Logan v Buxton Electrical Co P/L - [2016] SADC 149

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
LOGAN v BUXTON ELECTRICAL CO P/L & ORS
[2016] SADC 149
Reasons for Ruling of His Honour Judge Hannon
5 December 2016
PROCEDURE
Application by a third party to sever action against it from trial of primary action and other secondary actions – Balancing of interest of fairness to the third party in the presentation of its case and the efficient conduct of urgent proceedings – Application declined.
District Court Rules 2006 (SA) r 210; Dust Diseases Act 2009 s 10, referred to.
Abigroup Contractors P/L v Hardesty & Hanover International LLC [2008] SASC 369, applied.
Port Pirie City & District Council v Leenders & Partners P/L [2001] SASC 208, considered.

LOGAN v BUXTON ELECTRICAL CO P/L & ORS
[2016] SADC 149

Mr Logan, the plaintiff, issued proceedings on 21 September 2016 claiming damages against three of his former employers. He has alleged that as a result of their negligence, breach of statutory duty and breach of contractual obligations, he was exposed to asbestos during the course of his employment and that, as a result, he contracted mesothelioma and has suffered injury, loss and damage.
The defendant employers are Buxton Electrical Co Pty Limited (“the first defendant”), Allianz Australia Insurance Limited, as insurer of Adelaide Ship Construction (“the second defendant”), and Orica Limited (“the third defendant”). The first defendant has not filed an appearance and is not a participant in the proceedings.
On 7 October 2016 orders were made classifying the proceedings as urgent given the plaintiff’s prognosis. A court settlement conference was listed for 2 December 2016 on the basis that directions for trial would be made soon after if the matter did not resolve.
Various secondary actions were then issued. Third party actions were brought by the third defendant on 3 November 2016 against Wallaby Grip BAE Pty Limited (In Liquidation) (ACN 008 453 325) (“BAE”) and Amaca Pty Limited (Under NSW Administered Winding Up) (“Amaca”). On 10 November 2016 Amaca issue a third party action against CSR Ltd (“CSR”).
On 14 November 2016 the plaintiff applied for an urgent trial on account of a deterioration in his condition, his most recent prognosis being a life expectancy of approximately two months. That application was heard on 18 November 2016 and an order was made for trial commencing Wednesday 7 December 2016. Three days were set aside with a further two reserved given the then uncertainty over the extent of the issues to be litigated between the parties. The trial listing was made over the objection of CSR which had instructed solicitors only on 14 November 2016. Directions were made allowing the third parties until 24 November 2016 to file any application for severance of any action against them from the trial of the primary action.
The only third party to file a severance application was CSR. The application was filed on 23 November 2016 and heard on 1 December 2016.
The positions of the parties
CSR’s severance application was based on alleged general and specific prejudice arising from the extremely limited time in which CSR has had to prepare for trial. CSR contended that notwithstanding the provisions of rule 210(1) of the District Court Rules 2006 (“DCR”) to the effect that, unless otherwise directed, all issues involved in both primary and secondary actions are to be heard together, a severance order ought to be made in this case.
This was said to be particularly so given the provisions of s 10 of the Dust Diseases Act 2005 (“DD Act”) which provides:
The Court will determine questions of liability and quantum of liability to the plaintiff before dealing with questions of contribution between defendants or insurers unless, in the opinion of the Court, any delay resulting from dealing with the questions together is inconsequential in the circumstances.
Mr Hillary, who appeared on behalf of CSR on this application, filed two supporting affidavits. The first affidavit sworn 23 November 2016 set out the short timelines involved as set out above. It submitted that the question as to the respective liabilities of Amaca and CSR for the alleged exposure of the plaintiff to asbestos was a discrete issue having regard to a historical partnership agreement between them, and was a matter of no concern to the plaintiff or the defendants. It was contended that, in the circumstances, the dispute between Amaca and CSR ought to be separately decided once the primary action and other secondary actions were heard and determined.
In his second affidavit, sworn on 30 November 2016, Mr Hillary stated that on 29 November 2016 CSR had instructed him to obtain an expert report relevant to the reasonable cost of past and future care for the plaintiff. He has sought a report from a Ms King, who for various reasons set out in the affidavit, which include her involvement in other proceedings currently before another member of this Court which include CSR as a third party (“the Oliver proceedings”), is not expected to be able to provide a report relevant to this matter until on or after Monday 12 December 2016.
CSR stated that it had no wish to impede the hearing of the plaintiff’s claim in the time allotted to it, but contended that if the action brought by Amaca against it were not severed, then disruption to the hearing of the plaintiff’s claim must follow if CSR was to be afforded proper time in which to adequately prepare its case. CSR submitted that having regard to the urgency of the plaintiff’s case, and the need to balance the interests of the plaintiff in having an early trial against the prejudice to CSR if it was not given adequate time to properly prepare its case, the interests of justice weighed in favour of the proceedings against CSR being severed from the plaintiff’s action and other secondary actions. In this regard it pointed to some apparent disruption which had already occurred in the Oliver proceedings due to the need to allow time for receipt and consideration of a report from Ms King where a severance application by CSR was refused.
CSR drew attention to r 210(4) of the DCR which is to the effect that each party was bound by the Court’s judgment in so far as it determined issues affecting the interest of the party even though the party’s participation in the action arose from a secondary action in which those issues were not raised. CSR also referred to r 210 (2) and (3), which allow a party to a secondary action, to the extent permitted by the trial judge, to introduce evidence relevant to the primary action, and to cross-examine witnesses of a party to the primary action. CSR submitted that, in the context of granting the severance application sought by it, permission should be granted to CSR to cross-examine witnesses in the primary and ongoing secondary actions in relation to exposure to asbestos and as to damages relating to past and future care.
Having foreshadowed participation to that extent in the primary and other actions if there was a severance order, CSR observed that nevertheless it would not seek to lead evidence from Ms King in the primary action or ongoing secondary actions, and would only do so in the severed action between it and Amaca at a later stage after the primary action was determined. The purpose of such evidence would be to raise issues as to the reasonableness of any award of damages relating to past and future care needs.
The plaintiff consented to the application, pointing to the plaintiff’s poor prognosis and his concern that the current trial schedule not be disrupted.
Amaca opposed the application and contended there was an inherent inconsistency in CSR’s position. It submitted that the first affidavit of Mr Hillary relied, in part, on a contention that there was a discrete issue between it and Amaca which ought to be separately heard, as it did not concern the other parties, the implication being that if such an order was made, CSR would not participate in the primary action. Whereas, having now arranged to seek a report from Ms King, apparently only to be used in the action brought against it by Amaca, CSR nevertheless wished to fully participate in the primary action on the issues of both exposure and damages. Amaca contended that if CSR was to participate in the primary action and the secondary action against Amaca on those terms, then it should only be permitted to do so on the basis that it introduce all evidence it considered was relevant to the identified issues. It submitted that the course of action proposed by CSR, involving introduction of new evidence in the later hearing of a severed action, gave rise to the very problems r 210(1) was intended to avoid, that is, a retrial on issues already determined, with Amaca possibly having to call evidence again relating to exposure and as to the reasonableness of any assessment of damages.
Amaca also contended that the perceived problems of adjusting the trial schedule to accommodate the need for CSR to obtain a report from Ms King, and for the other parties to consider that report, may not cause much disruption to the proceedings, and certainly were problems not so apparent as to warrant a severance order of the action brought by Amaca. The second and third defendants, represented by the one counsel, supported the opposition by Amaca to the severance application, and made further submissions suggesting that the anticipated problems in accommodating Ms King’s evidence were likely to be more imagined than real.
BAE took no position on the matter.
Consideration
The general principles to be considered in relation to the application of r 210(1) are outlined in Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC.[1] Among other matters, reference was made to it being inappropriate to have one Judge hear and determine disputed issues of fact, which involve an assessment of the credibility and reliability of the same witnesses, in more than one trial arising from the same action.
[1] [2008] SASC 369 at [93] per White J.
Abigroup concerned an application for a preliminary trial on a discrete issue. However, similar considerations were referred to in the context of an application to sever third party proceedings in a case dealing with the predecessor to r 210(1) DCR being R37.05 of the Supreme Court Rules 1987, which was broadly in the same terms: Port Pirie City & Districts Council v Leenders & Partners Pty Ltd.[2] There, Lander J made the following observation as to the rationale for hearing third party proceedings at the same time as the primary proceedings:
There are good reasons for that. First, a trial which involves all parties simultaneously is the most cost effective way of deciding competing rights. Secondly, all parties obtain a decision at the same time. There is no hiatus when one party is subject to a judgment but cannot prosecute a claim for contribution or indemnity. … Thirdly, it avoids the possibility of conflicting findings and conflicting verdicts. It is inimical to the administration of justice for the Court to be called upon to consider the same factual circumstances twice. One court may be presented with different material to another or reach different views on the credibility or reliability of witnesses with the result that different findings of fact are made, and different and inconsistent verdicts reached.[3]
[2] [2001] SASC 208.
[3] At [36].
In this case I have had regard to the general prejudice to CSR arising from the extremely truncated time frame for receiving advice and preparing itself for trial. However, that is not an infrequent occurrence for parties involved in proceedings of this nature, and the compression of time frames in this case has also been the experience of the other defendants and third parties, although not to the same extent. I note that no specific additional evidence as to general prejudice has been put to the Court on account of the shortness of time to prepare in this matter. The only other matter raised by way of general prejudice was the contention that, as the action brought by Amaca against CSR involved discrete issues of no concern to the other parties, it was appropriate to sever them and so as to allow the plaintiff’s claim to be finalised first. The implication was that there would be no revisiting of issues decided in the primary action or the secondary actions attached to it.
However, CSR now appears to put a different proposition. It now intimates that it desires to participate in the primary action by cross-examining witnesses on the issues of exposure and damages. It suggests that it will be bound by any judgment of the Court affecting its interests under r 210(4) of the DCR. Yet at the same time it proposes that Amaca’s action against it be severed, and that in the later hearing of that action, it may call evidence from Ms King which goes to the reasonableness of any award or agreement on damages reached in the primary action.
That approach to my mind is indicative of a misconception as to the operation of r 210. It seems to me that r 210 contemplates that if there is no severance of proceedings by direction made under r 210(1), then the parties to the secondary actions are then able to participate in the primary action to the extent outlined, and are to be bound by any judgment of the Court as provided for by r 210(4). However, if the proceedings are severed, those provisions do not apply, such that the later proceedings may result in the Court dealing with the same factual circumstances twice, with possible undesirable outcomes as mentioned above by Lander J.
However, even if that not be the case, and if r 210 allows participation in the primary action as proposed by CSR, even if a severance order in relation to Amaca’s action against it was made, there is an inherent inconsistency in the position of CSR for the reasons put forward by Amaca. If CSR wishes to raise issues as to exposure and damages in the primary action, then it ought to seek to introduce any evidence going to those issues on which it wishes to rely in those proceedings, so that a decision is made once and for all at that stage.
The course proposed by CSR would not involve an efficient and effective use of Court resources. That is the very reason for the requirement under r 210(1) that primary and secondary actions be heard together unless the Court otherwise directs. I have had regard to the fact that if CSR’s application is rejected, such that it is required to participate in full in the actions now listed for trial, it must be given an appropriate opportunity to obtain the evidence it wishes to elicit from Ms King, and to introduce it in the proceedings if so advised. It would appear that in order to accommodate this there may be some disruption to the trial schedule. Any more than a minor disruption would be most undesirable given the plaintiff’s condition and the urgency of the matter. However at this stage I am not persuaded that any delay in this regard will be more than inconsequential.
On the basis of the information presently before me, and notwithstanding the plaintiff’s consent to the severance application, and having regard to what is just in the circumstances given the interests of each of the parties, I am satisfied that a more efficient and appropriate use of the Court’s time would be to continue to conduct the actions concurrently whilst allowing some minor accommodation to CSR in light of the problems identified.
For these reasons I rejected the application by CSR for severance of the action against it. As indicated at the time of my decision, that issue may be revisited if the delay needed to afford fairness to CSR in presenting its case involves more than inconsequential delay.
Upon my dismissal of the severance application, each of the other parties sought costs against CSR in relation to their appearance on the severance application. I did not rule on those applications at the time, and in the circumstances, I reserve the question of costs pending further developments following my decision.