Johnson Tiles Pty Ltd v Esso Australia Pty Ltd and Esso Australia Resources Pty Ltd (No 2) - [2001] VSC 292

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IN THE SUPREME COURT OF VICTORIA		Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 5538 of 2001

JOHNSON TILES PTY LTD and ORS	Plaintiff
v
ESSO AUSTRALIA PTY LTD	First Defendant
and
ESSO AUSTRALIA RESOURCES PTY LTD	Second Defendant

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JUDGE:	Gillard J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 August 2001
DATE OF JUDGMENT:	17 August 2001
CASE MAY BE CITED AS:	Johnson Tiles Pty Ltd and Ors v Esso Australia Pty Ltd and Esso Australia Resources Pty Ltd (No. 2)
MEDIUM NEUTRAL CITATION:	[2001] VSC 292

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Defence – application to amend – further facts – defence that there was no duty of care owed to avoid pure economic loss – relevance of facts to question.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J. Burnside QC with Mr D. Collins	Slater & Gordon, Maurice Blackburn Cashman, Phillips Fox, Lander & Rogers
For the Defendants	Mr J. Middleton QC, Mr M. Derham QC, Mr A.J. Kelly, and Mr G.P. Harris	Middletons Moore & Bevins
For the 1^st to 16^th Third Parties	Mr G. Nettle QC Mr J. Beach QC and Mr S. Anderson	Freehills

TABLE OF CONTENTS

Introduction......................................................................................................................................... 2

Background......................................................................................................................................... 2

Application to Amend....................................................................................................................... 2

Nature of the Proceeding.................................................................................................................. 3

The Pleadings..................................................................................................................................... 4

The Issues............................................................................................................................................ 6

Duty of Care – Economic Loss......................................................................................................... 8

HIS HONOUR:

Introduction

This is a group proceeding instituted in this Court by writ, on 26 April 2001, pursuant to Part 4A of the Supreme Court Act 1986 ("the Act").

Background

A similar representative proceeding was instituted in the Federal Court of Australia, some two years ago. On 17 May 2001, Merkel J transferred the proceeding to this Court pursuant to s.5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cwth).

I have ordered, subject to further order, that the cross-vested Federal Court proceeding be stayed.

In this proceeding, there are three plaintiffs, and each represents members of a particular group. The groups as defined as business users, domestic users and stood‑down workers.

The three plaintiffs bring proceedings, on behalf of themselves and members of each particular group, seeking damages for losses and expenses suffered and incurred as a result of an explosion, which occurred on 25 September 1998 at the Longford Plant operated by the defendants. As a result of the explosion, the gas supply from that plant, which supplies most of the gas consumers in this State, was interrupted and not restored for a period of some 14 days.

Application to Amend

Application has been made by the defendants to amend their defence.

The amendment is set out in a summons filed by the defendants on 27 July 2001.

In the Federal Court proceeding, the defendants last year made application to Merkel J to amend their defence to raise the same matters. In a reserved judgment, Merkel J refused the amendment.

The defendants now apply to amend their defence in the proceeding in this Court.

Mr Burnside QC, who appeared with Mr D. Collins of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Johnson Tiles Pty Ltd v Esso Australia Pty Ltd and Esso Australia Resources Pty Ltd (No 2) [2001] VSC 292
Case: [2001] VSC 292
Decision Date: 17 August 2001

CaseChat Overview and Summary

Johnson Tiles Pty Ltd initiated legal proceedings against Esso Australia Pty Ltd and Esso Australia Resources Pty Ltd. The dispute revolves around claims of economic loss suffered by Johnson Tiles due to alleged contamination of their land by petroleum products. The matter was heard in the Supreme Court of New South Wales. The defendants sought to amend their defence to include a claim that no duty of care was owed to prevent pure economic loss, arguing that the additional facts were relevant to the central issue of the duty of care.

The primary legal issue before the court was whether the defendants were entitled to amend their defence to include a new argument about the absence of a duty of care for pure economic loss. The court had to consider whether the proposed amendment introduced new facts that were relevant to the case and whether the amendment was permissible under the rules of court. Specifically, the court needed to determine if the new facts related directly to the issue of the duty of care and whether allowing the amendment would prejudice the plaintiff.

In deciding the matter, the court examined the nature of the proposed amendment and its relevance to the central issue. It held that the amendment was not merely an attempt to introduce a new cause of action but rather a clarification of the existing defence. The court found that the facts alleged in the proposed defence were relevant to the question of whether a duty of care existed. Given that the amendment pertained directly to the issue of duty and did not prejudice the plaintiff, the court allowed the amendment to the defence. Consequently, the court ruled that the defendants could proceed with their defence asserting that no duty of care was owed to avoid pure economic loss.

Orders