Westkon Precast Concrete Pty Ltd v Multiplex Constructions Pty Ltd

[2000] VSC 491

SUPREME COURT OF VICTORIA
AT MELBOURNE	Not Restricted

COMMERCIAL AND EQUITY DIVISION

BUILDING CASES LIST

No. 5483 of 2000

WESTKON PRECAST CONCRETE PTY LTD	Plaintiff
v
MULTIPLEX CONSTRUCTIONS PTY LTD	Defendant

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JUDGE:	Byrne J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 October 2000
DATE OF JUDGMENT:	27 October 2000
CASE MAY BE CITED AS:	Westkon Precast Concrete Pty Ltd v Multiplex Constructions Pty Ltd
MEDIUM NEUTRAL CITATION:	[2000] VSC 491

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Practice and Procedure – application by defendant by counterclaim to join defendant – whether viable cause of action – whether duty of care to plaintiff by counterclaim.

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APPEARANCES:	Solicitors
For the Plaintiff	Mr R. Anderson	Harwood Andrews Lawyers
For the Defendant	Mr A. Suddick	Nathan Kuperholz
For GMR (Aust) Pty Ltd	Mr P. Quinn	Phillip Quinn & Associates

HIS HONOUR:

1. The application before the court is brought by summons filed on 18 October 2000 by the plaintiff who is the defendant to counterclaim, Westkon Precast Concrete Pty Ltd ("Westkon").  It seeks to join as a third party or as a defendant to the counterclaim, GMR(Australia) Pty Ltd ("GMR").

1. The litigation before the court concerns the construction of two projects, one of which is the Broadmeadows Health Service Facility at Johnstone Street, Broadmeadows.  There is a contract made in 1997 between Westkon and the defendant, the builder, Multiplex Constructions Pty Ltd ("Multiplex").  Under this contract Westkon agreed to supply and erect certain precast concrete panels for the project.

1. What happened was this, as appears in the pleadings.  During the course of the erection of the precast concrete panels, the works collapsed, and the consequence of this was that one worker was killed, another was injured, and inevitably the project was delayed.

1. The claim comes before the court as a claim by Westkon against Multiplex, seeking moneys payable under the contract.  That claim for present purposes can be put to one side.  Multiplex has a counterclaim in which it alleges against Westkon that Westkon had a contractual obligation to carry out the works in a proper manner, and to protect and fully indemnify Multiplex against loss or damage in respect of personal injury and death.

1. It is said that Westkon is in breach of its obligation inasmuch as the failure of the dome structure in the course of erection which occurred on 7 October 1997, was the result of its poor erection procedures.  In particular, it is said that the propping to support the panel was insufficiently strong. 

1. Multiplex also says that Westkon is in breach of a duty of care, and as a consequence of that it has suffered loss.  The loss alleged is that it has become liable to pay, or may become liable to pay penalties and damages incurred by it as a result of legal proceedings brought by the Victorian WorkCover Authority.  It has also incurred legal costs in the coronial proceedings.  It seeks a sum of $404,000 approximately, or alternatively damages.

1. The contract of Westkon, as I have mentioned, was to erect - so far as this is here relevant - the precast concrete panels.  What is said by Mr Nelson, the legal practitioner handling the matter on behalf of Westkon, is that Westkon engaged the proposed new party, GMR, to provide structural design services which included the preparation of structural engineering drawings and importantly, to give advice as to the installation and erection of the precast concrete dome panels.  Nothing more is said about the contract.

1. Next, it is said that in or about October, the representative of GMR was asked to inspect the trial erection of certain dome panels.  This, it would seem, took place.  The proposed method of erection was approved by GMR and the work proceeded in accordance with that procedure.  It was this procedure which, it is said, was insufficient.  In any event, there appears to be no doubt that the panels in the course of erection failed.

1. What is put presently is that Westkon, as defendant to Multiplex's counterclaim, should be permitted to join GMR as a co-defendant to the counterclaim so as to attract the operation of s.131 of the Building Act. And in the alternative, that it should be added as a third party.

1. The affidavit material in support of the application is sparse.  The proposed pleading as between defendants to counterclaim, which has been delivered in accordance with the suggestions I made in my judgment in Wimmera-Mallee Rural Water Authority v FCH Consulting Pty Ltd[1] on 24 March 2000, fails to address the critical issue in this case, which is not so much the liability of GMR to Westkon, about which nothing much has been said, but rather the liability of GMR to Multiplex.

   [1] [2000] VSC 102

1. Therefore, Mr Quinn, the legal representative for the proposed party, says the application should be refused.  He reminded me that in the Wimmera-Mallee case I refused - and refused a second time - applications to join in that proceeding the designer of a water tower, whose design, it was said, was defective so that the water tower failed.

1. In that case, at paragraph [19], I remarked upon the insufficiency of the case put against the proposed party, in that case, MGZ Pty Ltd.  I said this: 

“It is apparent from this resume” - having set out a chronology of the events – “and from allegations in the pleadings which may be more contentious, that the MGZ detailed design was examined before construction both by FCH” - who is the first defendant in that proceeding – “and by the Swan Hill Building Surveyor,” - who may be associated with the plaintiff – “as part of the ordinary building approval process.  It may well be, however, that the building surveyor would not himself re-check the computations and engineering design in the circumstances of this case.  The involvement of FCH was probably disclosed to tenderers,” - I interpolate that FCH in that case was a check engineer engaged by the plaintiff, and I continue -  “although there is no detail of this before me.  But it does not appear whether MGZ prepared the designs on the basis that they would not be checked before construction, and if so, what was the basis of such an expectation.  It does not appear that the Authority relied in any way upon the design in authorising construction.  Indeed, it is said that F.C.H, an engineering consultant, was engaged by it to check the engineering designs and that it did so.  I do not overlook the allegation of FCH in paragraph 5(c) of the defence that the superintendent, whom I assume to have been engaged by the Authority, directed construction to begin, notwithstanding his reservations about aspects of the drawings.”[2]

[2][2000] VSC 102 at [19]

1. In reliance upon my comment in that paragraph, that there was no evidence of reliance, Mr Quinn says that I should refuse the application because the application is not well founded.

1. The test which I must apply in obedience to the direction of the Court of Appeal in Boral Resources (Vic) Pty Ltd v Robak Engineering and Construction Pty Ltd,[3] is analogous to that applied on a strike-out application, but with the significant difference that this is not a case of striking out a pleading which is properly before the court; it is to add a party and to allege a cause of action which is not yet before the court.

   [3][1999] 2 VR 507

1. Furthermore, it often happens in these applications where it is a defendant who seeks to join the party, that the defendant does so against the opposition of the plaintiff, and usually against the opposition of the party to be joined.  In this case the plaintiff takes a neutral position and the party to be joined is resisting.

1. The test which I will apply in this case is the test which I set out in the Wimmera-Mallee cases.  The task of the applicant is to show that the claim which it wishes to bring is not one which is unarguable or clearly hopeless.  Very often this can be demonstrated because the claim is one of a familiar kind, and one which the courts readily accept as giving rise to a duty of care.

1. In the present case, Multiplex labours under the difficulty that it has not as yet formulated in any detail its counterclaim, and I am driven, therefore, to consider whether as a matter of probability and not as a matter of mere speculation, the circumstances which I have summarised and will take to be proved, give rise to the appropriate duty of care.

1. I have looked again at the Wimmera-Mallee case, I have looked again at the second Wimmera-Mallee case which I determined in May of this year, and again at a case which I decided earlier this month, Hampton Park Central Pty Ltd v Australian Safeway Stores Pty Ltd.[4]  In that case I was pressed with the arguments that Mr Quinn pressed before me today, namely that there was no sufficient proximity between, in that case, the designer of a car park and the ultimate owner of the car park, so as to give rise to a duty of care and a responsibility in negligence following the failure of that car park. 

   [4][2000] VSC 422

1. In that case I concluded that I should join that party.  I think that the same reasoning obliges me to the same conclusion in this case.  I bear in mind that reliance is not the sole touchstone of duty of care.  As the High Court has pointed out in Bryan v Moloney[5] and again more recently in cases such as Perre v Apand Pty Ltd[6]  the proximity necessary to establish a duty of care is an elusive and flexible concept.  I have to look at the circumstances of each case and, in a specialist list such as the present, draw upon the experience which I have derived from the conduct of building litigation, and from the cases that have been decided in this area of law.

   [5](1995) 182 CLR 609

   [6](1999) 198 CLR 180

1. I am not satisfied that if this claim had been brought originally it would have been liable to be struck out as without foundation.  Notwithstanding the failure of Westkon to plead the claim in any detail, it seems to me that the facts have been sufficiently disclosed for me to form the view that it has established that there exists a viable claim in Multiplex against GMR if Multiplex had been minded to have brought it.

1. In the circumstances, I will accede to the application and order that GMR be joined as a party to the proceeding.

1. The case is complicated not only because here we are dealing with a counterclaim rather than a claim, but by the fact that there are, I have been told, a number of proceedings in the County Court arising out of this same unfortunate accident.  The claim by the widow of the deceased worker, has, I have been told, been settled as between her and the defendants, but liability as between the defendants in that claim remains to be resolved.  Those defendants are the parties before me - Westkon, Multiplex and GMR

1. I am told that there is also a worker's claim, although, about the detail of that I know nothing, and also a WorkCover claim of some kind.  Those cases clearly will involve a trial of similar issues, and it may well be that, if the parties are so advised, they will remove them to this court so that all the three can work out their respective liabilities in the different circumstances that those cases throw up.  It may be of course that this case may be removed to the County Court.  Whichever way, it is probably desirable that the issues be determined in the one forum.

1. No argument was addressed to the question of discretion.  I will therefore say nothing further than that, having been satisfied that there is a viable cause of action, I would exercise my discretion to join GMR as a defendant to the counterclaim of Multiplex.

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