Queanbeyan Leagues Club Ltd v Poldune Pty Ltd Armstrong v Bell
[2000] NSWSC 682
•13 July 2000
CITATION: Queanbeyan Leagues Club Ltd v Poldune Pty Ltd Armstrong v Bell [2000] NSWSC 682 CURRENT JURISDICTION: Equity FILE NUMBER(S): SC 3418/96; 5262/99 HEARING DATE(S): 19 June 2000 JUDGMENT DATE: 13 July 2000 PARTIES :
3418/96
Queanbeyan Leagues Club Limited (P)
Government Insurance Office of NSW (D2)
M J Armstrong (D14)
GIO Life Limited (D15)
Marshall Marks Kennedy (XD1)
5262/99
Michael Armstrong (P)
Jonathan Albin Bell (D1)
Robert Anthony Allport (D2)
Graeme Farquhar Finlayson (D3)
David Anthony Waters (D4)
David Anthony Ward Walters (D5)
David William Major (D6)
Bohdan Bilinsky (D7)
Norman Eric Napper (D8)
Richard Bowring Ormsby White (D9)
Alexander Geoffrey Duckett White (D10)
David Arthur Kenyon (D11)
Phillip Alan Moon (D12)
Phillip James Murphy (D13)JUDGMENT OF: Hamilton J
COUNSEL : 3418/96
A R Ridley (P)
J Timbs QC and I Bailey (D14)
Ms M White, solicitor (XD1)
5262/99
J Timbs QC and Ms K Rees (P)
J Gleeson and M Leeming (D1-13)SOLICITORS: 3418/96
Colquhoun Murphy (P)
Tress Cocks & Maddox (D14)
Phillips Fox (XD1)
5262/99
Tress Cocks & Maddox (P)
Corrs Chambers Westgarth (D1-13)CATCHWORDS: TORTS [10] - Torts generally - Joint or several tortfeasors - Contribution - Generally - Liability in respect of same damage - Whether liability must be ascertained before action can be commenced - Whether cross claim for contribution should be allowed in existing proceedings when trial of most issues of liability has already taken place. LEGISLATION CITED: Law Reform (Miscellaneous Provisions) Act 1946, ss 3 & 5
Supreme Court Act 1970, s 63
Supreme Court Rules 1970, Pt 13 r 5, Pt 15 r 26CASES CITED: Andrews v The Nominal Defendant [1963] SR(NSW) 110
Baldry v Jackson [1976] 2 NSWLR 19; [1976] 2 NSWLR 415
Bitumen & Oil Refineries (Australia) Ltd v Commissioner for Government Transport (1955) 92 CLR 200
James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53
National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (No 4) (1996) 138 ALR 409
NRMA Ltd v Morgan (No 3) [1999] NSWSC 768
Queanbeyan Leagues Club Limited v Poldune Pty Limited 17 December 1998 NSWSC Hamilton J unreported
The Commonwealth v Verwayen (1990) 170 CLR 394DECISION: Proceedings for contribution summarily dismissed; application to file cross claim in existing proceedings refused.
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISIONHAMILTON J
THURSDAY, 13 JULY 2000
3418/96 QUEANBEYAN LEAGUES CLUB LIMITED v POLDUNE PTY LIMITED & ORS
5262/99 MICHAEL ARMSTRONG v JONATHAN ALBIN BELL & ORSJUDGMENT
His Honour:
1 These are two applications in related sets of proceedings. The circumstances are unusual. The proceedings are complex. In 3418/96 (“the original proceedings”) the plaintiff sued five sets of defendants. Ten cross claims have been made. A trial has already been had in which most questions of liability on the claims and cross claims have been determined. A number of parties have been finally dismissed from the proceedings. A further trial is to take place of the remaining issues as to liability and on the question of damages.
2 In the original proceedings the plaintiff sued the second defendant and the 15th defendant (collectively called “the GIO”) for breach of a contract constituted by a deed of future arrangements under which the plaintiff was to receive a certain interest in land. The breach complained of was that the GIO upon selling the land did not take promised steps to impose the plaintiff's interest upon the purchaser. The plaintiff also sued as the 14th defendant Mr Armstrong, a law stationer, for the same damage on the grounds that he had caused or allowed the plaintiff's interest to be destroyed by negligently removing from a certificate of title a caveat which protected that interest. A firm of solicitors (“Bell”) acted for the plaintiff on the transaction with the GIO and in respect of the creation and perfection of the interest. The solicitor principally involved was Mr Bell. At the trial, I found that Mr Armstrong owed the plaintiff a duty of care and that he acted in breach of that duty: Queanbeyan Leagues Club Limited v Poldune Pty Limited 17 December 1998 unreported [35]. However, the question of whether the plaintiff suffered any damage by reason of that breach of duty remains undetermined, so that it has not yet been determined by the Court that Mr Armstrong is liable to the plaintiff in negligence, since damage is, of course, of a necessary element of the cause of action.
3 Bell was not a party to the original proceedings, although Mr Bell gave evidence at the trial. Mr Armstrong now seeks to claim contribution against Bell, on the ground that the plaintiff’s damage was caused or contributed to by negligence on the part of Bell. He does this in two ways, which lead to the two applications before me. First, he has by statement of claim commenced proceedings 5262/99 (“the new proceedings”) claiming such contribution. Secondly, he has applied for leave to file a further cross claim in the original proceedings, which would be the 11th cross claim. That is one of the applications before me. The other is an application by Bell for the statement of claim in the new proceedings to be struck out, or for the summary dismissal of those proceedings. I propose to deal with the applications in reverse order.
4 The application in the new proceedings is brought under Part 15 r 26 or, alternatively, Part 13 r 5 of the Supreme Court Rules 1970 (“the SCR”). It is brought on the ground that the statement of claim should be struck out because the facts pleaded in the statement of claim disclose no complete cause of action, so that if all the facts averred in the statement of claim were proved the plaintiff would not be entitled to succeed. Furthermore, it is suggested that, rather than leave being granted to replead, as would normally be given, the proceedings ought be summarily terminated, because the events needed to give the plaintiff a complete cause of action in those proceedings have not yet occurred.
5 The proceedings are brought under s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (the “LRMP Act”). That provision is as follows:
“5(1) Where damage is suffered by any person as a result of a tort …
…
(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, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by that person in respect of the liability in respect of which the contribution is sought.”
It is to be noted that the person who is entitled to bring an action under that provision must be a “tort-feasor liable in respect of that damage”. The only material allegations in the statement of claim concerning the plaintiff’s standing to bring the action are as follows:
“2 For the purposes of this Claim only, and without admission, Mr Armstrong says that to the extent to which he is held to be liable to the Club in the Principal Proceedings (such liability is denied), Mr Armstrong claims that the Club’s loss and damage for which he may ultimately be held liable is loss and damage caused by the negligent acts or omissions of the Defendants, for which the defendants would, if sued by the Club, have been liable, and Mr Armstrong claims contribution or indemnity pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 .”
6 As indicated above, although he has been found guilty of a breach of duty, Mr Armstrong’s liability to the plaintiff in the original proceedings has not yet been determined. The interpretation which has been placed by the Courts upon the meaning of “liable” in s 5(1)(c) does not require that the liability shall have been determined by judicial decision or judgment entered in Court proceedings; it may for instance, have been determined by arbitral award or by accord and satisfaction. But determined it must have been for a person to be “liable” within the meaning of s 5(1)(c) and therefore entitled to bring under that section an action which the person would not have been entitled to bring at common law. It has been quite specifically decided that such an action brought before the determination of liability is premature and that where there has been no determination of liability at the commencement of an action, the action must fail. This was decided by Yeldham J in Baldry v Jackson [1976] 2 NSWLR 19 at 26 - 27 and in this regard his Honour’s decision was not disturbed on appeal to the Court of Appeal: see [1976] 2 NSWLR 415 at 417, 420. Equally, what was said by his Honour is entirely consistent with what the High Court had previously said and has since said respectively in Bitumen & Oil Refineries (Australia) Ltd v Commissioner for Government Transport (1955) 92 CLR 200 at 209 - 211 and James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53 [25] - [30], [78].
7 It is apparent simply from an examination of the only relevant paragraph of the statement of claim that there are not averred facts which bring the case within the section. If I accept the decisions referred to above, as I do, then there is no suggestion anywhere in the factual material available that there has been any determination of the liability of Mr Armstrong to the plaintiff such as would found an action under s 5(1)(c) brought when the statement of claim in the new proceedings was filed, or, indeed, at this time. In those circumstances, it seems to me that the appropriate order is that the new proceedings be summarily dismissed under Part 13 r 5 of the SCR. That dismissal will not, of course, prevent proceedings being brought under the section if and when Mr Armstrong is determined to be liable to the plaintiff for the subject damage.
8 I turn to the second application, for leave to file a cross claim for the same relief in the original proceedings. This course would avoid the difficulty which has led to Bell’s success in the first application, because the LRMP Act specifically provides by s 3:9 In general terms, the usual policy is to allow all relevant cross claims to be brought forward so that the Court may, in accordance with the policy of s 63 of the Supreme Court Act 1970, finally and completely determine all questions in controversy concerning a subject matter and avoid all multiplicity of legal proceedings. The policy in favour of the determination of all relevant claims together has been often discussed by the Courts, but the advantages of the course are most succinctly summarised by Lindgren J in National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (No 4) (1996) 138 ALR 409 at 422 as follows:
“3(1) Any court to which this Part applies shall have power to grant to any defendant in respect of any right claimed or alleged by the defendant all such relief relating to or connected with the original subject of the cause or matter, claimed in like manner against any other person, whether already a party to the cause or matter or not, who has been duly served with notice in writing of the claim pursuant to rules of court or any order of the court, as might properly have been granted against that person if the person had been made a defendant to an action duly instituted by the same defendant for the like purpose.
(2) Every person served with any such notice as aforesaid shall thenceforth be deemed a party to the cause or matter with the same rights in respect of the person's defence against the claim as if the person had been duly sued in the ordinary way by the defendant.”
And see Andrews v The Nominal Defendant [1963] SR(NSW) 110.
“This has all the usual advantages afforded by the avoidance of multiplicity of suits; avoiding the possibility of inconsistent findings and decisions; economising on time and resources; and ensuring that all relevant parties are bound by results.”
10 The proceedings against Bell will necessarily traverse a number of matters which it has already been necessary to determine in these proceedings. Mr Bell gave evidence at the first trial. Furthermore, the damages issues in the proceedings against Bell will traverse exactly the same subject matter as the damages issues in these proceedings. These considerations tend in favour of allowing the cross claim to be incorporated in the original proceedings, for the issue of Bell's negligence to be tried by the same Judge, and for the claim to march forward from there with the other claims. A further factor which militates in favour of the allowance of the cross claim is that, as is demonstrated by my decision in relation to the new proceedings, if Mr Armstrong is not allowed to agitate this claim for contribution by way of cross claim, he cannot agitate it at all at the present time, or until after the ultimate conclusion of the original proceedings.
11 However, a serious problem arises from the fact that a number of the issues have already been determined in the original proceedings, and, if the cross claim were allowed to be incorporated into them, the question would arise of the degree to which Bell should be bound by those decisions, which were made in a trial in which he did not participate except as a witness. Provision is made in the Rules for orders to be made or directions given as to the extent to which a cross defendant is to be bound by decisions in proceedings (Part 6 r 4), but great complications arise in attempting to regulate these matters where decisions have already been made before the joinder, and especially in a context as complicated as the present. If it were directed that Bell should not be bound by the earlier decision in whole or in part (which may be necessitated by the dictates of natural justice), the relevant matters will have to be retried, not necessarily on an identical body of evidence. There is therefore a real risk of different decisions on the same subject matter in the same proceedings. The undesirability of this was emphasised by Giles J in NRMA Ltd v Morgan (No 3) [1999] NSWSC 768 [45].
12 Furthermore, the inconvenience to Mr Armstrong is substantially of his own making. He had opportunities to join Bell and incorporate this claim in the original proceedings at an earlier time. It could have been done before the trial commenced. Mr Armstrong says that it was not until Mr Bell gave evidence that the basis for a claim against Bell became clear. But even at that stage there was no application for joinder while the trial was still running. And this is so despite the fact that there was a lengthy adjournment in the trial by reason of an amendment that was made to the defences to rely on local government considerations as providing a plea of illegality to defeat the plaintiff's claim. At one stage during the trial it was even expressly stated by counsel for Mr Armstrong that it was not proposed to join Bell in the original proceedings. It was argued on behalf of Bell that by reason of the foregoing Mr Armstrong made an election which as a matter of law precludes him from succeeding in the present application, or that he is estopped from making the application on the principle enunciated in The Commonwealth v Verwayen (1990) 170 CLR 394. I have some doubts as to whether the matter goes that far, but it is in reality unnecessary to determine those questions.
13 Without coming to the conclusion that he is legally precluded from making the application, the fact must be faced that Mr Armstrong did not make the application until after the trial and after judgment upon the matters tried. In the circumstances, I do not think it proper to impose on Bell against its wishes a regime which it opposes. My conclusion that this is the correct course is reinforced by the fact that, if the cross claim were incorporated in the original proceedings and tried by the same Judge, necessarily upon a different body of evidence, a result may ensue even less desirable than different decisions upon the same subject matter by different Judges. That is, the same Judge may, upon different bodies of evidence, be obliged to reach different decisions on the same subject matter in the same proceedings, a result even more unfortunate so far as the public appearance of justice is concerned.
14 I have thus reached the conclusion that, although the refusal of the application creates an unsatisfactory situation, in the present circumstances the allowance of the application would create a situation which is even more complicated and unsatisfactory. I have decided for these reasons that the application should be refused.
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