Prentice & Carmody as trustees for the Carmprent Unit Trust v AGL Sales Pty Ltd
[2015] QSC 154
•17 June 2015
SUPREME COURT OF QUEENSLAND
CITATION:
Prentice & Carmody as trustees for the Carmprent Unit Trust & Anor v AGL Sales Pty Ltd & Ors [2015] QSC 154
PARTIES:
ANTHONY ERNEST PRENTICE AND JOHN PATRICK CARMODY AS TRUSTEES FOR THE CARMPRENT UNIT TRUST
(first plaintiffs)
CARMPRENT PTY LTD (ACN 114 898 985)
(second plaintiff)
v
AGL SALES PTY LTD (ACN 070 182 099)
(first defendant)
LANDIS & GYR PTY LTD (ACN 002 894 224)
(second defendant)
FORMWAY GROUP METERING PTY LTD
(ACN 140 782 421)
(third defendant)
ENERGEX LIMITED (ACN 078 849 055)
(fourth defendant)
SPI ELECTRICITY PTY LTD (ACN 064 651 118)
(third party)
FILE NO/S:
9985 of 2013
DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
17 June 2015
DELIVERED AT:
Brisbane
HEARING DATE:
On the papers, 21 May 2015
JUDGE:
Martin J
ORDER:
1. The second defendant’s amended notice claiming contribution from the third defendant dated 19 May 2015 is struck out.
2. The second defendant’s amended notice claiming contribution from the fourth defendant dated 19 May 2015 is struck out.
CATCHWORDS:
PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PLEADING – GENERALLY – where the third and fourth defendants seek to strike out the notice of contribution issued to each of them by the second defendant – where the plaintiffs’ claim for damages against the second defendant is pursuant to s 74B of the Trade Practices Act 1974 – where the plaintiffs’ claim against the third and fourth defendants is, in part, a negligence claim – whether the action available under s 74B is a tort – whether the second defendant is a tortfeasor – whether section 6 of the Law Reform Act 1995 applies – whether the “damage” suffered by the plaintiffs arising out of the application of s 74B is of a different character to that available against the third and fourth defendants
Civil Liability Act 2003, s 28, s 31, s 32A
Law Reform Act 1995, s 6Trade Practices Act 1974, s 52, s 74B
ACQ Pty Ltd v Cook (2008) 72 NSWLR 318
Alexander v Perpetual Trustees (2004) 216 CLR 109
Bartley v Myers (2002) 83 SASR 183
Commonwealth Bank of Australia v White [1999] 2 VR 681
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Jonstan v Nicholson (2003) 58 NSWLR 223
Lew Footwear Holdings Pty Ltd v Madden International Ltd [2014] VSC 320
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
Royal Brompton Hospital NHS Trust v Hammond [2002] 1 WLR 1397
Wallace v Litwiniuk (2001) 92 Alta LR (3d) 249
Williams v The Society of Lloyd’s [1994] 1 VR 274Zaravinos v Dairy Farmers Co-operative Ltd & anor (1985) 7 FCR 195
COUNSEL:
M Steele for the second defendant
K Holyoak for the third defendant
S Lumb for the fourth defendantSOLICITORS:
Wotton + Kearney Lawyers for the second defendant
Barry Nilsson Lawyers for the third defendant
Curwoods Lawyers for the fourth defendant
On 9 November 2010 the Sundowner Saloon hotel at Haigslea caught fire and substantial parts of the hotel were destroyed. The plaintiffs, who owned the hotel and its contents, seek damages under a number of heads. For the purposes of the application with which these reasons deal, it need only be noted that one of the claims for damages against the second defendant is pursuant to s 74B of the Trade Practices Act 1974.
The plaintiffs allege that the fire was started by a faulty Smart Meter (an electrical device). A number of causes of action are pleaded against the various defendants but, for the purposes of this application, a very abbreviated summary of the basis of the claims against the relevant defendants will suffice. It is alleged that:
(a) The second defendant (L&G) manufactured and supplied the Smart Meter which is said to be faulty.
(b) The third defendant (Formway) negligently advised the plaintiffs that, notwithstanding the burning smell being given off by the Smart Meter, that there was no need to do anything.
(c) The fourth defendant (Energex) negligently installed the Smart Meter.
In this application, Formway and Energex seek to have the notice of contribution from L&G to each of them struck out.
Notices claiming contribution
The notice against each of the third and fourth defendants is in the same terms:
“Take notice that the Second Defendant claims from you contribution under section 6 of the Law Reform Act1995, solely in respect of any liability in damages found for the Plaintiffs against the Second Defendant pursuant to section 74B of the Trade Practices Act 1974 (Cth), in such amount as the Court may think fit. This claim is made relying on the Plaintiffs’ allegations against you. Unless you wish to rely on some matter not pleaded by you in your Defence to the Plaintiffs’ Fourth Amended Statement of Claim, you need not plead to this notice and this claim will be taken to be in issue.”
Section 74B of the Trade Practices Act 1974[1] provided:
[1]The ambit of s 74B was altered when the TPA was replaced by the Competition and Consumer Act 2010 (Cth). A similar, but not identical, provision can now be found by combining various parts of sections 54, 259, 260(e), 271(1) and (2) in Schedule 2 of the Competition and Consumer Act.
“74B Actions in respect of unsuitable goods
(1) Where:
(a)a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply;
(b)a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer;
(c)the goods are acquired by the consumer for a particular purpose that was, expressly or by implication, made known to the corporation, either directly, or through the person from whom the consumer acquired the goods or a person by whom any antecedent negotiations in connexion with the acquisition of the goods were conducted;
(d)the goods are not reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied; and
(e)the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not reasonably fit for that purpose;
the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction.
(2) Subsection (1) does not apply:
(a)if the goods are not reasonably fit for the purpose referred to in that subsection by reason of:
(i)an act or default of any person (not being the corporation or a servant or agent of the corporation); or
(ii) a cause independent of human control;
occurring after the goods have left the control of the corporation; or
(b)where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgment of the corporation.”
L&G relies upon s 6 of the Law Reform Act 1995 (‘LRA’). It provides:
“6 Proceedings against, and contribution between, joint and several tortfeasors
Where damage is suffered by any person as a result of a tort (whether a crime or not) the following apply—
(a) judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage;
(b) if more than 1 action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the spouse, parent, or child of that person, against tortfeasors liable in respect of the damage (whether as joint tortfeasors or otherwise)—the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action;
(c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by the person in respect of the liability in respect of which the contribution is sought.”
The claim by the plaintiffs against L&G
In the fourth amended statement of claim (FASOC) the relevant claim by the first plaintiffs against the second defendant is contained in the following paragraphs.
“24. At all material times:
(a) The second defendant, as the manufacturer of the Smart Meter, supplied the Smart Meter in trade or commerce to another person who acquired the Smart Meter for resupply;
PARTICULARS
(i)On or about 23 December 2004, the second defendant entered into a contract (Meter Supply Contract) with DMS pursuant to which the second defendant was to provide services and/or materials to DMS as defined in the Meter Supply Contract;
(ii)Pursuant to the Meter Supply Contract, on or about 17 April 2007 DMS ordered a batch of EM5100 model smart meters, which included the Smart Meter;
(iii)On or about 8 May 2007 the second defendant delivered to DMS the subject Smart Meter which was as part of a batch supplied pursuant to the Meter Supply Contract
(iv)The subject Smart Meter, as part of the batch, was to be used for resupply insofar as the business of DMS or the third party involved the installation of smart meters in premises.
(b) the first defendant supplied the Smart Meter to the first plaintiffs;
PARTICULARS
(i)The plaintiffs repeat and rely upon the particulars in paragraphs 4 to 9.
(c) the first plaintiffs were consumers within the meaning of section 4B of the TPA;
(d) the Smart Meter was acquired by the first plaintiffs for the purpose of recording and monitoring electricity usage;
(e) such purpose was expressly or by implication made known to the second defendant;
PARTICULARS
(ai)the second defendant, as the manufacturer, knew that the purpose of the EM5100 model smart meter (one of which was supplied to the plaintiffs) was to measure, record and in certain cases transmit data relating to the use of electricity in premises;
(aii)the second defendant had entered into the Meter Supply Contract and had supplied the Smart Meter to DMS pursuant to that contract;
(aiii)there was no other purpose for which the Smart Meter would be supplied to DMS;
(i)the second defendant knew or ought to have known that it supplied the EM5100 model smart meter to entities such as DMS with which it had a Meter Supply Contract. By reason of having such a contract it knew or ought to have known that the Smart Meter was likely to be used in a premises (including commercial premises such as Hotels) for the purposes of measuring, recording and in certain cases transmitting data relating to the use of electricity in premises;
(ii)in the premises aforesaid, the purpose of the Smart Meter was by implication made known to the Second Defendant.
(f) the Smart Meter was not reasonably fit for purpose;
PARTICULARS
(i)the first defendant supplied a Smart Meter which was defective by reason that it was capable of igniting and catching fire during ordinary usage and ultimately did so;
(ii)a smart meter which catches fire during ordinary usage is not fit for the purpose of monitoring electricity usage;
(iii)the Smart Meter contained the defect as particularised in paragraph 33A herein;
(iv)by reason of the defect, there existed a risk that the Smart Meter may ignite and catch fire.
25. Further, at all material times:
(a) the second defendant, as manufacturer of the Smart Meter, supplied the Smart Meter in trade or commerce to another person who acquired the Smart Meter for resupply;
PARTICULARS
(i)The plaintiffs repeat and rely on the particulars to paragraph 24(a) aforesaid.
(b) the first defendant supplied the Smart Meter to the first plaintiffs;
PARTICULARS
(i)The plaintiffs repeat and rely upon the particulars in paragraphs 4 to 9 aforesaid.
(c) The first plaintiffs were consumers within the meaning of section 4B of the TPA;
(d) The Smart Meter was not of merchantable quality;
PARTICULARS
(i)the first defendant supplied a Smart Meter for use in a commercial premises in which persons and valuable assets would be located, which was defective by reason that it was capable of igniting and catching fire during its ordinary usage and ultimately did so;
(ii)a smart meter which catches fire during ordinary usage is not fit for the purpose of monitoring electricity usage.
(iii)the Smart Meter contained the defect as particularised in paragraph 33A herein;
(iv)by reason of the defect, there existed a risk that the Smart Meter may ignite and catch fire.
26. By reason of the fire in paragraph 19 aforesaid, the first plaintiffs suffered loss and damage as set out in paragraph 45 and 47 herein.
27. In the premises of paragraphs 24 and 26 aforesaid, the second defendant is liable to compensate the first plaintiffs for the loss and damage as particularised in paragraphs 45 and 47 herein.
PARTICULARS
(i) The liability to compensate is pursuant to section 74B of the TPA.
28. In the premises of paragraphs 25 and 26 aforesaid, the second defendant is liable to compensate the first plaintiffs for the loss and damage as particularised in paragraphs 45 and 47 herein.
PARTICULARS
(i)The liability to compensate is pursuant to section 74B of the TPA.”
The claim by the second plaintiff against L&G is in similar terms.
The damages claimed are set out in paragraphs 45 – 47 of the FASOC. Put briefly, they are as follows:
(a) Paragraph 45 links the first plaintiff’s loss suffered as a result of damage to the hotel to:
(i)The breach of s 74B of the TPA by L&G,
(ii)The breach of s 52 of the TPA and/or negligence by Formway,
(iii)The negligence of Energex.
(b) Paragraph 46 links the second plaintiff’s loss suffered as a result of damage to equipment within the hotel to:
(i)The breach of s 74B of the TPA and/or negligence by L&G,
(ii)The breach of s 52 of the TPA and/or negligence by Formway,
(iii)The negligence of Energex.
(c) Paragraph 47 links the plaintiffs’ loss suffered as a result incurring expenses to reinstate the hotel and the business to:
(i)The breach of s 74B of the TPA and/or negligence by L&G,
(ii)The breach of s 52 of the TPA and/or negligence by Formway,
(iii)The negligence of Energex.
The issues
The applicants’ argument is that s 6 of the LRA cannot apply as:
(a) L&G is not a “tortfeasor” within the meaning of s 6(c) in relation to any of the claims for which it may be found liable to the plaintiffs which are not “apportionable” pursuant to Part 2 of Chapter 2 of the Civil Liability Act 2003 (‘CLA’).
(b) If L&G is a “tortfeasor” then it is not entitled to indemnity or contribution because either applicant, if also a tortfeasor, cannot be liable in respect of the “same damage”. As the claim against each applicant is, if made out, an apportionable claim, L&G cannot be liable, with either applicant, for the same damage.
L&G submits that the proper construction of s 6 of the LRA should be ventilated at trial and that its contentions are not so “manifestly groundless”[2] that the notices claiming contribution should be struck out. It also argues that, for the purposes of s 6, whether a breach of s 74B of the TPA is a tort is a question which remains open.
[2] From General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129.
Does s 6 of the LRA apply?
Before contribution can be required to be made under s 6 there must first be “damage … suffered … as a result of a tort”. Section 6(c) then allows:
(a) a tortfeasor who is liable “in respect of that damage”
(b) to recover contribution
(c) from another tortfeasor who is
(d) liable in respect of the same damage.
Where is the tort?
The issue which was at the centre of the debate between the parties was whether or not the claim against L&G under s 74B of the TPA came within the meaning of the word “tort” in s 6 of the LRA. L&G argued that the proper construction of s 6 of the LRA, and whether it could seek contribution, should be left for consideration at the trial on the basis that its contentions were not so “manifestly groundless” as to allow for the notices seeking contribution to be struck out. Whether its contentions are manifestly groundless depends, in the first place, on the proper characterisation of the action against L&G under s 74B. In other words, does the basis for that action come within the meaning of the word “tort” as used in s 6?
There has been much consideration given to whether or not a breach of s 52 of the TPA is a “tort” for various purposes. It should be observed that s 52 was found in Pt V Div 1 of the TPA. In that division were a number of sections which proscribed certain “unfair practices, for example:
s 52“A corporation shall not … engage in conduct that is misleading or deceptive …”
s 53(a)“A corporation shall not … falsely represent that goods are of a particular standard …”.
s 55A“A corporation shall not … engage in conduct that is liable to mislead the public as to the nature, characteristics … of any services.”
Almost all of the provisions in the division were prohibitions on a corporation doing something which would fall within the genus of “unfair practices”.
Section 74B was in Pt V Div 2A of the TPA. That division dealt with actions against manufacturers or importers of goods. Other sections dealt with actions in respect of:
s 74C false descriptions
s 74D goods of unmerchantable quality
s 74E goods which do not match a sample.
Division 2A, as it applied in 1985, was described by Lockhart J in Zaravinos v Dairy Farmers Co-operative Ltd & anor[3] as “a revolutionary code of products liability”.[4] He went on to describe the purpose of the division:
“The rationale behind Division 2A is that liability for defects in goods should be borne by the manufacturer rather than the retailer because of modern methods of packaging, labelling, distribution and promotion of goods. Division 2A does not apply where there is a contract between the manufacturer and a consumer. It applies where the manufacturer supplies goods to another person, usually a distributor or retailer, who acquires the goods for the purposes of re-supply.” [5]
[3] (1985) 7 FCR 195.
[4] Ibid at 199.
[5] Ibid.
None of the sections in Div 2A purport to prohibit any conduct – they create a consequence for certain defined actions or behaviour. So far as s 74B was concerned, Lockhart J said:
“Section 74B creates a right in a consumer to recover loss or damage from the manufacturer of goods which are not reasonably fit for a particular purpose made known to the manufacturer, but, contrary for example to s 52, the section does not prohibit conduct of any kind by anybody. Hence, there is no conduct prohibited by that section which may constitute a contravention. It follows that no claim can be brought under s 82.”[6]
I respectfully agree with that description.
[6] Ibid.
The question of whether a breach of s 52 can amount to a “tort” has arisen with respect to other statutes or rules. A number of cases have considered r 7.01(1) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) which provides for service out of the jurisdiction where the proceeding is founded on a tort committed within Victoria.
In Williams v The Society of Lloyd’s[7] McDonald J held that damage suffered by reason of a contravention of the TPA caused by misleading or deceptive conduct was not caused by a “tortious act or omission” as that term is used in r 7.01(1). Five years after that decision, Byrne J, in Commonwealth Bank of Australia v White[8] came to the contrary conclusion that a claim for a breach of s 52 was a tort within the meaning of that rule. These conflicting decisions were the subject of consideration by Elliott J in Lew Footwear Holdings Pty Ltd v Madden International Ltd.[9] Elliott J examined a number of authorities before coming to this conclusion:
“[196] Given the state of the authorities, the preferred approach is to adopt the meaning of ‘tort’ in r 7.01(1)(i) given by Byrne J in Commonwealth Bank of Australia v White. … There is no proper basis upon which I could form the view that Byrne J was plainly wrong.” (citations omitted)
[7] [1994] 1 VR 274.
[8] [1999] 2 VR 681.
[9] [2014] VSC 320.
One of the cases referred to by Elliott J was Jonstan v Nicholson.[10] In that case Hulme J considered whether a claim under s 52 of the TPA and/or s 42 of the Fair Trading Act 1987 (NSW) should be regarded as a “tort” when determining whether the person engaged in the conduct was a “tortfeasor” for the purposes of s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). Section 5 of the New South Wales Act is in the same terms as s 6 of the LRA. Hulme J referred to the effect of s 52 of the TPA and, in particular, the fact that s 52 does not of itself give rise to any liability because the consequences of a contravention of it are found in other sections of the Act such as s 82. His Honour, in reviewing the authorities, said:
“[72] Whether a breach of s52 constitutes a tort has been the subject of consideration on a number of occasions. For example, in ANZ Banking Group Ltd v Turnbull[1991] FCA 618; (1991) 33 FCR 265 at 277, Shepherd J said that an action for breach of s52 was entirely statutory and not a tort. In an article in volume 67 of the Australian Law Journal, “Contribution, Contributory Negligence and Section 52 of the Trade Practices Act” Mr J C Campbell QC, (now Campbell J) argues that an action for breach of s52 is a tort. In Dorrough v Bank of Melbourne Ltd(1995) ATPR (Digest) 53,185 Cooper J, influenced by that article, said that there was a substantial argument that an action for breach of s52 was a tort. In Bialkower v Acohs Pty Ltd(1998) 83 FCR 1 at 11 the full Federal Court said that it preferred the views of Sheppard J to those of advanced by Campbell J but that it was unnecessary for the matter to be decided. Citing Bialkower v Acohs Pty Ltd, in Burke v LFOT Pty Ltd (2000) 178 FLR 161 at [131], Lehane J took the same view. In fact, as the other judgments in that case make clear, no party had suggested that s5 of the (Law Reform Miscellaneous Provisions) Act applied. On appeal, as might be expected, there was no discussion of s5 beyond the remark of Kirby J that “No state legislation intrudes to afford here a statutory foundation for contribution ...” - Burke v LFOT Pty Ltd[2002] HCA 17; (2002) 76 ALJR 749 at [99].”
[10] (2003) 58 NSWLR 223.
His Honour then considered whether the presence of s 82 changed that approach given that it and other sections provided remedies for a breach. He said:
“[77] At least in part it was the presence of s82 which influenced the court in Bialkower v Acohs Pty Ltd(1998) 83 FCR 1 at 11, to say that ‘the cause of action under s82 for breach of s52 of the Act is entirely statutory and is not an action in tort’. On the other hand, one of the difficulties which have beset courts asked to consider whether breaches of duties imposed by statute give rise to a civil cause of action has been the determination of what Parliament’s intention was. Commonly that has not been clearly expressed. An alternate way of looking at s82 is to regard the provision as merely an express indication of what might, and in my view would, otherwise have been implied, viz. that anyone who suffered in consequence of a breach of the obligations the statute imposed was to have a cause of action for the breach.
[78] To conclude that although, if s82(1) was not in the Act, a breach of s52 would constitute the tort of breach of statutory duty and would confer on someone injured by the breach a right to damages, the presence of an express statement in s82(1) that such damages may be recovered removes the breach from the concept of tort is to draw a distinction which is both fine and of no obvious practicable use.”
Hulme J then went on to consider decisions of the Federal Court to which I shall return and concluded:
“[97] In short, because I am disposed to give to the word ‘tort’ in s5 of the Law Reform (Miscellaneous Provisions) Act 1946, the meaning to which Winfield[11] assigns it, rather than that which it bore in previous centuries and because the High Court has thought it proper to so characterise at least one civil wrong where both the breach of obligation and right of action are the product of statute, it seems to me that, for the purposes of s5, a breach of s52 of the Trade Practices Act should be regarded as a tort and the person committing such a breach a ‘tortfeasor’. Because of the similarity in language, the same approach should be taken in relation to breaches of s42 of the Fair Trading Act.”
[11] Winfield, The Province of the Law of Tort 1st ed, 1937.
These decisions – Lew Footwear and Jonstan – are inconsistent with views expressed by other courts. In ACQ Pty Ltd v Cook[12] the New South Wales Court of Appeal examined some of the authorities on this point and said:
“[174] The balance of authority supports the view that the action for damages conferred by section 82 Trade Practices Act is not an action in tort, notwithstanding that it expressly confers a remedy for a breach of a standard of action that the Trade Practices Act itself requires to be adhered to: Bialkower v Acohs Pty Ltd(1998) 83 FCR 1 at 11; Marks v GIO Australia Holdings Ltd[1998] HCA 69; (1998) 196 CLR 494 at [17] 503-504, [38] 510, [40] 512; Hampic Pty Ltd v Adams[1999] NSWCA 455 at [61]. Until Part VIAA was introduced into the Trade Practices Act in 2004, the action for damages conferred by section 82 of that Act was not one in which damages could be reduced if the applicant’s conduct had contributed to the loss or damage: I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109. Similarly, when the action for damages under DAA is not for the breach of the tort of statutory duty, but is the enforcement of an expressly conferred statutory right of action, circumstances that fell within section 10(1) DAA would not be a ‘wrong’ within the meaning of section 8(a) of the 1965 Act because they would not involve an act or omission that gave rise to a liability in tort. Nor would there be a liability in respect of which a defence of contributory negligence was available at common law. The wording of section 8(b) of the 1965 Act clearly does not apply to the action under DAA. Thus, such an action is not a ‘wrong’ within the meaning of the 1965 Act.”
[12] (2008) 72 NSWLR 318.
A conclusion to like effect was reached by the Full Court of the Supreme Court of South Australia in Bartley v Myers[13].
[13] (2002) 83 SASR 183 at [211] and [329].
Whether an action based upon a breach of s 52 is a “tort” for the purposes of s 6 of the LRA is unnecessary to decide, but the debate in the authorities referred to above informs the decision which needs to be made about the status of s 74B.
At the base of each of the Lew Footwear and Jonstan decisions is the fact that s 52 imposes a duty on corporations. Where there is a duty, then a breach of that duty is possible and, so, one can speak of “a breach of s 52”. The same cannot be said of s 74B. As Lockhart J concluded in Zaravinos, it is wrong to speak of “a breach of s 74B” because no duty is imposed nor is any conduct prohibited. That, though, is not conclusive of the matter.
This is not the place to engage in a detailed study of what constitutes a “tort” for there are nearly as many definitions of tort as there are types of tort. As Hulme J observed in Jonstan:
“[60] There is, and was in 1946 (and in the 1930s when the English predecessor to s5 of the Law Reform (Miscellaneous Provisions) Act 1946 was introduced), no precise and universally accepted definition of a ‘tort’. It was defined in Salmond on the Law of Torts, 8th ed (1934), p15 as ‘a civil wrong for which the remedy is a common law action for unliquidated damages, and which is not exclusively the breach of a contract or the breach of a trust or other merely equitable obligation’, although in a footnote the author goes on to say that ‘No satisfactory definition of a tort has yet been found’. Winfield, 1st ed (1937), para2 said that ‘Tortious liability arises from the breach of a duty primarily fixed by law; this duty is towards persons generally and its breach is redressible by an action for unliquidated damages’. Earlier, in ‘Province of the Law of Tort’, the author had said that ‘unless an action were maintainable in the courts of Kings Bench, Common Pleas, Exchequer (or any one of them), as they existed before the Judicature Acts, it cannot be an action in tort’ although he had declined to include reference to this jurisdictional element in the definition - see p237. Pollock on Torts, 13th ed (1929), at page 5 contained a similar view. Clerk and Lindsell on Torts, 9th ed (1937), page 1 adopts the definition I have cited from Winfield although records that in the previous edition the definition had been ‘A tort may be described as a wrong independent of contract, for which the appropriate remedy is a common law action’. (The previous edition had been published in 1939.)
[61] Later editions - see Winfield and Jolowicz on Tort, 14th. ed, p4, Clerk and Lindsell, 14th ed, para1, Salmond and Heuston on The Law of Torts, 21st ed, p13 repeat those views. Fleming, The Law of Torts, 9th ed, p1 refers to Winfield's ‘Province of the Law of Tort’ and goes on to explain the concept by contrasting tortious liability with what he suggests are ‘broadly speaking (the other aspects of) the entire field of liability’ viz criminal, contractual and restitutionary. Byrne J in Commonwealth Bank of Australia v White (1999) 2 VR 681 at 697 also acknowledged the difficulty in definition.
[62] The definition in an early edition of Salmond and remarks to similar effect in Halsbury led Menhennitt J in Philip Morris v Ainley (1975) VR 345 at 349 to say that it appeared to him that ‘an action in tort is one in which the remedy is a common law cause of action although the right being enforced in the action may be a right created by either the common law or statute’. His Honour went on to hold that a statutory entitlement to an indemnity was not an action in tort although, it should be noticed, not on the simple basis that the remedy was conferred by statute.”
In Halsbury’s Laws of Australia the following is offered:
“[415-1] A ‘tort’ is a breach of a duty which has been imposed by law and which gives rise to a civil right of action for unliquidated damages. The law of tort protects certain recognised interests, such as the protection of one’s person and chattels, reputation and use of land.”
In The Laws of Australia this definition is adopted:
“[33.1.10] … a tort is defined as an interference with a person or personal liberty; reputation or dignity; possession of, or title to, land or chattels; certain economic interests; relations with others; or the proper exercise of executive or judicial power. Such interference ‘arises from the breach of a duty primarily fixed by law’, which duty is owed to persons generally and does not depend upon any agreement or consent between the parties.”
That very brief survey does show a concentration on the presence of a “duty” as an element of a broad definition of “tort”. As I have set out above, s 74B does not impose a duty and the right to claim damages does not rest upon any breach of a duty, an obligation or a requirement. One of the purposes of s 74B is to give a remedy to a person who might otherwise not have been able to seek redress due to not having any contractual relationship with a manufacturer. The action available under s 74B cannot be classified as tortious. It is a statutory right which arises in the circumstances prescribed in that section. Thus, any damages which the plaintiffs can recover from L&G under s 74B are not damages “suffered … as a result of a tort” and L&G cannot avail itself of s 6 of the LRA.
If my view is incorrect, then it is appropriate that I consider the issue of “same damage”.
Is the damage under s 74B the same as the damage allegedly caused by Formway and Energex?
In s 6(c) “that damage” is a reference to the “damage … suffered … as a result of a tort”. The section requires the identification of the “damage” suffered because the person seeking contribution must be liable for the same damage as the person from whom contribution is sought. There can be no claim for contribution by a person who has not committed a tort even if the actions of that person have caused damage.
L&G seeks contribution only with respect to any liability for damages it incurs pursuant to s 74B of the TPA. If, for the purposes of this discussion, it is assumed that the plaintiffs suffered damage as a result of the supply to them by L&G of goods that were not reasonably fit for purpose, then the question which necessarily arises is: Is that damage the same as the damage alleged to have been suffered by the plaintiffs for which Formway (negligent advice) and Energex (negligent installation) are said to be liable?
Section 74B does not proscribe conduct in the same way that s 52 proscribes “misleading or deceptive conduct”. Rather, it provides for consequences if goods are not reasonably fit for purpose. It provides that a “corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action”. A similar form of words was used in s 82 of the TPA[14]: “… a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVA, IVB or V … may recover the amount of the loss or damage by action …”.
[14] The relevant part of the “old” s 82 is now s 82 of the Competition and Consumer Act.
Section 74B requires examination, among other things, of whether the consumer has suffered loss or damage “by reason” of the goods not being reasonably fit for purpose. A similar task is required by s 82. In Marks v GIO Australia Holdings Ltd[15] the task in s 82 was described in this way:
“[38] It can be seen, therefore, that both ss 82 and 87 require examination of whether a person has suffered (or, in the case of s 87, is likely to suffer) loss or damage ‘by conduct of another person’ that was engaged in the contravention of one of the identified provisions of the Act. That inquiry is one that seeks to identify a causal connection between the loss or damage that it is alleged has been or is likely to be suffered and the contravening conduct. But once that causal connection is established, there is nothing in s 82 or s 87 (or elsewhere in the Act) which suggests either that the amount that may be recovered under s 82(1), or that the orders that may be made under s 87, should be limited by drawing some analogy with the law of contract, tort or equitable remedies. Indeed, the very fact that ss 82 and 87 may be applied to widely differing contraventions of the Act, some of which can be seen as inviting analogies with torts such as deceit[16] or with equity[17] but others of which find no ready analogies in the common law or equity, shows that it is wrong to limit the apparently clear words of the Act by reference to one or other of these analogies.” (emphasis added)
[15] (1998) 196 CLR 494.
[16] For example, s 52.
[17] For example, s 51AA.
There is no obvious reason why the approach referred to in Marks should not also apply to the assessment of “loss or damage” under s 74B with the result that the assessment may differ from the amount which would have been reached if the measure used in assessing damages in tort had been used. Assuming that the goods are not fit for purpose then the assessment of the damage referred to in s 6 of the LRA may be of a different nature and extent to that which would be awarded if the case against either Formway or Energex is proved.
A difference in the measure which can be used to assess damage was considered in Wallace v Litwiniuk[18]. In that case a provision similar to s 6 of the LRA, s 3(1) of the Canadian Tort-Feasors Act 1980, was considered. It provided:
“When damage is suffered by any person as a result of a tort, whether a crime or not,
(a) . . .
(b) . . .
(c)any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is or would, if sued, have been liable in respect of the same damage, whether as a joint tort-feasor or otherwise, but no person is entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability regarding which the contribution is sought.” (emphasis added)
[18] (2001) 92 Alta LR (3d) 249.
The court held:
“[32] …The compensation which she [the plaintiff] presently seeks from the respondents [the lawyers] is not damages for her physical injuries, but damages for what she would have obtained had the original claim been brought. In both cases, she sought damages, but that is not to say she sought the same damage. The damage is different. . . .
[33] The pleadings in [the plaintiff's] statement of claim against [the lawyers] only superficially look as though she is claiming the same damages she would have claimed against the [the negligent driver]. This seeming similarity results from the usual method for calculating damages in a professional negligence claim where a lawyer failed to bring litigation which might otherwise have been pursued. Damages for the professional negligence are calculated by reference to the damages which would have been obtained in the original claim: Dugdale and Stanton, Professional Negligence (London: Butterworths, 1989) at pp 363-364.
[34] The distinct nature of the original claim and the professional negligence claim is recognised by the need to estimate the value of the original claim, and then discount for the costs of pursuing the original litigation, and allow for any chance that the original claim might not have succeeded.”
That analysis was approved in Royal Brompton Hospital NHS Trust v Hammond[19]. That decision was, in turn, referred to with approval by the High Court in Alexander v Perpetual Trustees[20]. In Alexander the appellants sought contribution from the respondents under s 23B of the Wrongs Act 1958 (Vic). Section 23B(1) provided: “Subject to the following provisions of this section, a person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage …”.
[19] [2002] 1 WLR 1397.
[20] (2004) 216 CLR 109.
The statutory majority[21] said:
“[25] The issue currently before the court is not to be resolved primarily through reference to common law and equitable principles governing contribution, nor through a misplaced reliance on the circumstance that the areas of liability in respect of which the right to contribution potentially may apply have significantly been widened by the Act. Cautionary observations to like effect were made with respect to the UK Act by the House of Lords in Royal Brompton Hospital NHS Trust v Hammond.
[26] The evident remedial purpose of the legislation has been relied upon, in both the United Kingdom and this country, to support what is said to be a wide or broad interpretation of the statutory right and remedy which it created. Such expressions mask the requirement that the legislation be given its proper construction having regard to its purpose and scope. The new statutory right and remedy do not operate at large. Rather, they are available only to a party who meets the criteria specified in Pt IV. In Royal Brompton Hospital, Lord Bingham of Cornhill said of the UK Act:
‘When any claim for contribution falls to be decided the following questions in my opinion arise. (1) What damage has A suffered? (2) Is B liable to A in respect of that damage? (3) Is C also liable to A in respect of that damage or some of it?’
Translated to the present appeal, A represents the plaintiffs, B the respondents, and C Minters.
[27] Where a person has suffered damage in connection with some transactions or events involving the wrongful conduct of others, the statutory creation of rights of contribution between the wrongdoers seeks to address the injustice that may result in some cases if the victim, by his or her selection of defendants, could throw the burden of liability on to one or some of the wrongdoers, to the exclusion of the others. A policy of preventing or limiting such injustice will require a legislature to make choices between different methods of giving effect to that policy. Those choices will be reflected in the terms of the legislation. The Act directs attention to a common liability by using in s 23B the expression ‘in respect of the same damage’. This is a narrower concept than that of liabilities arising out of, or by reason of, the same transactions or related transactions. In resolving questions of construction of the legislation, it is not to be assumed that the legislative purpose is always to provide the widest possible sharing of liabilities, actual or potential, real or hypothetical.” (citations omitted)
[21] Gleeson CJ, Gummow and Hayne JJ
The “damage” suffered by the plaintiffs arising out of the application of s 74B is of a different character to that available against Formway and Energex. The remedy is a statutory one which has been held not to be subject to the same limitations as the relief available in an action for negligence. It cannot be said, therefore, that the “same damage” is available to be the subject of contribution.
A different consideration arises so far as the claim against Formway is based on s 52 of the TPA. The same measure of damage appears in s 52 and s 74B. On the assumption (which so far as s 74B is concerned, I do not accept) that the cause of action available in both sections can be regarded as falling within the definition of “tort” in s 6 of the LRA, then contribution would be available.
Apportionment
The plaintiffs’ claims against Formway are based on a breach of s 52 of the TPA and negligence. The claims against Energex are in negligence only.
So far as is relevant, the CLA provides:
“28 Application of pt 2
(1) This part applies to either or both of the following claims (apportionable claim)—
(a)a claim for economic loss or damage to property in an action for damages arising from a breach of a duty of care;
(b)a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 1989 for a contravention of the Australian Consumer Law (Queensland), section 18.
(2) For this part, if more than 1 claim of a kind mentioned in subsection (1)(a) or (1)(b) or both provisions is based on the same loss or damage, the claims must be treated as a single apportionable claim.
(3) This part does not apply to a claim—
(a) arising out of personal injury; or
(b) by a consumer.
(4) Also, this part does not apply to a claim to the extent that an Act provides that liability for an amount payable in relation to the claim is joint and several.
(5) A provision of this part that gives protection from civil liability does not limit or otherwise affect any protection from liability given by any other provision of this Act or by another Act or law.
…
31 Proportionate liability for apportionable claims
(1) In any proceeding involving an apportionable claim—
(a)the liability of a defendant who is a concurrent wrongdoer in relation to the claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just and equitable having regard to the extent of the defendant’s responsibility for the loss or damage; and
(b)judgment must not be given against the defendant for more than that amount in relation to the claim.
(2) If the proceeding involves both an apportionable claim and a claim that is not an apportionable claim—
(a)liability for the apportionable claim, to the extent it involves concurrent wrongdoers, is to be decided in accordance with this part; and
(b)liability for the other claim, and the apportionable claim to the extent it is not provided for under paragraph (a), is to be decided in accordance with the legal rules, if any, that, apart from this part, are relevant.
(3) In apportioning responsibility between defendants in a proceeding the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceeding.
(4) This section applies to a proceeding in relation to an apportionable claim whether or not all concurrent wrongdoers are parties to the proceeding.
…
32A Contribution not recoverable from concurrent wrongdoer
Subject to this part, a concurrent wrongdoer against whom judgment is given under this part in relation to an apportionable claim—
(a) can not be required to contribute to the damages recovered or recoverable from another concurrent wrongdoer for the apportionable claim, whether or not the damages are recovered or recoverable in the same proceeding in which the judgment is given; and
(b) can not be required to indemnify the other concurrent wrongdoer.”
The claims made against Formway and Energex in negligence are “apportionable claims” as they fall within that description in s 28(1)(a) of the CLA. The claim against L&G pursuant to s 74B of the TPA is not an apportionable claim as it does not fall within either category under s 28(1) of the CLA. In accordance with s 31(2)(a) of the CLA, the liability for the apportionable claim (to the extent that it involves concurrent wrongdoers) is to be decided in accordance with the proportionate liability provisions of the CLA, namely, Chapter 2, Part 2.
Section 32A of the CLA provides that a concurrent wrongdoer against whom judgment is given under Part 2 in relation to an apportionable claim cannot be required to contribute to the damages recovered or recoverable from another concurrent wrongdoer for the apportionable claim and cannot be required to indemnify the other concurrent wrongdoer. It leaves s 6(c) of the LRA with no room to operate.
Section 31(1) of the CLA provides that the liability of a defendant who is a concurrent wrongdoer in relation to the apportionable claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just and equitable having regard to the extent of the defendant’s responsibility for the loss or damage. Judgment must not be given for more than that amount in relation to the claim. There is, therefore, no capacity for the court to alter the amount of a defendant’s liability under the provisions of s 31 of the CLA by an order for contribution under s 6(c) of the LRA. This is another reason to strike out the notices.
Should the notices be struck out?
Any damages which the plaintiffs might recover from L&G under s 74B are not damages “suffered … as a result of a tort”. It follows that L&G cannot avail itself of s 6 of the LRA.
The provisions of the CLA set out above prevent contribution as sought by L&G.
There is no basis for the notices of contribution. Each of them is struck out.
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