal in St George Bank Ltd v Quinerts Pty Ltd (2009) 25 VR 666, a judgment of Nettle JA, with whom Mandie JA and Beach AJA agreed.

8Following a discussion with Mr Reid of Counsel, who appears for the defendants, it is apparent that the defendants have the capacity to plead claims against each of the four further parties in a manner which would satisfy the requirements of the legislation. At present, however, that has not been done and it will be necessary for the defendants to file a further proposed amended defence. However, I have been asked to deal today with the remaining matter in dispute between the parties, the question of prejudice, so that the parties can take further steps in the proceeding without being required to reargue that issue.

9The plaintiffs say that if the defendants are granted leave to amend their defence to effectively raise Part IVAA of the Wrongs Act, the plaintiff will be unable to join those parties as defendants to the proceeding. This will mean that if those parties are regarded as concurrent wrongdoers and the liability of the present defendants is limited, then the plaintiffs will be unable to recover the balance of their loss against the further parties. The reason for this is that the certificate of occupancy in respect of the units on the plaintiffs’ property was issued on 6 February 2001. By reason of s.134 of the Building Act 1993, “a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work”.

10The provision is stated to be “despite anything to the contrary in the Limitation of Actions Act 1958 or in any other Act or law”. In the present case, it is alleged that the damage arising from the defendants’ conduct did not manifest itself until late 2006. Ordinarily, therefore, if the only limitation period was that set out in the Limitation of Actions Act 1958, the plaintiffs may have had until late 2012 to join other parties, including the four other parties referred to by the defendants. It appears, however, that by the operation of s.134, the plaintiffs’ right of action against those parties did not subsist beyond 6 February 2011.

11The plaintiffs now say that their position should be looked at as at today to determine the effect of permitting the defendants to raise the issue of proportionate liability. The plaintiffs say that because, as at today’s date, potential claims against the four further parties are statute barred, that therefore the proposed amendment should not be permitted, because to allow the amendment would result in prejudice to the plaintiffs for which they could not be otherwise compensated.

12The defendants, on the other hand, submit that any prejudice arises as a result of the delays by the plaintiffs in making an application at an appropriate time to join those parties as defendants to the Magistrates’ Court proceeding. Each of the four further parties was joined as a party to the Magistrates’ Court proceeding in June or July 2010. Although, at that stage, no attempt was made by the defendants to amend their defence or to have the further parties joined as defendants to the plaintiffs’ claim, the third party proceedings against each of the four further parties made it clear that what the defendants wanted to do in those further proceedings was to make an apportionable claim against each of those parties under Part IVAA of the Wrongs Act, on the basis that each of those parties was a concurrent wrongdoer.

13By letter from the defendants’ solicitors, dated 27 July 2010, to the plaintiffs’ solicitors, it was noted that: “Our clients have now joined four parties to the proceedings. The joinder of these parties has been made based on expert evidence that has been obtained by our clients and provided to you.

“Our clients have now joined the parties that your clients should have made defendants when the proceedings were commenced. You now have the documents upon which our clients rely in the proceedings. The manner in which your clients have conducted this proceeding as set out above has placed our clients in the position in which they have had to undertake significant and expensive engineering investigations and incur legal costs that your clients should properly have incurred in preparing their case. Our clients will now incur further costs discharging it obligations in the proceedings to the joined parties (for example providing the joined parties documents filed and served by your clients).

We acknowledge that the current orders provide a date by which your clients may join other parties to their claim including the third – sixth joined parties. However, our view is that your clients are causing our clients to incur legal costs and expert fees to prepare the case for your clients. We request that you immediately give consideration to joining the third – sixth joined parties to your clients’ claim forthwith”.

14The letter referred to directions made on 23 July 2010 that, “the plaintiff serve any notice under r.28.03 together with an amended statement of claim by 14 October 2010”.

15The defendants’ solicitors sent follow-up letters on 27 July 2010 and 26 August 2010. In the latter communication, it was noted, “In particular, we would like your client’s response to the issues of discovery and joining the third – sixth parties to your clients’ claims”.

16By letter dated 13 September 2010, the plaintiffs’ solicitors responded, relevantly stating, “Should our clients provide instructions for the joinder of one or more parties to the proceedings against your client, an application will be made in accordance with the orders of 23 July 2010”.

17The plaintiffs did make an application to serve an amended statement of claim. The application was listed for 16 March 2011. In the proposed amended statement of claim, the plaintiffs pleaded that the third, fourth and fifth parties had been joined by the defendants in June and July 2010, and that:

“(a) the claim made by the plaintiffs in this proceeding is one involving an apportionable claim under Part IVAA of the Wrongs Act 1958;

(b) the third, fourth and fifth parties are concurrent wrongdoers within the meaning of that expression in Part IVAA of the Wrongs Act 1958;

(c) the Court should find that each of the third, fourth and fifth parties is wholly responsible for any damages found in favour of the plaintiffs, or alternatively, that there be judgment for such proportion of the total amount of damages as the Court considers to be just and equitable having regard to the extent of the third, fourth and fifth parties’ responsibility for the plaintiffs’ loss and damage, pursuant to Part IVAA of the Wrongs Act 1958”.

18A similar pleading was included in relation to the sixth party.

19Apparently at the directions hearing on 16 March 2011, the proposed further defendants to the plaintiffs’ claim raised the issue of the limitation period under the Building Act 1993. The plaintiffs’ application was adjourned and was never proceeded with. No explanation has been provided as to why the plaintiffs failed to make application to join the further parties as defendants to their proceeding between 27 July 2010, when the defendants’ solicitors raised the issue, and the expiry of the limitation period under the Building Act on 6 February 2011. The affidavit material filed on behalf of the defendants suggests that the delay may have arisen as a result of delay in preparation of a draft amended pleading.

20In my view, it is clear that the plaintiffs now have no possibility of making claims against the four further parties because any application to join those parties as defendants would be met with the limitation defence under the Building Act. However, that prejudice has arisen as a consequence of the plaintiffs’ own failure to make application to join those parties to their proceeding at an earlier time, particularly, in circumstances where they were alerted to the desirability of them joining those parties some months before the limitation period expired. 

21It is noted that the defendants have apparently settled their disputes with the third to sixth parties and although those parties apparently remain as parties to the present proceeding “for the purposes of apportionment”, that without the appropriate processes being followed any recovery by the plaintiffs could not involve the further parties.

22However, before there can be an apportionment pursuant to the Wrongs Act, it is necessary for those parties to be joined as defendants to the present proceeding, either by the plaintiffs or by the defendants. The plaintiffs cannot do so because the claims that they would wish to make against those parties are statue barred. In my view, the present defendants should be permitted to join those parties as defendants to the plaintiffs’ proceeding, provided they are able to properly articulate in a draft pleading the matters the authorities require in such a pleading, being:

“a. the existence of a particular person;

b. the occurrence of an act or omission by the particular person; and

c. a causal connection of the claim between that occurrence and the loss that is the subject of the claim”. (see Matthews v SPI Electricity Pty Ltd [2012] VSC 70 at paragraph 81, where J Forrest J quoted from the judgment in Ucak v Avante Developments Pty Ltd [2007] NSWSC 367.

23Subject to hearing further submissions from the parties, the orders I propose are as follows:

a.It is noted that:

i.any potential claims by the plaintiffs against the third to sixth parties would be statute bared by reason of section 134 of the Building Act 1993;

ii.the proposed amended defence, dated 6 June 2012, should be permitted to be filed and served, save as to paragraph 18 which does not contain the matters required to be pleaded if Part IVAA of the Wrongs Act is to be relied upon by the defendants.

b.The trial date of 14 November 2012 is vacated. The matter is relisted for trial on 6 December 2012 (estimate 7 sitting days). No further setting down fee is to be paid.

c.By 4pm on 26 June 2012, the defendants must file and serve a further proposed amended defence setting out a further pleading in paragraph 18 addressing the matters required to be pleaded in order for Part IVAA of the Wrongs Act to apply.

d.By 4pm on 13 July 2012, the plaintiffs, if they wish to object to the defendants being granted leave to file an amended pleading including an amended paragraph 18, must give written notice to the defendants of their objection to the proposed further pleading and a summary of the basis for their objection. In that event, it will be necessary for the defendants to bring their application for leave to file the further amended pleading before the Commercial List Duty Judge for determination.

e.If the plaintiff does not give written notice of their objection to the proposed further amended pleading, the defendants may make application to the Directions Group for an order to be made “on the papers” by the Commercial List Duty Judge for orders:

i.Joining each of the further parties as a defendant to the proceeding by the plaintiff against the defendant;

ii.Giving leave for the writ to be amended;

iii.Giving leave to the defendants to deliver their further amended defence and for service of the further amended defence and the amended writ on the plaintiffs and the added defendants;

iv.Providing for notice to be given to the added defendants that no relief will be sought from them in the proceeding and that they are only joined as defendants to the proceeding to enable the present defendants to seek to have their liability to the plaintiffs apportioned.

v.A copy of the order made by me today and these reasons for decision (when settled) shall be served with the documents upon the further defendants by the present defendants.

vi.Such other matters as the parties or the Commercial List Duty Judge considers appropriate.

f.The costs of the hearing of the application today shall be costs in the cause.

g.The costs of and arising from the defendants’ application to amend their defence shall be dealt with in accordance with the Rules of Court.

h.Reserve liberty to apply.

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Certificate

I certify that these 8 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 13 June 2012 and revised on 14 June 2012.

Dated: 14 June 2012

Caroline Dawes

Associate to His Honour Judge Anderson