Williams v Reid
[2010] SASC 264
•27 August 2010
SUPREME COURT OF SOUTH AUSTRALIA
(Miscellaneous Appeal: Civil)
WILLIAMS v REID & ORS
[2010] SASC 264
Judgment of The Honourable Justice Gray
27 August 2010
LIMITATION OF ACTIONS - EXTENSION OR POSTPONEMENT OF LIMITATION PERIODS - GENERALLY - POWER OF COURT TO EXTEND LIMITATION PERIOD
LIMITATION OF ACTIONS - EXTENSION OR POSTPONEMENT OF LIMITATION PERIODS - EXTENSION OF TIME IN PERSONAL INJURIES MATTERS - KNOWLEDGE OF MATERIAL FACTS OF DECISIVE CHARACTER - KNOWLEDGE - GENERALLY
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - SUMMARY JUDGMENT
Appeal against a decision of a Judge of the District Court, dismissing an appeal from a Master of the District Court declining to enter summary judgment or order disjoinder - plaintiff sustained personal injuries and issued proceedings against company operating premises at which injury sustained - plaintiff sought and obtained joinder of a number of further parties, substantially out of time - basis of joinder was plaintiff's discovery that defendant company uninsured and that premises leased from second company and discovery of identities of sole directors of each of the companies - joinder was opposed and summary judgment sought on ground that plaintiff had no reasonable basis to be granted an extension of time under the Limitation of Actions Act - whether plaintiff's claim for an extension of time within which to bring proceedings bound to fail - whether discovery that defendant company uninsured a material fact - whether sole directorship of defendant company and identity of director, material facts.
Held: appeal dismissed - on material before the Court not appropriate to find that claims of plaintiff bound to fail - pleaded facts if established at trial could arguably give rise to liability of director of defendant company - whether or not director of defendant company liable as a joint tortfeasor is a matter requiring further evidence at trial.
Limitation of Actions Act 1936 (SA) s 36 and s 48; District Court Act 1991 (SA) s 43(2)(b); Supreme Court Civil Rules 2006 (SA) r 288(1)(ii); Civil Liability Act 1936 (SA) s 21, referred to.
Lovett v Le Gall (1975) 10 SASR 479; Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628; Estate of the Late Sir Donald Bradman v Allens Arthur Robinson [2010] SASC 71; Napolitano v Coyle (1977) 15 SASR 559; Richardson v Ioannou (1986) 127 LSJS 1; Sola Optical Australia Pty Ltd v Mills (1987) 46 SASR 364; Cakebread v Henriks (1986) 128 LSJS 139; Raison v Alexoudis (1986) 130 LSJS 174; Finlay v Silcon Industries Pty Ltd (2003) 229 LSJS 14; Jackamarra v Krakouer (1998) 195 CLR 516; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, considered.
WILLIAMS v REID & ORS
[2010] SASC 264Miscellaneous Appeal
GRAY J:
Introduction
This is an appeal against a decision of a Judge of the District Court, dismissing an appeal from a Master of the District Court.
Background
Christine Judith Reid, the plaintiff and respondent alleges that on 16 January 2002, she slipped and fell at premises at Thebarton known as the “Snowdome” and sustained personal injury, loss and damage.On 14 January 2005, Ms Reid issued proceedings against Mt Thebarton Snow & Ice Pty Ltd, a respondent to the appeal. Those proceedings were issued immediately prior to the expiration of the limitation period prescribed by section 36 of the Limitation of Actions Act 1936 (SA).
Subsequent to the issuing of those proceedings, Ms Reid became aware in or about November 2006, that Mt Thebarton Snow & Ice was uninsured. She further learnt that Neil John Williams was the sole director of Mt Thebarton Snow & Ice. It also became apparent to Ms Reid that a separate corporate entity, Mt Thebarton Pty Ltd, was the owner of the premises from which the Snowdome was operated. Pursuant to a lease dated 1 March 2001, the premises from which the Snowdome operated were leased to Mt Thebarton Snow & Ice for a period of five years. Petrus Wilhelmus Maria Zwaans was the sole director of Mt Thebarton Pty Ltd.
On 4 April 2007, Ms Reid sought to join Mr Williams, Mt Thebarton Pty Ltd and Mr Zwaans, and on 5 September 2007 orders for joinder were made. The claim against those parties was substantially out of time. An amended summons and second further amended statement of claim were filed on 6 September 2007. An extension of time under section 48 of the Limitation of Actions Act was sought.
On 12 October 2007, Mr Williams, Mt Thebarton Pty Ltd and Mr Zwaans sought summary judgment and disjoinder on the basis that Ms Reid had no reasonable basis to be granted an extension of time under the Limitation of Actions Act. Lengthy delays occurred in the filing of affidavits in support of and in opposition to the application. On 10 July 2009, the Master of the District Court declined to enter summary judgment or order disjoinder. An appeal from this decision was dismissed by a Judge of the District Court on 23 November 2009.
The Master concluded that on the information then before the Court, she was not prepared to find that the claims of Ms Reid against Mr Williams were bound to fail. In the Master’s opinion, the pleaded facts, if established at trial, could arguably give rise to a grant of an extension of time and a finding of a breach of duty of care by Mr Williams. The District Court Judge agreed.
On 23 December 2009, permission to appeal from the decision of the District Court Judge dismissing Mr Williams’ appeal[1] was granted by a Judge of this Court. There has been no appeal by Mt Thebarton Pty Ltd or Mr Zwaans.
[1] Reid v Mt Thebarton Snow & Ice Pty Ltd [2009] SADC 130; Permission to appeal was required: District Court Act 1991 (SA) section 43(2)(b); Supreme Court Civil Rules 2006 (SA) rule 288(1)(ii).
District Court Proceedings
The new material facts relied upon by Ms Reid were that Mt Thebarton Snow & Ice, the lessee of the property, was not insured, that Mr Williams was the sole director of Mt Thebarton Snow & Ice, that Mt Thebarton Pty Ltd was the owner and lessor of the premises from which Mt Thebarton Snow & Ice operated the Snowdome and that Mr Zwaans was the sole director of Mt Thebarton Pty Ltd.
Save for ordering that Ms Reid’s cause of action based on a “failure to insure” ought to be struck out, the District Court Master dismissed the defendants’ applications. The Master held, that although Ms Reid’s contention that on discovering that Mt Thebarton Snow & Ice did not have public insurance she looked to find other tortfeasors might be tenuous, it was not “so obviously untenable that it can not succeed”. The Master concluded that it was arguable that the ascertainment of the fact that Mt Thebarton Snow & Ice was uninsured was material to Ms Reid’s decision to join the other parties:
The plaintiff identifies being informed by letter dated 25 November 2006 the first defendant did not have public liability insurance as a material fact. Obviously she cannot because of my orders striking any allegation of a duty to maintain insurance allege this is a material fact relevant to the claim struck out. However, it is submitted it was armed with the information that there was no public liability insurance that she looked to find other tortfeasors, in particular the second defendant, the sole director of the first defendant. Whilst this may be tenuous it is not “so obviously untenable that it can not succeed” per General Steel. It is arguable the ascertaining of the fact of no insurance is material to her decision to join other parties.
The Master also noted that there was incomplete information with respect to the involvement of Mr Williams and Mr Zwaans with their respective companies. The Master concluded that their involvement in the companies’ activities was critical in determining whether their conduct was such that they were liable as joint tortfeasors and that without further information, these were matters for evidence at trial:
I do not have enough information regarding the level of involvement of the second and fourth defendants in their respective companies. I have no alternative but to conclude this is a matter for evidence at trial as the extent of their involvement is critical in determining whether their conduct is such that they are liable as joint tortfeasors.
In coming to this conclusion, the Master made reference to the judgment of Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd[2] where Redlich J reviewed the authorities and the circumstances in which a director will be liable for the wrongful acts of the relevant company:[3]
Both in Australia and in England a director is in no different position to an agent who, whilst binding their principal may also be liable for their tortious acts. The defendants' submission that Mr and Mrs Secchi cannot be held liable for their conduct as director's because their acts are those of the corporation, expressed in such absolute terms must be rejected. This does not mean that directors become personally liable merely because they are directors. Unless they procure or direct the tortious conduct the law does not impose upon them liability for the acts of other agents or employees, whether they are directors of large corporations or what is described as "one man" companies.
There is an obvious jurisprudential distinction to be drawn between those who by choice enter into contractual arrangements with a corporate entity and should thus be taken to have accepted limited liability and those who have had no dealings with a company and whose only interest is not to be harmed by the conduct of anyone. The utilisation of limited liability as a shield against those who choose to deal with a company can be more readily accepted than in the case of strangers who are harmed by corporate activity and who naturally turn for liability to those who caused the harm. Those who are victims of a tortious act such as trespass, conversion or negligence will probably have played no role in the selection of the tortfeasor who inflicts the harm.
I am not persuaded that there is any soundly-principled basis for the imposition of a requirement that a director who, by virtue of their level of involvement and control is found to have procured or directed the commission of the acts should not be liable unless the director knew or was indifferent as to whether the acts were unlawful or likely to cause loss or damage to the true owner of the goods. Despite the absence of direct binding authority, and the differing views expressed in various Federal Court decisions, the preponderance of authority provides no support for a principle which would so limit a director's liability at the expense of a victim who may not have chosen to deal with the corporation tortfeasor. The line of authority which requires an assumed responsibility before a director will be liable is concerned with tortious conduct which involves an assumption of a duty of care and reliance before liability is established. This limitation upon liability arises in circumstances where the victim has dealt with a company and has chosen to accept the risks associated with the company's limited liability and torts. These cases do draw attention to the personal liability which may be imposed upon a director of a "one person company" because of the degree of control that the director has.
[2] Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd (2003) 9 VR 171.
[3] Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd (2003) 9 VR 171 at [198]-[200].
As a consequence of these considerations, the Master concluded:
This is not an appropriate matter for summary judgment. I am not in a position to conclude the plaintiff’s claim is doomed to failure and devoid of merit. The defendants have not established the plaintiff’s claim cannot succeed on any possible view of the facts or law. …
An appeal from the Master’s decision was dismissed by a District Court Judge who held that the Master was correct in her findings. With respect to the ascertainment of material facts, the Judge observed:[4]
It is my view that the learned Master correctly found that, once the plaintiff was aware that there was no public liability insurance, then she looked to locate other tortfeasors. The information that there was no insurance held by the first defendant was material to the plaintiff’s decision to look for and then join other parties to the action. The ascertainment of the names of the landlord and the directors of the first and third defendants was also material to the plaintiff’s decision to provide instructions to her solicitors to pursue proceedings against those parties, to investigate the relationship between the named sole directors in the companies and the corporate entities and to investigate further the relationship between all four defendants by speaking to employees who worked at the Snow Dome together [with] other potential witnesses.
[4] Reid v Mt Thebarton Snow & Ice Pty Ltd [2009] SADC 130 at [15].
The Judge agreed with the Master’s view that there was insufficient information regarding the level of involvement of Mr Williams and Mr Zwaans in their respective companies to determine the issues raised on the application for summary judgment. The Judge observed that:[5]
…The level of their involvement is critical in determining whether their conduct is such that they are liable as joint tortfeasors. This is a matter for evidence at trial.
The Judge further agreed with the Master that there was insufficient evidence to determine whether Mt Thebarton Pty Ltd and Mr Zwaans occupied the premises and what level of involvement, if any, they had in the Snowdome, and that these were matters for evidence at trial.
[5] Reid v Mt Thebarton Snow & Ice Pty Ltd [2009] SADC 130 at [16].
Finally, the Judge dismissed the complaint of Mt Thebarton Pty Ltd and Mr Zwaans that the Master had erred with respect to matters relevant to the operation of section 21 of the Civil Liability Act 1936 (SA)[6] and in particular, the finding that Mt Thebarton Pty Ltd and Mr Zwaans had failed to disprove their occupation of the premises:[7]
In order to succeed on a summary judgment application it is necessary for the third and fourth defendants to establish that the plaintiff cannot succeed on any view of the facts and law. To put it another way, in order to establish that the plaintiff cannot succeed to the requisite standard, they must show that the landlord was not in occupation. The Master correctly, in my view, identified that the defendants have not discharged this onus. It is a matter for evidence at trial. The question of occupation of premises requires careful consideration of the lease and other evidence together with argument. As the learned Master observed, if the answer was as obvious as is contended by the third defendant, why was it felt necessary to include in the lease clause 2.24 requiring the first defendant to maintain insurance for the period of the lease and to insure against public liability in its name and that of the third defendant?
[Footnote omitted]
[6] Section 21 of the Civil Liability Act 1936 (SA) provides:
The liability under this Part of a landlord who is not in occupation of premises is limited to injury, damage or loss arising from—
(a)an act or omission on the part of the landlord in carrying out an obligation to maintain or repair the premises; or
(b)a failure on the part of the landlord to carry out an obligation to maintain or repair the premises.
[7] Reid v Mt Thebarton Snow & Ice Pty Ltd [2009] SADC 130 at [22].
The Judge concluded:[8]
The Master properly declined to enter summary judgment or order disjoinder in relation to the second, third and fourth defendants. The balance of the consequential orders made by the Master are likewise appropriate. I see no basis upon which the Master’s decision should be interfered with. Accordingly I will dismiss the appeal.
[8] Reid v Mt Thebarton Snow & Ice Pty Ltd [2009] SADC 130 at [24].
The Appeal
As discussed earlier, this appeal concerned Mr Williams’ application for summary judgment. There has been no appeal by Mt Thebarton Pty Ltd or Mr Zwaans. The central complaints on appeal were that the Judge erred in her interpretation of what is meant by the phrase “facts material to the plaintiff’s case” within the meaning of section 48(3)(b)(i) of the Limitation of Actions Act and in concluding that it was arguable that Ms Reid’s pleaded case against Mr Williams could succeed.
A further argument was raised relating to what were said to be evidential insufficiencies in respect of when Ms Reid became aware of the alleged material facts. Those insufficiencies were addressed by the granting of an adjournment on the appeal, with the consent of the parties, to allow for the filing of further affidavits. By affidavit dated 29 March 2010, Ms Reid deposed that on 28 November 2006, on receiving information from her solicitors, she first became aware of the facts said to be material. By affidavit dated 29 March 2010, the solicitor of Ms Reid, Stephen Peter White, confirmed the matters deposed to by Ms Reid.[9]
[9] The hearing and the determination of the appeal was delayed because of the need for the preparation and filing of the further affidavit material.
On the resumption of the appeal hearing, counsel for Mr Williams accepted that the appeal could proceed on the basis that Ms Reid learnt of the facts asserted to be material on 28 November 2006.[10]
[10] It is accepted that the relevant ascertainment of the material fact must be personal ascertainment by a plaintiff rather than ascertainment by a plaintiff’s agents: Lovett v Le Gall (1975) 10 SASR 479 at 483; see also Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628.
The Legislation and the Authorities
Section 36 of the Limitation of Actions Act prescribes the limitation period for claims concerning personal injury and provides:
(1) All actions in which the damages claimed consist of or include damages in respect of personal injuries to any person, shall be commenced within three years next after the cause of action accrued but not after.
(1a) However, in the case of a personal injury that remains latent for some time after its cause, the period of 3 years mentioned in subsection (1) begins to run when the injury first comes to the person's knowledge.
(2) In this section—
personal injuries include any disease and any impairment of a person's physical or mental condition.
The Court’s power to extend the limitation period is found in section 48 of the Limitation of Actions Act. That section relevantly provides:
(1) Subject to this section, where an Act, regulation, rule or by-law prescribes or limits the time for—
(a) instituting an action; or
(b) doing any act, or taking any step in an action; or
(c) doing any act or taking any step with a view to instituting an action,
a court may extend the time so prescribed or limited to such an extent, and upon such terms (if any) as the justice of the case may require.
(2) A court may exercise the powers conferred by this section in respect of any action that—
(a) the court has jurisdiction to entertain; or
(b)the court would, if the action were not out of time, have jurisdiction to entertain.
(3) This section does not—
…
(b)empower a court to extend a limitation of time prescribed by this Act unless it is satisfied—
(i)that facts material to the plaintiff's case were not ascertained by him until some point of time occurring within twelve months before the expiration of the period of limitation or occurring after the expiration of that period and that the action was instituted within twelve months after the ascertainment of those facts by the plaintiff; or
…
and that in all the circumstances of the case it is just to grant the extension of time.
(3a) A fact is not to be regarded as material to the plaintiff's case for the purposes of subsection (3)(b)(i) unless—
(a) it forms an essential element of the plaintiff's cause of action; or
(b)it would have major significance on an assessment of the plaintiff's loss.
(3b) In determining whether it is, in all the circumstances of a case, just to grant an extension of time, the court should have regard to—
(a)the period of extension sought and, in particular, whether the passage of time has prejudiced a fair trial; and
(b)the desirability of bringing litigation to an end within a reasonable period and thus promoting a more certain basis for the calculation of insurance premiums; and
(c)the nature and extent of the plaintiff's loss and the conduct of the parties generally; and
(d) any other relevant factor.
[Emphasis added]
The purpose of section 48 of the Limitation of Actions Act was recently considered in Estate of Sir Donald Bradman v Allens Arthur Robinson, where the Full Court observed:[11]
The broad purpose of the Act is to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action is to be commenced. The general power conferred by the legislation is limited by subsection (3) which relevantly provides that the Court is not empowered to extend a limitation period unless it is satisfied that facts material to the plaintiff’s case were not ascertained by the plaintiff until some point of time occurring within 12 months before the expiration of the period of limitation, or occurring after the expiration of that period and that the action was instituted within 12 months after the ascertainment of those facts. Further, the Court must be satisfied that, in all the circumstances of the case, it is just to grant an extension of time. …
[Footnote omitted]
[11] Estate of the Late Sir Donald Bradman v Allens Arthur Robinson [2010] SASC 71 at [23] (Sulan & Layton JJ, Vanstone J in dissent).
In Sola Optical Australia Pty Ltd v Mills[12] the High Court discussed the meaning of the phrase “a fact material to the plaintiff’s case” and observed:
A fact is material to the plaintiff's case if it is both relevant to the issues to be proved if the plaintiff is to succeed in obtaining an award of damages sufficient to justify bringing the action and is of sufficient importance to be likely to have a bearing on the case. The Shorter Oxford English Dictionary defines the word "material", inter alia, to mean "Of such significance as to be likely to influence the determination of a cause". Although a definition attributed to the sixteenth century, in our opinion it provides an apt guide to the intention of the legislature in choosing to refer, without any elaboration, to "facts material to the plaintiff's case".
[12] Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628 at 636-637 (Wilson, Deane, Dawson,
Toohey and Gaudron JJ).
The court further said that “materiality” is:[13]
…a broad general requirement that is capable of satisfaction by objective inquiry.
[13] Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628 at 636 (Wilson, Deane, Dawson,
Toohey and Gaudron JJ).
The approach taken to the meaning of a “fact material” subsequently adopted in Sola Optical had been discussed in some detail in the decisions of Lovett v Le Gall[14] and Napolitano v Coyle.[15] In Lovett v Le Gall,[16] the Full Court considered that a fact is material if it is of such significance as to be able to influence the determination of the case.[17]
[14] Lovett v Le Gall (1975) 10 SASR 479 as adopted in Napolitano v Coyle (1977) 15 SASR 559 and Richardson v Ioannou (1986) 127 LSJS 1
[15] Napolitano v Coyle (1977) 15 SASR 559.
[16] Lovett v Le Gall (1975) 10 SASR 479.
[17] Lovett v Le Gall (1975) 10 SASR 479 at 481. In the course of his consideration, Bray CJ discussed the differences between the terms of the equivalent English provision and those of the Limitation of Actions Act, at the time of the enactment of the Limitation of Actions Act:
The learned judge held that facts were material to the plaintiff's case within the meaning of the subsection if they were relevant to that case in a not unimportant way. I am content to adopt this definition, though I have suggested an alternative form of words later on. The argument for the appellant was, as I have said, that to be material the facts in question must be necessary for the purpose of formulating the plaintiff's cause of action. But the statute refers to the plaintiff's case, not to his cause of action.
…
Accordingly I agree with his interpretation of the word "material" set out above. Another way of putting it might be to say that a fact is material within the meaning of the sub-section if it is of such significance as to be able to influence the determination of the case; cf. the dictionary definition of "material" from the 3rd edition of the Shorter Oxford Dictionary cited by the learned Judge. A similar definition of the word prefixed with the words "chiefly Law" appears in the New English Dictionary.
The findings of the Full Court in Lovett were summarised in the following manner in Sola Optical Australia Pty Ltd v Mills by King CJ in the Full Court:[18]
1.The words "not ascertained by him" refer to the plaintiff personally and not to his solicitors or agents.
2.The words "material to the plaintiff's case" do not refer to facts material for the purpose of alleging a complete cause of action, but to facts material to be proved in order that the plaintiff should establish his case at trial.
3.The facts referred to are facts material to the plaintiff's case at trial not to his decision to sue.
4.The section does not require that ignorance of the material fact later ascertained should have caused or contributed to the failure to sue in time or that the ascertainment of the fact should have caused or influenced the decision to sue."
[18] Sola Optical Australia Pty Ltd v Mills (1987) 46 SASR 364 at 367.
The High Court confirmed these matters on appeal and as earlier noted, determined that a fact is a material fact “if it is both relevant to the issues to be proved if the plaintiff is to succeed in obtaining an award of damages sufficient to justify bringing the action and is of sufficient importance to be likely to have a bearing on the case”.[19]
[19] Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628 at [363].
Of particular relevance to this proceeding was the High Court’s discussion in Sola Optical regarding the interaction between the material fact ascertained and a plaintiff’s decision to sue. In assessing whether such interaction was required for an extension of time to be granted under section 48(3) of the Limitation of Actions Act, the High Court distinguished and overruled two earlier authorities of the Full Court of South Australia,[20] and ultimately approved Lovett v Le Gall.[21]
[20] In Cakebread v Henriks (1986) 128 LSJS 139 the Full Court determined that there must be some interaction between the ascertainment of the material fact and the decision to sue. In that case, the Court held that there was no evidence to support the proposition that the material fact “had any bearing on the institution of proceedings” and as a consequence, time was not extended. Cakebread was followed by the Full Court in Raison v Alexoudis (1986) 130 LSJS 174. In that case, it was held that the plaintiff had always intended to sue and consequently the ascertainment of the material fact had no bearing on the institution of proceedings. The Court held that as a consequence, the plaintiff did not qualify for an extension of time under section 48(3) of the Limitation of Actions Act.
[21] Lovett v Le Gall (1975) 10 SASR 479.
In adopting the approach outlined, the Court in Sola Optical expanded the test to be met pursuant to section 48 of the Limitation of Actions Act. This expansion was recognised by the Full Court in Finlay v Silcon Industries Pty Ltd,[22] where following extraction of the relevant observations in Sola Optical, Doyle CJ observed:
This reflects a liberal approach to the meaning of s 48(3)(b)(i), and makes the exercise of the ultimate discretion all the more important.
[22] Finlay v Silcon Industries Pty Ltd (2003) 229 LSJS 14 at [73] (Doyle CJ, with whom Nyland and Lander JJ agreed).
Consideration of the Appeal
Ms Reid asserts that following the expiration of the limitation period, she became aware for the first time that Mt Thebarton Snow & Ice was uninsured. At this time the solicitors for Mt Thebarton Snow & Ice suggested that if Ms Reid were to pursue her action and recover judgment, the judgment would be unsatisfied. Unsurprisingly in this circumstance, Ms Reid instructed her solicitors to make enquires as to whether there were any other parties who would be liable as tortfeasors. Consequent enquires led to the discovery that Mt Thebarton Snow & Ice had a sole director, Mr Williams, that the premises were leased by Mt Thebarton Snow & Ice from Mt Thebarton Pty Ltd and that the sole director of that company was Mr Zwaans.
Ms Reid pleads that Mr Williams was the manager of Mt Thebarton Snow & Ice and was responsible for all management decisions in relation to the operation of Mt Thebarton Snow & Ice. Ms Reid then further pleads:
The second defendant, in his capacity as sole director of the first defendant and the person solely responsible for the management of, and all management decisions in relation to the operation of the first defendant (‘the controller of the first defendant”), was negligent in that, knowing that members of the public were being invited to attend at the Snowdome and the nature of the recreational facilities being offered to the public at the Snowdome, failed to ensure that the first defendant took all reasonable steps were taken to ensure that the Snowdome premises were maintained in good and safe condition. The plaintiff
refers torelies upon and repeats the matters set out in sub-paragraphs 10.1 to 10.13 above.[23]In the alternative, the second defendant was at all material times present at the Snowdome premises on a day to day basis and made all management decisions regarding the operation of the business conducted as the Snowdome including all decisions as to the maintenance and repair of the Snowdome premises. The second defendant was solely responsible for authorising expenditure and overseeing work for maintenance and repairs to the Snowdome premises.
The second defendant, in his capacity as a controller of the first defendant, was negligent in that, knowing that members of the public were being invited to attend at the Snowdome premises and the nature of the recreational facilities being offered to the public at the Snowdome, he failed to ensure that the Snowdome premises were maintained in a good and safe condition. The plaintiff relies upon and repeats the matters set out in sub-paragraphs 10.1 to 10.3 above.
[23] 10 The first defendant was negligent in that it:
10.1failed to take any or any reasonable care to see that the plaintiff would be safe in using the shorter east/west ramp.
10.2caused or permitted the shorter east/west ramp to become or remain a danger.
10.3failed to ensure that the shorter east/west ramp complied with the Building Regulations 1973 (“Building Regulations”) and AS1428-1977 referred to therein (“Code Rules”).
10.3.1The shorter east/west ramp does not comply with Code Rules 7.2(a) to 7.2(d), 7.5, 7.6, 7.9 and 16 and therefore does not comply with the Building Regulations, in that:
(a) it has a full slope gradient of approximately 1:4.7 and has incremental gradients varying between 1:4.7 up to 1:6.4, which are in excess of the prescribed 1:8;
(b) the northern side of the shorter east/west ramp does not have a hand rail;
(c) the kerb along the northern side of the shorter east/west ramp is less than 100 millimetres along the northern edge;
(d) there is no level rest area not less than 1200 millimetres long at the change of direction from the longer north/south ramp to the shorter east/west ramp;
(e) the southern edge of the shorter east/west ramp, where there are concrete steps leading down to the underground car park, does not have a balustrade with an opening in excess of 125 millimetres;
(f) it does not have a non slip finish.
10.4failed to ensure that the shorter east/west ramp complied with AS/NZS 2661.1:1993 “Slip Resistance of Pedestrian Surfaces, Part 1: Requirements” (“the Slip Resistance Standard”):
10.4.1The shorter east/west ramp does not comply with the Slip Resistance Standard in that the shorter east/west ramp achieved measured wet and dry coefficients of friction of 0.57 and 0.59 respectively, which do not comply with the Slip Resistance Standard which requires the coefficient of friction to be not less than 0.62 for a surface with a slope of 18% and not less than 0.78 for a surface with a slope of 29%;
10.5permitted the plaintiff to walk along the ramp when they it knew or ought to have known that it was unsafe and dangerous for her to do so.
10.6caused or permitted the shorter east/west ramp to be constructed and/or remain with two [sic] steep a gradient for safe use by pedestrians;
10.7failed to maintain the ramp in a safe condition;
10.8failed to repair displaced paving bricks in the ramp to ensure they did not present as a tripping hazard;
10.9failed to apply a non-slip finish and/or protection to the shorter east/west ramp; or alternatively failed to re-apply a non-slip finish or protection to that ramp when it had worn off;
10.10caused or permitted the shorter east/west ramp to be constructed and/or remain without a handrail on its northern side;
10.11in construction or occupation of the shorter east/west ramp failed to take account of the fact that users of, and visitors to, the Snowdome would be leaving the premises with wet and icy clothing and shoes;
10.12failed to warn users of the ramp of the excessively steep gradient and/or the slipperiness of the shorter east/west ramp;
10.13failed to reasonably maintain the shorter east/west ramp and to regularly inspect its condition.
It was accepted by Mr Williams and Ms Reid that for the purpose of the appeal this Court should proceed on the basis that Ms Reid amended her claim to join Mr Williams, Mt Thebarton Pty Ltd and Mr Zwaans within 12 months of her learning of the alleged new material facts.
A complaint of Mr Williams on appeal was that Ms Reid’s claim for an extension of time within which to bring proceedings against them, was bound to fail. It was said that the discovery that Mt Thebarton Snow & Ice was uninsured was not a material fact and that the other asserted material facts did not provide the basis for claims against Mr Williams.
As earlier observed, following receipt of the information that Mt Thebarton Snow & Ice was uninsured, Ms Reid investigated alternative tortfeasors against whom she could institute proceedings. In that process, she discovered that Mr Williams was the sole director of Mt Thebarton Snow & Ice and as a consequence instituted proceedings against Mr Williams. The extent of the involvement of Mr Williams in the operations of Mt Thebarton Snow & Ice is critical to any finding with respect to whether his conduct as director was such that he would be liable as a joint tortfeasor.
It is to be remembered, in accordance with the observations of Redlich J in Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd[24], that directors of companies may be held liable for the companies’ torts when the director has sufficient control over the acts of the company and the conduct of the director satisfies the relevant tests for liability.
[24] Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd (2003) 9 VR 171.
The potential liability of a director as a joint tortfeasor illustrates that the discovery by Ms Reid of Mr Williams as the sole director of Mt Thebarton Snow & Ice, was material to the cause of action instituted against Mr Williams. Whether or not Mr Williams in this case had sufficient involvement in the operations of Mt Thebarton Snow & Ice to attract liability is a matter for evidence at trial.
In General Steel Industries Inc v Commissioner for Railways (NSW)[25] Barwick CJ set out, in an appendix to his reasons, a list of authorities dealing with the test to be applied in determining whether to terminate an action summarily before trial. As Barwick CJ observed:[26]
The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense".
At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance".
[25] GeneralSteel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125.
[26] GeneralSteel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 138.
The above statements referred to by Barwick CJ were all made in relation to the summary determination of a proceeding without trial. Although the expressions employed varied, they all may be seen to be different ways of saying that a court should not exercise its powers of summary determination of a proceeding except in clear cases.[27]
[27] It is to be noted that Barwick CJ also referred to the remarks of Dixon J in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 where his Honour observed: “A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury.”
The approach of Barwick CJ in General Steel was subsequently adopted by Brennan CJ & McHugh J in Jackamarra v Krakouer (1998) 195 CLR 516 at [32].
I agree with the conclusion of the District Court Master and the District Court Judge. Their respective rejection of Mr Williams application and appeal were appropriate in the circumstances.
Finally for the purposes of this appeal, as noted above, Mr Williams accepted that the Court should proceed on the basis of the assertions of fact made by Ms Reid in her affidavit as to when she became aware of the absence of public liability insurance, aware of the sole directorships and aware of the lease arrangements. It was made plain that this concession did not extend beyond the appeal and that Mr Williams reserved his right to challenge the assertions in Ms Reid’s affidavit and those of her solicitors, at trial. I consider this to be an appropriate position to adopt. These matters are best left to the trial Judge to determine.
Conclusion
For these reasons, this appeal is dismissed.
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