VWA v Probuild (No 2)
[2016] VSC 615
•13 October 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PERSONAL INJURIES LIST
S CI 2015 04116
| VICTORIAN WORKCOVER AUTHORITY | Plaintiff |
| v | |
| PROBUILD CONSTRUCTIONS (AUSTRALIA) PTY LTD (ACN 095 250 945) & ORS | Defendants |
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JUDGE: | Zammit J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 28 September 2016 |
DATE OF JUDGMENT: | 13 October 2016 |
CASE MAY BE CITED AS: | VWA v Probuild & Ors (No 2) |
MEDIUM NEUTRAL CITATION: | [2016] VSC 615 |
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ACCIDENT COMPENSATION ACT – Section 138 indemnity proceeding – costs – personal injury claim – Sanderson order/Bullock order sought against unsuccessful defendants for indemnity costs payable by VWA to successful third defendant – whether claims against defendants interdependent or alternatives – substantial connection between claims sufficient – nature of section 138 Accident Compensation Act 1985 claims permits Sanderson/Bullock order – conduct of unsuccessful defendants.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R.H. Stanley | Wisewould Mahony Lawyers |
| For the First Defendant | Mr J.C. Simpson | Meridian Lawyers |
| For the Second Defendant | Ms M. Tsikaris | Norton Rose Fulbright |
| For the Third Defendant | No appearance |
HER HONOUR:
Introduction
In this matter, I delivered my reasons for judgment on 23 March 2016, VWA v Probuild [2016] VSC 102 (‘recovery proceeding’) and I also delivered my reasons for judgment in the related worker’s proceeding on the same day, Griffin v VWA [2016] VSC 101 (‘contribution proceeding’).
The parties have now resolved all but one of the outstanding issues, including four cost disputes arising from both hearings. The remaining costs issue in this proceeding is an application by the plaintiff, Victorian Workcover Authority (‘the VWA’), that the first and second defendants, Probuild Constructions (Australia) Pty Ltd (‘Probuild’) and Tubeway Scaffolding Pty Ltd (‘Tubeway’) pay the third defendant, Higgins Coating Pty Ltd (‘Higgins’) costs (‘a Sanderson order’) or alternatively that Probuild and Tubeway indemnify the VWA of its liability to pay Higgins’ costs (‘a Bullock order’).
The background to the recovery and contribution proceedings is set out in detail in my earlier reasons for judgment. In essence, the worker, Mr Griffin, claimed damages for injuries which he alleged he sustained on 2 May 2011 during the course of his employment with Aluline (Australia) Pty Ltd (‘Aluline’), installing balustrades at a building site referred to as the Bank Apartments at 263 City Road, Southbank.
Prior to the commencement of the trial, Mr Griffin in proceeding S CI 2014 05515 settled his claim against the defendants, being his employer, Aluline, the head contractor, Probuild, the scaffolding contractor, Tubeway, and the painting contractor, Higgins. The contribution dispute was, as discussed, resolved by the judgment. I determined in the contribution proceeding to apportion contribution in the following percentages:
(a) Probuild - 50%
(b) Aluline - 25%
(c) Tubeway - 25%
I did not consider that Higgins had any liability to Mr Griffin.
In relation to the recovery proceeding, I assessed Factor X as 75% (Probuild 50%, Tubeway 25% and Higgins 0%). I determined that Probuild and Tubeway were liable to indemnify the VWA to an amount to be calculated according to the formula on that basis.
In support of the VWA’s application for a Sanderson or Bullock order, Mr Stanley made a number of submissions including, that there had been conduct by Tubeway and Probuild by which they had encouraged the VWA to join Higgins as the third defendant in the recovery proceeding. In that respect, Mr Stanley relied on two affidavits of his instructing solicitor, Dominic Peter Lay sworn 19 August 2016 (‘First Affidavit’) and 30 August 2016 (‘Second Affidavit’). It is convenient and relevant to set out the evidence before the court set out in Mr Lay’s affidavits.
The VWA’s solicitors, Wisewould Mahony Lawyers, received instructions to investigate the potential of issuing recovery proceedings in respect of compensation paid and to be paid to Mr Griffin on 11 June 2013. After undertaking investigations, including discussing matters with Mr Griffin’s solicitors and considering the contents of an expert report by Dr Short dated 13 February 2014, the VWA’s solicitors considered there was sufficient evidence for the VWA to commence proceedings against Probuild and Tubeway. On 28 February 2014 a writ was filed in the recovery proceeding in the County Court naming Probuild as first defendant and Tubeway as second defendant.[1]
[1]Dominic Peter Lay’s Affidavit sworn 19 August 2016, [2]-[4] (‘First Affidavit’).
On 2 May 2014 Tubeway’s lawyers served the second defendant’s defence. Tubeway alleged in its defence of 2 May 2014 (‘Tubeway’s Defence’) that Higgins was responsible for Mr Griffin’s injuries and therefore the VWA’s loss. At paragraph 16(c) of Tubeway’s defence, Tubeway alleged that Higgins, inter alia, failed to:
(a) inspect the swing stage which Mr Griffin and/or its contractors used at the premises;
(b) notify Tubeway of any issues or concerns with respect of the safety of the swing stage; and
(c) notify Tubeway of any issues or concerns with respect to Mr Griffin and/or contractors assessing the swing stage. [2]
[2]First Affidavit, [5]-[7], Tubeway’s Defence dated 2 May 2014, [16](c) (‘Tubeway’s Defence’).
Tubeway’s Defence also pleaded the existence of a contract between itself and Higgins relating to the supply, setup and operation of the swing stage. Paragraph 17 alleged that ‘…the worker’s injuries were attributable to Higgins Coating Pty Ltd’s breach of contract and/or breach of terms and conditions’. Under the subjoined particulars Tubeway pleaded the following matters against Higgins:
· failing to ensure that the swing stage was used at all times in a proper and responsible manner in accordance with Condition 14 of the Terms and Conditions;
· failing to ensure that all safety information provided by Tubeway will be conveyed by it to all persons responsible for the installation, utilisation, or dismantling of the swing stage in accordance with Condition 21.3 of the Terms and Conditions; and
· failing to ensure that it would at all times abide by any relevant legislation stating occupational health and safety requirements in connection with the use of the swing stage in accordance with Condition 21.5 of the Terms and Conditions. [3]
[3]First Affidavit, [8], Tubeway’s Defence, [17].
Mr Lay exhibits to the First Affidavit a file note dated 6 May 2014 prepared by the solicitor for the VWA who had conduct of this matter at the time, Mr Paul Czarnota. Mr Czarnota’s file note records his initial actions and a telephone conversation with Mr Phil Kusiak, solicitor for Tubeway. Mr Czarnota’s file note of the telephone conversation recorded: ‘[Tubeway] were engaged by Higgins to install the scaffolding, and once installed, Higgins is responsible for running the swing stage’.[4]
[4]First Affidavit, exhibit DPL2.
On 4 July 2014 Probuild’s defence was filed. Probuild denied being liable in any way and alleged at paragraphs 17-17.5 that Higgins was negligent. The particulars at paragraph 17.5 repeated those found at paragraphs 10 and 11 of Mr Griffin’s statement of claim. The same 29 particulars of negligence were alleged against each defendant by Mr Griffin. The particulars found at paragraphs 10 and 11 of the worker’s proceeding included, inter alia, against Higgins:
· failing to provide safe plant and equipment for the use by the worker at the premises;
· failing to instruct or properly instruct the worker;
· failing to provide any or adequate instructions to the worker as to the safe and correct means of access to the swing stage;
· failing to ensure that the safe system of work was implemented and enforced;
· failing to ensure that the swing stage had any or proper and/or safe access point;
· causing, permitting and/or allowing the worker to access the swing stage without a safe means for access and/or entry.[5]
[5]Ibid, exhibit DPL3.
On 18 September 2014 Tubeway’s then solicitors wrote to the VWA’s solicitors providing a copy of the contract referred to in paragraph 17 of Tubeway’s defence, WorkSafe Victoria publication titled ‘What you need to know about…suspended scaffolds’ revised October 2005 and copy of AS/NZ 1576.4:2013 Australian/New Zealand Standard – Scaffolding – Suspended.[6]
[6]Ibid, exhibit DPL4.
Tubeway’s solicitors asserted that their client’s role was limited to supplying, erecting and relocating the scaffolding as noted in the attached contract and as pleaded in its defence and sought a response from the VWA’s solicitors of the basis upon which the VWA alleged that:
(a) Tubeway was liable for any failures in relation to the induction and/or system of work given Higgins’ role in managing and controlling the swing stage, and Probuild’s admitted role as head contractor and occupier of the premises;
(b) supplying unsafe plant, and how importantly, the VWA alleged that the swing stage was unsafe and noncompliant with the Australian Standards; and
(c) breaches of statutory duty under the Regulations.[7]
[7]Ibid, exhibit DPL4, [6].
In the same letter of 18 September 2014, Tubeway’s lawyers indicated that it would seek instructions to apply for summary dismissal of the claim or to have the offending paragraphs of the statement of claim struck out.[8] Further, at paragraph 5(f) of the 18 September 2014 letter, Tubeway’s solicitors stated:
…any daily maintenance and/or inspections of the swing stage was the responsibility of Higgins Coating Pty Ltd (Higgins) given our client handed over operation of the swing stage to Higgins, and our client was not on site at the time of the alleged incident.[9]
[8]Ibid.
[9]Ibid.
Mr Lay deposes in his First Affidavit, that as a result of Tubeway and Probuild’s defences, and the ‘many representations’ made by Tubeway’s lawyers, his office determined that it was necessary and appropriate to join Higgins as a third defendant to the proceeding. Instructions were sought and obtained from the VWA and on 12 December 2014 an amended writ naming Higgins as third defendant was filed’.[10]
[10]Ibid, [16].
After the issuing of the writ, by letter dated 6 February 2015, Tubeway’s lawyers offered the VWA an ‘each party bear their own’ settlement. Paragraph 8 of the letter stated, inter alia:
(a) our client’s role [Tubeway] was limited to supplying, erecting and relocating the cage and it handed over day to day control of the cage to Higgins;
…
(d) Higgins, as the manager and controller of the cage, was responsible for ensuring that the cage was in a safe access position and used in a safe manner, which it was contractually obliged to do in addition to its common law and statutory duty of care owed to the worker.[11]
[11]Ibid, exhibit DPL5.
Tubeway and the VWA’s lawyers continued to exchange correspondence in which Tubeway continued to assert that Higgins was responsible for the day to day control of the swing stage.[12] Mr Lay deposes that as a result of the ongoing assertions by Tubeway in relation to Higgins, combined with the defences maintained by Probuild he formed the opinion that it was not appropriate nor feasible for the VWA to cease its action against Higgins prior to the commencement of the trial.[13]
[12]Ibid, [19]-[21], exhibits DPL6, DPL7 and DPL8.
[13]Ibid, [22].
Mr Lay then deposes to representations regarding Higgins’ liability during the trial. He notes that Probuild’s opening outlined a case which asserted that Higgins engaged Tubeway as a subcontractor and was therefore vicariously liable for its failings and further that Tubeway had contractually agreed to ensure that those using the swing stages had safe and secure access.[14] Mr Lay notes that Probuild’s witness, Mr Cirianni, on 12 November 2015 gave evidence in chief identifying that Higgins controlled the swing stages and on 17 November 2015 that Higgins was likely involved in the setup and positioning of the swing drops.[15]
[14]Ibid, [23], exhibit DPL9.
[15]Ibid, [24]-[25], exhibits DPL10 and DPL11.
Mr Lay goes on to depose that Ms Tsikaris, counsel for Tubeway, opened Tubeway’s case on 24 November 2015 outlining that Higgins had breached the supply agreement and specifically had failed to abide by its ‘project safety plan, risk assessment and control measures, which imposed responsibilities to identify hazards and check the swing stages’.[16]
[16]Ibid, [26], exhibit DPL12.
Mr Lay deposes that ‘as a result of the manner in which both Probuild and Tubeway opened their respective cases and the evidence called by both as to Higgins’ involvement I formed the opinion during the running of the trial that it was not appropriate nor feasible for the plaintiff (VWA) to cease its action against Higgins’.[17]
[17]Ibid, [28].
The relevant law
The Court has a statutorily conferred general discretion to determine the question of costs,[18] including a discretion as to whether to grant a Bullock or Sanderson order.
[18]Supreme Court Act 1986 (Vic) s24.
The exercise of the discretion involves consideration of whether it is reasonable and just for such an order to be made.[19]
[19]Victorian Workcover Authority v Kagan Bros Consolidated Pty Ltd (2011) 31 VR 386, [12] (citations omitted) (‘Kagan’).
In exercising this discretion, there is no rule, but rather a fact-specific discretion which must be exercised judicially and according to the justice of the case.[20] Whilst the discretion is not to be fettered by any immutable requirement,[21] there is a line of authorities which provides guidance as to the factors which may be considered by the Court in determining whether to exercise the discretion.
[20]Ibid, [16].
[21]Ibid.
These key authorities were conveniently summarised in the Court of Appeal case of Kagan, in which their Honours Justices Redlich and Bongiorno considered the following factors when determining whether it was just to make an order against the unsuccessful defendants:
(a) whether it was reasonable for the plaintiff to join the successful defendant;[22]
(b) whether the conduct of the unsuccessful defendants was such as to make it fair to impose some liability on them for the costs of the successful defendant;[23] and
(c) whether the claims against the successful defendant and the unsuccessful defendants are interdependent or essentially alternative claims.[24]
[22]Ibid, [12] (citations omitted).
[23]Ibid, [26] (citations omitted).
[24]Ibid, [16] (citations omitted).
It is convenient for me to briefly expand upon each of the above factors, before considering same in light of each party’s submissions.
Reasonableness of the joinder, and the conduct of the defendants
An assessment of whether a Bullock or Sanderson order will do justice to the unsuccessful party usually commences with an inquiry as to whether it was reasonable for the plaintiff to have joined the successful defendant.[25]
[25]Ibid, [12] (citations omitted).
In determining the reasonableness of the joinder, the knowledge of the plaintiff and its legal advisers at the time of the joinder is relevant[26], as well as the conduct of the unsuccessful defendants. In some circumstances, the reasonableness will be informed by the conduct of the unsuccessful defendants after the joinder, and even until judgment.[27]
[26]Altamura v Victorian Railways Commissioners [1974] VR 33 (‘Altamura’), 35.
[27]Altamura [1974] VR 33, 35; Central Goldfields Shire v Margaret Fay Haley & Ors (No 2) [2009] VSCA 203 (‘Central Goldfields’), [8].
The facts of each case will inform the Court as to whether the conduct of the unsuccessful defendants was such to make it fair to impose on them some liability for the successful defendant’s costs. However the authorities indicate that conduct justifying such a finding includes where the unsuccessful defendant tells the plaintiff in one way or another that it should look to the successful defendant for its remedy, or has done something to induce the plaintiff to maintain its suit against the successful defendant.[28]
[28]Kagan (2011) 31 VR 386, [26] (citations omitted).
Nature of the Claims
The consideration of whether the claims are interdependent is not a discrete consideration, but reflects the requirement that it must have been reasonable for the plaintiff to join the successful defendant.[29] The characterisation of the claims as interdependent, is not a necessary or critical prerequisite to the making of an order[30] and it would lead to error if such a characterisation was mandatory.[31] Regardless of how the claim has been initiated or formulated, the justice of the case may still merit such an order if there is a substantial connection between the claims.[32] Consideration may be given to factors including the connection between the claims and whether the claims rest on the same facts, the same causes of action and the same relief.[33]
[29]Popovic v ACN 098 054 678 Pty Ltd & Anor [2012] VSC 612 (‘Popovic’), [14].
[30]Ibid, [13].
[31]Kagan (2011) 31 VR 386, [20].
[32]Ibid, [21].
[33]Ibid, [22].
Applicability of Bullock and Sanderson Orders in section 138 proceedings
In considering whether the Court can exercise its discretion to grant a Bullock or Sanderson Order in proceedings under section 138 of the Accident Compensation Act[34], their Honours in Kagan noted as follows:
We can discern nothing in the assessment called for by s 138 which would preclude the making of a Bullock order as between “third parties” against whom an apportionment is sought, if the circumstances justify it.[35]
[34]1985 (Vic).
[35]Kagan (2011) 31 VR 386, [25].
Probuild’s submissions
Probuild submitted that the VWA’s application for a Bullock or Sanderson order should be refused on the basis that the VWA’s claims against Probuild, Tubeway and Higgins were never interdependent or alternatives and accordingly, the VWA’s claim against Higgins is not one which is capable of attracting a Bullock or Sanderson order. Probuild relied on Kagan in support of this submission.[36]
[36]Probuild’s Further Submissions dated 22 August 2016 (‘Probuild’s Further Submissions’), [3].
Before me, Mr Simpson, on behalf of Probuild made further submissions in relation to five points as to why the discretion ought not be enlivened.
Firstly, Mr Simpson submitted that the joinder of Higgins by the VWA was a reflex joinder, not based on any forensic analysis of the cause of action,[37] in order to bring the proceeding into alignment with the proceeding issued by Mr Griffin, in which Higgins was a defendant.[38]
[37]T37, L25.
[38]T37, L30.
Secondly, it was submitted that there was no operative encouragement by Probuild to join Higgins, and that the active encouragement came from Tubeway.[39] Mr Simpson took the Court to the chronology of events leading up to the joinder of Higgins by the VWA, noting in particular the fact that the filing of Tubeway’s defence (in which it makes allegations against Higgins) and the making of the file note of 6 May 2016 recording the discussion between Mr Czarnota and Mr Kusiak took place almost two months before Probuild filed its defence.[40] It was further submitted that Tubeway not only encouraged the VWA, but asserted that Higgins was responsible for running the swing stage.[41]
[39]T38, LL2-7.
[40]T38, LL12-23.
[41]T39, L1.
In this regard, Mr Simpson submitted that, in contrast to Tubeway’s 14 specific particulars of liability against Higgins, Probuild pleaded a “garden variety nondescript pleading”, namely that the extent to which Higgins caused or contributed to Mr Griffin’s injuries must be taken into account in calculating Probuild’s liability.[42] It was submitted that Probuild did not enlarge or in any way encroach upon what had already been asserted by Tubeway as the basis of Higgins’ liability both in the extensive way that Tubeway pleaded its defence and in the way that the file note of the VWA solicitors’ discussion with Mr Kusiak reveals.[43]
[42]T39, L24; T40, LL1-5, L11.
[43]T40, LL16-21.
Thirdly, it was submitted that the VWA adopted a scattergun approach in pleading its cause of action against each of Probuild, Tubeway and Higgins[44]; the VWA did not seek to discriminate in any shape or form against or between each of the defendants[45]. Probuild submitted that to simply group the defendants and put in the alternate for each is an important consequence that the VWA must bear in the event that one or other of those multiple defendants are not shown to have liability.[46]
[44]T42, L3.
[45]T42, LL22-25.
[46]T43, LL6-11.
Mr Simpson invited the Court to apply this consideration in the exercise of my discretion. [47]
[47]T43, L15.
Fourthly, it was submitted that it is not fair within the relevant sense of McCracken & McCracken[48] that Probuild be held liable to a Sanderson or Bullock Order[49] in that the plaintiff itself was also unsuccessful.[50]
[48]McCracken & McCracken v Pippet [2000] VSCA 20, [11].
[49]T44, L2.
[50]T44, LL18-21.
Finally, it was submitted on behalf of Probuild that the VWA would have joined Higgins in reliance on Tubeway’s defence and conduct,[51] and Probuild only made limited and distinct assertions against Higgins it its defence. [52] It was submitted that Probuild’s case against Higgins was squarely and fairly predicated on a contractual basis, which is a quite different quality and character to the manner in which Tubeway went about trying to persuade the VWA that it had no liability.[53] Tubeway took additional and extra steps to attempt to impress upon the VWA that they should give up the case against Tubeway.[54]
[51]T44, LL26-31.
[52]T46, L5.
[53]T50, L13, LL18-22.
[54]T51, L21-24.
Tubeway’s submissions
Tubeway, in submitting that the order sought should be refused, relied on the case of Kagan, and also the decision in State of Victoria v Horvath[55] in which Vincent JA, with whom Winneke P and Chernov JA agreed, stated as follows:
In short, an order will not ordinarily be made unless:
(a) the plaintiff’s claims against the two defendants are interdependent or essentially alternatives; a
(b) it is reasonable for the plaintiff to have joined the successful defendant and the conduct of the unsuccessful defendant gas been such as to make the order just.[56]
[55](No 2) (2003) VSCA 24 (‘Horvath’).
[56]Tubeway’s Further Submissions dated 22 August 2016, [15]-[16] (‘Tubeway’s Further Submissions’).
Tubeway submitted that neither of the above criteria was satisfied by the VWA.[57] It was submitted that the VWA’s case against Tubeway was not interdependent or an alternative to Higgins, as the VWA had a separate right to an indemnity from each defendant.[58] It was further submitted that the conduct of Tubeway in pleading in its defence the conduct of other defendants, did not cause the VWA to commence or maintain any claim against Higgins.[59]
[57]Ibid, [17].
[58]Ibid.
[59]Ibid, [19].
Before me, Ms Tsikaris, on behalf of Tubeway, submitted that the joinder was not in response to the defence filed by Tubeway,[60] but rather a reflex action following the proceeding issued by Mr Griffin.[61] There was no inducement by Tubeway offered or proffered for the VWA to join Higgins, and the chronology bears out as a reaction to Mr Griffin also pursuing Higgins.[62]
[60]T55, L18.
[61]T55, L16.
[62]T55, LL19-22.
Ms Tsikaris relied on the fact that the proceedings replicate the pleadings adopted by Mr Griffin; it was submitted that the VWA proceeding against Higgins mirrors Mr Griffin’s allegations against Higgins, including an allegation as to occupier’s liability which Tubeway did not plead in its defence.[63]
[63]T56, LL4-13.
Tubeway further submitted that the VWA was able to deal with and negotiate with each defendant on a several basis and could at any time have served separate offers to any defendant including Higgins but chose not to. On this basis it was submitted that the unsuccessful defendants ought not be burdened with a costs order because the VWA failed to engage in negotiations with Higgins to resolve the proceeding against that party when it could have done so.[64]
[64]Tubeway’s Further Submissions, [20].
The VWA’s submissions
In support of the VWA’s application for a Sanderson or Bullock order, Mr Stanley submitted, first, that there had been conduct by Probuild and Tubeway, by which they had encouraged the VWA to join Higgins as a third defendant to the recovery proceeding. He submitted that based on the evidence as set out in Mr Lay’s affidavits, the VWA had only intended to join Probuild and Tubeway in the recovery proceeding. However, from an early stage, at least from the filing of the defences, Probuild and Tubeway’s solicitors made representations about Higgins’ liability to Mr Griffin, in effect inducing the VWA to join Higgins.
Mr Stanley submitted in relation to Tubeway that:
(a) from the time which it filed its defence it denied liability and pleaded Higgins’ responsibility for Mr Griffin’s injuries;[65]
(b) Tubeway’s solicitors, as demonstrated by Mr Czarnota’s file note at DPL2 reinforced Tubeway’s position, inculpating Higgins; and
(c) representations were made by Tubeway’s solicitors in correspondence with the VWA’s solicitors, asserting Higgins’ liability, in circumstances where Tubeway had intimate knowledge of the operation of the swing stages on the site.[66]
[65]T23, LL1-24; Tubeway’s Defence, [16]-[17].
[66]T25, L12.
In relation to Probuild, Mr Stanley submitted that Probuild in its defence also denied liability and at paragraphs 17-17.5 of its defence dated 3 July 2014 alleged Higgins was negligent.
It was submitted that Probuild and Tubeway’s conduct prior to the VWA joining Higgins on 12 December 2014, some ten months after issuing the proceedings against Probuild and Tubeway, informs the court as to the reasonableness of the VWA’s decision to join Higgins as a third defendant. It was not an action taken lightly and was informed by Probuild and Tubeway’s defences and in Tubeway’s case the ongoing representations in correspondence.
Mr Stanley submits that Probuild and Tubeway’s conduct continued to implicate Higgins after the issuing of proceedings against Higgins on 12 December 2014. He referred to Tubeway’s solicitors’ letter dated 6 February 2015,[67] in which Tubeway’s solicitors sought each party bear own settlement and again asserted Higgins’ involvement and liability to the VWA.
[67]First Affidavit, exhibit DPL5.
Tubeway maintained its denial of negligence or breach of care in relation to the circumstances giving rise to Mr Griffin’s injury. Following further written exchange between Tubeway and the VWA’s lawyers, Tubeway’s solicitors asserted again in a letter dated 20 October 2015[68] ‘…the swing stages onsite are also required to be tested daily and we refer you to the Daily Safety Checklist discovered by our client. Our client is not onsite daily and did not undertake the daily check of the swing stages. We are instructed that this was the responsibility of Probuild and/or Higgins [emphasis added]’.
[68]Ibid, exhibit DPL7.
Mr Stanley submitted that the way in which Probuild and Tubeway opened their cases and the fact that Probuild and Tubeway’s witnesses gave evidence of Higgins’ involvement were further reasons as to why it was appropriate for the VWA to continue its claim against Higgins right up until the conclusion of trial.[69]
[69]T28, LL2-26.
Mr Stanley pointed to the fact that Probuild and Tubeway’s ultimate submissions at the end of the evidence were that the court should attach percentages to Higgins for its liability.
Mr Stanley submitted that the court should not be critical of the fact that the VWA could have negotiated with Higgins given that each claim against each defendant is a several claim and therefore the VWA could have negotiated with each defendant on a several basis. There was no evidence before the court of what, if any, negotiations took place between the VWA and Higgins at any stage. Mr Stanley submitted that Tubeway’s criticism of the VWA for failing to negotiate with Higgins is flawed in that, it presupposes that there were no negotiations and that even if there were the negotiations they would have been successful. To reach such conclusions Mr Stanley submitted would be speculation. Mr Stanley pointed to the fact that it cannot be said that the VWA did not endeavour to settle the claim with Higgins. By letter dated 6 October 2015, the VWA offered to settle the claim with all defendants, including Higgins for $445,000 plus costs.
Mr Stanley spent time in his submissions addressing Probuild and Tubeway’s submissions that s 138 claims under the Act were apportionable with no contribution proceedings as between defendants. It was submitted that claims on which a Bullock or Sanderson order is made are commonly interdependent or essentially alternatives and that the VWA’s case against Probuild and Tubeway was not interdependent or an alternative to Higgins.
As Mr Stanley noted the latter issue was ‘front and centre’ of Probuild and Tubeway’s resistance to the VWA’s application. Mr Stanley took the court through the relevant case law on this issue which I have already briefly referred to. He submitted that Probuild and Tubeway’s submissions that the case brought by the VWA against Higgins was not interdependent to the case brought against Probuild and Tubeway should fail for two reasons:
(a) it is not factually correct and that the cases were dependent on one another; and
(b) even if they were not interdependent, the fact of interdependence between claims is not a prerequisite to the court making a Sanderson or Bullock order. Rather, it is a matter that can inform the court, but it is not a matter which should rate against the making of the order even if the court were to find.
In relation to his first point, that the claims were dependant, Mr Stanley noted:
· the case the VWA brought against Higgins concerned the same exact facts as the claims against Probuild and Tubeway;
· the claims were brought against all defendants as a cause of action in negligence and breach; and
· there was a close factual matrix, similar allegations and causes of actions against all defendants and similar recovery sought against all defendants.
In relation to the second reason given my earlier comments at paragraph 30 , I agree that the fact that this claim is a s 138 recovery claim does not disavow it of a Sanderson or Bullock order.
Findings
In my view, the circumstances of this case justify the making of an order, the effect of which would be that Probuild and Tubeway should bear Higgins’ costs. I have reached that conclusion because of the combination of a number of factors.
I do not accept Probuild’s submission that the VWA’s claim against Higgins is not one which is capable of attracting a Sanderson or Bullock type order. The authorities state the principle that whilst normally an order will not be made unless the claims are interdependent, this is not a prerequisite to the making of an order. In any case, I do not accept the submissions of Probuild and Tubeway that the claims between the defendants are not interdependent or in the alternative. I am satisfied there is a factual connection between the claims brought by the VWA against Probuild, Tubeway and Higgins. There is clearly a relationship between the cause of action brought against all three defendants. In my judgment in this proceeding[70] at paragraphs 8-11, I set out inter alia, the particulars of negligence alleged against each defendant. I noted the overlap in the particulars with the pleadings in the contribution proceeding and while I found that certain pleadings were only applicable to one defendant, there were others clearly applicable to all defendants. I will not repeat my findings in this proceeding or the contribution proceeding but it is clear that the factual matrix was such that each party played a role in the installation of the swing stage; the training of staff that would have used the swing stage, including Mr Griffin, and the work system in place at the Bank Apartments and access to the swing stage. I am satisfied that there was substantial connection between the claims brought against each of the defendants in the recovery proceeding.
[70]VWA v Probuild [2016] VSC 102.
This of course does not conclude the analysis of whether a Sanderson or Bullock order should be made against Probuild and Tubeway. The determination of costs is in the court’s absolute and unfettered discretion but it must be exercised judicially.[71] The guiding factor in making such an order is that it must be reasonable and just for such orders to be made. A consideration of whether it is just and reasonable includes an inquiry into whether it was reasonable for the VWA to have joined Higgins. As I have mentioned, this may involve looking at the conduct of the defendants before joining Higgins and subsequent to the joinder and even up to the date of the making of the decision.
[71]Central Goldfields Shire [2009] VSCA 203, [7].
In this case, I am satisfied that it was reasonable for the VWA to join Higgins in December 2014. In reaching this conclusion, I have considered the conduct of each of Probuild and Tubeway prior to the joinder, during the course of the proceeding and the trial, and until the time of judgment. Probuild and Tubeway filed defences which squarely inculpated Higgins. The VWA’s solicitors made subsequent inquiries of Tubeway’s solicitors about Higgins’ involvement, including receiving further documents to assist in the assessment of whether to join Higgins. It was reasonable for the VWA having considered the defences, the additional documents and communications with Tubeway’s solicitors to join Higgins.
True it is that I have considered the VWA adopted a ‘scattergun’ approach in the way it pleaded the claims against the defendant. That is, that the VWA should have identified which particulars of negligence were relevant to each defendant and that there was an overlap with the pleadings in the recovery proceeding with the contribution proceeding. Having said that, I do not accept that the VWA adopted a reflex joinder. The joinder was based on a forensic analysis of the cause of action available to the VWA’s lawyers at the time. Probuild and Tubeway’s defences squarely raise Higgins’ potential liability. The correspondence from Tubeway to the VWA’s lawyers dated 18 September 2014,[72] sets out in detail why the case against Tubeway was redundant to warrant it to be withdrawn. The letter set out at page 2 that the daily maintenance and inspection of swing stages was Higgins’ responsibility.
[72]First Affidavit, exhibit DPL4.
Further, a comparison of the particulars of negligence alleged against the defendants by Mr Griffin at paragraph 15 of his statement of claim and the particulars of negligence pleaded by the VWA against the defendants in the recovery proceeding are to a large extent replicated and canvas similar issues, they are not identical. For example, the VWA pleads additional particulars against the defendants including, inter alia, failing to take reasonable care for the safety of the worker[73] and causing, permitting and/or allowing the swing stage to be used by the worker in a state and/or condition which it knew or ought to have known presented as a reasonably foreseeable risk of injury to the worker[74].
[73]The VWA’s Statement of Claim dated 12 December 2014, [10](d).
[74]Ibid, [10](r).
Whilst the VWA could have negotiated with each of the defendants separately, I do not accept that the lack of evidence as to negotiations with Higgins supports the refusal of an order. I accept Mr Stanley’s submissions that had the VWA discontinued against Higgins, it is likely that Higgins would have sought costs from the VWA[75] for pursuing a course which I have found was reasonable by the VWA by reason of the conduct of the unsuccessful defendants in their defences, their representations and their conduct at trial. Nonetheless, the outcome of any negotiations is merely speculation, and not helpful to the consideration of the exercise of the Court’s discretion.
[75]T74, L28.
In conclusion, I am satisfied that the VWA’s claims against Probuild, Tubeway and Higgins have a sufficient connection, and that Tubeway and Probuild’s conduct induced the claim against Higgins and which it was reasonable for the VWA to have made. In the circumstances I consider there would be a substantial injustice if a Sanderson/Bullock order was not granted.
Whilst I accept that Probuild played a more limited role in inducing the VWA to join Higgins, in circumstances in which its defence raised issues as to Higgins’ liability at a time in which the VWA may already have been considering joining Higgins, I do not accept that there was no operative encouragement by Probuild to join Higgins.
In conclusion, I consider a Sanderson Order should be made in favour of the VWA. In relation to the apportionment as between Probuild and Tubeway, I find that Tubeway should be responsible for 55% of Higgins’ costs, and Probuild should be responsible for 45% of Higgins’ costs.
Subject to any submissions made by the parties, I consider Probuild and Tubeway should pay the VWA’s costs of this application.
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