Wallace v Heavy Mechanics Pty Ltd; Transport Accident Commission v Heavy Mechanics Pty Ltd
[2017] VSC 772
•15 December 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PERSONAL INJURIES LIST
S CI 2016 04607
BETWEEN:
| DAMIEN MAXWELL WALLACE | Plaintiff |
| v | |
| HEAVY MECHANICS PTY LTD (ACN 137 483 124) | Defendant |
| GET OFF ROAD PTY LTD | Third Party |
AND BETWEEN:
S CI 2017 01579
| TRANSPORT ACCIDENT COMMISSION | Plaintiff |
| v | |
| HEAVY MECHANICS PTY LTD (ACN 137 483 124) | Defendant |
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JUDICIAL OFFICER: | JUDICIAL REGISTRAR CLAYTON |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 1 December 2017 |
DATE OF RULING: | 15 December 2017 |
CASE MAY BE CITED AS: | Wallace v Heavy Mechanics Pty Ltd & Ors; Transport Accident Commission v Heavy Mechanics Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2017] VSC 772 |
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PRACTICE AND PROCEDURE – Application for stay of common law proceedings where Defendant subject to criminal prosecution by WorkSafe – Whether real risk of prejudice to Defendant if stay not granted – Zhao & Anor v Commissioner of the Australian Federal Police (2014) 43 VR 187 referred to – McMahon v Gould (1982) 7 ACLR 202 referred to – Jury Directions Act 2015 (Vic) ss 41 and 42 – Application granted in part.
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S CI 2016 04607
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Martin | Rennick Briggs |
| For the Defendant | Ms R Kaye | Moray & Agnew |
| For the Third Party | Ms N Norris | Ligeti Partners |
S CI 2017 01579
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D Cook, solicitor | Wisewould Mahony |
| For the Defendant | Ms R Kaye | Moray & Agnew |
JUDICIAL REGISTRAR CLAYTON:
Introduction
On 1 December 2017 the Defendant, Heavy Mechanics Pty Ltd (‘Heavy Mechanics’), made application by Summons[1] for a stay of these proceedings on the basis that it is now the subject of a criminal prosecution brought against it by WorkSafe.
[1]Filed 29 November 2017.
On 20 November 2017 WorkSafe served a Charge Sheet and Summons on Heavy Mechanics for alleged breach of s 23(1) of the Occupational Health and Safety Act 2004 (Vic).[2]
[2]Which sets out that: ‘An employer must ensure, so far as is reasonably practicable, that persons other than employees of the employer are not exposed to risks to their health or safety arising from the conduct of the undertaking of the employer.’
The plaintiffs oppose the application on the basis that it is premature, and argued that Heavy Mechanics had failed to establish how it could potentially be prejudiced in the criminal proceeding if the civil proceedings were not stayed.
The issue for determination is whether this proceeding should be stayed until the conclusion of the criminal proceeding.
Background
The Primary Proceeding
Mr Wallace claims damages for psychiatric injuries arising from a motor vehicle accident that occurred on 7 August 2014 (‘the collision’). The collision occurred when the trailer of a vehicle separated from a truck and collided with the car which Mr Wallace’s partner, Lisa Turner, was driving. Ms Turner, the plaintiff’s infant son, Jack Wallace, and another motorist, Peta Cox, were killed in the collision. Following the collision, Mr Wallace viewed the bodies of his partner and son, and subsequently suffered nervous shock.[3]
[3]Statement of Claim filed in TAC proceeding on 2 May 2017 [13]-[14].
Mr Wallace alleges that Heavy Mechanics inspected and serviced the trailer on 5 separate occasions in 2014.[4]
[4]Statement of Claim filed in primary proceeding on 10 November 2016 [8].
He alleges that on 1 August 2014, a ‘B service’ on the trailer was conducted by Heavy Mechanics. A ‘B Service’ requires a mechanic to check the draw bar and tow eye bush tension dolly bolts, and to check and report the towing couplings. On this occasion, a Heavy Mechanics mechanic recorded that:
(a) the draw bar and tow eye bush tension dolly bolts had been inspected, and did not record any defects; and
(b) the towing couplings had been inspected, and did not record any defects.[5]
[5]Ibid [10].
Mr Wallace claims that shortly prior to the collision, there was a failure of the tow eye assembly which attached the trailer to the truck, and such failure caused the trailer to separate from the truck and collide with his partner’s vehicle.[6]
[6]Ibid [12].
Mr Wallace claims that Heavy Mechanics is liable for the negligent service and inspection undertaken by its mechanics of the towing couplings.
As a result of the collision, Mr Wallace claims that he has been totally incapacitated for any employment, and has lost wages and superannuation entitlements.[7]
[7]Ibid [14].
Heavy Mechanics denies Mr Wallace’s allegations against it,[8] and alleges that Mr Wallace is not entitled to damages as he was neither directly involved nor a witness to the transport accident.[9]
[8]Defence filed in primary proceeding on 20 January 2017.
[9]Ibid [16].
On 3 November 2017 I made orders granting Heavy Mechanics leave to join Get Off Road Pty Ltd (‘GOR’) as a third party to the primary proceeding. Heavy Mechanics claims that GOR removed or replaced the tow eye assembly on the trailer on or about 17 June 2011 and in doing so it replaced a washer of the incorrect size.[10] This allegedly masked the signs of wear and tear in the tow eye assembly which occurred at an accelerated rate.[11] Heavy Mechanics therefore claims contribution from GOR for any damages it is liable for to Mr Wallace.
[10]Third Party Notice filed 14 November 2017 [6]-[10].
[11]Ibid [11].
The TAC Recovery Proceeding
On 2 May 2017 the TAC brought proceedings against Heavy Mechanics for indemnity pursuant to s 104 of the Transport Accident Act 1986 (Vic) (‘TAC Act’). It claims a proportion of the amount of any liability to Mr Wallace, and indemnity for statutory payments made to injured claimants including to Ms Irma Turner who is the mother of Mr Wallace’s deceased partner, and the estates of the deceased.
The allegations of negligence made by the TAC largely mirror those alleged by Mr Wallace in the primary proceeding.
Heavy Mechanics denies the allegations of negligence brought against it by the TAC, and denies that it owed a duty of care to Mr Wallace, Irma Turner, Jack Wallace and Peta Cox.[12] Further, it claims that Mr Wallace and Irma Turner did not suffer any injury within the definition of the ‘injury’ in the TAC Act.[13]
[12]Defence filed in the TAC proceeding on 9 June 2017.
[13]Ibid [20].
Previous Orders
The primary proceeding and the TAC recovery proceeding had been fixed for hearing in the Shepparton Circuit due to commence on 12 February 2018. That Circuit has been cancelled as the new courtroom is still under construction. The matter currently has no fixed trial date. The next Supreme Court Circuit in Shepparton will not commence until 27 August 2018.
On 15 May 2017 I made orders in the primary proceeding inter alia that:
(a) The Defendant make any request for further and better particulars of the Statement of Claim on or before 19 May 2017.
(b) The Plaintiff file and serve any further particulars required within 28 days of receipt of the Defendant’s request for further and better particulars of the Statement of Claim.
(c) The Defendant file and serve any third party notices after the discovery process between the parties has been completed.
(d) All parties make discovery (including full inspection) in accordance with the Rules and file and serve and Affidavit of Documents on or before 16 June 2017.
(e) If parties wish to interrogate, they must file and serve interrogatories for the examination of another party on or before 16 July 2017.
(f) Answers to interrogatories must be filed and served in accordance with the Rules.
(g) Any subpoena under Order 42A be issued and served on or before 22 December 2017.
(h) The parties are to serve copies of any reports required to be served under Order 33 or Order 44 on or before 31 October 2017.
(i) On or before 31 October 2017;
(i) the parties are to exchange any medical and/or expert reports concerning damages and liability; and
(ii) the Plaintiff is to serve particulars of special damage, loss of earnings and loss of earning capacity along with supporting documentation.
(j) The parties are to have attended a mediation of the proceeding by 30 November 2017.
Mirror orders were made in the recovery proceedings with slightly different dates.
In the primary proceeding, Heavy Mechanics filed a request for further and better particulars of the Statement of Claim on 19 May 2017 and Mr Wallace filed further and better particulars on 11 July 2017.
Heavy Mechanics filed interrogatories for the examination of Mr Wallace on 14 July 2017, and he filed answers on 17 August 2017.
Heavy Mechanics filed a Notice for Discovery on 14 June 2017 and various subpoenas for production in September and November 2017.
On 27 September 2017 Mr Wallace filed his list of special damages.
In an Affidavit sworn on 30 November 2017 Mr Wallace’s solicitor, Michael Glen, stated that ‘the interlocutory steps in the proceeding have been completed, save and except for a mediation which was due to be held on or prior to 30 November 2017’.
That mediation, it appears, did not proceed, as Heavy Mechanics was served with the Charge Sheet and Summons from the Victorian WorkCover Authority on or about 20 November 2017. On 27 November 2017, Heavy Mechanic’s solicitors notified the solicitors in the primary and recovery proceedings that they intended to make this application.
In breach of my orders of 15 May 2017, it appears that Heavy Mechanics did not file and serve an Affidavit of Documents by 16 June 2017.
Other than mediation, this appears to be the only outstanding interlocutory matter.
Stay of Proceedings
Heavy Mechanics argues that the allegations in the WorkSafe prosecution mirror the allegations in Mr Wallace’s Statement of Claim. It is clear that the foundation of the prosecution case is the findings of a report prepared by Advanced Technology Testing and Research (‘ATTAR’) commissioned by the Victorian WorkCover Authority.
Heavy Mechanics says that there is a real risk of prejudice to it if the civil proceedings go ahead, as:
(a) the same entity is involved in both proceedings;
(b) Heavy Mechanics has a sole director, Mr Haire, who would be the individual required to swear answers to interrogatories, an Affidavit of Documents and potentially give evidence;
(c) the allegations against it are the same in both proceedings; and
(d) the same expert report of ATTAR would be relied on in both proceedings.
The consequences of a finding against it in the criminal proceedings could amount to penalties totalling $1,400,000.
Heavy Mechanics says that, pursuant to ss 41 and 42 of the Jury Directions Act 2015 (Vic) they have a clearly enshrined legislative right to silence which would be infringed upon by the requirement to, for example, swear answers to interrogatories.
At the hearing, Heavy Mechanics submitted the Court of Appeal decision of Zhao & Anor v Commissioner of the Australian Federal Police[14] (“Zhao”).
[14](2014) 43 VR 187; upheld by the High Court in Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46.
In Zhao the Court suggested that the case of Lee No 2[15] stood for the proposition that the right to require the Crown to prove its case without assistance from the accused was a constituent part of the accused’s privilege against self -incrimination and that it could not be abrogated other than by statute.[16]
[15]Lee v Queen (2014) 308 ALR 252.
[16]Zhao at 207.
The Court in Zhao found that, where the subject matter of forfeiture proceedings was substantially the same as the subject matter of criminal proceedings, the Crown could be advantaged in a manner which would render the trial of the criminal proceedings unfair, if the forfeiture proceedings were not stayed.[17]
[17]Ibid 187.
However their Honours, citing the guidelines identified by Wooten J in McMahon v Gould[18] (‘McMahon’) also noted that ‘the court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings.’[19]
[18](1982) 7 ACLR 202.
[19]Zhao at 193; McMahon at 206-7.
In Zhao the appeal was allowed and a stay on the forfeiture order was instituted until the hearing and determination of the criminal proceedings, whilst reserving liberty to the Commissioner to have the stay revoked or varied if any new material established that there was no risk of abrogation.[20]
[20]At 208-9.
Counsel for Heavy Mechanics submitted that the principles set out in McMahon have been modified by the Court of Appeal in Zhao and impliedly on the appeal in the High Court, as they arguably failed to accord sufficient primacy to the accused’s right to a fair criminal trial.[21]
[21]Referring to Crespin v Francis & Anor [2016] VSC 277 (‘Crespin’).
In Crespin, J Forrest J heard an appeal from a refusal by a Senior Member at VCAT to stay a proceeding where criminal proceedings were also on foot. The civil proceeding related to the payment for various plumbing services; the criminal charges related to criminal damage. The contractual relationship between the parties was central to the question of whether the Applicant had a right to be on the premises and carry out the actions he performed, which may have had a bearing on the criminal defence the Applicant sought to mount.
His Honour found that the substantive question to be answered was whether, if the Applicant in that case gave evidence and was cross examined as to his contractual relationship with the Second Respondent, there would be a real risk of prejudice to his defence in his criminal proceeding.[22]
[22]Ibid [31].
His Honour declined to overturn the decision VCAT. He was satisfied that the Senior Member was alive to the central issue and had not been satisfied that there was a real risk of prejudice to the Applicant.[23]
[23]Ibid [38].
In both the current proceedings, Heavy Mechanics has already filed its Defence. In neither proceeding has the plaintiff sought to interrogate, and the time for interrogation has now passed.
There are only two outstanding interlocutory steps – the filing of an affidavit of documents, which should have been completed by 16 June 2017 in the primary proceeding and by 16 August 2017 in the recovery proceeding, and the mediation which was to have occurred by 30 November but was superseded by this application.
Counsel for Heavy Mechanics submitted that, due to the close relationship between the allegations against her client in the civil proceedings and the criminal charges, any step that Heavy Mechanics is required to take in the civil proceedings would risk its right to silence.
Whilst Heavy Mechanics may be correct that the weight of recent decisions gives primacy to a defendant’s right to silence over the other considerations set out in McMahon, those guidelines remain helpful to the Court in determining when a stay should be granted. Those guidelines include inter alia:
a)Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court.
b)It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds.
c)The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with.
e) The Court’s task is one of “the balancing of justice between the parties”.
(f) each case must be judged on its own merits.[24]
[24]McMahon at 206.
In the current proceedings, Mr Wallace lost his partner and child in what one can only imagine must have been extremely distressing circumstances. At the time of their deaths he had been employed in an occupational health and safety role for seventeen years on a full time basis. Since their deaths he has been unable to return to full time work and alleges a significant psychiatric injury.
One does not have to stretch the imagination very far to assume that Mr Wallace would wish his claim be dealt with as expeditiously as possible. If his claim is successful he will be entitled to compensation which may significantly assist him and alleviate financial pressures. But regardless of the outcome of the civil claim, it is entirely reasonable to assume that any delay of the proceedings is likely to cause irreparable prejudice of the kind envisaged in Aon Risk Services.[25] The prolongation of uncertainty and the stress caused by ongoing litigation cannot be adequately compensated by payment of damages.
[25]Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.
It is necessary for the Court to balance the prejudice to the plaintiffs by delaying indefinitely the civil proceedings, against the potential prejudice to the Defendant of being required to take further steps in the proceeding.
It is a difficult balance to fairly assess. I accept that the Defendant ought not be compelled to proceed with the trial of the civil claim until the outcome of the criminal proceedings is known. I accept that there may be a risk of prejudice to the Defendant if it was required to give evidence at a civil trial prior to the conclusion of criminal proceedings.
However, given that the criminal proceeding has only just commenced, and that none of the parties is in a position to know how long the delay occasioned by that proceeding may be, this Court is keen to ensure that the civil proceedings continue to progress in a way that does not prejudice the Defendant. It is important that the civil trials are ready to commence as soon as the criminal proceedings are finalised. It is in everyone’s interests, including the Court’s, that the matter not be unduly delayed.
There are many steps in the preparation of this proceeding that do not, or are unlikely to, infringe on Heavy Mechanic’s right to silence.
It can prepare its medical evidence by arranging medical examinations of Mr Wallace, if it so wishes, and by issuing any further subpoenas without any risk to the right to silence.
It can obtain expert opinions from, for example, forensic accountants in relation to past loss of earnings and future loss of earning capacity - such steps would not require any disclosure of its defence to the criminal proceedings.
Heavy Mechanics sues a third party and could proceed to interrogate that third party, obtain from and provide discovery to the third party and obtain expert opinions as to the liability of that third party, without risk to its right to silence in the criminal proceedings.
Preparing an affidavit of documents, which should have already been completed, would not impact on the Defendant’s right to silence.
Heavy Mechanics has already filed a Defence in this proceeding, and the ATTAR report has already been disclosed to all parties.
Importantly, there is no reason that the parties cannot mediate this matter. Mediation is confidential and nothing that is said at mediation can be used in this or any other proceeding.
The time for the plaintiffs to interrogate Heavy Mechanics has passed and no such interrogation could now occur without leave of the Court. In the event that the plaintiffs did seek leave to interrogate, the Court could carefully consider the content of the interrogatories and whether the answers might impinge upon the Defendant’s right to silence. In the event that a determination was made that providing answers would so impinge, the Court could order that the provision of answers be delayed until the determination of the criminal proceedings.
Upon determination of the criminal proceeding, the civil proceeding should be ready to be listed for trial in very short order, whether on circuit in Shepparton or another convenient regional location or in Melbourne.
I will, therefore, not stay the matter but I will also not relist this matter for hearing. I will make orders extending the time for the Defendant to file an affidavit of documents, extend the date for the parties to attend a mediation, and will list it for a further directions hearing for the Defendant to update the Court on the status of the criminal proceeding. At that time, it may be appropriate to either stay this proceeding, or fix the matter for trial.
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