Wang v KM Square Developments Pty Ltd
[2022] VMC 16
•16 June 2022
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
Case No. L11533648
| JIN WANG & ANOTHER | Plaintiffs |
| (according to the attached Schedule) | |
| v | |
| KM SQUARE DEVELOPMENTS PTY LTD (ACN 601 295 783) & ORS (according to the attached Schedule) | Defendants |
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MAGISTRATE: | J.P. FOSTER |
WHERE HELD: | Melbourne (Online) |
DATE OF HEARING: | 15 February 2022, 30 March 2022, 1 June 2022 |
DATE OF DECISION: | 16 June 2022 |
CASE MAY BE CITED AS: | Wang v KM Square Developments Pty Ltd & Ors |
MEDIUM NEUTRAL CITATION: | [2022] VMC 16 |
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SUMMARY JUDGMENT APPLICATION – Trespass – Nuisance – Contractors – Tortious liability for acts of contractors.
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APPEARANCES: | COUNSEL | SOLICITORS |
| For the Plaintiffs | Mr S Smith | Henley Legal Lawyers |
| For the Defendants | Mr H Kirimof | Align Law |
HIS HONOUR:
Background
A Complaint, for damages not exceeding $40,000 was filed in this proceeding on 26 June 2020.
The genesis of the Complaint relates to matters which arose on or about 15 April 2020[1] whereby a boundary fence between a property owned by the Plaintiffs at 55 Campbell Street, Glen Waverly (the Plaintiffs’ Land) and a property owned by the First Defendant at 53 Campbell Street, Glen Waverly (the Defendant’s Land) was damaged.
[1]See paragraphs 8 and 9 of the Statement of Claim. Note however that Mr. Zhang affirms on 17 December 2021 that the fence was damaged in February 2020 (see paragraphs 12-13) and was sought to be replaced on 15 April 2020 (see paragraph 20).
The complaint alleges, amongst other things, that:
(a) a trespass was committed by the First Defendant (by its servants and agents) which damaged the fence, surrounding plants and garden landscaping;
(b) the First Defendant substantially disturbed and interfered with the quiet enjoyment of the Plaintiffs’ Land thereby constituting a private nuisance; and
(c) the Second Defendant, as the sole director of the First Defendant and being knowingly and wilfully concerned in the conduct and actions of the First Defendant, was vicariously liable for the tortious conduct of the First Defendant.
A Notice of Defence was filed on 13 August 2020.
A Reply was filed on 28 August 2020.
The Plaintiff filed an Amended Statement of Claim on 26 April 2021 for damages not exceeding $100,000 (ASOC) pursuant to the orders made by Registrar Barboussas on 22 April 2021.
A Notice of Amended Defence was filed on 21 May 2021.
A Reply to the Amended Defence was filed on 4 June 2021.
Various other interlocutory steps have subsequently taken place, including discovery, the attendance at a pre-hearing conference, and the Plaintiffs filing various expert witness statements.
By a summons issued on 17 December 2021, the First and Second Defendants made application for summary judgment upon the Plaintiffs’ ASOC (ASJ).
That application was first made returnable on 31 January 2022 before being subsequently adjourned to 15 February 2022.
On 15 February 2022, 3 applications were before the Court:
(a) the ASJ;
(b) an application by the Plaintiffs pursuant to r 22.21 of the Magistrates’ Court General Civil Procedure Rules 2020 for leave to cross-examine deponents of affidavits filed in support of the ASJ; and
(c) an application by the Plaintiffs for leave to join the City of Monash and file and serve a Second Further Amended Statement of Claim.
On 15 February 2022, I granted leave to the Plaintiffs to cross examine deponents of affidavits filed in support of the ASJ.
The affidavits filed in support of the ASJ were as follows:
(a) Affidavit of Jiao Wen (being the Second Defendant) sworn 17 December 2021;
(b) Affidavit of Xuenan (James) Zhuang sworn 17 December 2021; and
(c) Affidavit of Yi Fan (Raymond) Zhang sworn 17 December 2021.
Ms Wen is a director of the First Defendant.
Mr Zhuang is the Second Defendant’s husband.
Mr Zang is a director of R.Z. Owens Constructions Pty. Ltd. (A.C.N. 128 548 881) who was the builder at the Defendant’s Land during the time when the boundary fence between the Plaintiffs’ Land and the Defendant’s Land was damaged.
The affidavits filed in response to the ASJ were as follows:
(a) Affidavit of Jin Wang sworn 7 January 2022; and
(b) Affidavit of Jin Wang sworn 25 January 2022.
On 30 March 2022, counsel for the Plaintiffs cross examined the Second Defendant, Mr Zhuang and Mr Zhang. Counsel also made detailed oral closing submissions in addition to the written submissions dated 15 February 2022 and 30 March 2022.
Between 30 March 2022 and 1 June 2022, the Plaintiffs did a number of further things:
(a) on 14 April 2022 the Plaintiffs sought and obtained a subpoena from the court seeking production from the Monash City Council of a variety of documents which concerned planning permits (and related documents) issued in respect of the Defendant’s Land.
(b) on 19 April 2022 the Plaintiffs filed a Form 46A Application seeking further discovery from the First and Second Defendants seeking all correspondence from October 2014 to the present day between the First and Second Defendants and:
i.R.Z. Owens Constructions Pty. Ltd.;
ii.The City of Monash; and
iii.Owners Corporation PS 817463D.
(c) on 27 May 2022 the Plaintiffs sought leave to join R.Z. Owens Constructions Pty. Ltd. (A.C.N. 128 548 881) as a further defendant to the Complaint and sought to abandon its proposed joinder of the City of Monash (which was previously envisaged on 15 February 2022).
On 1 June 2022, counsel for the First and Second Defendants made oral closing submissions in addition to the written submissions dated 14 February 2022. Counsel for the Plaintiffs made further oral closing submissions by way of reply.
On 1 June 2022 I deferred (to a date to be fixed) the applications by the Plaintiff:
(a) for leave to join R.Z. Owens Constructions Pty. Ltd. (A.C.N. 128 548 881); and
(b) for further discovery from the First and Second Defendants.
The application by the Plaintiff for leave to join the City of Monash has now fallen away.
The only matter that this judgment determines is the ASJ.
Key Issues in Dispute
The First and Second Defendants seek summary judgment pursuant to r 22.16 of the Magistrates’ Court General Civil Procedure Rules 2020 and s 62 of the Civil Procedure Act 2010.
Sections 61 to 65 of the Civil Procedure Act 2010 provide as follows:
61 Plaintiff may apply for summary judgment in proceeding
A plaintiff in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a defendant's defence or part of that defence has no real prospect of success.
62Defendant may apply for summary judgment in proceeding
A defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff's claim or part of that claim has no real prospect of success.
63Summary judgment if no real prospect of success
(1)Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
(2)A court may give summary judgment in any civil proceeding under subsection (1)—
(a)on the application of a plaintiff in a civil proceeding;
(b)on the application of a defendant in a civil proceeding;
(c)on the court's own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.
64Court may allow a matter to proceed to trial
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a)it is not in the interests of justice to do so; or
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate.
65Interaction with rules of court
The powers of a court under this Part are in addition to, and do not derogate from, any powers a court has under rules of court in relation to summary disposal of any civil proceeding.
In Goodrich v Kilmore Racing Club Inc,[2] McDonald J summarised the principles of summary judgment:
[2][2021] VSC 767.
The test for the grant of summary judgment under s 63 is set out in the joint judgment of Warren CJ and Nettle JA in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd as follows:
Upon the present state of authority:
(a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success;
(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel;
(c) it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[3]
[3]Ibid [38] (citations omitted).
The First Defendant seeks summary judgment in respect of part of the ASOC, namely paragraphs:
(a) 9 – trespass claim;
(b) 10 – trespass claim;
(c) 11 – deliberate/negligent destruction claim; and
(d) 13 – nuisance claim.
The Second Defendant seeks summary judgment in respect of the entirety of the ASOC.
Findings
The claim against the First Defendant
The First Defendant (by its director, the Second Defendant) gave sworn evidence to the effect that:
(a) the First Defendant had no knowledge of the acts leading to the alleged damage to the boundary fence;
(b) the First Defendant did not authorise (directly or indirectly) any acts which damaged the fence; and
(c) the First Defendant did not retain (directly or indirectly) any fencing contractors to replace the fence.
Mr Zhuang gave sworn evidence to the effect that:
(a) R.Z. Owens Constructions Pty. Ltd. was the builder for the development; and
(b) Mr Zhang (director of R.Z. Owens Constructions Pty. Ltd.) was a friend of his, but that he had no interactions with Mr Zhang concerning the replacement of the fence at any time.
Mr Zhang gave sworn evidence to the effect that:
(a) he is a director of R.Z. Owens Constructions Pty. Ltd.;
(b) the fence was damaged in February 2020 by concrete contractors who were conducting preparation work for the driveway and the mailbox footings on the Defendant’s Land;
(c) an excavator was being used on the Defendant’s Land;
(d) one of the concreters, when using the excavator, moved its arm which hit the fence causing some damage to it;
(e) he did not speak with the Second Defendant or Mr Zhuang about the damage to the fence until after 15 April 2020;
(f) he made the decision to replace the fence on 15 April 2020 as it was “the right thing to do” and that the cost and inconvenience of replacing the fence would not be too great for R.Z. Owens Constructions Pty. Ltd.;
(g) he engaged fencers to replace the fence; and
(h) he did not give permission to the fencers to trespass upon the Plaintiffs’ Land.
On 30 March 2022, counsel for the Plaintiffs extensively cross examined each of the deponents pursuant to the leave granted to do so on 15 February 2022.
That extensive cross examination merely confirmed, to my mind, the truthfulness and veracity of the evidence being given by the Second Defendant, Mr Zhuang and Mr Zhang.
Any damages sought by the Plaintiffs in this case ought to be sought against the concreters, the fencers or the builders.
The First Defendant is not vicariously liable for the actions of those third parties for those third parties are not employees of the First Defendant.
A contractor relationship does not give rise to vicarious liability.[4]
[4]Hollis v Vabu Pty Ltd (2001) 207 CLR 21; see also Colonial Mutual Life Assurance Society Limited v Producers and Citizens Cooperative Assurance Co of Australia Limited (1931) 46 CLR 41.
In Hollis v Vabu Pty Ltd[5] Court, comprising of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ said:
In Northern Sandblasting Pty Ltd v Harris, McHugh J referred to the force of arguments which would justify the imposition of liability on employers for the acts of independent contractors. It has long been accepted, as a general rule, that an employer is vicariously liable for the tortious acts of an employee but that a principal is not liable for the tortious acts of an independent contractor. That general rule was not challenged in this appeal.[6]
[5](2001) 207 CLR 21.
[6]Ibid 36 [32] (citations omitted).
The existence of an employment contract is determined by the recently decided principles set out in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd.[7]
[7][2022] HCA 1.
The relationship between the First Defendant and R.Z. Owens Constructions Pty. Ltd. is clearly a relationship of principal and independent contractor.
In my view, applying the test for summary judgment under s 62 of the Civil Procedure Act 2010, the Plaintiffs do not have a real chance of success as against the First Defendant in respect of paragraphs 9, 10, 11 and 13 of the ASOC.
The claim against the Second Defendant
The Plaintiffs’ claim as against the Second Defendant is set out at paragraph 6 of the ASOC which provides that:
6. The Second Defendant (“JW”) is and was at all material times:
(a)the sole director of (the First Defendant);
(b)responsible for the management and control of (the First Defendant);
(c)the directing mind of (the First Defendant);
(d)knowingly and wilfully concerned in the conduct and actions of (the First Defendant) as hereinafter specified;
(e)aided and abetted (the First Defendant) in its conduct and actions as hereinafter specified; and
(f)vicariously liable for the tortious actions of (the First Defendant).
As counsel for the Defendants correctly pointed out in written submissions, none of these elements, in themselves, or in combination, make a director liable to the Plaintiffs for the actions of the corporate First Defendant.
In answer to that submission, counsel for the Plaintiffs directed my attention to an article entitled ‘How do we assess the risk of personal liability for directors arising out of tortious acts?’.[8]
[8]Mark Byrne, ‘How do we assess the risk of personal liability for directors arising out of tortious acts’ (2017) 32, Australian Journal of Corporate Law, 351.
The learned author states:
….in reality there have been many cases that have demonstrated a preparedness of the courts to lift that corporate veil and find the director personally liable. The difficulty is that the law to determine this is unsettled and still being debated. Numerous tests and criteria have been put forward, but the elements that should make up a certain set of principles to be applied have not been resolved.[9]
[9]Ibid 352.
The learned author goes on to state four distinct categories of test that can be identified for which a director may be liable in tort. They are:
a. the ‘direct or procure test’;[10]
b. the ‘make the tort his own test’;[11]
c. the ‘assumption of responsibility test’;[12] and
d. the ‘Root Quality test’.[13]
[10]Ibid 354.
[11]Ibid 355.
[12]Ibid 357.
[13]Ibid 361.
Having carefully considered the contents of that article, and the tests mentioned therein, I do not consider that any of the tests are applicable to the current proceeding having regard to the evidence before me in this application.
Having heard the evidence of the Second Defendant and having witnessed the cross examination of her, the Second Defendant struck me as an honest witness who simply had no knowledge of the problems concerning the damage to, and replacement of, the boundary fence. Such matters seem to be within the knowledge, power, and direction of R.Z. Owens Constructions Pty. Ltd.
No doubt that is why the Plaintiffs have belatedly sought to join R.Z. Owens Constructions Pty. Ltd. in its Form 46A application filed on 27 May 2022.
The Second Defendant does not have any liability to the Plaintiffs by reason of the matters pleaded in paragraph 6 of the ASOC.
In my view, applying the test for summary judgment under s 62 of the Civil Procedure Act 2010, the Plaintiffs do not have a real chance of success as against the Second Defendant.
Conclusion
Pursuant to r 22.16 of the Magistrates Court General Civil Procedure Rules 2020 and s 63 of the Civil Procedure Act 2010, I give summary judgment to the First Defendant in respect of the claims made against the First Defendant in paragraphs 9, 10, 11 and 13 of the ASOC.
Pursuant to r 22.16 of the Magistrates Court General Civil Procedure Rules 2020 and s 63 of the Civil Procedure Act 2010, I give summary judgment to the Second Defendant and dismiss the claim against the Second Defendant.
I will hear from the parties, on a date to be fixed by the coordinator, on the question of interest and costs in respect of this application.
At that time:
(a) I will hear from the parties concerning the future hearing and determination of the further applications by the Plaintiff:
i.for leave to join R.Z. Owens Constructions Pty. Ltd. (A.C.N. 128 548 881); and
ii.for further discovery from the First Defendant.
(b) I will hear from the parties concerning any further interlocutory orders that are sought.
MAGISTRATE J.P.FOSTER
16 June 2022
SCHEDULE OF PARTIES
Case No. L11533648
JIN WANG
First Plaintiff
and
FENG ZHEN ZHANG
Second Plaintiff
and
KM SQUARE DEVELOPMENTS PTY LTD
(ACN 601 295 783)
First Defendant
and
JIAO WEN
Second Defendant
and
OWNERS CORPORATION NO. PS 817463D
Third Defendant
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