Major Media Pty Ltd v Hays Specialist Recruitment

[2011] VCC 1362

IN THE COUNTY COURT OF VICTORIA Revised

(Not) Restricted

AT MELBOURNE
COMMERCIAL LIST

EXPEDITED CASES DIVISION

Case No. CI-11-02591

MAJOR MEDIA PTY LTD	Plaintiff
v.
HAYS SPECIALIST RECRUITMENT	Defendant
(AUSTRALIA) PTY LTD

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	14 October 2011
DATE OF JUDGMENT:	14 October 2011 (Revised 17 October 2011)
CASE MAY BE CITED AS:	Major Media Pty Ltd v. Hays Specialist Recruitment (Australia) Pty Ltd
MEDIUM NEUTRAL CITATION:	[2011] VCC 1362

REASONS FOR JUDGMENT

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Catchwords:  Practice and procedure – Proportionate liability – Employment agency
introduced bookkeeper who later defrauded the employer – Concurrent
wrongdoers – Whether each caused the same loss or damage –
Compensation order made after conviction of bookkeeper for a criminal
offence – Whether a “concluded proceeding in relation to the
apportionable claim” – Sections 24AE, 24AF, 24AH and 24AL Wrongs
Act 1958 – St George Bank Ltd v Quinerts Pty Ltd (2009) 25 VR 666
applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D. Klempfner	Rockman & Rockman
For the Defendant	Mr M. Barrett	Katrina Raymond Consulting
HIS HONOUR:

1           By summons dated 20 September 2011, the defendant seeks an order that David Pitt be added as a second defendant to the proceeding. The purpose of the application is so that, at the trial of the proceeding, the present defendant might contend that if it is found liable to the plaintiff, liability should be apportioned pursuant to Part IVAA of the

Wrongs Act 1958.

2           The plaintiff engaged the present defendant, who carries on business as an employment agency, to find a person suitable to be employed by the plaintiff as an in- house bookkeeper. The plaintiff alleges that Mr Pitt was recommended by the defendant as a suitable candidate for employment. The plaintiff says that insufficient background and reference checks were carried out by the defendant and, if appropriate checks had been made, it would have been ascertained that Mr Pitt had stolen from a previous employer sums exceeding $2.5m. The plaintiff employed Mr Pitt as a bookkeeper and Mr Pitt, during the course of his employment with the plaintiff, stole sums totalling $160,341.01.

3           The plaintiff opposes the application to join Mr Pitt as a defendant. If an order were to be made joining Mr Pitt as a defendant, neither the plaintiff nor the present defendant would seek any relief against him. He would only be joined to the proceeding

because of the requirements of the Wrongs Act, which, in this respect, are dissimilar to proportionate liability provisions in other jurisdictions, where joinder of a person as a party is not necessary in order for there to be apportionment of liability.

4 On 9 December 2010, an order was made by Her Honour Judge Hannan in this court, following the conviction of Mr Pitt of the offence of obtaining property by deception, ordering that he pay to the plaintiff compensation in the sum of $160,341.01. That order was made pursuant to s.86 of the Sentencing Act 1991 and pursuant to s.87, the order “must be taken to be a judgment debt due by the offender to the person in whose favour the order is made”.

5           Mr Klempfner of Counsel, who appeared for the plaintiff, submitted that, in the circumstances, Mr Pitt should not be regarded as a concurrent wrongdoer, or alternatively, that as a result of the compensation order made in the criminal proceeding, the Court should not give leave because the compensation order was a “concluded proceeding” for the purposes of s.24AL(2) of the Act.

6           The Court must, in my view, answer three questions to determine this application:

a.	Is the present claim an apportionable claim?
b.	Might Mr Pitt be regarded as a concurrent wrongdoer?
c.	Has Mr Pitt been the subject of a previously concluded proceeding in relation to the present claim?

7           The definition of apportionable claim is set out in s.24AE and is determined by reference to s.24AF(1)(a). It is clear, in my view, that the plaintiff’s claim is for economic loss arising from a failure to take reasonable care and the claim has been

pleaded in tort, contract and the federal consumer legislation. The question of
whether Mr Pitt is a concurrent wrongdoer depends upon whether his actions caused
the loss or damage that is the subject of the present claim.

8           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, [2009] VSCA 245, a judgment of Nettle JA, with whom Mandie JA and Beech AJA agreed. At paragraph 68, Nettle JA concluded that the “loss or damage that is the subject of the claim” in s.24AH has the same meaning as “the same damage” in s.23B of the Act.

9           In determining the present application, the critical question is whether Mr Pitt and the present defendant caused the same damage claimed by the plaintiff. This is always a difficult question and has, in previous decisions, been determined by such matters as whether the quantum of the damage claimed is the same, as it is in this case, or

whether the loss or damage claimed arose at the same time, or whether the nature of
the loss and damage caused by the actions of each defendant is the same.

10         In St George Bank Ltd v Quinerts Pty Ltd, Nettle JA examined a number of authorities on these matters, including two cases in which the actions of one potential concurrent wrongdoer were fraudulent. The first was Vella v Permanent Mortgages Pty Ltd

[2008] NSWSC 585 a decision of Young CJ in Eq and the second a decision of
Bryson AJ in Chandra v Perpetual Trustees Victoria Ltd [2007] NSWSC 694,.

11         Whilst Nettle JA was not persuaded by the reasoning of Young CJ in Eq, in relation to the decision in Chandra, he considered that there was “nothing in Bryson AJ’s

reasoning or conclusion which is inconsistent with the conclusion to which I have

come in this case” (para 87). Nettle JA, in comparing the facts in Chandra with the facts of the case before the Court of Appeal, appeared to apply the ‘but for’ test in analysing causation, although, in paragraph 94, he referred to the discussion of

causation by the High Court in March v E & MH Stramare Pty Ltd (1991) 170 CLR 507.
12	defendant is the total of the amounts stolen from the plaintiff by Mr Pitt. It is the

In the present case, the loss or damage claimed by the plaintiff against the present plaintiff may have suffered other loss or damage as a consequence of the actions of the present defendant. Defendant’s counsel, Mr Barrett, submitted that s.24AH anticipates that the concurrent wrongdoers may either act jointly or “independently of each other”. In this case, the defendant alleges that Mr Pitt acted independently. However, from an analysis of the facts which are presently pleaded, the same loss or damage appears to have been caused by both the present defendant and Mr Pitt.

13         One of the matters presently disputed by the defendant is whether the employment of Mr Pitt was as a consequence of the actions of the defendant or arose as a result of an independent decision of the plaintiff. It seems to me that, on the basis of the plaintiff’s allegations, what is alleged is that Mr Pitt was employed by the plaintiff as a consequence of the recommendation by the defendant. Mr Pitt would not have been employed by the plaintiff if proper checks had been undertaken by the present defendant. As a consequence, the subsequent criminal activity by Mr Pitt was a direct result of Mr Pitt having been employed in these circumstances in the responsible position of a bookkeeper. I am satisfied there is an appropriate causal link between the separate acts of each alleged wrongdoer and the “same damage” claimed in respect of them.

14         The compensation order was made by Judge Hannan on 9 December 2010, prior to the issue of this proceeding on 7 June 2011. Mr Klempfner submitted that Her Honour’s order was a “concluded proceeding” and that it was a proceeding “in relation to the apportionable claim”.

15         Mr Barrett referred to the definition of “proceeding” in s.3 of both the County Court Act and the Supreme Court Act. In relation to the County Court, a “proceeding” includes a criminal proceeding, whereas that is not the case in relation to the Supreme Court.

Therefore he suggested that a different result may be reached on the plaintiff’s interpretation if the proceeding were commenced in different Courts or the compensation order was not sought until after the civil claim was issued. He also referred to the fact that the reference in s.87 of the Sentencing Act to a compensation order, being “taken to be a judgment debt” and enforced as such, supported the view that it should not be regarded as a “concluded proceeding” for the purposes of s.24AL(2).

16         His primary submission, and the one which I accept, was that the compensation order made in the criminal proceeding was not made in a “previously concluded proceeding in relation to the apportionable claim”. It is clear in s.24AL that the apportionable

claim refers back to subsection 1 and must be a claim of the same nature as the
claim in the present proceeding. This is not the position in the present matter.

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For these reasons, I consider it appropriate to grant the relief sought by the of the assertions included in the statement of claim and the defence and is not intended to bind the trial judge in relation to the question of whether there is an apportionable claim or whether Mr Pitt should be regarded as a concurrent wrongdoer in circumstances where the trial judge must determine whether or not to apportion liability.

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Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 14 October 2011 and revised on 17 October 2011.

Dated: 17 October 2011

Caroline Dawes

Associate to His Honour Judge Anderson