Parke v Johnson

[2010] TASSC 41

[2010] TASSC 41

COURT:  SUPREME COURT OF TASMANIA

CITATION:                 Parke v Johnson [2010] TASSC 41

PARTIES:  PARKE, Michael Francis
  v
  JOHNSON, Damien
  BOND, David

FILE NO:  539/2006
DELIVERED ON:  15 September 2010
DELIVERED AT:  Hobart
HEARING DATES:  21 April and 6 September 2010
JUDGMENT OF:  Holt AsJ

CATCHWORDS:

Procedure – Supreme Court procedure - Tasmania – Practice under Rules of Court – Parties – Third party procedure – Claim for contribution – Inchoate right.

Port of Melbourne Authority v Anshun (1981) 147 CLR 589, Andrews v Nominal Defendant (1963) 63 SR (NSW) 110 and Western Metals Zinc NL v Wesfarmers Transport Ltd (2003) WASCA 152 considered.

Supreme Court Rules 2000 (Tas), r202.

Aust Dig Procedure [271]

REPRESENTATION:

Counsel:
             Defendant:  B R McTaggart
             Storey's Maintenance Services Pty Ltd:             M K Wilkins
             Cadbury Schweppes Limited:  A R Mills
Solicitors:
             Defendant:  Wallace Wilkinson & Webster
             Storey's Maintenance Services Pty Ltd:          Page Seager
             Cadbury Schweppes Limited:  Dobson Mitchell & Allport
Judgment Number:  [2010] TASSC 41
Number of paragraphs:  24

Serial No 41/2010
File No 539/2006

MICHAEL FRANCIS PARKE v DAMIEN JOHNSON
and DAVID BOND (Third Party)

REASONS FOR JUDGMENT  HOLT AsJ

15 September 2010

1. The plaintiff by his statement of claim makes the following allegations.  On 20 March 2006 he was working in the course of his employment with labour hire company, Storey's Maintenance Services Pty Ltd (Storey's).  Storey's had been engaged by Cadbury Schweppes Limited (Cadbury) to provide labour services to it in connection with demolition and rebuilding work at the Cadbury factory at Claremont.  The plaintiff was working in the ceiling space.  The ceiling gave way and he fell fracturing his right femur and right hip.  The defendant was employed by a company which had been engaged by Cadbury to supervise the work.  A few days earlier the defendant had identified that the part of the ceiling space through which the plaintiff fell was inadequate to support the weight of a person.  He caused to be placed around the perimeter of the space a length of tape.  The plaintiff says that this precaution was inadequate and so claims that his injury was the result of the defendant's negligence.

1. The defendant entered his appearance and filed his defence in mid-2007.  He subsequently joined a third party.  He now wishes, by further third party proceedings, to claim that if he is liable to the plaintiff then he is entitled to have Storey's and Cadbury contribute to the damages awarded against him.  He relies upon the Wrongs Act 1954 (the Act), s3(1)(c), for the prospective claims. The Supreme Court Rules 2000, r202, provides that after the expiry of 30 days from delivery of the defence the leave of the Court or a judge is required before the third party procedure can be invoked. The Act contains a twelve month time limit from the service of the writ on the defendant for the bringing of contribution claims made under its provisions. It includes a discretionary power to extend time.

1. The defendant's application is for a grant of leave under the rules and for an extension of time under the Act.  A grant of leave under the rules would serve no purpose if the time for the bringing of the proceedings is not extended.  Accordingly, the submissions were directed to the question of whether time should be extended under the Act.

1. Ordinarily in determining whether or not to grant an extension of time all of the relevant circumstances of the case must be considered and weighed to determine where the justice of the case lies:  Hill v Iluka (2002) TASSC 113 at par23. However, no weighing process will arise if the prospective claim is bound to fail. Dismissal of the application will necessarily follow. I have concluded that the prospective proceedings are bound to fail.

1. The Act, s3(1)(c) is as follows:

"(1)      Where damage is suffered by a person as the result of a wrongful act –

…

(c)       a person who is liable in respect of that damage may recover contribution from any other person who is, or would, if sued by the person by whom the damage was suffered at the time when the cause of action arose, have been, liable in respect of the same damage but so that no person is entitled to recover contribution under this section from a person who is entitled to be indemnified by him in respect of the liability in respect of which the contribution is payable;"

1. Firstly, there is no cause of action until the liability of the defendant referred to in s3(1)(c) is established, ordinarily by judgment (but perhaps instead may be established by arbitral award or agreement amounting to accord and satisfaction or accord executory followed by satisfaction):  Bitumen & Oil Refineries (Aust) Ltd v Commissioner for Government Transport (1955) 92 CLR 200 at 212. Secondly, there is no cause of action under s3(1)(c) if the person from whom contribution is sought is not a person who is liable to the plaintiff or would if sued by the plaintiff be liable.

1. Storey's and Cadbury cannot presently be held liable to the plaintiff for his injury.  He has no cause of action  against them because of a legislative restriction on the bringing of claims by workers against their employers and other specified persons. 

1. The Workers Rehabilitation and Compensation Act 1988, s138AB, as it existed in 2006, provided that before a worker could commence proceedings for damages against an employer an election to claim damages had to be lodged. As counsel for the defendant conceded, this provision not only applies to the plaintiff's employer, Storey's, but also applies to any claim which the plaintiff may have had against Cadbury. This is because, by virtue of s29, Cadbury was a principal and so was potentially liable to provide worker's compensation payments. Section 132 includes in the definition of "employer" any person who is so liable. The required election could not be made unless the degree of permanent impairment suffered was agreed by the worker and the employer or determined by the Workers Rehabilitation and Compensation Tribunal to be a percentage of the whole person of not less than 30%. The election had to be made within two years of the date upon which the worker's claim for compensation was given to the employer unless the Tribunal granted an extension of time.

1. There has been no suggestion that there has been an agreement or determination that the plaintiff's degree of permanent impairment is not less than 30%.  The requirement that it has been so agreed or determined goes to the right itself and so without satisfaction of it the worker has no cause of action against his or her employer:  Skilled Engineering Ltd v Glaxo Wellcome Australia Pty Ltd (2005) 15 Tas R 88.

1. The ordinary rule of practice, subject to change by legislation or rules of court, is that proceedings which are commenced before a cause of action has arisen are liable to be struck out.  In Baldry v Jackson (1976) 2 NSWLR 415, Samuels JA said at 417 - 418:

"Mr Herron, for the appellant, commenced his argument in this way.  He first concedes the principle that 'the cause of action in respect of which a litigant approaches the Court of justice must be complete at the time when he issues his process';  per Lord Hanworth MR in Re Keystone Knitting Mills' Trademark (1929) 1 Ch 92 at 103. That principle is undoubtedly well established: see, for example, Eshelby v Federated European Bank Ltd (1932) 1 KB 254 and Wigan v Edwards (1973) 47 ALJR 586 at 592, 596, although, as Gibbs J pointed out in Wigan v Edwards at 592:  'The principle that an amendment cannot be made which will introduce a new cause of action which arose after the commencement of proceedings is purely one of procedure and can be varied or abolished by statute.'"

1. Counsel for the defendant submits that the ordinary rule of practice that a claim must be consummate by the time of the issue of the originating process has no application at all to third party and co-defendant proceedings for contribution.  It was contended that not only does it not matter that the defendant has yet to suffer judgment, but also that it does not matter that the plaintiff is yet to acquire a cause of action against the proposed third party.  The argument proceeds that there is a possibility that by the time of trial there may exist an agreement or determination that the plaintiff's degree of permanent impairment is not less than 30%.  If this occurs and Storey's or Cadbury are found to be at fault and the defendant suffers judgment, the entitlement to judgment in the contribution proceedings will have been established.

1. With respect to counsel, it seems clear on a perusal of the rules and a consideration of the authorities that the availability of the third party and co-defendant procedure only modifies the ordinary rule to the extent necessary to permit a defendant to bring a contribution or indemnity claim prior to the establishment of the defendant's liability to the plaintiff. 

1. The third party and co-defendant procedure is utilised in proceedings pending between plaintiff and defendant or defendants (rr202 and 211). Judgment cannot be entered in favour of the person claiming contribution or indemnity prior to the trial of the action between plaintiff and defendant (rr209 and 211(4)) and if there is no trial prior to the entry of judgment against the defendant (rr207 and 211(4)).  The rules plainly vary the ordinary practice by permitting the claim to be brought before there has been judgment against the defendant and satisfaction.  

1. In Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, Gibbs CJ, Mason and Aickin JJ explained the inchoate nature of the claim at 595 in the following terms:

"Although the right to an indemnity arises on payment of the liability to which it relates and not before, this is not a bar to the litigation as between a defendant and a third party, or as between defendants, of a claim based on an indemnity in respect of a liability in negligence asserted by the plaintiff in his action. It is accepted that under so-called 'third party procedures' of the kind provided for by O 16A, the claim to an indemnity may be litigated in the plaintiff's action, notwithstanding that the payment creating the right to indemnity is not made until after the amount of the plaintiff's verdict is ascertained in that action. It has been repeatedly affirmed that one of the peculiarities of third party procedure is that it enables litigation on the indemnity to take place before there is any liability (Horden-Richmond Ltd. v Duncan (1947) 1 KB 545, at p552; Bitumen and Oil Refineries (Australia) Ltd. v Commissioner for Government Transport (1955) 92 CLR 200)."

1. In Andrews v Nominal Defendant (1963) 63 SR (NSW) 110, the court said of the procedure at 118:

"It deals with the intermediate situation where, upon the entry or satisfaction of a judgment against the defendant, an immediate right will become available to the defendant …". 

1. In support of his contention that contribution proceedings can be commenced under the Act, s3(1)(c), before the plaintiff has a cause of action against the third party or co-defendant, counsel for the defendant referred to two cases.  On analysis, however, it can be seen that neither of these cases assists. 

1. The first case referred to was Western Metals Zinc NL v Wesfarmers Transport Ltd (2003) WASCA 152. There the court was concerned with legislation which prohibited an award of damages where there had been no agreement or determination that the injured worker had a disability of not less than 16%. Contribution proceedings were brought when there was no agreement or determination as to the level of disability. The third party applied to have the claim against it set aside and failed at first instance. An appeal was lodged which included the following ground:

"The learned judge erred in law in finding that, notwithstanding that there had been no determination of the Plaintiff's level of disability pursuant to s93D for the purpose of s93E(3) of the Act, s93F(4) of the Workers Compensation and Rehabilitation Act 1981 did not prohibit the Respondent (Defendant) from issuing third party proceedings against the Appellant (Third Party), because if the Plaintiff were (at some future time) to obtain an agreement or determination pursuant to s93(3)(a) then the prohibition on the Respondent (Defendant) obtaining contribution contained in s93F(4) would not apply."

1. The court noted that the prohibition went to the remedy and not the right saying at par30:

"Given that the Compensation Act has been amended to remove the express prohibition on commencing an action, it must be assumed that Parliament has now deliberately chosen not to prevent the bringing of an action. There may be good reasons of policy for directing the prohibition to the stage of the award of damages, rather than that of institution of the action."

1. The argument and outcome are set out at pars32 and 34 which are as follows:

"32      Finally, the appellant raises the question of the effect of s93F(4) and asserts that, since there has been no determination of a relevant level of disability, s93E(3) does not allow damages to be awarded in respect of that disability and therefore the appellant 'is not liable' to make any contribution pursuant to the Contribution Act. Since the appellant is not liable to make contribution, it follows, it is said, that no action against the appellant for contribution is competent.

…

34         It appears that in using the words 'is not liable', s93F(4) is not intended to indicate whether or not an action may be brought. Rather, like s93C, it looks to the time at which the award would normally be made. The cause of action in contribution does not arise until judgment in the main action. In our view s93F looks to the time at which liability to make contribution would arise, and provides that if at that time s93E(3) does not permit damages to be awarded, or if at that time damages have been awarded in accordance with s93F(1), then there is no liability for contribution. "

1. Western Metals was referred to in Skilled Engineering Ltd v Glaxo Wellcome Australia Pty Ltd (supra) and summarised at par19 in the following terms:

"Western Metals Zinc NL v Wesfarmers Transport Ltd (supra) involved legislation that at the date of the injury in question had included a provision that proceedings were not to be commenced without leave. That provision had been repealed but a provision remained to the effect that when the division which covered the claim applied, a court was "not to award damages" contrary to the division. It was held that this provision did not preclude the bringing of an action in circumstances where the division might not be satisfied and that the prohibition was directed to the stage of the award of damages, rather than the institution of the action."

1. There is nothing in Western Metals to support the defendant's contention that contribution proceedings can be commenced at a time when the plaintiff, in the hypothetical proceedings against the third party contemplated by the Act, s3(1)(c), is without a cause of action. 

1. The second case referred to by counsel for the defendant was Forstaff Blacktown Pty Ltd v Brimac (2005) NSWCA 423. Like Western Metals, however, there the legislation was concerned with the required degree of impairment existing at the date of trial rather than necessarily at the date of the institution of the proceedings.  This case provides no support for the defendant. 

1. The proposed contribution proceedings cannot be brought unless and until the plaintiff has a cause of action against the prospective third parties.  There being no agreement or determination that the plaintiff has a degree of permanent impairment of not less than 30% there is presently no cause of action against them.  The proceedings, if instituted, would be struck out as premature. 

1. It follows that the application must be dismissed.