JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : FUDLOVSKI -v- JGC ACCOUNTING & FINANCIAL SERVICES PTY LTD [No 3] [2013] WASC 476 CORAM : KENNETH MARTIN J HEARD : 10 DECEMBER 2013 DELIVERED : 10 DECEMBER 2013 PUBLISHED : 24 DECEMBER 2013 FILE NO/S : CIV 2239 of 2012 BETWEEN : NIKOLA FUDLOVSKI First Plaintiff
ROSEMARY FUDLOVSKI
Second Plaintiff
FUDLOVSKI INVESTMENTS PTY LTD
Third Plaintiff
AND
JGC ACCOUNTING & FINANCIAL SERVICES PTY LTD
First Defendant
JUSTIN GEORGE COPPIN
Second Defendant
NIGEL WILLIAM HART
Proposed additional defendant to proposed counterclaim
Catchwords:
Practice and procedure - Application to add third party - Foreshadowed counterclaim - Plaintiff opposed - Civil Liability Act - Concurrent wrongdoers - Victorian legislation - Policy considerations
Legislation:
Civil Liability Act 2002 (WA), s 5AK, s 5AN
Trade Practices Act 1974 (Cth), s 87CH Result:
Application granted
Third party added to counterclaim Category: B
Representation:
Counsel:
First Plaintiff : Mr D H Solomon
Second Plaintiff : Mr D H Solomon
Third Plaintiff : Mr D H Solomon
First Defendant : Mr T J Carmady
Second Defendant : Mr T J Carmady
Proposed additional defendant
to proposed counterclaim : In person
Solicitors:
First Plaintiff : Solomon Brothers
Second Plaintiff : Solomon Brothers
Third Plaintiff : Solomon Brothers
First Defendant : Williams & Hughes
Second Defendant : Williams & Hughes
Proposed additional defendant
to proposed counterclaim : In person
Case(s) referred to in judgment(s):Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564Atkins v Interprac Financial Planning [2007] VSC 445Cowan v Greatorex [2008] VSC 401Fudlovski v JGC Accounting & Financial Services [No 2] [2013] WASC 301Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509Wurth Australia Pty Ltd v Burgess [2012] WASC 504KENNETH MARTIN J: (This judgment was delivered extemporaneously on 10 December 2013 and has been edited from the transcript.)
1 I am dealing with the application on behalf of the first and second defendants for leave to add Mr Hart as an additional defendant into a proposed counterclaim foreshadowed to be filed in this action, CIV 2239 of 2013 by the present defendants against the plaintiffs. A minute of the proposed counterclaim against the defendants, including Mr Hart as an extra proposed defendant, has been filed and served. 2 The defendants' application for leave as regards adding Mr Hart to the proceedings as an additional defendant, is brought pursuant to s 5AN(1) of the Civil Liability Act 2002 (WA) ('the Act'). That section says the court may give leave for any one or more persons to be joined as defendants in proceedings involving an apportionable claim. There is no argument some of the plaintiffs' common law causes of action against the existing defendants do involve apportionable claims for the purposes of the Act.
3 Subsection 5AN(2) is not relevant to this application.
4 At the outset, I refer to my previous reasons, Fudlovski v JGC Accounting & Financial Services [No 2] [2013] WASC 301. They give some background to the provisions of the Act. I refer to what I assessed as forensic implications at [39] – [49] of those reasons.
5 I have also been assisted by the parties' and Mr Hart's written submissions earlier filed for this application. The defendants' application for leave to add Mr Hart as an extra defendant (to a foreshadowed counterclaim) is something of a sequel to my earlier reasons. There I concluded Mr Hart could not properly remain as a third party to the action, at the defendants' behest. That setback has led to the present application.
6 Having foreshadowed by minute their potential counterclaim, which will effectively contend Mr Hart (as a proposed extra defendant with the existing plaintiffs) is a concurrent wrongdoer in respect of apportionable claims, both under the Act and by reason of s 87CH of the Trade Practices Act 1974 (Cth) (the TPA), the defendants' submission is that this an appropriate case for leave under s 5AN of the Act or s 87CH of the TPA. The defendants seek to obtain by their foreshadowed counterclaim, in terms of apportionable claims at the end of the matter, declaratory relief apportioning responsibility for any economic damage found in favour of the plaintiffs between themselves and the defendants to the counterclaim.
7 The defendants foreshadow that, if at the trial it is established that they carry any measure of responsibility to the plaintiffs for their economic damages, they will then seek a declaration under their contention as to the measures of responsibility as between all concurrent wrongdoers who are found to have contributed to that harm. That percentage measure will be in terms of a proportionate allocation of respective faults, in accord with the Act.
8 The defendants' application for leave to add Mr Hart as a defendant to the counterclaim is opposed by the plaintiffs, in accord with written submissions of 20 November 2013. It is an understatement to observe the application is strongly opposed. In fact, it was contended, invoking principles from Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509 as to bringing procedures for collateral purposes, that I would be condoning an abuse of process to grant the leave now sought. I disagree.
9 The starting position of the plaintiffs, through their solicitors, is that although 5AN of theAct expressly allows a court to grant leave to add persons as defendants in an apportionable claim scenario, nevertheless the court ought exercise its power under that statutory provision by reference to principles applicable to rules of court long established in terms of the joinder of parties. This is particularly by reference to O 18 of the Rules of the Supreme Court 1971 (WA) where there are longstanding, well-understood principles governing joinder. I note a recent articulation of those principles by Corboy J in Wurth Australia Pty Ltd v Burgess [2012] WASC 504 [57], and strongly relied upon by the plaintiffs as conceptually applicable.
10 In broad terms RSC O 18 joinder principles dictate that merely because it might be desirable or convenient to add somebody as a party to litigation, that in itself is not enough. Rather, it must be necessary for the party to be added to the litigation. It is contended then that I ought approach an application of s 5AN(1) with an eye to the centuries of law underlying that rule of court. I reject the submission. Section 5AN(1) of the Act is clear and speaks for itself in unconstrained fashion.
11 As I indicated in Fudlovski [No 2], the Act brought about revolutionary change in terms of how common law tort claims were progressed in Australia. The new legislation effectively implements a policy change - moving away from the position whereby concurrent wrongdoers used to potentially bear 100% responsibility as their contribution to economic damage, even though other wrongdoers might also have contributed to that loss or damage.
12 The policy implications underlying a seismic shift in legislative policy (implemented in all Australian States) are now well known. It is clear there has been a shift in terms of policy as regard the individual responsibility of concurrent wrongdoers in tort being elevated to prominence. In that respect some of the forensic considerations I identified in my previous reasons are relevant.
13 Today I have had the attendance and participation of Mr Hart, who is now acting in person. The defendants seek leave to add Mr Hart as a party to their foreshadowed counterclaim. He opposes the application, as do the plaintiffs. Mr Hart raises some submissions of a pragmatic nature as to why he ought not be joined.
14 It is not for this court to provide legal advice to Mr Hart. The extent to which he may participate in the proceedings if he is made a party is a matter for him. Clearly, however, one consequence of adding him to the action as a defendant party (by my leave) as I indicated in the previous reasons, is that he would be formally bound by the outcome of any curial decisions in the proceedings. It would not be open for Mr Hart to subsequently contend that there was no issue estoppel or binding findings of a court concerning him. What those findings might turn out to be at a future time would depend upon the evidence adduced at any trial.
15 Although the Victorian legislation is in different terms to the Western Australian legislation, it was implemented to achieve the same underlying policy objective. The Victorian decision in Atkins v Interprac Financial Planning [2007] VSC 445 (Hargrave J) presents as almost on all fours with the present case. That is, in terms of the plaintiffs' stance that a non-party did not bear any measure of apportionable responsibility as a concurrent wrongdoer. Hargrave J said, at [36]:
In these circumstances, the most appropriate procedure is to order that the defendants plead their allegations of concurrent wrongdoing in an amended defence and counterclaim, with leave being given to join the added parties as defendants to that counterclaim. This will enable the plaintiff to plead its answer to these allegations in a reply and defence to counterclaim. It will also enable the added parties to defend the counterclaim if they so desire. In this regard, the indications are that a defence by the added parties is highly unlikely.
16 I will not read the balance of his Honour's remarks. They appear subsequently to have been endorsed by Hollingworth J in Cowan v Greatorex [2008] VSC 401. There her Honour did not adopt the same course as regards a counterclaim, but she observed upon the point in Atkins at [33]. I note that the circumstances in the latter case were different as it was the defendant who did not wish to seek to declaratory or other relief against the additional party. 17 Another observation I wish to make concerns a submission of the plaintiffs' counsel that there would be no utility in a declaration in that the claim would be purely hypothetical according to Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564. That is, making the declaration against Mr Hart, were he to be joined, effectively constitutes the prosecution of something hypothetical or indeed, a collateral purpose.
18 Again, I reject that submission. It seems to me the proposition is inconsistent with the structure of pt 1F of the Act, which envisages an apportionment of responsibility between concurrent wrongdoers. It is true that apportioning responsibility may happen where persons are not made parties, such as through death, corporate liquidation, or other inconvenient circumstances. Nevertheless, it seems that s 5AK (in particular s 5AK(3) and (5)) have some relevance. There seems to be implicit recognition under s 5AK(3) in particular that an apportionment of responsibility is, as between 'defendants' in the proceedings, in the normal course. Section 5AK(3)(b) (somewhat inconsistently) says the court is to have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.
19 At the end of the day, it seems to me that there is a little bit of forensic fencing going on. The addition of Mr Hart as an extra defendant to make him a party to the counterclaim, simply affords him an opportunity to participate in the proceedings as a party. There is no obligation upon him to actively do so. He might, for instance, simply file a submitting appearance. If he did that his ultimate costs exposure from an adverse result in the trial would be relativelyprotected. Whether he does so actively or not is a matter entirely for him. At the end of the day, it is a matter upon which Mr Hart can take his own advice.
20 I will grant leave pursuant to s 5AN(1) of the Act and s 87CH of the TPA for the defendants to add Mr Hart as an additional party (defendant) to their foreshadowed counterclaim under their minute of counterclaim, filed 1 November 2013. The counterclaim can be combined with the existing defence and filed as one document in due course.