Stevenson v TKJ Nominees Pty Ltd

[1999] WADC 28

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   STEVENSON -v- TKJ NOMINEES PTY LTD & ANOR [1999] WADC 28

CORAM:   NISBET DCJ

HEARD:   12 JULY 1999

DELIVERED          :   9 AUGUST 1999

FILE NO/S:   CIV 3799 of 1998

BETWEEN:   ROBERT DONALD STEVENSON

Plaintiff

AND

TKJ NOMINEES PTY LTD (ACN 008 768 769)
First Defendant

SATTERLEY & CO (ACN 009 054 979)
Second Defendant

Catchwords:

Practice and procedure - Appeal from decision of Deputy Registrar refusing to set aside judgments entered in default of defence - Hearing de novo - Principles - Otherwise turns on own facts.

Legislation:

Nil

Result:

Appeals allowed, judgments in default of defence set aside.

Representation:

Counsel:

Plaintiff:     Mr L Tsaknis

First Defendant             :     Mr M Odes QC

Second Defendant         :     Mr P McCann

Solicitors:

Plaintiff:     John Quigley & Co

First Defendant             :     Jackson McDonald

Second Defendant         :     Phillips Fox

Case(s) referred to in judgment(s):

Briggs v Glentham Pty Ltd (1992) 8 WAR 339

Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520

Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246

Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Cooperative Assurance Co of Australia Ltd (1931) 46 CLR 41

Evans v Bartlam [1937] AC at 480

Hazart Pty Ltd v Rademaker (1993) 11 WAR 26

Hunt v Knabe (No 2) (1992) 8 WAR 96

Macquarie Bank Ltd v Beaconsfield [1992] 2 VR 461

Montana Hotels Pty Ltd v Fasson Pty Ltd (1986) 61 ALJR 282

Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313

Palmer v Prince [1980] WAR 61

Przetak v Metropolitan (Perth) Passenger Transport Trust [1961] WAR 2

Sedleigh-Denfield v O'Callaghan [1940] AC 880

Case(s) also cited:

Johnsen v Duks [1963] NSWR 730

Kostokanellis v Allen [1974] VR 596

Lombank Limited v Cook [1962] 1 WLR 1133

McInness v Wardle (1931) 45 CLR 548

Ministry of Foreign Affairs & Trade v Vehicles & Supplies Ltd [1991] 4 All ER 65 (PC)

Mitchell v Tsiros (No 2) [1982] VR 801

National Australia Bank Ltd v Singh [1955] 1 Qd R 377

SGIC v Trigwell (1979) 142 CLR 617

Sharples v Northern Territory (1987) 91 FLR 11

Southport Corporation v Esso Petroleum Co Ltd [1954] 2 QB 182

Stoneman v Lyohns (1975) 133 CLR 550

Taylor v Commissioner for Main Roads (1946) 46 SR (NSW) 117

Torette House Pty Ltd v Berkman (1940) 62 CLR 637

Wall v Morrissey [1969] IR 10

Walsh v Levin [1952] VLR 361

Webster v Lampard (1993) 177 CLR 598

1. NISBET DCJ:  The plaintiff's writ of summons and statement of claim in this matter were filed on 16 September 1998.  The second defendant's memorandum of appearance was filed 6 October 1998 and that of the first defendant on 9 October 1998.  Notwithstanding that the solicitors for the plaintiff were aware of the interest of each of the first and second defendants in the action and knew that each intended to defend the plaintiff's claim, and, in the case of the second defendant, was in receipt of a specific request not to enter judgment without reference to it, the solicitors for the plaintiff entered judgment against each of the defendants in default of defence on 12 November 1998.

2. Each of the first and second defendants applied to set aside the default judgment by summons dated and filed 17 November 1998.  The plaintiff, determined to hang on to the default judgment he had snapped on each of the first and second defendants, vigorously opposed the judgments being set aside which resulted in the matter ultimately being sent off to a special appointment which was heard by Deputy Registrar Harman on 30 March 1999.  The Deputy Registrar dismissed each of the first and second defendants' applications upon the ground (it seems) that neither disclosed an arguable defence.

3. Each of the first and second defendants appealed from that decision and, it is common ground, such an appeal is a hearing de novo on the merits and it is not necessary to point to some particular error in the decision of the Deputy Registrar.  This is a consequence of the Registrars' jurisdiction in interlocutory matters in this Court being a delegated jurisdiction, an essential condition for the validity of which is the existence of a provision for a complete review de novo by a judge of any decision made in the delegated jurisdiction:  Briggs v Glentham Pty Ltd (1992) 8 WAR 339 at 349-350; Hunt v Knabe (No 2) (1992) 8 WAR 96 at 109-110 and Hazart Pty Ltd v Rademaker (1993) 11 WAR 26 at 28. A further necessary consequence of this is that it is open to the parties to adduce further evidence on the hearing of the appeal unless some reason is shown why it should be excluded: Hazart Pty Ltd v Rademaker.  Another, equally valid reason why further evidence may be admitted is that the appeal being a hearing de novo may be regarded as being a second application to set aside a judgment of the court which is not a final judgment:  Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246 at 248 and in these circumstances:

   "The principle obviously is that unless and until the court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure" per Lord Atkin in Evans v Bartlam [1937] AC at 480.

4. As the plaintiff understandably makes no complaint about the time within which each of the first and second defendants brought their applications to set aside judgments in default of defence and bases its maintenance of its default judgments solely on the basis that neither of the defendants has an arguable defence it is as well to examine the statement of claim and the cases which each of the defendants seek leave to put before the court.  This is in conformity with authorities such as Palmer v Prince [1980] WAR 61 at 62 and Macquarie Bank Ltd v Beaconsfield [1992] 2 VR 461 at 465.

5. In his statement of claim the plaintiff pleads that on about 22 February 1996 at 4.00 pm he was riding his motorcycle along Ranford Road approaching the intersection of Ranford Road and Campbell Street in Canning Vale when, about 30 metres from that intersection he hit a large puddle of water by reason of which the motor cycle lost traction and "aquaplaned" and then hit a stationary vehicle waiting to execute a right hand turn into Campbell Street.  The plaintiff was thrown off his motorcycle and sustained significant injuries in consequence.  "Aquaplane" and its derivatives does not rate a mention in the Shorter Oxford English Dictionary but does in the Australian Oxford Paperback Dictionary where it has been ascribed two meanings, the second and relevant being "to glide uncontrollably on the wet surface of a road".  The notion is not all that difficult to understand.  Basically the presence of a large puddle of water on the roadway deprived the plaintiff of the ability to control his motorcycle being neither able to brake nor steer.

6. The plaintiff further pleads that "the water on the road emanated from a reticulation system located on the south western corner of the intersection on land immediately adjacent to Ranford Road where the accident occurred, commonly known as " 'Sanctuary Waters Private Estate' …".  The plaintiff then pleads:

   "10.At all material times the first defendant was the registered proprietor in fee simple of the land.

   11.At all material times the second defendant was the project manager and developer of the land.

   12.The first defendant and/or the second defendant and/or the first and second defendant jointly exercised control over the land.

   13.By reason of the matters pleaded in paragraphs 1-5 and 9 to 12 the defendants owed a duty of care to the plaintiff.

   14.The defendants and each of them committed a nuisance upon the road where the accident occurred by fixing the reticulation system onto the land and permitting water from the reticulation system to go onto the road so as to constitute a danger to persons lawfully using the road, including the plaintiff.

   15.Further, or in the alternative the accident was caused by the negligence of the defendants.

   Particulars of negligence

   (a)placing the reticulation system in a location whereby it was foreseeable that water from the reticulation system would go onto the road and cause a danger to users of the road and cause damage of the kind which in fact was suffered by the plaintiff;

   (b)failing to take any or any proper or effective measures whether by periodic inspection or otherwise, to ensure that water from the reticulation system did not go onto the road or, alternatively did not go onto the road in sufficient quantity to pose a danger to users of the road;

   (c)permitting water from the reticulation system to go onto the road;

   (d)failing to warn users of the road of the danger posed by water from the reticulation system being on the road;

   (e)the plaintiff will further rely upon the fact of the water on the road as evidence of negligence."

7. I should point out that paras 1 to 5 of the statement of claim contain averments as to the plaintiff's date of birth, the fact of each of the first and second defendants' incorporation, an averment that Ranford Road is a public highway and that the plaintiff was riding his motorcycle on Ranford Road.

Defence of first defendant

1. The first defendant by the affidavit of Warren Leslie Jones sworn 10 December 1998 shows that it entered into a contract with the second defendant in or about November 1993 for the development, management and sale of the land in question.  The second defendant was to be responsible for the appointment of all contractors.  The first defendant says that it had no knowledge of any nuisance or danger created by water from the reticulation system and particularly had no knowledge of the plaintiff claiming to have sustained injury in consequence thereof until the writ was served.  The first defendant further states that it did not select the sub‑contractors who designed and installed the irrigation and did not supervise or control that work.  The first defendant says this was the second defendant's job.

Defence of second defendant

1. By the affidavit of John Anthony Arias, sworn 15 December 1998 the second defendant deposes that it would recommend contractors to the first defendant pursuant to the performance of its contract to develop, manage and sell the land on its behalf.  The second defendant deposes that it took care in the selection of contractors and had employed a full time project manager.  Additionally the second defendant did not design or install the irrigation works.  What happened in this regard was that it engaged Landscape Enterprises WA to carry out landscaping and that firm in turn engaged Elliott's Irrigation who performed the design and installation of the reticulation system.  The second defendant had no knowledge of any alleged nuisance and had no knowledge of the plaintiff's claim until it was served with the writ.  Additionally the second defendant would like to put in issue as to whether the irrigation works had progressed as far as the corner of Ranford Road and Campbell Street by the date upon which the plaintiff alleges he sustained his injuries, namely 22 February 1996.

The claim in nuisance

1. In Sedleigh-Denfield v O'Callaghan [1940] AC 880 it was demonstrated that the occupier of land from which a nuisance arises may be sued even if it did not create the nuisance. The conditions upon which this might occur were described by Viscount Maugham however in these terms:

   "An occupier of land 'continues' a nuisance if with knowledge or presumed knowledge of its existence he fails to take any reasonable means to bring it to an end with ample time to do so.  He 'adopts' it if he makes any use of the erection, building, bank or artificial contrivance which constitutes the nuisance."

   It follows that an occupier of land who did not create the nuisance and neither knew nor ought to have known of it is not liable in damages for that nuisance.  See for example Montana Hotels Pty Ltd v Fasson Pty Ltd (1986) 61 ALJR 282.

2. Having regard to the fact that each of the first and second defendants deny that they were in control of the land in any relevant sense at the relevant time, denied any knowledge of the nuisance let alone adopting or continuing it, they each have a good defence to the claim in nuisance which should be permitted to proceed.  Apart from which, for my own part I have difficulty in seeing how water emanating from a reticulation system on a road is to be regarded any differently from say water that would come onto the road through rainfall, but that can be left to another day I think, as can another point which was not argued before me which is that it seems to me that if the defendants were to raise a defence of contributory negligence in the plaintiff which, at the time of entry of judgment they had had no opportunity to investigate, this would be a complete defence to an action in nuisance in Western Australia: Przetak v Metropolitan (Perth) Passenger Transport Trust [1961] WAR 2.

The claim in negligence

1. The starting point for a consideration of any action in negligence is the identification of a duty of care owed by the defendants to the plaintiff.  No argument was addressed to me on this point.  The plaintiff baldly pleads that, in effect, the first and second defendants as owners or, alternatively, owners and occupiers of land which abuts a public road owe a duty of care to every member of the public who might travel on that road.  There are of course obvious cases where an owner or occupier of land will owe a duty of care to road users such as that which requires them to take reasonable precautions to prevent stock straying onto the highway, the escape of fire and so on.  The duty here alleged though is one to prevent the escape of water from a reticulation system flowing onto the road.  What would be the situation if the water came from rainfall on the defendants' land which, by reason of the natural fall of the land travelled all over the plaintiff's land before seeping out onto the roadway?  I point to these issues simply with a view to trying to identify the duty of care which is raised by the statement of claim.  It seems to me to have been imprecisely pleaded with the consequent difficulty that when it comes to identifying a breach of that duty and who was responsible for it, it is not an easy task.

2. Assuming therefore without deciding that the defendants owed the plaintiff a duty of care for example not to cause or permit water to escape from its reticulation system onto the roadway, each of the defendants say that they are not liable in negligence because at the relevant time neither of them had possession or control over the land, neither of them had possession or control over the reticulation works, neither of them designed or installed the reticulation system and neither of them knew or had any reason to know that there was any problem with the escaped water onto the roadway.  In these circumstances the rule is as stated by Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Cooperative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48:

   "In most cases in which a tort is committed in the course of the performance of work for the benefit of another person, [the defendant], cannot be vicariously responsible if the actual tortfeasor is not his servant and he has not directly authorised the doing of the act which amounts to a tort.  The work, although done at his request and for his benefit, is considered as the independent function of the person who undertakes it, and not as something which the person obtaining the benefit does by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance.  The independent contractor carries out his work, not as a representative but as a principal."

3. As already mentioned, importantly, therefore it has to be firstly discerned what the duty of care is said to be in order that it might then be understood whether that duty of care is personal to the defendants, that is to say incapable of delegation, or whether the duty of care arose out of the performance of the work itself.  As Brennan CJ put it in Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 at 330:

   (Referring to the dictum of Dixon J above):

   "When this rule applies, no vicarious liability for the independent contractor's negligence is imposed on a defendant who requested the performance of the task in the course of which the relevant negligent act was done or the relevant negligent omission was made.  In such a case, there is no basis for sheeting home to the defendant either liability for the independent contractor's tort or responsibility for the independent contractor's act or omission.

   However, if the defendant is under a personal duty of care owed to the plaintiff and engages an independent contractor to discharge it, a negligent failure by the independent contractor to discharge the duty leaves the defendant liable for its breach.  The defendant's liability is not a vicarious liability for the independent contractor's negligence but liability for the defendant's failure to discharge his own duty (Voli v Inglewood Shire Council (1963) 110 CLR 74 at 95). The duty in such a case is often called a 'non-delegable duty'."

4. Here, it seems to me that each of the defendants have an arguable case in the first instance as to whether they owed any duty of care to the plaintiff at all and, if they did, then, whether their duty was capable of being discharged by another.

5. Again the nature of the duty has to be examined carefully to see whether it is of such a type that it could never be discharged by the engagement of a qualified and competent independent contractor - see Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 550.

6. In my opinion it is well open to argument by each of the defendants that even if they owed a duty of care to the plaintiff it was discharged by their engagement of a competent independent contractor who, in the performance of work which was not necessarily dangerous in itself, undertook that work so carelessly that in a situation which was foreseeable that that carelessness created a risk of injury to others, owed a duty of care to those who stood in a relationship of proximity to them.

7. In the circumstances I am of the opinion that each of the defendants have a good arguable defence to the plaintiff's claim against them in negligence.

8. Accordingly I propose to set aside the default judgments.  I give each of the first and second defendants unconditional leave to defend.  Each has 14 days within which to file a defence and I will hear the parties as to costs.