Richards v High Energy Service Pty Ltd
[2023] WADC 52
•24 MAY 2023
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: RICHARDS -v- HIGH ENERGY SERVICE PTY LTD [2023] WADC 52
CORAM: GETHING DCJ
HEARD: 3 & 11 MAY 2023
DELIVERED : 24 MAY 2023
FILE NO/S: CIV 31 of 2018
BETWEEN: AND
DAVID ALUN RICHARDS
Plaintiff
AND
HIGH ENERGY SERVICE PTY LTD
First Defendant
VICINITY MANAGER PTY LTD
Second Defendant
PERRON INVESTMENTS PTY LTD
Third Defendant
VICINITY CUSTODIAN PTY LTD t/as GALLERIA SHOPPING CENTRE
Fourth Defendant
Catchwords:
Practice and procedure - Summary judgment - Issue estoppel - Action for damages for personal injury arising from a workplace accident - Whether an issue estoppel arises where the plaintiff in the current litigation was a defendant in an action commenced by another person injured in the same workplace accident - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 16, O 20 r 19
Result:
Application for summary judgment or strike out dismissed
Representation:
Counsel:
| Plaintiff | : | Mr J R Criddle |
| First Defendant | : | Mr G P Bourhill SC |
| Second Defendant | : | Ms B A Mangan SC |
| Third Defendant | : | Ms B A Mangan SC |
| Fourth Defendant | : | Ms B A Mangan SC |
Solicitors:
| Plaintiff | : | Stephen Browne Lawyers |
| First Defendant | : | Moray & Agnew Lawyers |
| Second Defendant | : | Herbert Smith Freehills |
| Third Defendant | : | Herbert Smith Freehills |
| Fourth Defendant | : | Herbert Smith Freehills |
Case(s) referred to in decision(s):
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Albrecht v Commonwealth Bank of Australia [2015] WASC 167
Blair v Curran (1939) 62 CLR 464
Catlin v National Australia Bank Ltd [2003] WASC 245
Cockman v Gorman [2022] WASC 125
Diedler v Borowiec [2021] WASC 394
Donaldson v Worrells (Voluntary Liquidator) Suffolk Investments Pty Ltd [2019] WASC 401
DP World Australia Ltd v Fremantle Port Authority [2009] WASCA 16
Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994)
Gallo v Dawson (1990) 64 ALJR 458
Gerovich v Maxwell John Gerovich as Executor of the Estate of Anthony Gerovich [2018] WASC 153
Helmers v Como [2014] WASC 394
Johnson v Hallam [2015] WASC 149
Kelly v Hilton [2021] WASC 369
Knights Capital Group v Bajada and Associates Pty Ltd [2016] WASC 69
Lashansky v Legal Practice Board of Western Australia [No 3] [2013] WASCA 260
Ramsay v Pigram (1968) 118 CLR 271
Shire of Toodyay v Merrick [2016] WASC 29
Smargiassi Nominees Pty Ltd v Shire of Collie [2021] WASCA 107
SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138
Smith v High Energy Service Pty Ltd [2021] WADC 101
Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118
Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14
Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507
Webster v Lampard (1993) 177 CLR 598
Zaghloul v Bayly [2021] WASCA 125
GETHING DCJ:
Introduction
On 3 February 2015 an explosion occurred in an electrical substation at the Morley Galleria Shopping Centre (Galleria). It involved a piece of equipment known as a Long & Crawford GF3 high voltage switch gear (the GF3). The consequences of the explosion were catastrophic. Two men died. Two others were very badly injured. One was the plaintiff, Mr Richards. The other was one Glenn Smith.
In the present action Mr Richards has sued four defendants (which I will refer to as the Richards Action). The second defendant (Vicinity Manager Pty Ltd) and the third defendant (Perron Investments Pty Ltd) jointly owned Galleria at the material time (collectively the Owners). The fourth defendant (Vicinity Custodian Pty Ltd) managed Galleria at the material time (Manager). I will refer to the Owners and the Manager (that is the second, third and fourth defendants) collectively as the 'Other Defendants'.
The first defendant, High Energy Service Pty Ltd (HES), was engaged by the Manager to provide electrical maintenance services and fault rectification services at Galleria. HES employed Mr Smith. Mr Smith requested Mr Richards to attend Galleria and provide a quotation for repairs to certain electrical equipment, it being in issue whether it was the GF3 or another similar piece of equipment.
In separate proceedings Mr Smith also sued HES and the Other Defendants (which I will refer to as the Smith Action). He further sued Mr Richards and his wife trading as Richards Energy Services (RES).
The Smith Action proceeded to trial and judgment. Her Honour Judge Vernon's decision was reported as Smith v High Energy Service Pty Ltd (Smith Decision).[1] Her Honour ultimately:
(a)found that HES was liable in negligence for Mr Smith's loss to the extent of 90%;
(b)found that Mr Smith was contributorily negligent to the extent of 10%;
(c)dismissed Mr Smith's claims against RES, the Owners and the Manager; and
(d)dismissed HES's third party claims against RES, the Owners and the Manager.
[1]Smith v High Energy Service Pty Ltd [2021] WADC 101 (Smith).
Her Honour's decision was handed down on 29 October 2021.
By application filed 13 March 2023, the Other Defendants brought an application for summary judgment against Mr Richards (Application). They assert that the factual findings in the Smith Decision give rise to an issue estoppel in relation to Mr Richards' claims against each of them. The time lapse since they filed their appearances meant that they required the leave of the court to bring the Application.
The Application came on before me for hearing on 3 May 2023. After hearing from counsel for the Other Defendants and counsel for Mr Richards, I formed the view that I also needed to hear from counsel for HES. I adjourned the hearing to 11 May 2023, and requested some further written submissions.
On 8 May 2023 the Other Defendants filed an amended chamber summons (Amended Application). They added an alternative order in essence seeking an order that to the extent that the current statement of claim (filed 8 March 2021) makes allegations against each of the Other Defendants, those paragraphs be struck out.
At the hearing on 11 May 2022, I heard from counsel for HES. HES's position is that for all practical purposes it accepts that it is bound by the Smith Decision, though its pleadings do not yet reflect this position. HES will abide by the decision of the court on the Amended Application.
At the conclusion of the hearing on 11 May 2023, I dismissed the Amended Application, and said I would publish reasons, which are as follows. My reasons assume a measure of familiarity with the Smith Decision.
Principles governing a defendant's application for summary judgment
By Rules of the Supreme Court 1971 (WA) (RSC) O 16 r 1(1), the court may enter judgment for a defendant 'if satisfied that the action is frivolous or vexatious [or] that the defendant has a good defence on the merits'. The onus is on the defendant as applicant to persuade the court that this is a case in which it is appropriate to award summary judgment.[2]
[2] Donaldson v Worrells (Voluntary Liquidator) Suffolk Investments PtyLtd [2019] WASC 401 [56] (Strk AJ); Knights Capital Group v Bajada and Associates Pty Ltd [2016] WASC 69 [42] (Pritchard J); Johnson v Hallam [2015] WASC 149 [6] (Gething AM) (Johnson).
The application is to be supported by affidavit verifying the facts upon which the application is based.[3] The Amended Application is supported by three affidavits, complying with this requirement:
(a)an affidavit affirmed on 13 March 2023 by Marin Zubonja, a solicitor employed by the lawyers for the Other Defendants (First Zubonja Affidavit);
(b)a second affidavit from Mr Zubonja, affirmed on 3 April (Second Zubonja Affidavit); and
(c)an affidavit affirmed on 2 May 2023 by Catherine Russo, another solicitor employed by the lawyers for the Other Defendants (Russo Affidavit).
[3] RSC O 16 r 1(2).
Mr Richards is also entitled to file an affidavit to show cause against the application.[4] Given the issues involved in the determination of the Amended Application Mr Richards has not done so, nor was there any need for him to do so.
[4] RSC O 16 r 2.
An application by a defendant for summary judgment must be brought within 21 days after an appearance has been filed, or at any later time by leave of the court.[5] The policy rationale for the time limit is to ensure that summary judgment applications are brought at an early stage of proceedings, before unnecessary expense has been incurred.[6] The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties, and may be exercised in favour of an applicant where strict compliance with the rules will work an injustice upon the applicant.[7] The burden is on the applicant to show the delay is justifiable in all of the circumstances.[8] In order to determine whether the rules will work an injustice, it is necessary to have regard to the merits of the application, the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application for the extension of time.[9] Where an application has some merit, the requirements for leave will not ordinarily be demanding.[10] Delays in bringing a summary judgment application whilst parties are negotiating to resolve the action should not weigh heavily against the grant of leave to bring the application in the event of the failure of those negotiations. A contrary view may lead to applications for summary judgment being commenced unnecessarily, merely to hold this option open as of right.[11]
[5] RSC O 16 r 1.
[6] Lashansky v Legal Practice Board of Western Australia [No 3] [2013] WASCA 260 [48] (Newnes JA, Pullin & Murphy JJA agreeing) (Lashansky); Diedler v Borowiec [2021] WASC 394 [62] (Strk AM) (Diedler); Shire of Toodyay v Merrick [2016] WASC 29 [24] (Gething AM) (Shire of Toodyay).
[7] Gallo v Dawson (1990) 64 ALJR 458, 459 (McHugh J) (Gallo); Diedler [70]; Albrecht v Commonwealth Bank of Australia [2015] WASC 167 [13] (Gething AM) (Albrecht).
[8] Kelly v Hilton [2021] WASC 369 [20] (Strk J) (Kelly).
[9] Diedler [61] - [63]; Shire of Toodyay [24]; Gallo (459).
[10] Lashansky [48]; Diedler [62]; Kelly [20].
[11] Diedler [69]; Johnson [12].
On an application by a defendant for summary judgment, the plaintiff is bound by its pleaded case.[12] In Forsayth NL v Northern Gold NL Franklyn J stated:[13]
It is for the plaintiff to determine what is his cause of action. The defendant then knows what is the case he has to meet. It is not for the Court, on an O 16 application, to identify or accept some other cause of action, not pleaded, which the evidence before it might arguably support and which, possibly for good reason, was not relied on by the plaintiff in his Statement of Claim and to then allow the Statement of Claim to remain on foot in reliance on a possible subsequent amendment.
[12] Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994) 7 (Franklyn J, with whom Wallwork J agreed) (Forsayth); Johnson [24]; Shire of Toodyay [77].
[13] Forsayth (7) (Franklyn J).
The critical issue is whether it is clear that there is no real question to be tried.[14] Once it appears that there is a real question either of fact or of law, an application for summary judgment must fail.[15]
[14] Zaghloul v Bayly [2021] WASCA 125 [116] (judgment of the court) (Zaghloul).
[15] Cockman v Gorman [2022] WASC 125 [23] (Curthoys J).
In looking at whether the defendant has a 'good defence on the merits' the question is whether, on the material before the court, it has been demonstrated that the plaintiff's action should not be permitted to proceed to trial because it is apparent that it must fail.[16] This may require extensive argument.[17] As to questions of law, the Court of Appeal in Zaghloul recently observed:[18]
There are cases where the court has considered it appropriate to determine questions of law on a summary judgment application. There should be summary judgment if the facts are undisputed and the law is clear. In general, however, an application for summary judgment is not the occasion to dispose of difficult or substantial questions of law which cannot be determined without full argument. It will usually be appropriate to leave the determination of such questions for trial.
[16] Webster v Lampard (1993) 177 CLR 598, 602 (Mason CJ, Deane & Dawson JJ); Diedler [77]; Gerovich v Maxwell John Gerovich as Executor of the Estate of Anthony Gerovich [2018] WASC 153 [27] (Pritchard J) (Gerovich).
[17] Diedler [77]; Gerovich [28].
[18] Zaghloul [117] (references omitted).
Notwithstanding this guidance, all counsel pressed me to determine whether there is an issue estoppel at this interlocutory stage as it would have significant case management issues if left to trial. This was the course which the respondent sought to adopt in Smargiassi Nominees Pty Ltd v Shire of Collie.[19] Whilst the respondent was ultimately not successful in obtaining summary judgment on the basis of the issue estopped, the Court of Appeal did not take issue with the approach taken of asserting the issue estoppel on an application for summary judgment.
[19] Smargiassi Nominees Pty Ltd v Shire of Collie [2021] WASCA 107 [42] (judgment of the court) (Smargiassi). See also: DP World Australia Ltd v Fremantle Port Authority [2009] WASCA 16 (DP World); Helmers v Como [2014] WASC 394 [29] (Gething AM).
There are two general themes which permeate applications to summarily determine a civil action. The first is caution:[20]
The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence.
[20] Spencer v The Commonwealthof Australia [2010] HCA 28; (2010) 241 CLR 118 [24] (French CJ & Gummow J) (references omitted); Zaghloul [116]; Sutton Investments Pty Ltd v Realistic Investments Pty Ltd[2017] WASCA 14 [24] (judgment of the court) (Sutton); SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 [20] (judgment of the court) (SMEC).
The second is certainty of outcome:[21]
It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant … should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.
[21] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] (Gaudron, McHugh, Gummow & Hayne JJ) (references omitted); Zaghloul [116]; Sutton [24]; SMEC [20].
Issues involving the Other Defendants in the Smith Action
The salient findings from the Smith Decision relied on by the Owners and the Manager are as follows:[22]
[22] Second, Third and Fourth Defendants' Submissions filed 3 April 2023, par 36.
(a)the explosion was caused by the end-cap of the 'red' fuse, which had originally been held in the fuse clip on the front left‑hand side of the GF3 tank, falling to the bottom of the tank and the wall of the tank, resulting in a short circuit current, which in turn created an electrical arc of 8,000 amps;
(b)the very high energy levels produced by the arc heated the oil in the tank so rapidly that a high-pressure gas bubble, primarily comprising flammable hydrogen, was created, which exploded on contact with the air, creating a fireball;[23]
(c)the lifting of the lid (of the GF3) beyond 200mm (by Smith), which allowed the end cap to fall into contact with the busbar and the tank wall, caused the explosion;[24]
(d)HES owed a duty to ensure that the very significant risk to life associated with the relevant works was identified, and that required action was taken;[25]
(e)HES breached its duty of care by failing to give a more detailed assessment of the risks, and a more specific direction that Smith 'be careful';[26]
(f)HES also breached its duty to provide Mr Smith with a safe system of work;[27]
(g)Mr Smith was negligent in looking after his own safety, by failing to pause and consider why the lid would not open, and the dangers of proceeding in those circumstances;[28]
(h)the explosion would not have happened if Mr Smith had been directed or instructed by HES not to inspect the GF3 or not do anything further in relation to it;[29]
(i)HES's negligence was causative of Mr Smith's injury and loss;[30] and
(j)had Mr Smith taken some time to consider why the lid would not open, and the dangers of proceeding in those circumstances before attempting to open the lid, and to contact HES or to discuss the matter with Mr Richards before entering Substation 4, the explosion was likely to have been avoided.[31]
[23] Smith [69].
[24] Smith [208].
[25] Smith [326].
[26] Smith [327].
[27] Smith [328].
[28] Smith [402].
[29] Smith [331].
[30] Smith [332].
[31] Smith [402] - [403].
As to RES, Mr Smith maintained that, as at 3 February 2015, RES, by Mr Richards, had a common law duty of care to warn him of the risks of inspecting the GF3 with a disintegrated fuse in it, and lifting the lid while the busbars were live.[32] Her Honour found that RES did not owe Mr Smith this duty.[33]
[32] Smith [86].
[33] Smith [333].
HES brought third party proceedings against RES claiming that, if it was held liable to Mr Smith, it was entitled to a contribution by RES towards that liability.[34] Her Honour found that HES was not entitled to any contribution from RES.[35] Specifically:[36]
Mr Richards was not told enough about the nature of the issues with the GF3, or what HES and Mr Smith were expecting of him, to establish any acceptance of responsibility on his part for what Mr Smith and HES wanted him to do, nor did he profess to have any particularly relevant expertise. He had arrived with an understanding about what he had been asked to do, based on a telephone conversation of less than two minutes. That understanding was that he was to be engaged to remove the oil from a T4 GF3 that had a disintegrated fuse.
[34] Smith [89].
[35] Smith [333].
[36] Smith [334].
RES did not commence contribution (fourth party) proceedings against the Owners or the Manager seeking a contribution in the event that it was found liable to either Mr Smith or HES.
In order to understand the claim made by Mr Smith against the Other Defendants, it is necessary to provide some more detail of the electrical equipment involved. The GF3 which exploded was situated in one of four electrical substations (Substation 4) which distributed electrical power from the main intake substation (Main Substation). The equipment in the Main Substation included a protection system comprising a Sepam 1000 relay (Sepam relay) and a Merlin Gerin YFS6 circuit breaker (Merlin Gerin). The protection system operated, relevantly, by the Sepam relay measuring current in the circuit. If the Sepam relay detected a fault in Substation 4, it would send a signal to the Merlin Gerin to operate or 'trip'. The Merlin Gerin trip coil mechanism would then operate to disconnect Substation 4. It was not in issue in the Smith Action that for some considerable time before 2 February 2015, the batteries in the battery charger connected to the trip coil mechanism in the Merlin Gerin, were effectively dead, that is with limited, or no, electrical charge.[37]
[37] Smith [12] - [14].
As to the Owners and Manager, Mr Smith's claim was limited to what Judge Vernon described as the 'battery claim':[38]
93Mr Smith claims against HES and the Owners and the Manager with respect of the failure to ensure that the dead batteries in the battery charger had been replaced, which in turn resulted in the Merlin Gerin's tripping mechanism being unable to operate. Mr Smith says these parties each owed him a duty to ensure the HV system at the Galleria was safe to work on, which required that its protection systems be maintained in an operational state.
94There was no dispute at trial that this is only an issue to the extent that I find that there was an earth fault in Transformer 1 which would have been detected by the Sepam relay. In that case, the submission is, had the batteries been charged, the Merlin Gerin would have operated to cut off power to the GF3 before the 'red' fuse was damaged, and the explosion would not have occurred. In those circumstances, Mr Smith claims that the failure to replace the batteries was factually causative of the accident.
[38] Smith [93] - [94], [106].
And more specifically:[39]
97Mr Smith claims against the Owners and the Manager in negligence and pursuant to s 5(1) of the Occupiers' Liability Act 1985 (WA) (OLA), for failing to take reasonable care to ensure Mr Smith's safety from a danger due to the state of the premises. Mr Smith claims that that they had each been informed before 3 February 2015 that the batteries in the battery charger required replacing and failed to replace them, or to arrange for them to be replaced, and did not tell Mr Smith or HES that the batteries had not been replaced and that, accordingly, the protection system was not operating properly.
98As far as the Owners are concerned, Mr Smith says that they did not take reasonable care in engaging the Manager, by failing to require the Manager to enter into a maintenance agreement for the HV system, under the terms of their agreement with the Manager, and by failing to enforce the terms of that agreement, or supervising the Manager's performance of its obligations under that agreement, to maintain the Galleria.
[39] Smith [97] - [98].
The substance of the battery claim was first raised by RES in its defence to the third party proceedings brought by HES.[40] The primary expert called in support of the battery claim was a Professor Trevor Blackburn who was instructed by RES and called by its counsel.[41] Ultimately Judge Vernon preferred the other expert evidence.[42] However, given the finding that HES was not entitled to a contribution from RES (see [24] above), the battery claim only ended up being relevant to the claims as against the Owners and the Manager.
[40] Second Zubonja Affidavit, pages 82 - 85.
[41] See generally: Smith [367] - [376].
[42] Smith [377] - [383].
Her Honour dismissed the claims against the Owners and the Manager,[43] finding that:
(a)if an earth fault had occurred in Transformer 1 on 2 February 2015, that fault would have been detected by the Sepam relay, which would have sent a signal to the Merlin Gerin to trip;[44]
(b)had the Merlin Gerin operated, by tripping, Substation 4 and the GF3 would have been isolated;[45]
(c)on 2 February 2015, and from about March 2011, the batteries in the battery charger powering the trip mechanism in the Merlin Gerin were dead;[46]
(d)the batteries in the battery charger were required to operate the Merlin Gerin's trip mechanism and that, as a result of the dead batteries in the battery charger, the Merlin Gerin could not operate to trip power to the GF3 on 2 February 2015;[47]
(e)the fault which occurred in Transformer 1 on 2 February 2015 was not an earth fault, and was a 'phase to phase fault'[48] (that is, not a fault of a type that would been detected by the Sepam relay causing it to send a signal to the Merlin Gerin to trip); and
(f)(therefore) the dead batteries in the battery charger were not causative of the explosion.[49]
[43] Smith [406].
[44] Smith [342].
[45] Smith [342].
[46] Smith [342].
[47] Smith [348].
[48] Smith [388].
[49] Smith [392].
In light of these findings, it was not necessary for her Honour to determine who was liable for the failure to replace the batteries in the battery charger, or the Limitation Act2005 (WA) issues raised by the Manager.[50]
[50] Smith [392].
Issues involving the Owner and the Manager in the Richards Action
The claim made by Mr Richards against HES is in similar, but not identical, terms to that made by Mr Smith, reflecting that Mr Richards was a contractor to HES and Mr Smith was an employee of it. One issue of significance is that if Mr Richards is estopped from asserting a factual position inconsistent with the findings in the Smith Decision, it would seem that, by parity of reasoning, HES would also be estopped from asserting a factual position inconsistent with the findings in the Smith Decision. Hence the need to hear from counsel for HES ([10]).
It does not appear to be in issue in the Richards Action that each of the Owners and the Manager owed duties of care to Mr Richards both at common law and under the OLA.
The breach which Mr Richards asserts against the Owners is in the following terms (the YSF6 circuit breaker is the Merlin Gerin):[51]
[51] Statement of Claim filed 8 March 2021, pars 16 and 17.
16.The Second and Third Defendants by their servants and agents were negligent and in breach of their common law statutory duties in that they:
Particulars of the Second and Third Defendants' Negligence/Breach of Statutory Duty
(a)failed to put in place or ensure that their contractors/sub‑contractors put in place systems of work to ensure the Plaintiff did not work in circumstances where a high voltage fuse switch had a live component and/or was not completely isolated from the electricity supply;
(b)failed to maintain the substation and downstream protection devices to ensure, and failed to ensure, the downstream protection against power overload was present and operational such that the absence of downstream protection for the GF3 unit constituted a danger due to the state of the complex which were within the control of each of the Second and Third Defendants;
(c)failed to pay heed to a report from the First Defendant notifying the requirement to replace the batteries providing backup power for the YSF6 circuit breaker and to replace a defective battery charger for the batteries providing backup power to the YSF6 circuit breaker;
(d)failed to adequately inspect the substation to ensure it was safe before permitting the Plaintiff to enter it;
(e)permitted the Plaintiff to enter an area when they knew, or should have known, that the area was being used as a storeroom and was unsafe;
(f)failed to take action to ensure that the Plaintiff was not exposed to hazards while at the complex and;
(g)failed to assess or adequately assess the risks involved in allowing the substation to be used as a storeroom.
17.But for the negligence or breach of duty of the Second and Third Defendants in failing to maintain the YSF6 circuit breaker -
(a) the explosion which occurred on the 3rd February 2015 would have been 30% of the energy emitted with the consequence that the Plaintiff's injuries would have been significantly less severe than those in fact sustained;
(b)the YSF6 circuit breaker would have operated to isolate the GF3 unit which would have prevented the disintegration of the red phase fuse in GF3 which ultimately led to the explosion.
The breach which Mr Richards asserts against the Manager is in the following terms:[52]
[52] Statement of Claim filed 8 March 2021, pars 18 and 19.
18.The Fourth Defendant by its servants and agents were negligent and in breach of its common law and statutory duties in that it:
Particulars of the Fourth Defendant's Negligence/Breach of Statutory Duty
(a)failed to put in place or ensure that their contractors/sub‑contractors put in place systems of work to ensure the Plaintiff did not work in circumstances where a high voltage fuse switch had a live component and/or was not completely isolated from the electricity supply;
(b)failed to maintain the substation and downstream protection devices to ensure, and failed to ensure, the downstream protection against power overload was present and operational such that the absence of downstream protection for the GF3 unit constituted a danger due to the state of the complex which was within the control of the Fourth Defendant;
(c)failed to pay heed to a report from the First Defendant notifying the requirement to replace the batteries providing backup power for the YSF6 circuit breaker and to replace a defective battery charger for the batteries providing backup power to the YSF6 circuit breaker;
(d)failed to adequately inspect the substation to ensure it was safe before permitting the Plaintiff to enter it;
(e)permitted the Plaintiff to enter an area when it knew, or should have known, that the area was being used as a storeroom and was unsafe;
(f)failed to take action to ensure that the Plaintiff was not exposed to hazards while at the complex; and
(g)failed to assess or adequately assess the risks involved in allowing the substation to be used as a storeroom.
19.But for the negligence or breach of duty of the Fourth Defendant in failing to maintain the YSF6 circuit breaker -
(a)the explosion which occurred on the 3rd February 2015 would have been 30% of the energy emitted with the consequence that the Plaintiff's injuries would have been significantly less severe than those in fact sustained;
(b)the YSF6 circuit breaker would have operated to isolate the GF3 unit which would have prevented the disintegration of the red phase fuse in GF3 which ultimately led to the explosion.
Each of the Owners and the Manager filed amended defences on 7 March 2023. The amendments removed the substantive pleadings in response to allegations made by Mr Richards, and replaced them with a summary of the findings of fact made in the Smith Decision. The amendments set up a plea of issue estoppel based on the Smith Decision, identifying particular findings from that decision which I have quoted above. The salient findings from the Smith Decision are summarised in the Amended Defences filed by each of the Owners and the Manager on 2 March 2023. It is instructive to quote from the Manager's Amended Defence (with the track changes removed):[53]
[53] Fourth Defendant's Amended Defence filed 2 March 2023, pars 1 - 15.
1.By Writ of Summons in CIV No. 497 of 2017 consolidated with action commenced by Writ of Summons in CIV No. 343 of 2018, Glenn Anthony Charles Smith (Smith) commenced proceedings against the parties who are named in this action as the:
(a)plaintiff (and Janet Elizabeth Richards t/as Richards Energy Services); and
(b)first defendant (High Energy Service Pty Ltd (HES)), second defendant (Vicinity Manager Pty Ltd), third defendant (Perron Investments Pty Ltd) and fourth defendant,
(Smith action).
2.The trial of the Smith action was heard before Her Honour Judge Vernon on 12-16, 19-23, 26-30 October 2020, and 2 and 5‑6 November 2020.
3.On 29 October 2021, Her Honour Judge Vernon published her reasons for decision in the Smith action (Smith reasons).
4.Her Honour Judge Vernon summarised Smith's claim against HES and HES's defence at [72]-[82] and [112] of the Smith reasons.
5.Her Honour Judge Vernon summarised Smith's ('battery') claim against the defendants at [93]-[102] of the Smith reasons.
6.On 1 November 2021, Her Honour Judge Vernon made orders including that:
(a)there be judgment for Smith against HES with a reduction for the Smith's contributory negligence of 10%;
(b)Smith's actions against each of the plaintiff (and Janet Elizabeth Richards t/as Richards Energy Services), Vicinity Manager Pty Ltd, Perron Investments Pty Ltd and the fourth defendant be dismissed; and
(c)HES' third-party actions against each of the plaintiff (and Janet Elizabeth Richards t/as Richards Energy Services), Vicinity Manager Pty Ltd, Perron Investments Pty Ltd and the fourth defendant be dismissed,
(the Smith judgment)
7.As to paragraph 1 of the statement of claim filed on 8 March 2021 (statement of claim):
(a)The fourth defendant does not admit each allegation in sub‑paragraph 1(a).
(b)The fourth defendant admits sub-paragraphs 1(b) and 1(c).
(c)Her Honour Judge Vernon made findings as to the plaintiff's qualifications and experience and circumstances that were central to the Smith judgment particularly at [275]-[277], [284] and [286] of the Smith reasons.
8.As to paragraph 2 of the statement of claim:
(a)The fourth defendant admits each allegation pleaded in sub‑paragraphs 2(a) to 2(c).
(b)The fourth defendant does not plead to sub-paragraphs 2(d) and 2(e) as there is no allegation against it.
(c)Her Honour Judge Vernon made findings as to HES' business and relationship with the fourth defendant and circumstances that were central to the Smith judgment particularly at [6], [8], [32]-[36] and [240] of the Smith reasons.
9.The fourth defendant does not plead to paragraph 3 of the statement of claim as there is no allegation against it.
10.As to paragraph 4 of the statement of claim, Her Honour Judge Vernon made findings as to the fourth defendant's business and circumstances that were central to the Smith judgment particularly at [6] and [11] of the Smith reasons.
11.As to paragraph 5 of the statement of claim, Her Honour Judge Vernon made findings as to the complex's electrical system that were central to the Smith judgment particularly at [6] and [12]‑[31] of the Smith reasons.
12.As to paragraphs 6 to 10 and 15(a) to (e) of the statement of claim, Her Honour Judge Vernon made findings as to all of the events on 2 February 8 2015 that were central to the Smith judgment particularly at [6] and [37]- [60] of the Smith reasons.
13.As to paragraphs 11 to 14 and 15(a) to (e) of the statement of claim, Her Honour Judge Vernon:
(a)made findings as to the events that occurred on 3 February 2015 that were central to the Smith judgment particularly at [6], [61]-[66], [68] to [70] and [208] of the Smith reasons;
(b)found that the explosion was caused by the end-cap of the 'red' fuse, which had originally been held in the fuse clip on the front left hand side of the GF3 tank, falling to the bottom of the tank and coming into contact with live busbars at the bottom of the tank and the wall of the tank, resulting in a short circuit current, which in turn created an electrical arc of 8000 amps. The very high energy levels produced by the arc heated the oil in the tank so rapidly that a high-pressure gas bubble, primarily comprising flammable hydrogen, was created, which exploded on contact with the air, creating a fireball; and
(c)found that it was the lifting of the lid (of the GF3) beyond 200 mm (by Smith), which allowed the end cap to fall into contact with the busbar and the tank wall, causing the explosion. Smith reasons [208].
14.As to paragraphs 14 and 15 of the statement of claim, Her Honour Judge Vernon found that the entire culpability of the cause of the explosion lay with HES and Smith. In doing so, Her Honour Judge Vernon found that:
Duty
(a)Smith, HES' employee, knew that the end-cap remained in the GF3 and was aware of the danger presented by loose metal in the tank. He also knew that before the plaintiff arrived, that he was unable to open the lid of the GF3 arrived beyond 200 mm. Smith reasons [399].
(b)That (knowledge) ought to have given Smith pause for thought about why the lid of a switch with a disintegrated fuse, and an end-cap unattached to that fuse, was not opening, and the potential risk, if not that the end-cap had been dislodged, that something had occurred in the GF3 that required a reassessment of the risks before proceeding to open the lid to inspect the tank without isolating Substation 4. Smith reasons [400].
(c)HES knew that Smith (and therefore also the plaintiff) were facing a highly unusual situation that they had never seen before. Smith reasons [321].
(d)HES must have appreciated from what its employee was told (by Smith) that there was a chance the plaintiff or Smith would lift the lid of the GF3 whilst still live. Smith reasons [321].
(e)In the circumstances more was required (of HES) than simply acquiescing to the (Smith's) plan to have the plaintiff 'have a look' and giving non-specific instructions to 'be careful'. Smith reasons [321].
(f) there ought to have been an assessment of the risks by HES and instructions given by HES on the basis of those assessed risks. Smith reasons [321].
(g)HES' employee's role was to ensure the faulty equipment was isolated and earthed if necessary and to take into account the possibility of inadvertence or carelessness on the part of Smith. Smith reasons [324].
(h)Given the minimal difficulty of taking these steps, and issuing a direction to ensure the isolation of the GF3, and the very significant risk to the life, health and safety of Smith and others (including the plaintiff) of not doing so, HES owed a duty, to ensure that the risk was identified and the required action taken. Smith reasons [326].
Breach of duty
(i)Smith, HES' employee, should have assessed the risks. Smith reasons [400].
(j)HES did not have any system in place for identifying relevant specialists and no vetting of the plaintiff's relevant expertise had taken place. Smith reasons [322].
(k)HES' employee did not question Smith about whether he had isolated the GF3 or Substation 4 or intended to do so or, instructed him to do so, before Smith or the plaintiff inspected the GF3. Smith reasons [323].
(l)HES did not properly assess what Smith intended to do before his plan was carried out, by identifying what risks were present, whether Smith had identified all relevant risks, whether Smith's plan of action was adequate to remove the relevant risks by including a plan to isolate Substation 4 and the GF3, and not open the lid until the GF3 was dead, and if not, direct him to do so. Smith reasons [325].
(m)HES' employee was required to give a more detailed assessment of the risks, and a more specific direction than that Smith 'be careful'. In failing to do this, HES breached its duty of care to Smith. Smith reasons [327].
(n)HES also breached its duty to provide Smith with a safe system of work, by failing to impose a rule that where a report of a hazard was made in accordance with HES's Manual of Standards cl 5.9, and where that report concerned live HV equipment, that equipment was not to be further accessed for any purpose until isolated and earthed, without written authority. Smith reasons [328].
(o)Smith, HES' employee, was negligent in looking after his own safety, by failing to pause and consider why the lid would not open, and the dangers of proceeding in those circumstances. Smith reasons [402].
Causation
(p)Had Smith been directed or instructed by HES not to inspect the GF3 or do anything further in relation to it, he would have obeyed that instruction. Smith would have followed a rule requiring him not to inspect or work on the GF3 where there had been a hazard that required a report to his supervisor. If either had occurred, the explosion would not have happened. Smith reasons [331].
(q)HES' negligence was causative of Smith's injury and loss. Smith reasons [332].
(r)Had Smith taken some time to consider why the lid would not open, and the dangers of proceeding in those circumstances before attempting to open the lid, and to contact HES again, or to discuss the matter with the plaintiff before entering Substation 4, the explosion was likely to have been avoided. Smith reasons [402]-[403].
(s)HES' culpability for the cause of the explosion (and the plaintiff's injuries loss and damage) is 90% and Smith's culpability for the cause of the explosion (and the plaintiff's injuries loss and damage) is 10%. Smith reasons [404]-[405].
Battery claim
(t)Further, in relation to the battery claim (in [18(b)] and [18(c)] of the Smith reasons), Her Honour Judge Vernon found:
i.If an earth fault had occurred in Transformer 1 on 2 February 2015, that fault would have been detected by the Sepam relay, which would have sent a signal to the Merlin Gerin to trip. Smith reasons [342].
ii.The fault which occurred in Transformer 1 on 2 February 2015 was not an earth fault, and was a phase to phase fault. Smith reasons [383].
iii.In any event, the dead batteries in the battery charger were not causative of the explosion. Smith reasons [392].
iv.The explosion was the result of the decision (by Smith), with knowledge that the 'red' fuse had disintegrated, to open the lid of the GF3 without isolating it, resulting in the end-cap, having been dislodged from its position in the clip holder, coming into contact with the live busbars. Had the busbars not been live at that time, the explosion would not have occurred. Smith reasons [394].
v.It was unnecessary to determine who is liable for the failure to replace the batteries in the battery charger. Smith reasons [395].
15.As to paragraphs 14, 18 and 19 of the statement of claim, the fourth defendant repeats the preceding paragraph of this defence.
The Manager's Amended Defence concludes:[54]
The issue of liability for the cause of the explosion pleaded in paragraph 13 of the statement of claim and accident pleaded in paragraph 20 of the statement of claim and the plaintiff's resulting personal injury and loss and damage has been judicially determined in the Smith reasons and the Smith judgment and operates as an issue estoppel of the plaintiff's claim against the fourth defendant.
Each of the Owners' Amended Defences are in substantially identical terms.[55]
[54] Fourth Defendant's Amended Defence, par 16.
[55] Second Defendant's Amended Defence, par 15; Third defendant's Amended Defence, par 15.
It is against this pleading context that the Application was filed.
The doctrine of issue estoppel
An issue estoppel 'operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching' a determination in prior proceedings.[56] It is to be distinguished from a cause of action estoppel which 'operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment'.[57] It is also to be distinguished from an Anshun estoppel, which 'operates to preclude the assertion of a claim …, or the raising of issue of fact or law … if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding …'.[58] It is also the case that 'making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel'.[59]
[56] Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507, [22], 517 (French CJ, Bell, Gageler & Keane JJ) (Tomlinson).
[57] Tomlinson [22], (517).
[58] Tomlinson [22], (517) - (518).
[59] Tomlinson [26], (519) (references omitted).
The Court of Appeal recently observed in Smargiassi that:[60]
Each doctrine is informed by the public interest in finality in litigation and the conclusiveness of judicial decisions: controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances.
[60] Smargiassi [42] (judgment of the court).
The court went on to quote the following passage from judgment of Dixon J in Blair v Curran as to the scope of an issue estoppel:[61]
A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as a legal foundation or justification of its conclusion …
[61] Smargiassi [43]; Blair v Curran (1939) 62 CLR 464, 531 (Dixon J) (Blair).
The court in Smargiassi identified three requirements for the doctrine of issue estoppel to apply:[62]
1.The same question has been decided.
2.The judicial decision which is said to create the estoppel was final.
3.The parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.
[62] Smargiassi [44].
The court continued:[63]
[63] Smargiassi [45] - [47] (references omitted).
45Accordingly, an issue estoppel may arise where a state of fact or law is alleged or denied, the existence of which is 'a matter necessarily decided' by a prior final judgment between the parties or their privies. However, only that which is 'legally indispensable to the conclusion' is finally precluded. In Blair v Curran Dixon J explained that:
'In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action … [However] the estoppel [is not] confined to the final legal conclusion expressed in the judgment, decree or order. … the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous …'
46Dixon J distinguished between:
1.Matters of fact or law which are 'fundamental or cardinal' to the prior judicial determination or 'necessarily involved' in it as its legal justification or foundation. In short, the 'immediate foundation' of the prior judicial determination.
2.Matters of fact or law which are 'subsidiary or collateral'; for example, evidentiary facts - rather than ultimate facts - not being part of the 'essential foundation or groundwork' of the prior judicial determination. In short, 'no more than part of the reasoning supporting the conclusion'.
47The former will ground an issue estoppel. The latter will not. Thus Fullagar J has stated: 'Issue-estoppel applies only as to issues. There is no estoppel as to evidentiary facts found in the course of determining the affirmative or negative of an issue. There is nothing to prevent a party from tendering in a later proceeding in relation to a particular issue facts negatived in an earlier proceeding when they were tendered in relation to a different issue' (emphasis added) … So too issue estoppel has been said to be confined to: (1) an issue of fact or law directly involved in a judicial determination; (2) a matter which has been put in issue and determined; or (3) an essential element in a cause of action or defence in proceedings in which judgment has been entered …
The facts of Smargiassi were that the appellant, Smargiassi Nominees Pty Ltd (Smargiassi), was the owner of certain land (Land) within the respondent, Shire of Collie (Shire). Smargiassi commenced proceedings in the Supreme Court seeking a declaration that its use of the Land was a lawful non-conforming use under the applicable local planning scheme (Scheme). There was prior litigation in which Smargiassi was successfully prosecuted for using the Land in contravention of the Scheme. The Shire contended that the prior litigation had finally determined the use to which the Land was being put at the relevant time. The acting master at first instance agreed. The Court of Appeal did not. It held that all that was determined in the prior litigation was that the particular use specified in the prosecution notice was in breach of the Scheme. The prior litigation did not conclusively determine all of the uses to which the Land was being put during the offence period.[64] So provided the pleadings in the subsequent action respected the specific facts made incontrovertible in the prior litigation, Smargiassi was able to contend that other types of usage were lawfully conducted on the Land during the period when the offence was said to have occurred.[65]
[64] Smargiassi [81] - [82], [88].
[65] Smargiassi [102] - [103].
The decision in Smargiassi thus illustrates that issue estoppel can raise in relation to specific facts found in the prior litigation.
Another Supreme Court decision relied on by counsel for the Other Defendants is Catlin v National Australia Bank Ltd.[66] In that case the Catlin's entered into two loans with the defendant (Bank). The first was a home loan. The second was a mortgage facility. There was then a third loan to ANA Enterprises Pty Ltd as trustee for the Catlin Family Trust trading as Adrienne's Café. The Catlins entered into a guarantee of ANA's obligations under this third loan agreement. All moneys advanced were secured by a mortgage over the Catlin's house. The Catlin's defaulted on payments, and ultimately the Bank issued a notice of demand for all money owing on the three accounts. The Catlin's did not comply.
[66] Catlin v National Australia Bank Ltd [2003] WASC 245 (Catlin).
The prior litigation was an action by the Bank for an order for possession of the Catlin's house. It obtained summary judgment. The Catlins unsuccessfully sought to stay execution pending an appeal to the Full Court.
The subsequent litigation was against the Bank and a receiver who had been appointed over the café. After a successful strike out application, they sought to sue as the trustees of the Catlin Family Trust. This created difficulties which I don't need to address for present purposes. What is significant is that in the subsequent action, the Catlins pleaded an agreement with the Bank pursuant to which, in consideration of the Caitlins paying the Bank $500,000, it would completely discharge them and the Trust from all liability to it (referred to as the 'Second Agreement'). Master Newnes held that they were estopped from doing so. Specifically:[67]
49In determining whether res judicata applies or an issue estoppel arises, the starting‑point is what was decided in the summary judgment proceedings.
50In my view, the judgment entered on 3 May 2000, and affirmed by the decisions of the Full Court on appeal, decided that default had occurred under the three loan agreements referred to, that the Catlins were in default under the house mortgage and that the Bank was entitled to possession of the house under that mortgage. It also decided that no binding agreement had been made between the Catlins and the Bank in the terms now alleged to constitute the "Second Agreement".
51It follows, in my view, that an issue estoppel arises in respect of the Catlins' claim under the Second Agreement. This Court has already found as a fact that no such binding agreement was ever made. In addition, to the extent the Catlins seek to establish that they were not in default under the loan accounts they are estopped from doing so. That, too, is the subject of an express finding in the earlier proceedings.
[67] Catlin [49] - [51].
Another instructive Supreme Court decision is that of the Court of Appeal in DP World. In that case, the appellant (DP World) provided stevedoring services at a wharf. The respondent (FPA) owned an unloader that was used to unload fertiliser from ships for Wesfarmers CSBP Ltd (CSBP). The unloader was hired by CSBP and operated by DP World. There was an accident involving the unloader colliding with a sweeper truck driven by a Mr Mills. Mr Mills sued DP World and the FPA for damages for personal injuries (Mills Action). He was successful at trial. Following an appeal, that liability was apportioned 60% to FPA and 40% to DP World.
Shortly before the trial in the Mills Action, FPA commenced an action against DP World seeking damages in respect of damage to the unloader. In that action, FPA pleaded that DP World was liable to indemnify FPA for the damage to the unloader pursuant to a contract between the FPA as owner of the unloader, CSBP as hirer and DP World as operator, and also in damages for breach of a duty of care arising, by virtue of the contract, as bailee or under the general law. DP World subsequently applied for summary judgment on the grounds that, as a result of the decision in the Mills Action, an issue estoppel or an Anshun estoppel arose in respect of FPA's claims for the breach of the alleged duty of care, and that FPA's claim for a contractual indemnity was res judicata and subject to an Anshun estoppel. The application for summary judgment was dismissed, the learned primary judge concluding that there were triable issues in respect of each of those matters. The Court of Appeal (Newnes JA, within whom McLure JA) agreed.
In relation to issue estoppel, Newnes JA concluded:[68]
In my view, in respect of the claim for a contractual indemnity, the appellant failed to make out an entitlement to summary judgment on the basis of issue estoppel - assuming it was in issue below. It is arguable that no issue estoppel arises; that is, it is arguable that there was no determination in the Mills action of any issue that is cardinal to the respondent's current claim for damage to the unloader, the current action being concerned with a contract differently constituted, between different parties, and for property damage as opposed to personal injury. If, as seemed to be common ground, her Honour found that the issue was one for trial, I consider, with respect, that her Honour was correct.
[68] DP World [70].
In relation to an Anshun estoppel, Newnes JA concluded:[69]
84In my view, in the light of the authorities to which I have referred, the questions in this case are whether the respondent's claim in the current action is based on substantially the same facts as the contribution proceedings in the Mills action and could have been brought in those proceedings in the Mills action, and whether it was unreasonable for the respondent not to have brought it in those proceedings. An important consideration is the likelihood of conflicting judgments.
85The claim for indemnity made in the current action was not, of course, a matter that arose directly out of the contribution proceedings in respect of Mr Mills's claim for damages for personal injury, but I understood it was accepted by both parties to this appeal that it could have been brought by the appellant in the Mills action under O 19 of the rules of court.
86It is clear, however, that Anshun estoppel does not operate simply because a party is asserting a cause of action which could have been, but was not, raised in a previous proceeding in which that party was asserting a different cause of action based on substantially the same facts against the same party. The touchstone is reasonableness; the question is whether it was unreasonable for the party asserting the cause of action in the second proceeding to have refrained from raising it in the earlier proceeding.
87Whether it was unreasonable not to bring the claim in the earlier proceedings depends upon an examination of all the relevant circumstances, focussing on the issue of reasonableness. There can be no hard and fast rules. As the High Court pointed out (602) in Anshun, a party may legitimately refrain from litigating an issue in earlier proceedings for a variety of reasons such as expense, the importance of the particular issue, and motives extraneous to the actual litigation.
88In the present case, the learned primary judge concluded that there was a triable issue as to whether it was unreasonable for the respondent not to raise in the Mills action its current claim for indemnity in respect of the damage to the unloader. I do not consider that in so concluding her Honour was in error.
89I do not accept the submission made by the appellant's counsel that in all material respects the present case is on all fours with Anshun. In Anshun, in the first action the Authority sought a contribution from Anshun to any damages it was liable to pay to the workman and in the later action it sought a complete indemnity from Anshun in respect of those damages. Here, on the other hand, the respondent sought in the Mills action to be indemnified in contract by the appellant in respect of any damages it was liable to pay to Mr Mills and in the current action it seeks to be indemnified in contract by the appellant in respect of the damage to the unloader. Its claim in the latter does not touch upon the extent of its liability to contribute to the damages payable to Mr Mills.
90While it was, I think, common ground that there are a number of matters of fact that are common to both proceedings, as counsel for the respondent argued, there are also a number of others that are not, including the respondent's right to indemnity in respect of damage to the unloader, the nature and extent of the damage to the unloader, and the monetary loss attributable to it. The degree to which there is an overlay of facts is not entirely clear at this stage. However, it appears there are substantial issues of fact to be determined that were not relevant to the contribution proceedings in the Mills action. That militates against the appellant's contention that the respondent is estopped from bringing the current action.
[69] DP World [84] - [90].
McLure JA agreed with Newnes JA, though making a salient additional observation:[70]
I have had the advantage of reading the reasons for judgment of Newnes AJA. I agree that leave to appeal should be granted but the appeal dismissed for the reasons he gives. I wish to make an additional observation on the doctrine of issue estoppel. There may be a number of questions of fact or law that were necessarily established as the legal foundation for the judgment in the Mills action ... If the same issues of fact or law arise for determination in the respondent's action against the appellant in relation to the damage to the crane (respondent's action), the parties will be bound by the findings. However, the appellant was unable to identify any issue of fact or law determined in the Mills action which was capable of being a complete defence to the respondent's action so as to justify the grant of summary judgment.
[70] DP World [1].
The doctrine of issue estoppel was applied by the High Court in Tomlinson. Mr Tomlinson was a worker at an abattoir. Initially he was employed by the respondent (RFP). At some point, the appellant was told that his employment with RFP would be discontinued and he would be employed by a labour hire company, Tempus Holdings Pty Ltd (Tempus). Some two or so years later, Mr Tomlinson was told by Tempus that it was unable to offer him ongoing employment. Mr Tomlinson complained to the Fair Work Ombudsman that his entitlements had not been paid when he was made redundant. The Fair Work Ombudsman commenced proceedings against RFP, asserting that it, not Tempus, had been the employer of Mr Tomlinson and ten other persons. The Federal Court agreed and ordered RFP to pay a civil penalty as well as the amounts required to be paid under the relevant award to Mr Tomlinson and his fellow workers.
Mr Tomlinson subsequently brought proceedings against RFP in the District Court of New South Wales claiming damages at common law in respect of a personal injury. He asserted that while Tempus was his employer, RFP as the party in control of the workplace owed him a duty of care akin to that owed by an employer, a breach of which caused his injuries. If RFP was his employer, then Mr Tomlinson would have been precluded from claiming or recovering damages by the relevant legislation governing the management of workplace injuries. RFP sought to raise an issue estoppel based on the Federal Court decision. The trial judge rejected RFP's argument of issue estoppel and found that Tempus was Mr Tomlinson's employer at the relevant time. The NSW Court of Appeal allowed an appeal by RFP on the basis of issue estoppel. The High Court unanimously disagreed, holding that RFP could not assert an issue estoppel against Mr Tomlinson.
The key issue in Tomlinson was the third of the requirements set out at [42], specifically whether Mr Tomlinson was a 'privy' to the earlier Federal Court decision. The plurality (French CJ, Bell, Gageler & Keane JJ) observed:[71]
Consistently with the rationale for the principle, the explanation demonstrates that a party to a later proceeding (A) can be privy in interest with a party to an earlier proceeding (B) on either of two bases. One basis is that A might have had some legal interest in the outcome of the earlier proceeding which was represented by B, or that B has some legal interest in the outcome of the later proceeding which is represented by A. … The other basis is that, after that earlier proceeding was concluded by judgment, A might have acquired from B some legal interest in respect of which B would be affected by an estoppel which A then relies on in the later proceeding.
[71] Tomlinson [33], (521) - (522).
And:[72]
38… It is a principle at the core of our legal system that a party claiming or denying the existence of a legal right or obligation should have an opportunity to present evidence and arguments to establish the facts and law on which the claim or denial is founded. There are countervailing considerations, some of which operate to create exceptions to that principle. Finality and fairness, including maintaining the certainty of past adjudicated outcomes and ensuring the predictability of future adjudicated outcomes, are amongst those countervailing considerations, and the estoppels informed by those considerations are amongst the exceptions to the principle. The operation of an estoppel, it must be remembered, is to preclude the assertion in a subsequent proceeding of what is claimed to be the truth.
39The justice of binding to an estoppel a person who was a party to an earlier proceeding is readily apparent: the person has already had an opportunity to present evidence and arguments. The justice of binding to an estoppel a person whose legal interests stood to benefit from the making or defending of a claim by someone else in an earlier proceeding will often also be apparent. With the benefit of the claim or defence also comes the detriment of the estoppel. That, at least, is the underlying theory. But it is a theory which has limitations. It would be quite unjust for such a person to be precluded from asserting what the person claims to be the truth if the person did not have an opportunity to exercise control over the presentation of evidence and the making of arguments in the earlier proceeding and if the potential detriment to the person from creating such an estoppel was not fairly taken into account in the decision to make or defend the claim in the earlier proceeding or in the conduct of the earlier proceeding.
40Traditional forms of representation which bind those represented to estoppels include representation by an agent, representation by a trustee, representation by a tutor or a guardian, and representation by another person under rules of court which permit representation of numerous persons who have the same interest in a proceeding. To those traditional forms of representation can be added representation by a representative party in a modern class action. Each of those forms of representation is typically the subject of fiduciary duties imposed on the representing party or of procedures overseen by the court (of which opt-in or opt-out procedures and approval of settlements in representative or class actions are examples), or of both, which guard against collateral risks of representation, including the risk to a represented person of the detriment of an estoppel operating in a subsequent proceeding outweighing the benefit to that person of participating in the current proceeding.
[72] Tomlinson [38] - [40], (523) - (524) (references omitted).
Applying these principles, the plurality concluded:[73]
Performing that function and invoking those procedures, the Fair Work Ombudsman did not represent the legal interests of Mr Tomlinson, in the sense which gives rise to an estoppel, by seeking in the Federal Court orders that Ramsey pay Mr Tomlinson and others amounts which Ramsey had failed to pay in breach of applicable terms. The fact that Mr Tomlinson had complained to the Fair Work Ombudsman and the fact that he provided evidence in the proceeding make no difference to that conclusion. Counsel for Ramsey disavowed any suggestion that Mr Tomlinson in fact gave to the Fair Work Ombudsman some additional non-statutory authority to act as his agent. The Fair Work Ombudsman acted in the discharge of its own statutory responsibility.
[73] Tomlinson [46], (526).
The fifth member of the court, Nettle J, came to the same conclusion, endorsing the three elements set out at [42].[74] As to privity, his Honour stated:[75]
It is established by the decided cases that privity of interest exists where party and privy share the same interest, in the sense that they are equally entitled to assert a discrete legal right; or where they share an interest by reason of an established legal or equitable relationship, such as agency or trusteeship; or, in some of the more recently decided cases, where the privy claims 'under or through' or 'on account of or for the benefit of' the party in a manner which is sufficiently analogous to one or other of the same interest or established legal or equitable relationship cases to warrant its inclusion. But the problem is in deciding what is sufficiently analogous.
[74] Tomlinson [90], (537) (Nettle J).
[75] Tomlinson [95], (539).
The facts of an earlier High Court case are also instructive to consider, being Ramsay v Pigram.[76] The appellant was the nominal defendant for the New South Wales government (Nominal Defendant). The respondent, Pigram, was injured when a vehicle he was driving collided with a vehicle being driven by a police officer, one Thrift. Following this collision, two actions were commenced concurrently. In the first, Thrift successfully sued Pigram, and recovered damages. In the second, Pigram sued the owner of the vehicle, who was represented by the Nominal Defendant. The Nominal Defendant sought to plead an issue estoppel in its favour based on the outcome of the action commenced by Thrift. As McTiernan J observed:[77]
As the parties in the two relevant actions are not the same it is necessary in order to make applicable the doctrine of estoppel that the present action involves one of the parties to the earlier action and a privy of the other.
[76] Ramsay v Pigram (1968) 118 CLR 271 (Ramsay).
[77] Ramsay (282) (McTiernan J).
The Nominal Defendant argued that:[78]
… where, in an action for personal injury arising out of the use of a motor car, the legal responsibility of the owner is purely vicarious and dependent upon the doctrine of respondeat superior, the owner and driver have such a community of interest as defendants, or potential defendants, to be entitled to have the benefit of an issue estoppel arising in favour of one or the other.
[78] Ramsay (282).
All members of the court disagreed, holding that there was no privity of interest between the Nominal Defendant and Thrift to enable the former to rely on the findings in the latter's action.[79] Barwick CJ observed:[80]
In every respect the action between the respondent and the police officer was personal to each of them, neither being in any sense in relation to the action or any of the issues involved in it, representative of another.
[79] Ramsay (279) (Barwick CJ), (282) (McTiernan J), (288) (Taylor J, with whom Kitto J agreed), (289) (Windeyer J).
[80] Ramsay (279) (Barwick CJ).
The Chief Justice added:[81]
So expressing the issues in the District Court action [commenced by Thrift], it will be seen that no issue of breach of the Government's duty to [Pigram] was involved. Whilst it is no doubt true that rarely will there be any practicality in drawing the distinction in an action for personal injuries between the duty of the principal and that of the agent where the suggested cause of the injury is the act of that agent, it is none the less of importance on occasions, of which I think this is one, to maintain and observe that distinction. …
Thus, though the act in question be the same in each case and, if you will, though I think it not to matter, the evidence establishing it be the same, the issues raised in each case are not, upon a proper analysis, identical.
[81] Ramsay (278) (Barwick CJ).
Determination
As the decision in Ramsay illustrates, it is not sufficient that the same facts were considered in the earlier action (in that case, the circumstances of the collision between the vehicles driven by Mr Thrift and Mr Pigram).
As the decision in DP World illustrates, nor is it necessarily sufficient that the party against whom the estoppel is asserted was a party to the earlier action.
In the present case, RES was a party to the Smith Action. Mr Richards was a partner in RES. Counsel for the Other Defendants asserted that this was sufficient given that Mr Richards was for all practical purposes RES. However, Mr Richards was a party in a different capacity. Somewhat analogously to the position identified by Barwick CJ in Ramsay quoted at [62] and [63], the legal rights asserted were different. In this Smith Action, the issues were:
(a)whether RES breached a duty of care it owed to Mr Smith; and
(b)whether RES was a liable to contribute to HES in respect of any liability it was found to have to Mr Smith.
As mentioned, in the Smith Action, RES did not commence contribution proceedings (fourth party proceedings) against the Owners and the Manager.
In the Richards Action, the issue is whether HES, the Owners and the Manager breached the duty of care each owed to Mr Richards. The particulars of breach in relation to the Owners ([34]) and the Manager ([35]) are much wider than simply the battery issue, though do include the battery issue. Mr Richards' claim also includes a second aspect of the battery issue, being whether, but for the negligence or breach of duty of the Owners and the Manager in failing to maintain the Merlin Gerin, 'the explosion which occurred on the 3rd February 2015 would have been 30% of the energy emitted with the consequence that the Plaintiff's injuries would have been significantly less severe than those in fact sustained' (quoted in context at [34] and [35]). This is not an issue which Judge Vernon ruled on in the Smith Decision.
For these reasons, I am of the view that the issue of whether the Owners and the Manager were liable to Mr Richards was not determined in the Smith Decision, so no issue estoppel can arise.
However, what counsel for the Other Defendants pressed was the argument that Mr Richards is estopped from controverting the 'fundamental or cardinal' factual issues which comprise the immediate foundation of the Smith Decision (see [43] above). These are the issues set out at [22] and [30], including the finding that the fault which occurred in the transformer on 2 February 2015, was not an earth fault. Its argument is that, to use the words of the plurality in Tomlinson, Mr Richards had the 'opportunity to present evidence and arguments to establish the facts and law' on this issue, and indeed did so. Counsel asserts that the public interest in finality in litigation and the conclusiveness of judicial decisions requires that this factual controversy not be reopened (see [40]).
Other people, in addition to Mr Smith and Mr Richards, have commenced proceedings against HES, the Owners and the Manager for damages for personal injuries caused by the explosion (though I am told from the bar table that these have all settled).[82] Counsel for the Other Defendants accepted that there was no issue estoppel against these parties, as they were not a party to the Smith Action. So to this extent, the factual issues in the Smith Decision could have been relitigated.
[82] Second Zubonja Affidavit, par 12.
The other matter that became apparent in the initial argument is that in order to place the factual findings in relation to the battery issue in their necessary context, the factual findings in relation to the circumstances in which the explosion occurred would also need to be the subject of an estoppel. Hence, as noted, the need to involve HES.
As mentioned, the decision in Smargiassi illustrates that issue estoppel can raise in relation to specific facts found in the prior litigation. However, this was an insufficient basis of itself to found an estoppel in Ramsay. In Ramsay in both the prior litigation and the subsequent litigation, the same facts were in dispute: the circumstances of the collision between the vehicles driven by Mr Thrift and Mr Pigram. However, as the context was different - different duties of care owed by different parties - no issue estoppel arose.
In Smargiassi, it was significant that Smargiassi was litigated in the same capacity in the prior and subsequent litigation: in each case the issue was whether Smargiassi as occupier of the land was entitled to use the land in a particular manner. This was the position in Catlin as well: in each case the Catlins litigated in the capacity of borrowers/guarantors to the Bank. And in DP World: in both the prior litigation and the subsequent litigation DP World and the FPA were sued in the same capacity, being the operator and owner of the unloader respectively. Hence, the observation of McLure JA that the parties would be bound by 'questions of fact or law that were necessarily established as the legal foundation for the judgment' in the prior litigation.[83]
[83] DP World [1].
In the present case, the capacity in which Mr Richards was involved were different, so consequently were the issues. In the Smith Action, RES was a party as a defendant and alleged contributor to the injury sustained by Mr Smith, the issue being whether RES was jointly liable, with HES and the Other Defendants, to Mr Smith. In the Richards Action, Mr Richards sues in his own right, in the capacity of a person injured in the same accident as Mr Smith. The issue is whether HES and the Other Defendants owed a duty of care to Mr Richards and, if so, whether it was breached. As I have said, it is closer to Ramsay: in the prior action the issue was whether the employee was directly liable; in the subsequent action, the issue was whether the owner/employer was vicariously liable.
Counsel for Mr Richards makes the point that, while Mr Richards may have had the opportunity to present evidence and arguments on the factual issues, he did not have the full range of opportunities available were he a plaintiff in that action. In particular, given that RES was successful on its primary argument ([23] and [24]), he did not have the opportunity to challenge the factual findings on the battery issue on appeal. That point is raised, albeit in a slightly different context, by Newnes JA in DP World. His Honour referred to the following passage from the decision of Dixon J in Blair:[84]
In matters of fact the issue‑estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order … the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself …. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.
His Honour then commented:[85]
It is therefore essential to approach reasons for judgment which are said to create an issue estoppel with an accurate understanding of what the author of the reasons was required to decide: Murphy v Abi‑Saab (1995) 37 NSWLR 280. In that case, Gleeson CJ suggested (288) that a practical test of whether a decision was fundamental is to ask whether it is possible to appeal against the finding. His Honour pointed out that as finality of litigation is the primary object of the principle underlying issue estoppel, it would be incongruous if the doctrine operated so as to force a litigant to appeal in order to displace part of the reasoning of a court whilst having no intention, and perhaps no hope, of displacing the judgment.
[84] Blair (532) (Dixon J); DP World [59].
[85] DP World [60].
In the present case, the issue is more acute. In the Smith Decision, there was no reason for RES to have appealed the decision on the battery issue as, in its capacity as a defendant, it was successful on another point. It would be incongruous if the doctrine of estoppel operated to force RES to have appealed the battery issue in the Smith Decision in which it was a defendant in order to preserve Mr Richard's personal position in the Richards Action in which he is the plaintiff.
In my view, given the differences in the legal framework in which these factual decisions arise, I do not consider that the Smith Decision involved the determination of the 'same question' as in the Richards Action ([42]). Mr Richards is entitled to present his case for personal injuries free of the factual constraints of the Smith Decision in which he participated in a different legal capacity. This places him in the same position as the other people who have (or could have) commenced proceedings as a consequence of the explosion. The liability of the Owners and the Manager to Mr Richards as an injured plaintiff was not determined in the Smith Decision. He does not seek to litigate this matter afresh in the Richards Action.
What final orders are appropriate?
As mentioned, the merits of the Amended Application are a factor in the exercise of the discretion to extend the time within which a defendant may bring an application for summary judgment. The Other Defendants had a meaningful argument and were readily justified in bringing the Amended Application. The delay is explicable. There was no real prejudice to the plaintiff as a result of the delay. There should be leave to bring the Amended Application.
It is sufficient to dismiss an application for summary judgment to find that there is a real question of fact or law to be tried. Having regard to the caution with which I am to approach an application for summary judgment, I do not have sufficient certainty that the Smith Decision gives rise to any issue estoppel in the Richards Action to warrant summary judgment being entered. The Other Defendants have not persuaded me that they have a good defence on the merits on this basis. So I decline to enter summary judgment.
Counsel for the Other Defendants alternatively characterised Mr Richards position as being an abuse of the processes of the court as it required the same parties to litigation the same point a second time. However, in my view, the issue of an abuse of process is, in this case, co-extensive with that of an issue estoppel. The fact Mr Richards is now litigating in a difference capacity, in the context of different legal issues, means that he is not abusing the processes of the court.
I gave some thought to whether there should be a limited factual estoppel, along the lines foreshadowed by McLure JA in DP World. Potentially, this would have been on the factual findings set out at [30]. However, for the reasons set out at [77], the same objection in principle stands in respect of an estoppel in relation to specific facts. Additionally, the breaches asserted by Mr Richards set out at [34] and [35] go beyond any potential 'fundamental' or 'cardinal' facts found by Judge Vernon, even though they arise in the same overall factual context. There is also a real risk that a limited factual estoppel would be so intertwined with the balance of the evidence that it would be practically impossible to draw a bright line between the two. On these bases I also declined to make the alternate orders sought in the Amended Application to strike out certain portions of the statement of claim.
For these reasons at the conclusion of the hearing on 11 May 2023, I dismissed the Amended Application.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
LL
Associate
24 MAY 2023
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