Robinson v Kentz Pty Ltd
[2020] WADC 163
•22 DECEMBER 2020
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: ROBINSON -v- KENTZ PTY LTD [2020] WADC 163
CORAM: STAUDE DCJ
HEARD: 25 SEPTEMBER 2020
DELIVERED : 22 DECEMBER 2020
FILE NO/S: CIV 2191 of 2017
BETWEEN: RAYMOND HUTCHING ROBINSON
Plaintiff
AND
KENTZ PTY LTD
First Defendant
CBI CONSTRUCTORS PTY LTD
Second Defendant
Catchwords:
Practice and procedure - Amendment of pleadings in contribution proceedings - Proposed addition of new grounds for contribution - Case management principles
Practice and procedure - Application by co-defendant to set aside consent order dismissing plaintiff's claim against another co-defendant - Legal effect of consent order dismissing plaintiff's claim on contribution proceedings - Whether court has power to set aside order - Whether discretion to set aside should be exercised
Legislation:
Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1947 (WA)
Occupiers Liability Act 1985 (WA)
Rules of the Supreme Court 1971 (WA)
Workers' Compensation and Injury Management Act 1981 (WA)
Result:
Application to set aside consent order for judgment refused
Application for leave to amend contribution notice refused
Application for leave to amend defence in contribution proceedings allowed in part
Representation:
Counsel:
| Plaintiff | : | No appearance |
| First Defendant | : | Ms B A Mangan |
| Second Defendant | : | Mr M J Feutrill SC |
Solicitors:
| Plaintiff | : | Not applicable |
| First Defendant | : | Jackson McDonald |
| Second Defendant | : | Wotton + Kearney Lawyers (Perth) |
Case(s) referred to in decision(s):
Ansons Pty Ltd v Merlex Corporation Pty Ltd [2001] WASC 204
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Brambles Constructions Pty Limited v Helmers (1966) 114 CLR 213
Castellan v Electric Power Transmission Pty Ltd (1967) 69 SR (NSW) 159
George Wimpey & Co Ltd v British Overseas Airways Corporation (1955) AC 169
James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53
Minister of Foreign Affairs, Trade & Industry v Vehicles & Supplies Ltd [1991] 4 All ER 65
Ryan Nominees Pty Ltd v Western Australian Planning Commission [2003] WASCA 134
Sebastian v Strongwall International Ltd (deregistered) [2011] FCA 1045
Wintle v Stevedoring Industry Finance Committee (No 3) [2002] VSC 369
STAUDE DCJ:
Introduction
This is an application by chamber summons by the first defendant Kentz Pty Ltd (Kentz) for leave to amend its notice of contribution against the second defendant CBI Constructors Pty Ltd (CBI) and its defence to CBI's contribution claim, and to set aside a consent order made between the plaintiff and CBI dismissing the plaintiff's claim against CBI in consequence of a settlement agreement.
Kentz submits that the relief it seeks will promote the just and efficient determination of the contribution proceedings without causing any significant prejudice to CBI. CBI opposes the orders sought mainly on the grounds of intolerable unexplained delay in the making of the application (invoking case management principles), and on the basis that Kentz has no grounds upon which to apply to set aside the consent order.
The litigation
The plaintiff Mr Robinson was injured in an accident in the course of his employment as an instrument fitter at a worksite on Barrow Island on 21 May 2015. He tripped on a timber glut on the ground in the Plant West Meg laydown area.
The plaintiff was employed by Kentz. Kentz and CBI were parties to a joint venture agreement. The joint venture contracted with Chevron Australia Pty Ltd to carry out mechanical electrical instrumentation works for the Gorgon LNG project.
The plaintiff was paid weekly payments and statutory allowances by Kentz pursuant to the Workers' Compensation and Injury Management Act 1981 (WA) (the Workers' Compensation Act). He elected to retain the right to claim damages and sued Kentz by writ of summons filed 21 June 2017. The plaintiff joined CBI as the second defendant. Against each defendant the plaintiff claimed damages for breach of duty of care.
On 4 April 2018 CBI served a notice of contribution on Kentz seeking contribution pursuant to s 7 of the Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1947 (WA) (the Contribution Act) in the event that it was found to be liable to the plaintiff. Relevantly, s 7(1) provides:
Subject to Part 1F of the Civil Liability Act 2002, where damage is suffered by any person as the result of a tort -
…
(c)any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect of the same damage whether as a joint tortfeasor or otherwise but so that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability for which contribution is sought.
CBI's statement of claim in the contribution proceedings dated 19 June 2018 pleaded, in addition to contribution pursuant to the Contribution Act, a contractual indemnity pursuant to cl 3.2 of the joint venture agreement which provided that each party would:
indemnify the other from and against any claims and losses to the extent arising from its fault or negligence or otherwise arising from the works for which it is responsible.
The plaintiff's claims were settled in October and November 2018. On 8 October 2018 a consent judgment was entered for the plaintiff against Kentz for $221,085.07, exclusive of workers' compensation payments of $258,362.93, the sum of these amounts being $479,448, at which the plaintiff's entitlement to damages was capped by s 93K of the Workers' Compensation Act. The plaintiff's claim against CBI was settled for $278,914.93 by way of a deed of release dated 2 November 2018 and a consent judgment dismissing the plaintiff's claim against CBI entered on 29 November 2018.
In the contribution proceedings a number of directions were made by a registrar on 25 March 2019, including that CBI file and serve an amended statement of claim on or before 12 April 2019, and that Kentz file and serve its defence on or before 3 May 2019.
On 12 April 2019, pursuant to leave granted on 25 March 2019 to do so, CBI lodged an amended notice of contribution and amended statement of claim in the contribution proceedings that pleaded the compromise of the plaintiff's claim against it. CBI also pleaded that:
(i)both Kentz and CBI were controllers of the laydown area where the plaintiff was injured, and occupiers of that area for the purposes of the Occupiers Liability Act 1985 (WA), and that they both owed a duty of care to see that the plaintiff would not suffer injury or damage by reason of dangers due to the state of the laydown area;
(ii)the laydown area was a workplace within the meaning of the Occupational Safety and Health Act 1984 (WA) and that due to the state of the laydown area it was reasonably foreseeable that a person traversing the laydown area may trip and suffer injury;
(iii)the plaintiff's injury was caused by Kentz's breaches of its common law and statutory duties;
(iv)by consenting to judgment for the plaintiff on 8 October 2018 Kentz admitted that the plaintiff's injury was caused by its fault or negligence;
(v)it was reasonable for CBI to compromise the plaintiff's claim against it for $278,914.93;
(vi)the sum paid by CBI was a loss within the meaning of the joint venture agreement for which Kentz was liable to indemnify CBI pursuant to cl 3.2 as it arose from works for which Kentz was responsible pursuant to sch 2 of that agreement and the loss was caused by the fault or negligence of Kentz;
(vii)Kentz was liable to indemnify CBI fully, or for such proportion of the loss as was caused by Kentz;
(viii)alternatively, Kentz was liable to contribute to CBI's loss pursuant to s 7 of the Contribution Act; and
(ix)in the further alternative, CBI was entitled to an equitable contribution from Kentz.
Kentz's defence was not filed until 22 July 2019. It denied that by consenting to judgment in favour of the plaintiff it admitted negligence. It also denied liability to contribute to CBI's liability to the plaintiff on the grounds it had paid the amount at which his damages were capped by s 93K. Kentz also denied liability to indemnify CBI pursuant to the joint venture agreement.
On the same day Kentz filed a notice of contribution against CBI seeking an order pursuant to s 92(b) and s 92(c) of the Workers' Compensation Act that CBI pay Kentz the amount of the workers' compensation paid to the plaintiff. Section 92 provides, relevantly:
Where in respect of an injury an action is brought by a worker for damages independently of this Act against his employer or against some other person (referred to in this section as the defendant) or against both of them -
…
(b)if the action proceeds to judgment, including the acceptance of an offer to consent to judgment, against the employer only or against the employer and the defendant, there shall be deducted from the amount of the judgment and be paid to the employer a sum representing the amount (after apportionment in respect of any contributory negligence of the worker) actually recoverable by the worker by way of weekly or lump sum compensation, medical and other expenses paid pursuant to this Act, but where liability is apportioned between the employer and the defendant the defendant's liability to pay to the worker shall be reduced accordingly;
(c)if the action proceeds to judgment, including the acceptance of an offer to consent to judgment, against the defendant only or is settled by the acceptance of money paid into court by the defendant, the payments and expenses referred to in paragraph (b) shall be a first charge on the judgment or the amount of money paid into court and the defendant shall be bound to pay the amount of the compensation, and medical and other expenses to the employer and the judgment shall be pro tanto discharged by such payment, or the amount due under the charge shall be paid out of court to the employer or his authorised agent, as the case may be;
On 12 September 2019 CBI lodged a reply to Kentz's defence. CBI pleaded that:
(i)Kentz was estopped from denying (or not admitting) that it was negligent, that Kentz' negligence caused the plaintiff's injuries, and that the plaintiff suffered loss and damage of not less than $479,448;
(ii)the consent order dismissing the plaintiff's claim against CBI was made without objection or appeal by Kentz;
(iii)Kentz was estopped by that order from asserting that the plaintiff's loss and damage were caused or contributed to by any fault or negligence on the part of CBI;
(iv)s 93K of the Workers' Compensation Act did not apply to the joint venture agreement; and
(v)further, and alternatively, that on the proper construction of the Workers' Compensation Act, Kentz's liability to CBI pursuant to the joint venture agreement existed independently of the Workers' Compensation Act and was not affected by s 93K and s 301.
Section 93K provides, relevantly:
…
(4)Damages in respect of an injury can only be awarded if -
(a)the worker elects, in the manner prescribed in the regulations, to retain the right to seek the damages; and
(b)the Director registers the election in accordance with the regulations; and
(c)court proceedings seeking the damages are commenced after the Director gives the worker written notice that the Director has registered the election; and
(d)the court is satisfied that the worker's degree of permanent whole of person impairment is at least 15%.
(5)Unless the court is satisfied that the worker's degree of permanent whole of person impairment is at least 25% -
(a)the amount of damages to be awarded is to be a proportion, determined according to the severity of the injury or injuries, of the maximum amount that may be awarded; and
(b)the maximum amount of damages that may be awarded in respect of the injury or injuries is Amount A, but the maximum amount may be awarded only in a most extreme case in which the worker's degree of permanent whole of person impairment is less than 25%.
(6)Subsection (5) has effect in respect of the amount of a judgment before the operation of section 92(b).
(7)No entitlement to damages is created by subsection (5) and that subsection is subject to any other law that prevents or limits the awarding of damages.
(8)If -
(a)subsection (4) does not allow damages to be awarded in respect of the injury; or
(b)damages in respect of the injury have been awarded in accordance with subsection (5),
the employer is not liable to make any contribution under the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (the Contribution Act) in respect of damages awarded against another person in relation to the injury.
(9)If subsection (5) limits the damages that could have been awarded in respect of the injury -
(a)the contributions that the employer may be liable to make under the Contribution Act in respect of damages awarded against other persons in relation to the injury are not to exceed the damages that could have been awarded in accordance with subsection (5); and
(b)if the employer has made or been directed to make a contribution under the Contribution Act in respect of damages awarded against another person in relation to the injury, the amount of damages that may be awarded in accordance with subsection (5) is reduced by the amount of that contribution.
Section 301 provides:
Except as provided by this Act, its provisions apply notwithstanding any contract to the contrary.
On 3 February 2020 the contribution proceedings were listed for trial on 31 July 2020. On 20 April 2020 that date was vacated due to unavailability of counsel and the matter was relisted to be heard on 14 August 2020. Mediation was ordered.
On 12 May 2020 the proceedings were listed for a mediation conference on 4 June 2020. On the day before the mediation conference CBI lodged a chamber summons for an order for the trial of preliminary issues. The mediation conference did not proceed. The registrar listed the chamber summons for hearing at a special appointment on 24 June 2020 and ordered that Kentz pay CBI's costs of the mediation conference thrown away in any event.
On 24 June 2020 Kentz, without leave, filed an amended notice of contribution and an amended defence. The amended notice of contribution claimed a contractual indemnity under the joint venture agreement, as well as a contribution pursuant to the Contribution Act on the grounds that CBI's negligence contributed to the plaintiff's loss and damage. (These pleadings are the subject of the present application.)
On the same day Wallace DCJ heard CBI's application for the trial of preliminary issues. On 1 July 2020 her Honour granted the application in the terms of CBI's minute of proposed orders dated 22 June 2020. The preliminary issues are as follows:
1.On the assumption that it was reasonable for [CBI] to settle the plaintiff's claim against it for $278,914.93 and on the proper construction of the joint venture agreement, and on the admitted and agreed facts, is [Kentz] liable to indemnify [CBI] for $278,914.93 on the grounds that [CBI's] liability to pay that amount to the plaintiff under the terms of the deed of release arises from:
(a)works (as defined in the joint venture agreement) for which [Kentz] is responsible pursuant to schedule two of the joint venture agreement; or
(b)[Kentz'] fault or negligence in causing the plaintiff's injuries and any loss or damage?
2.Is [CBI] prevented by the [Workers' Compensation Act] (s 93K and s 301) from claiming an indemnity from [Kentz] pursuant to the joint venture agreement against:
(a)the whole of [CBI's] liability to the plaintiff under the deed of release; alternatively
(b)that part of [CBI's] liability to the plaintiff under the deed of release that coincides with the extent to which [Kentz] negligently caused the plaintiff's injury?
3.On the proper construction of the joint venture agreement and ss 92(b) and 92(c) of the [Workers' Compensation Act], and on the admitted and agreed facts, is [CBI] liable to reimburse (indemnify) [Kentz] for any portion, and if so what portion, of the workers' compensation and other payments made to the plaintiff?
CBI proposed a draft statement of agreed facts and issues. The draft statement was premised on Kentz's contribution claim being, as originally pleaded, for reimbursement of its workers' compensation expenses (there being no claim made for a s 7 contribution, nor any claim for contractual indemnity).
The orders made on 1 July 2020 included directions that Kentz notify CBI on or before 1 July 2020 if any of the facts set out in the draft statement of agreed facts and issues was not agreed, that CBI file a statement of agreed facts (if any) by 15 July 2020, that CBI file and serve a written outline of submissions and a list of documents to be relied on by 24 July 2020, and that Kentz file and serve a written outline of submissions and list of documents by 31 July 2020.
On 30 July 2020 in accordance with the orders of Wallace DCJ, though one week late, CBI lodged its outline of submissions, a book of papers for the judge, a list of authorities, and a statement of admitted and uncontroversial facts and issues. By that time Kentz had not complied with the direction to notify CBI of any fact in the draft statement of agreed facts and issues that was not agreed.
Not until 13 August 2020, the day before trial, did Kentz lodge an outline of submissions. Kentz's outline is framed in terms that refer to the proposed amendments to Kentz's contribution notice and defence and to the setting aside of the consent order, apparently in anticipation of this application, by chamber summons lodged the same day, being determined in the course of the trial, but Kentz's submissions in respect of the three preliminary issues are not contingent, in my view, upon the relief sought in its application.
The application is supported by an affidavit that was sworn on 12 August 2020 by Kentz's solicitor Ms Dempster. In it Ms Dempster deposes to CBI having first raised the prospect of disposing of its contribution claim by way of the determination of proposed preliminary issues on 27 November 2018. Over the course of the following year CBI proposed two further versions of the issues (20 February 2019 and 8 October 2019). After conferral between counsel on 10 December 2019, CBI provided a further minute of proposed preliminary issues and a minute of proposed agreed facts on 23 December 2019.
In this context Ms Dempster states:
22.Whilst its concerns have not been expressly conveyed to the second defendant's lawyers in writing, the first defendant has not been persuaded that it is appropriate, having regard to the issues in dispute between the parties from time to time, to have the preliminary questions (in a prior or current form) determined on the basis that there is no prospect that doing so will resolve the matter in its entirety.
As there was no appeal from the orders made by Wallace DCJ on 1 July 2020, and no application to vacate the trial of the preliminary issues, this contention is at once otiose and impertinent. Yet, it was made again in Kentz's outline of submissions for the trial dated 13 August 2020. In those submissions, counsel wrote:
23.It is now apparent from the claims that have been identified as being not the subject of the hearing of the Preliminary Issues claims, and the complexity of Second Defendant's Outline of Submissions for Trial of Preliminary Issues filed 30 July 2020 (CBI's submissions) that the proposed trial of the three Preliminary issues does not satisfy any of the circumstances for there to be a separate trial of these issues and it is not appropriate for there to be a separate trial of the issues.
24.Kentz invites the court to of its own motion vacate the hearing on 14 August 2020.
Wallace DCJ was satisfied, on the basis of the pleadings as they were at the time of her Honour's ruling, that it was appropriate that the preliminary issues proposed by CBI be tried separately. Kentz, it seems, wants to upset that situation by raising other issues.
Ms Dempster's affidavit states that (at some unspecified point of time) she 'noted' that Kentz's contribution notice and defence to CBI's claim for contribution did not cover all issues for determination between the parties, leading her, it would seem, to filing the amended contribution notice and defence on 24 June 2020. She deposes to being 'unaware' of CBI being taken by surprise by the proposed amendments, or of any prejudice likely to be suffered by CBI if the amendments were made. She states also that the amendments would 'narrow the factual issues in dispute', a point developed in Kentz's submissions.
The affidavit does not purport to offer any explanation for the failure of Kentz to apply for leave to amend its notice of contribution and defence prior to the date of the trial.
As to the consent order dismissing the plaintiff's claim against CBI, Ms Dempster states Kentz's position to be that the dismissal of the plaintiff's claim against CBI does not bar its claim for contribution. Nevertheless, it seeks to have the consent order set aside 'out of an abundance of caution'. Ms Dempster does not depose to any reasons for Kentz not opposing the consent order, or not appealing it, or not acting earlier to set it aside.
Ms Dempster's affidavit also addresses Kentz's response to the draft statement of agreed facts and issues. It is unnecessary to refer to that subject at this moment. Ms Dempster states further that there was no conferral prior to the lodgement of the chamber summons 'for reasons of expediency'.
When the matter was called on before Stone DCJ on 14 August 2020, Mr Vijayakumar appeared for CBI to apply for an adjournment on the grounds that senior counsel for CBI was unwell and due to be tested for COVID-19. Ms Dempster appeared for Kentz. His Honour observed that Kentz's application seriously undermined the grounds on which the preliminary questions were based. His Honour was critical of Kentz for previously stating by letter to the court that the matter was ready for trial. I note in this regard that in response to a routine pre‑trial enquiry by the registry, Ms Dempster wrote to the court on 5 August 2020 confirming her contact details and those of counsel. Ms Dempster also stated that the trial would be completed in the allocated time, that there were no security or technology requirements for the hearing, and that there were no ongoing settlement negotiations at that time. The letter contained no hint that any application was anticipated that might affect the course of the trial.
His Honour vacated the trial date and adjourned the hearing of the chamber summons to 25 September 2020. Further affidavits have been filed since.
In an affidavit sworn 24 August 2020, Ms Rice, a solicitor for CBI, deposes to the history of the litigation from CBI's point of view. It suggests numerous procedural defaults by Kentz.
Ms Dempster made a further affidavit in support of Kentz's application on 1 September 2020. In it Ms Dempster suggests a number of explanations for those defaults and verifies the chronology of events annexed to Kentz's outline of submissions of the same date. Yet again, no explanation is proffered for the tardiness of Kentz's application.
Mr Vijayakumar, for CBI, made a further affidavit on 9 September 2020 in which he deposes to the events of October and November 2018 when the plaintiff's claims against Kentz and CBI were settled. He states that his firm was involved in without prejudice communications with SRB Legal, who were Kentz's solicitors at the time, and Jackson McDonald who he understood were likely to take over the conduct of the matter on behalf of Kentz. Mr Vijayakumar was in correspondence with Mr Lustig of Jackson McDonald prior to the entry of the consent judgement. He states that he informed Mr Lustig by email on 8 November 2018 that the plaintiff's claim against CBI was in the process of being finalised and that a minute of consent order dismissing the claim would be filed ahead of a court hearing on 30 November 2018. He says the minute of consent order was lodged on 29 November 2018, after which there was no further correspondence with SRB Legal or Jackson McDonald with regard to the settlement of the plaintiff's claim and the filing of the consent order. To his knowledge Kentz did not oppose the entry of the consent order and there was no application or submission made to the court at a hearing on 27 November 2018 to the effect that Kentz opposed the dismissal of the plaintiff's claim against CBI.
In this regard I note from the court file that there was a case management hearing on 27 November 2018 at which the plaintiff, Kentz and CBI were represented. At that time the matter was adjourned to a listing conference on 14 January 2019. There was a direction that the plaintiff be excused from attending any further court hearings as between the defendants. Costs were ordered in the cause in the contribution proceedings. It does not appear to be in dispute that Kentz knew of CBI's intention to file a consent order dismissing the plaintiff's claim.
CBI's position on the preliminary issues
CBI's position is that the preliminary issues are legal questions of general importance, particularly the second which is whether the limit of an employer's liability to pay damages to an injured worker under s 93K of the Workers' Compensation Act applies to an independent contractual liability of the employer to indemnify a person in respect of that person's liability for injury to the employer's worker (as opposed to a liability to contribute/indemnify under the Contribution Act).
CBI's position with respect to the preliminary issues is that they can be determined on the admissions made by Kentz and the legal effect of the consent judgment for the plaintiff against Kentz and the consent order dismissing the plaintiff's claim against CBI.
CBI submits that the result of the consent judgment giving effect to the compromise of the plaintiff's claim against Kentz is that Kentz is adjudged liable in negligence/breach of statutory duty to the plaintiff. On this basis CBI says that Kentz cannot deny fault or negligence for the purposes of CBI's indemnity/contribution claims.
On the other hand, the effect of the consent order together with the deed of release, CBI submits, is that the CBI is adjudged not to be liable in negligence/breach of statutory duty to the plaintiff. On that basis CBI says that Kentz cannot assert negligence or fault against CBI.
In particular, on the authority of James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53, CBI says that the dismissal of the plaintiff's claim against it means that it is not 'a tortfeasor who is or would if sued have been liable in respect of the same damage' for the purpose of s 7 of the Contribution Act. In James Hardie & Co Pty Ltd v Seltsam Pty Ltd the High Court found that the dismissal of a claim against one defendant, even by consent, and without adjudication of the merits, established that that defendant was not liable to the plaintiff and thereby not liable for contribution to another defendant.
In CBI's submission, there is an issue estoppel with respect to the facts on which the consent judgment and the consent order were made. Although Kentz was not given the opportunity to be heard on the making of the consent order, unlike in James Hardie, it was put on notice that the order would be made as part of the settlement of the plaintiff's claim against CBI and did not object to or appeal from it.
Moreover, CBI argues that by consenting to judgment for the plaintiff, Kentz is taken to have admitted, and is bound by, the facts pleaded by the plaintiff that establish his cause of action, and further, that Kentz is bound by the facts underpinning the dismissal of the plaintiff's claim against CBI. The dismissal of the claim, in CBI's submission, establishes that CBI is not liable to the plaintiff for negligence or breach of statutory duty.
As to question 1, CBI says that it is entitled to a contractual indemnity for the amount it paid to the plaintiff in settlement of the plaintiff's claim because that amount, if reasonably paid, would fall within the meaning of 'claims and losses' in cl 3.2 of the joint venture agreement. That clause provided that each party was liable to indemnify the other for claims for losses arising from the works for which that party is responsible. So, where both parties are at fault, their liability is to be apportioned. CBI relies on the effect of the consent judgment for the plaintiff against Kentz and the consent order dismissing the plaintiff's claim against CBI to prove that Kentz was negligent and CBI was not.
As to question 2, the issue is whether, given the statutory limit on Kentz' liability, Kentz could be liable to indemnify or contribute to the cost of CBI's settlement with the plaintiff. CBI's argument is that there is nothing in the Workers' Compensation Act that prevents an employer from entering into a contract to indemnify another party against liabilities that that party may incur to the employer's workers. Such a contract would not conflict with s 301 and would exist independently of the operation of the Workers' Compensation Act. It is further argued that a contractual liability to indemnify another party who may be a joint tortfeasor would exist independently of the Contribution Act.
As to question 3, CBI argues that Kentz is unable to recover any of its workers' compensation payments to the plaintiff pursuant to s 92 of the Workers' Compensation Act because the plaintiff's claim against CBI did not result in a judgment for the plaintiff or involve an acceptance of money paid into court or an offer to consent to judgment.
Kentz's position on the preliminary issues
Kentz's submissions anticipate leave to amend its contribution notice and defence and the setting aside of the consent order.
On the first issue of Kentz's contractual liability to indemnify CBI, Kentz says that it and CBI, as occupiers and controllers of the laydown area, each owed a duty of care to the plaintiff to ensure that the plaintiff would not suffer injury by reason of dangers due to the state of the laydown area. It was reasonably foreseeable that, due to the state of the laydown area, a person traversing the area may trip and suffer injury.
Kentz accepts that it is liable to indemnify CBI to the extent to which the plaintiff's injury and loss arose from Kentz's fault or negligence or otherwise arose from the works for which Kentz is responsible pursuant to sch 2 of the joint venture agreement, yet there is, in its submission, no evidence that the claim arose to any extent from its fault or negligence, or otherwise arose from the works for which it was responsible (as opposed to the fault or negligence of CBI or the works for which it was responsible). Accordingly, it submits that question 1 should be answered in the negative.
As the second issue, Kentz says that as the plaintiff has been awarded the maximum amount of damages permitted by s 93K(5) of the Workers' Compensation Act, it is not liable to make any contribution under the Contribution Act by virtue of s 93K(9). As s 301 contains an express statutory prohibition against contracting out of the provisions of the Workers' Compensation Act, cl 3.2 of the joint venture agreement is rendered void or inoperative to the extent of its inconsistency.
As to the third issue, Kentz's position is that by entering into the deed of release and consenting to the dismissal of the action against CBI, CBI and the plaintiff, in contravention of s 301 of the Workers' Compensation Act contracted out of the provisions of s 92 that would otherwise entitle Kentz to an apportionment of liability as between it and CBI. Accordingly, Kentz argues that cl 16 of the deed of release is void or inoperative and further, that the consent order should be set aside.
Section 93 is also relied upon. Kentz says that by s 93(2) it is entitled to a full or partial indemnity in respect of the workers compensation paid to the plaintiff because the circumstances in which the plaintiff was injured created a legal liability on the part of CBI to pay damages.
The application
Other than par 21 of the minute of proposed amended defence which is premised on leave being granted to amend the contribution notice, the proposed amendments to the defence are of little consequence. They can be characterised as 'tidying up' amendments.
The proposed amendments to Kentz's notice of contribution, however, introduce new claims. The original notice merely claimed an indemnity from CBI in respect of workers' compensation payments paid by Kentz to the plaintiff. The proposed amendments to the notice of contribution add a claim for contribution pursuant to s 7 of the Contribution Act in respect of the damages paid by Kentz, as well as claims for indemnity under both cl 3.2 and cl 11 of the joint venture agreement, and in the alternative, an equitable contribution.
CBI says that leave to amend should not be granted for four reasons. The first is that Kentz is estopped from raising new causes of action due to the legal effect of the consent judgment against it and the consent order. The second is that the proposed amendments do not disclose any reasonably arguable cause of action or defence, or may prejudice, embarrass or delay the fair trial of the action. The third is that, in the event, Kentz has not provided an adequate explanation for its delay in raising the new claims, and the fourth is that the application for leave is made too late the proceedings.
CBI also contends that unless the consent order dismissing the plaintiff's claim against it is set aside, there are no grounds for allowing Kentz to amend its notice of contribution to raise any claim based on an allegation that the plaintiff's injury was caused by the negligence of CBI.
Although the two limbs of the application are co-dependent I propose to deal with them sequentially, beginning with the application to set aside the consent order.
Setting aside the consent order
The application to set aside the consent order, it must be said, is somewhat ambivalent. Both Ms Dempster in her affidavit in support and Ms Mangan in her submissions to the court asserted that the dismissal of the plaintiff's claim against CBI does not preclude the relief sought by Kentz and that the setting aside of the consent order is sought on a precautionary basis for the reason that it is a potential impediment to its claim for contribution. Kentz refers to CBI's reply in its contribution proceedings in which it pleads that the consent order precludes Kentz from alleging that CBI's fault or negligence caused the plaintiff's injury, loss and damage. While Kentz does not accept that it has this effect, it submits that 'it would be an absurd result if this court is incapable of revoking an order made when the far reaching and unfair consequences now submitted by CBI were not contemplated' (written submissions dated 1 September 2020, par 47).
Kentz submits that the consent order was made ex parte and can be set aside: O 58 r 23 Rules of the Supreme Court 1971 (WA) (RSC). Kentz relies on the dicta of McKerracher J in Sebastian v Strongwall International Ltd(deregistered) [2011] FCA 1045 [70]. In that case the court was dealing with motions to discharge injunctions restraining the disposal of property the subject of litigation that had been made ex parte. His Honour referred to Minister of Foreign Affairs, Trade & Industry v Vehicles & Supplies Ltd [1991] 4 All ER 65 as authority for the proposition that an ex parte order is in its nature provisional and capable of reconsideration by a judge other than the one who made it, 'particularly when the affected third party to the proceeding on whom the ex parte order has been served, relies upon detailed evidence which was not originally before the court'. In my view the consent order is not an ex parte order of a kind that dealt with in Sebastian v Strongwall International Ltd(deregistered), or to which O 58 r 23 applies. Rather, the consent order was made inter partes: between the parties directly affected by it. In my view there is no statutory power to set aside the consent order to be found in the RSC or elsewhere.
Any power to grant the relief sought is found in the inherent jurisdiction of the court to prevent or rectify an injustice. The relevant principles applicable to an interlocutory order were set out by Master Sanderson in Ansons Pty Ltd v Merlex Corporation Pty Ltd [2001] WASC 204, quoted with approval in Ryan Nominees Pty Ltd v Western Australian Planning Commission [2003] WASCA 134 [2] as follows:
(1)There is power to vary or discharge a perfected or entered order.
(2)The power should be exercised with care and only in the most unusual circumstances.
(3)If the perfected order has continuing operation and there is a change in the underlying circumstances which applied when the order was made, then the order can be varied or discharged to take account of the changed circumstances.
(4)In a circumstance where the substratum of fact or law underpinning the order has changed, the perfected order can be discharged or varied by a single judge.
(5)The fact that the perfected order in question was made by consent and pursuant to an agreement between the parties does not in any way affect the power of the court to vary or discharge the order.
The court was not directed to any authorities dealing with the power to set aside a consent order constituting a final judgment (in the absence of fraud or any other vitiating factor), or the power to do so on the application of someone who was not a party to the making of the consent order.
CBI did not seek to persuade the court that it had no power, but submitted rather that its discretion should not be exercised. In the circumstances, but not without some misgiving, I consider that it is appropriate to deal with the application on the basis that it is conceded that the court can grant the relief sought.
CBI's position is that there has been no procedural unfairness. Kentz was put on notice. By not opposing the making of the order Kentz effectively waived its right to apply to set it aside. In any event, there is no explanation for its delay in bringing the application.
The starting point, it seems to me, is to ask: what is the effect of the consent order on Kentz?
The dismissal of the plaintiff's claim against CBI did not affect Kentz directly, as Kentz had not commenced any contribution proceedings against CBI when the consent order was entered. Kentz's contribution notice was not filed until 22 July 2019, some eight months after the plaintiff's claim against CBI was dismissed. Yet, it is clear from the affidavit evidence of Mr Vijayakumar to which I have referred, and which is not disputed, that Kentz was on notice of CBI's intention to resolve the plaintiff's claim against it in that fashion.
While the right to contribution under the Contribution Act only arises when liability has been established (see Brambles Constructions Pty Limited v Helmers (1966) 114 CLR 213), it is usual, as between co‑defendants, for notices of contribution to be served in accordance with RSC O 19 r 8 in anticipation of potential liability findings.
The appellant in James Hardie was in a similar position to Kentz, except that it had in fact commenced contribution proceedings. According to Gaudron and Gummow JJ [17], the appellant had a right to be heard as to whether the consent order was entered. Its options were as follows [19]:
The appellant might have sought deferral of the entry of judgment in favour of the respondent until determination of the issue of liability of the appellant to the plaintiff for the purposes of the appellant's contribution claim against the respondent. In the process of negotiation between the parties, various options might have been available. A release agreed between the plaintiff and one tortfeasor would not necessarily have released the others. Further … if the plaintiff had released the respondent without a judgment, then the appellant could have maintained its action for contribution.
Their Honours went on to say that the appellant would have had standing to appeal any decision to enter a consent judgment between the respondent and the plaintiff against its wishes. By that means the appellant would have 'kept in play the question whether it was entitled to recover contribution from the respondent' [20]. The majority approved Castellan v Electric Power Transmission Pty Ltd (1967) 69 SR (NSW) 159 which held (following George Wimpey & Co Ltd v British Overseas Airways Corporation (1955) AC 169) that contribution cannot be successfully claimed by one tortfeasor against another alleged tortfeasor who, having been sued by the injured party, has been found in that action not to be liable to the injured party, no matter on what ground.
So, as a matter of law, when Kentz served its notice of contribution against CBI, CBI was no longer in the position of 'any other tortfeasor who is or would if sued have been liable' to the plaintiff, and therefore not liable to contribute to Kentz under s 7 of the Contribution Act.
The entry of the consent order could have been opposed by Kentz, but was not. When Kentz did eventually serve its contribution notice it did so on the basis of a right to contribution pursuant to the Workers' Compensation Act, not the Contribution Act, which perhaps explains its acquiescence. No other explanation has been deposed to or even suggested. (In those circumstances, if the making of the consent order were opposed, different considerations may have arisen from those set out by Ashley J in Wintle v Stevedoring Industry Finance Committee (No 3) [2002] VSC 369.)
While the consent order in my view preludes a claim by Kentz to contribution pursuant to s 7 of the Contribution Act, it is not clear that it would necessarily have the same effect on its claim for contribution pursuant to s 92(b) and (c) of the Workers' Compensation Act, which is the basis upon which Kentz's claim is pleaded at present, and its right to an indemnity under the joint venture agreement that it seeks leave to claim.
CBI's position is that the consent order precludes the agitation of any issue of fault or negligence, citing James Hardie. Although the consent order would seem to have the effect of precluding a claim for contribution under s 7 of the Contribution Act, it is doubtful, in my view, having regard to the principles of res judicata, that it has the effect contended for by CBI, of deciding the material facts on which the plaintiff's claim was based so as to preclude Kentz, who was not a party to the compromise between CBI and the plaintiff, from alleging fault or negligence against CBI for other purposes.
For the purposes of this decision, I am not satisfied that the consent judgment or the consent order estops Kentz from asserting that CBI was negligent or otherwise at fault, although clearly Kentz is unable to assert that CBI is or would have been liable in damages to the plaintiff, and is unable to deny its own liability.
Assuming for present purposes that the court has power to give the relief sought, I am not persuaded it should be granted for the following reasons.
Kentz did not oppose the entry of the consent order when it had the opportunity to do so. Kentz was represented and can be taken to have known the consequences of the consent order. Kentz's notice of contribution (served after the consent order was entered) pleads a right to contribution pursuant to the Workers' Compensation Act. It has not been shown that the consent order is an impediment to that claim.
Kentz's proposed amendment to its notice of contribution adds a claim for contractual indemnity. It has not been shown that, in the event that the amendment were allowed, the consent order would be an impediment to that claim, or even the alternative claim for equitable contribution.
Kentz seeks the setting aside of the consent order for precautionary reasons. That is an insufficient basis for the exercise of any discretion to set aside the consent order as the discretion should be exercised with care and only in the most unusual circumstances: Ryan Nominees Pty Ltd v Western Australian Planning Commission [2].
It is not been shown that the interests of justice require the consent order to be set aside. I do not consider that Kentz is unduly prejudiced in its defence of CBI's claim for contribution, or in its claim contribution as presently pleaded, by the consent order.
The application was not brought until just before the date appointed for the trial of preliminary issues. Kentz's failure to offer any explanation for the delay militates against the exercise of the court's discretion. Kentz has been shown to have complied poorly with procedural requirements. It would be unfair to CBI, which has been shown to have been generally compliant and keen to progress its contribution proceedings to trial, to make an order that would have the effect of requiring it to re-plead its case.
Leave to amend
The legal principles applying to an application for leave to amend pleadings have been set out in the respective written outlines of submission. There is no controversy in relation to the principles. They are found in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. All matters relevant to the exercise of the discretion to grant leave should be weighed.
The principles were summarised by Beech J (as his Honour then was) in Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296 [52]:
…
(a)the effect of an amendment on the court and on other litigants is relevant;
(b)there is no right to amend to introduce an arguable case and it is wrong to say that only in extreme circumstances would a party be shut out from litigating an arguable case;
(c)justice requires that parties have a proper opportunity to plead their case, but limits may be placed on repleading when delay and cost are taken into account;
(d)a just resolution does not mean that a party will always be permitted to raise any arguable case at any point in the proceedings, on payment of costs, even indemnity costs;
(e)the inevitable strains of litigation must be taken into account in weighing the adverse consequences of delay - this applies to natural persons and other litigants;
(f)the nature and importance of the amendment to the party amending must be taken into account;
(g)attention must be given to the extent of the delay, and the costs associated with it, the prejudice which might reasonably be assumed to follow from it and any prejudice that is shown;
(h)the point in the litigation relative to the trial may be an important consideration;
(i)where a discretion is sought to be exercised in favour of a party, an explanation will be called for;
(j)the point can be reached where a party has had a sufficient opportunity to put its case.
The conspicuous factors militating against the exercise of the court's discretion are Kentz's failure to make its application timeously in the absence of a satisfactory explanation of its delay in eventually doing so. The bringing of an application for leave to amend so late in the proceedings offends against case management principles. It can be seen in this case to have caused delay in the resolution of the contribution proceedings to the detriment of CBI in terms of costs. It has also added to the expenditure of court resources.
The proposed claim for contribution pursuant to s 7 of the Contribution Act is untenable by reason of the effect of the consent order dismissing the plaintiff's claim against CBI. As the application for the setting aside of the consent order has been refused, leave to amend to add that claim should not be granted for that reason alone.
As to the proposed claim for contractual indemnity, Kentz has not given any explanation for its failure to plead this claim when it responded to CBI's claim, that is, when it filed its defence and its own contribution notice, or to give notice of the proposed amendment at any time earlier than 24 June 2020, the day of the hearing of CBI's application for the trial of preliminary issues. By that point Kentz had had more than enough time to formulate its claim. In the absence of an explanation for its delinquency it is difficult to discern any reason to grant leave.
I would add that am not satisfied that Kentz will suffer undue prejudice amounting to an injustice if leave is not given. In summary, the interests of justice do not compel a grant of leave to amend at this stage of the proceedings.
Conclusion
For the reasons given herein, I would dismiss Kentz's application to set aside the consent order dismissing the plaintiff's claim against CBI. I would grant the application for leave to amend the defence except with respect to par 21 of the minute of proposed amended defence. I would dismiss the application for leave to amend Kentz's notice of contribution.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
RR
Associate to Judge Staude21 DECEMBER 2020
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