Wong v Body Corporate 1 Plan No. 433814 P
[2009] VCC 100
•18 February 2009
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
Case No. CI-06-02022
| JOYCE WONG | Plaintiff |
| v | |
| BODY CORPORATE 1 PLAN NO. 433814P | Defendant |
| and | |
| G R & G D MILLER | First Third Party |
| and | |
| MANNINGHAM CORPORATE CENTRE PTY LTD | Second Third Party |
| and | |
| LINK FIRE PTY LTD | Third Third Party |
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| JUDGE: | HIS HONOUR JUDGE MISSO |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 27 January and 3 February 2009 |
| DATE OF JUDGMENT: | 18 February 2009 |
| CASE MAY BE CITED AS: | Wong v Body Corporate 1 Plan No. 433814 P & Ors |
| MEDIUM NEUTRAL CITATION: | [2009] VCC 0100 |
REASONS FOR JUDGMENT
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Catchwords: NEGLIGENCE – third party proceeding by a body corporate against its manager – injury to the plaintiff lawfully entering the body corporate property – manager engaged pursuant to an agreement in writing – whether the agreement imposed an obligation to arrange for repairs and maintenance and advise against risks – whether the manager owed a duty of care to the injured plaintiff – terms and limits of the manager’s engagement.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | No appearance | |
| For the Defendant | Mr A Moulds | Hall & Wilcox |
| For the Third Parties | Mr R Heath | Monahan & Rowell |
| HIS HONOUR: |
Introduction
1 The plaintiff commenced a proceeding against Body Corporate 1 Plan No. 433814P (“the Body Corporate”).
2 The body corporate joined:
[1] G R and G D Miller are husband and wife in partnership in the conduct of a body corporate management. During the trial, both Mr Moulds and Mr Heath referred to the Millers as "the Manager" for convenience sake, and partly because it was the evidence of Mr Miller that essentially he was the operative person in the partnership and that his wife played a rather modest role in the conduct of the management business
(a) G R & G D Miller (collectively called “the Manager”) as first third party;[1] (b) Manningham Corporate Centre Pty Ltd as second third party; and (c) Link Fire Pty Ltd (“Link”) as third third party. 3 The plaintiff's proceeding settled for $90,000, inclusive of costs. The Body Corporate contributed $60,000 toward the settlement, and Link contributed $30,000.
4 What remained to be determined was the third party proceeding between the Body Corporate and the Manager.
5 Mr A Moulds of counsel appeared for the Body Corporate and Mr R Heath of counsel appeared for the Manager.
6 Mr Moulds tendered a Joint Court Book ("CB") pages 1-319: Exhibit A.
7 Two witnesses were called. The first was Mr B Keogh who was called to give evidence by Mr Moulds on behalf of the Body Corporate, and Mr G Miller who was called to give evidence by Mr Heath on behalf of the Manager.
8 The plaintiff was not called to give evidence. I was referred to part of a statement she made, by both Mr Moulds and Mr Heath, by agreement as a representation of the event which led to the plaintiff suffering injury upon which her proceeding was based.
9 The plaintiff alleged in her Amended Statement of Claim that on 15 August 2005, she entered premises at 195 Thompsons Road, Bulleen (“the premises”) to attend the rooms of a Dr Cherkasski, prosthodontist. She entered the entrance area of the building and stepped onto wet tiles, with the result that she slipped and fell, suffering injury.[2]
[2] CB 4-5
10 The relevant portion of that statement is as follows:
"At 9 am, Mon 15 Aug 2005, it was continuing to rain, as it had all weekend. Having parked the car in the car park at the back of the building, I proceeded around the outside of the building in the rain to the front. The front tiled uncovered porch was completely wet from the continuing rain. Upon opening the door to the foyer, I noticed the rubber mat lying on the ground was well away from the front door and lying at an angle, close to the lift doors. I was at approx one and a half steps away and I realised that it was too far away for me to reach safely. I was concerned that the wet bushwalking shoes I was wearing would dirty their floor. I decided to put my right foot on the tiled floor just inside the door. As the orthodontist’s door was to the left, I intended to turn left and walk directly to the door. Immediately the wet sole of my right shoe touched the shiny black tiles, there was absolutely no grip and complete slip – like water on a glass surface – on the floor and I fell on my left side, hitting and injuring my left side, left arm and shoulder."[3]
[3] CB 310
11 Mr Moulds submitted that the Body Corporate and Link owed the plaintiff a duty of care. Both accepted responsibility for the occurrence of the incident which befell the plaintiff, however, Mr Moulds submitted that the Manager was liable to also contribute to the damages, the subject of the settlement, based upon its contractual obligations and also because it owed the plaintiff a duty of care which it had breached.
The Pleadings
12 Mr Heath made extensive submissions regarding the case pleaded against the Manager. It is for that reason that it is necessary to summarise the case pleaded against the Manager.
13 Essentially, the case pleaded against the Manager is as follows:
(a) By agreements commencing 21 June 2003 and 31 December 2005, the Manager agreed to manage the common property of the Body Corporate for which the Body Corporate agreed to remunerate the Manager: paragraph 6. (b) The agreements provided that the Manager would: (i) arranged for routine and minor (less than $1000) repairs and maintenance of the common property of the Body Corporate.
(ii) provide general advice to the Body Corporate as to meeting procedures and regulations as may be required by the Body Corporate to carry out and perform its duties and functions under the Act and the Regulations:[4] paragraph 7.
[4] The Act and the Regulations referred to in the earlier part of the pleading are the Occupational Health and Safety Act 2004 and the Subdivision (Body Corporate) Regulations 2001: paragraphs 4 and 5
(c)
It was reasonably foreseeable to the Manager, or to reasonable persons in their management position, that the tiles in the entrance area of the ground floor might constitute a risk of injury to persons using the entrance area if the tiles were wet, and that the Manager owed a duty of care to persons using the entrance area, including the plaintiff, to exercise reasonable care in its management function so as to avoid a reasonably foreseeable risk of harm: paragraphs 9-10.
(d)
If the plaintiff slipped and fell as she alleged, then her injury, loss and damage was caused by a breach by the Manager of its duty of care and by its negligence. Sub-joined “Particulars” (a)-(i) are said to be the substrata of the allegations of breach of duty of care in negligence: paragraph 11.
(e)
As a further basis of claim against the Manager, the Body Corporate alleged that if the tiles were defective and in need of maintenance or repair and/or constituted a danger or hazard, that from at least 15 August 2003 the Manager knew of their state and/or such state had been brought to its attention and that it had failed to take steps within a reasonable time to make the Body Corporate aware of its need to make appropriate decisions with respect to raising funds for the necessary repairs, maintenance or other works on the tiles. The sub-joined “Particulars” refer to a falling episode involving a pedestrian in a similar area of the premises on 18 August 2003: paragraph 12.
(f)
If the tiles were defective et cetera, then the Body Corporate alleged that the Manager was in breach of the express provisions of the agreements which are referred to in paragraphs 6 and 7, repeating the same particulars as are sub-joined to paragraph 11 as the particulars of the breaches: paragraph 13-14.
14 In its Defence filed 10 April 2007, the Manager pleaded:
(a)
It admitted that it had been appointed manager of the Body Corporate from 1 January 2003 to 31 August 2006, and in “Particulars” it referred to the agreements which resulted in that appointment and various minutes of meetings of the Body Corporate as constituting the whole of the agreement resulting in the appointment: paragraph 6.
(b) It admitted the allegations in paragraph 7. (c) It did not admit the allegations in paragraphs 9, 10 or 11. (d)
It denied the allegations in paragraph 12, and referred to the incident said to constitute some prior knowledge on the part of the Manager which occurred on 15 August 2003; that the incident was a trip and not a slip on the tiles, and it then referred to the steps taken in relation to that incident in relation to insurance notification and the provision of warning signs at the entrances to the premises. Furthermore, in extensive sub- joined “Particulars” it set out the particulars of conversations and the generating of documents which arose from instructions given to the Manager in relation to that incident: paragraph 12.
(e)
It extensively pleaded the agreements and their effect and what legal relationship was established between the Body Corporate and the Manager, and in particular, its obligations under the agreements which were contrary to the allegations made by the Body Corporate: paragraphs 14-18.
15 A simple synthesis of the allegations made by the Body Corporate against the Manager amount to:
(a)
A breach of the management agreement entered into on 31 December 2005, and more particularly, to arrange routine and minor repairs and maintenance and to provide general advice: paragraphs 6, 7, 13 and 14.
(b)
The breach of duty and/or negligence of the Manager in undertaking its management functions: paragraphs 10 and 11.
(c)
A breach of the management agreement entered into on 31 December 2005 by not bringing to the attention of the Body Corporate the Manager’s state of knowledge derived from the incident of 15 August 2003 within a reasonable time to make the Body Corporate aware of its need to make appropriate decisions to raise funds for necessary repairs, maintenance and other works: paragraphs 7 and 12.
The Agreements
16 The first agreement appointing the Manager is dated 20 November 2002 (“the 2002 agreement”).[5] It is signed by Mr Miller, Mr Angelo Nastasi and Mr Vincent Ginevra and bears the seal of the Body Corporate.
[5] CB 237-240
17 It is convenient at this point to turn to the Subdivision (Body Corporate) Regulations 2001 (“the Regulations”) because of a submission which was central to both the case put by the Body Corporate and the Manager, that is, that the Manager pleaded that it had specific responsibilities delineated expressly in the agreements and that it had no other or further responsibility to the Body Corporate.
18 The relevant parts of Regulation 201 are as follows:
“Functions of bodies corporate
(a) to repair and maintain - (i) the common property …
(b) to manage and administer the common property ….”
19 The relevant parts of Regulation 207 are as follows:
“Repairs and maintenance of common property
(1) The body corporate must keep in a state of good and serviceable
repair and maintain -(a) the common property … .”
20 The thrust of Regulations 201 and 207 were incorporated into the 2002 agreement in clause 5:
“The Body Corporate has the repair and maintenance functions set out in Regulation 201(a) and the duty set out in Regulation 207 to keep in a state of good and serviceable repair and maintain the Body Corporate property. In complying with such function the Body Corporate must decide and instruct the Manager in the following matters where appropriate:
5.1 what (if any) works and services are to be undertaken by the Body
Corporate;
5.2 the tradesmen and professionals who carry out such works and
services and the terms and conditions of their engagement;
5.3 if the work has been carried out satisfactorily.
In the case of minor repairs or an emergency the Manager is authorised to make the above decisions for and on behalf of the Body Corporate and to arrange to have the necessary work done."[6]
[6] CB 238
21 I was referred to Schedule 1, which bears the heading “DUTIES COVERED BY ANNUAL MANAGEMENT FEE” , and in particular to the following:
"MAINTENANCE
(1) arrange for routine minor repairs and maintenance of body corporate property;
(2) obtain quotations for repair, maintenance and replacement of body
corporate property of a minor nature.ADVICE
(1) provide general assistance to the Body Corporate for it to carry out
and perform its duties and obligations under the schedule.
22 The first agreement was replaced by an agreement which is in a different form than the first agreement.[7] The copy I was referred to is not signed by persons on behalf of the Body Corporate nor anyone on behalf of the Manager, however, there was no issue as between the Body Corporate and the Manager that it was the relevant agreement which governed their contractual relationship from the commencement day of that agreement, being 1 January 2005 (“the second agreement”).
[7] CB 46-53
23 In a similar way the thrust of Regulations 201 and 207 were incorporated into the second agreement. The following are all of the clauses in the second agreement to which both the Body Corporate and the Manager referred me:
"7. OBLIGATIONS OF BODY CORPORATE The Body Corporate must: 7.2 make the Manager aware of any defects in the Body Corporate property and make prompt decisions in relation to any necessary repairs and maintenance or other works ….
. . . 10. RESPONSIBILITY FOR REPAIRS AND MAINTENANCE
10.1
The Body Corporate is responsible under the Regulations for repair and maintenance of the Body Corporate Property. The Manager is not liable to the Body Corporate or to any other party in respect of any defects in the Body Corporate property, failure to comply with Building or other Regulations or town planning requirements or any need for repair or the existence of any danger or hazard unless –
10.1.1
it has been brought to the attention of the Manager and the Manager fails to take any steps within a reasonable time to make the Body Corporate aware of its need to make appropriate decisions in respect of and to raise funds for the necessary repairs and maintenance or other works, or
10.1.2
the Manager has been instructed to arrange for the repairs and maintenance or other works and sufficient funds are available for them to be carried out but fails to make such arrangements within a reasonable time.
10.2 The Manager is not required to –
10.2.1 inspect the Body Corporate Property, attend itself to any repairs, maintenance or other works, make itself aware of any defects in the Body Corporate Property, failure to comply with Building or other Regulations or town planning requirements or any need for repair or the existence of any danger or hazard."
24 I was also referred to Clause 5, which imposes obligations on the Manager set out in Schedule 1, and, in particular, to the following parts of that schedule:
“MAINTENANCE
Arrange for routine and minor (<$1,000) repairs and maintenance of
Body Corporate property
ADVICE
Provide general advice to the Body Corporate as to meeting procedures and the Regulations and as may otherwise be required for the Body Corporate to carry out and perform its duties and functions under the Act and the Regulations.”
25 The incident which befell the plaintiff occurred on 15 August 2005 and after the commencement of the second agreement, and therefore, it is that agreement which is relevant to determining the delineation of the specific obligations of the Body Corporate compared with those of the Manager.
26 There is no doubt that Regulations 201 and 207 define the functions of the Body Corporate and the obligations to undertake repair and maintenance of Body Corporate property.
27 There is no doubt that clause 10.1 of the second agreement reiterates the obligation imposed by Regulation 207 for the Body Corporate to undertake repair and maintenance of the Body Corporate property.
28 There is no doubt that the balance of clause 10.1 defines the position of the Manager as follows:
“(a) the Manager is not liable to the Body Corporate or to any other party in respect of any defects in the Body Corporate property … or any need for repair or the existence of the danger or hazard unless:
(i) under 10.1.1 it (being a defect or need for repair or existence of a danger or existence of a hazard) has been brought to the attention of the Manager; and (ii) the Manager fails to take steps within a reasonable time to make the Body Corporate aware of its need to make appropriate decisions etc; and (b) the Manager has been instructed to arrange for the repairs and maintenance or other works and sufficient funds are available for them to be carried out but fails to make such arrangements within a reasonable time.”
29 The work which clause 10.1 does is to establish that responsibility rests with the Body Corporate under the Regulations, and in this case, Regulation 207.
30 The obligations of the Manager under Clause 5 set out in Schedule 1 do not qualify or compromise that primary responsibility nor are in conflict with clause 10.1 just because the Manager can “arrange” for routine and minor repairs and maintenance of the Body Corporate property for repairs less than $1000.
31 It cannot be the case that the obligation to “arrange” the routine and minor repairs imposes on the Manager an obligation to inspect the Body Corporate property for the purpose of undertaking the Body Corporate’s responsibility under Regulation 207, or having the responsibility to determine whether there is a need for repair or the existence of any danger or hazard. That would create an immediate and irreconcilable conflict between the work which Clause 10.1 is expected to do and the obligation of the Manager under Schedule 1.
32 Although neither Mr Moulds or Mr Heath submitted what the word “arrange” means, Mr Moulds submitted that it was consistent with the Manager’s obligation to meet routine minor repairs and maintenance, carrying with it a responsibility to act as an active agent of the Body Corporate, whereas in answer to that submission, Mr Heath submitted that the question of maintenance, and also advice referred to in Schedule 1, must be interpreted consistently with Clause 10.1, and that Clause 10.1 is the prism through which other clauses and the obligations on the Manager in Schedule 1 should be interpreted, and therefore, the obligation to undertake repairs and maintenance did not impose any independent or discretionary responsibility on the Manager to determine whether repair or maintenance was required.
33 In my view, the interpretation of the word “arrange” must be determined by analysing what a Body Corporate is. A Body Corporate, it is trite to say, is a corporation which can only conduct its affairs through its elected members who make decisions for the benefit of the Body Corporate. If repair and maintenance of the Body Corporate property is required, no doubt that subject will be debated by the individual elected members. The end result of the debate is arriving at a decision whether the repair and maintenance should be undertaken, by whom and at what cost.
34 As a matter of convenience, where the repair and maintenance is both routine and minor, it does not impose an independent or discretionary function on the part of the Manager, but rather it is for the Body Corporate to determine for itself whether the repair and maintenance is required, and whether it is routine and minor, and then to divest itself of responsibility, if it so wishes, to determine who should undertake the repair and maintenance and at what cost, and to delegate the latter responsibility to the Manager.
35 I now turn to the matter of advice also referred to in Schedule 1, which is an obligation of the Manager. It is as follows:
“Provide general advice to the Body Corporate as to meeting procedures and the Regulations as may otherwise be required for the Body Corporate to carry out and perform its duties and functions under the Act and the Regulations."
36 The words “general advice” which the Manager is obliged to give the Body Corporate must qualify the words “meeting procedures” and “the Regulations” et cetera for the specific purpose of the Body Corporate meeting its obligations at law in order to carry out and perform its duties and functions under the Act and the Regulations.
37 The words “general advice” are not capable of being given a broader meaning to include giving advice relevant to the kind of risk to which the plaintiff was exposed when she entered the premises, and once again the interpretation of the advice to be given by the Manager to the Body Corporate must be interpreted in the same way as the maintenance obligation referred to in Schedule 1, and that is, that it is does not qualify or is in conflict with Clause 10.1, but must be interpreted through the prism of Clause 10.1.
38 Having looked closely at the second agreement and the evidence of Mr Keogh and Mr Miller, it occurs to me that the contractual relationship between the Body Corporate and the Manager was clearly one where the Body Corporate was responsible for making decisions relevant to repair and maintenance and the detection of existing dangers or hazards, and not the Manager. In a practical sense, if the Body Corporate made a decision relevant to repair and maintenance, or, for that matter, any other decision relevant to the administration of the Body Corporate, it would prevail upon the Manager to undertake its contractual obligation to execute that decision.
39 A clear illustration of that is the proposal of the cleaners engaged by the Body Corporate known as “The Minders” to the Manager to have a couple of rubber mats purchased for anti-slip purposes and to protect the tiles.[8]
[8] CB 85
40 Armed with that proposal, Mr Miller sent a facsimile transmission to Mr Nastasi, advising him that the suggestion of The Minders was a reasonable one and that he would proceed with the proposal unless Mr Nastasi had any concerns about the proposal.
41 Mr Miller was referred to the handwritten notation dated 3 June 2003 on the facsimile transmission, which reads:
“3/6/03 Ange OK no concerns. I told Minders on site.”
42 He agreed that the handwritten notation was made by him, which he said summarised the conversation he had with Mr Nastasi. He said that he authorised the purchase of the rubber mats. He said he knew nothing of the nature of the rubber mats purchased or of their size or where they were placed. He referred to an invoice rendered by The Minders to him which included a charge of $220 described on the invoice in the following way:
“2 x Foyer Mats as per verbal instructions from Jeff Miller.”[9]
[9] CB 337
43 At the time when this transaction occurred, the Body Corporate comprised only Mr Nastasi. This is obvious from the minutes of the meeting of the Body Corporate on 20 November 2002.[10]
[10] CB 69-70
44 It occurs to me that all the Manager was doing was to manage the affairs of the Body Corporate in an administrative sense, rather than having the responsibilities which the Body Corporate alleges that it had. This did not involve Mr Miller making an inspection or risk assessment. It was for the Body Corporate to undertake each of those steps consistent with both its statutory and contractual obligations.
The Evidence
45 I should firstly deal with the reliance by the Body Corporate on the incident which occurred on 15 August 2003 involving Ms Gloria Drummond. It did not involve a slip on tiles at the northern entrance to the premises. It involved Ms Drummond tripping on a step at the northern entrance.[11]
[11] The step is the same as the step at the southern entrance shown in photographs at CB 312-316 and 338, and also in the report of H L Burn & Associates, Consulting Engineers, at CB 295
46 Mr Miller said he made a file note in a diary of a report to him of the incident involving Ms Drummond.[12] Subsequently, he spoke to Dr Ginevra.[13] Mr Miller said that he was instructed to inform the Body Corporate insurers and to arrange for the installation of signage to warn persons entering the northern entrance.
[12] CB 242
[13] Dr Ginevra is the same person referred to as Mr Vincent Ginevra who executed the first agreement as a member of the Body Corporate: CB 237
47 Mr Miller said that the subject was raised at a special general meeting of the Body Corporate on 27 August 2003 and was taken up in the general business of the meeting.[14] The particular item of business was noted in the minutes as follows:
“WARNING SIGNS: it was agreed for MBCM to proceed with installation of step warning signs at the entrance to both foyers as quoted by Delta Neon.”
[14] CB 91-93, and particularly at CB 92
48 By the time the meeting was held, Mr Miller had communicated with Delta Neon by facsimile transmission dated 25 August 2003, indicating what signage was required and where it was to be positioned,[15] and in response, Delta Neon forwarded to Mr Miller a quotation which amounted to $116.60[16] which was presented to the meeting. Following approval that the signage was required, the Body Corporate approved its installation and gave instructions to Mr Miller to authorise Delta Neon to go ahead. By a facsimile transmission dated 29 August 2003, Mr Miller requested that Delta Neon proceed to install the signage.[17]
[15] CB 96
[16] CB 95
[17] CB 94
49 There were two matters which emerge from the incident involving Ms Drummond: firstly, the incident did not involve the tiles. To the extent that the Body Corporate relied upon the occurrence of that incident to suggest that the Manager had acquired knowledge of the risk that a person entering the southern entrance might slip and fall on the tiles, I reject that submission; s
50 Secondly, it is quite clear that the installation of signage was a relatively minor matter given that the cost was $116.60. It is evidence of the way in which the contractual relationship under the first agreement operated as between the Body Corporate and the Manager.
51 It is clear that it was at the instigation of Dr Ginevra that the Manager became involved to undertake the administrative tasks of informing the Body Corporate insurers and taking the necessary steps to investigate what signage was required, the appropriate tradesman to undertake the installation of signage and the cost of its installation, all of which was a matter for the Body Corporate to determine what it considered it should do, and having arrived at a conclusion, the Manager was given the responsibility of executing its instructions.
52 This is another example consistent with what I referred to in paragraphs 39-42 above of the way in which the contractual relationship operated in a practical sense.
53 The foregoing was the thrust of the evidence of Mr Miller, and to a large degree the evidence of Mr Keogh.
54 In summary, the relevant evidence of Mr Keogh was:
(a)
Mr Miller was elected to the committee of the Body Corporate and attended his first meeting on 27 August 2003.[18]
(b)
He had not entered the southern foyer before the incident which befell the plaintiff occurred.
(c)
He did not expect the Manager to look at the premises every day, and he said that no money was set aside for the Manager to undertake inspections of the premises.
(d)
He said that he expected the Manager to advise on dangers which might be present on the premises, but he did not define what he meant by dangers.
(e)
He said he was not aware of any owners or tenants residing or in occupation of the premises who had made any comment to him about the southern entrance.
(f)
He said there was no instrument of delegation to the Manager relevant to any repair or maintenance obligations or in relation to any other obligations.
(g)
He said that the Manager was asked to give advice about the Occupational Health and Safety Act 2004 (“the OHS Act”) in relation to the duties of persons who manage or control workplaces.[19] He said Mr Miller advised of the need for an expert to make a risk assessment of the premises.
(h)
He said that an expert was called in, and that he was not surprised by that event.[20]
(i)
He said he would have received a copy of the report of Link.[21] He said he recollected reading it and would have read a box in the body of the report numbered 2. He said he did not recollect asking the Manager to clarify the material contained in box numbered 2 and that there were no minutes of any meetings reflecting anyone asking the Manager for clarification of the material contained in box numbered 2.
(j)
He said he did not expect the Manager to second-guess the inspection of the premises by Link or its conclusions contained in its report.
(k)
He said that no-one expected the Manager to look into the southern foyer for any reason after the report of Link had been received.
[18] CB 91-93
[19] This was a specific reference to section 26 of the Act which imposed an obligation on a person, whether an owner or otherwise, who had management or control of the workplace to ensure, so far as was reasonably practicable, that the workplace and the means of entering and leaving it were safe and without risks to health. A failure by a body corporate to comply with the section carried the risk of prosecution and the imposition of a penalty of 9000 penalty units.
[20] The expert he referred to was Link
[21] CB 254-255
55 In summary, the relevant evidence of Mr Miller was as follows:
(a)
He said he advised that Body Corporate under the OHS Act. He referred to the minutes of a meeting of the Body Corporate on 1 September 2004 when this matter was raised.[22] He said that the Body Corporate resolved on that occasion to engage Link to undertake a risk assessment.
(b)
He said he engaged Link, which provided a report dated 16 November 2004. He said it was distributed to the members of the committee. He said no member of the committee asked him any questions about the report of Link. He referred to the invoice rendered by Link for its fees of $400 for conducting the risk assessment.[23]
(c)
He referred to the letter he sent to each member of the committee of the Body Corporate dated 27 January 2005 enclosing a copy of the report of Link and action taken or required arising from the report.[24] He said he was not asked to second-guess the report of Link.
(d)
He said that he did not take any steps relevant to the premises without instructions from the Body Corporate.
(e)
He said that after he received a copy of the Writ, he wrote to each unit owner by letter dated 5 July 2006 notifying them of the Writ and inviting the Body Corporate to have the tiles inspected and modified or covered in order to minimise any further risk factors.[25] He was referred to the minutes of the meeting of the Body Corporate on 18 July 2006, where reference was made to the Writ.[26]
(f)
He referred to his own file note dated 19 July 2006 in which he recorded other business of the meeting and his recommendation that a slip resistant paint be applied to the tiles, and that the instructions he was given were not to take any action pending the outcome of the claim and that he was instructed not to include those matters in the minutes.[27]
[22] CB 132
[23] CB 156
[24] CB 252-253
[25] CB 282
[26] CB 283-285
[27] CB 321
Submissions
56 I have dealt with the contractual relationship between the Body Corporate and the Manager in sufficient detail above to conclude that the first agreement was overtaken by the second agreement and is irrelevant to my considerations of the contractual relationship between the Body Corporate and the Manager.
57 I have also dealt with the delineation of the responsibilities of the Body Corporate imposed by statute and the responsibilities of the Body Corporate imposed by the second agreement and those of the Manager delineated by the second agreement.
58 What remains is to determine whether the Manager was in breach of a duty of care and was negligent.
59 Mr Moulds submitted that in addition to the obligation to undertake maintenance and advice, that there are regulations which establish that a duty of care was owed in the circumstances.
60 Mr Moulds referred me to Regulation 303(2) which, upon the appointment of a manager by Regulation 302(1), is required to hold:
“… insurance to indemnify the manager against any claim is due to the negligence of the manager or the manager's employees arising from their actions on behalf of the body corporate.”
61 He submitted that Regulation 303(2) contemplated claims in negligence against the Body Corporate. That is obviously the case.
62 Mr Moulds referred me to definitions of “manage” and “manager” from The Macquarie Dictionary for the purpose of submitting that by reason of those definitions the role of the Manager is to manage the affairs of the Body Corporate in a much broader sense and scope than that contended for by the Manager.
63 Firstly, the reliance on Regulation 303(2) in isolation or in combination with the definitions of “manage” and “manager” does not assist the Body Corporate. To endeavour to derive from the Regulation that the requirement for insurance means that a duty of care is owed at common law relevant to the risk to which the plaintiff was exposed is to read into the Regulation more than the work it is expected to do.
64 The requirement to have insurance is no doubt to protect the victims of the Manager’s negligence from an impecunious manager, and there is no doubt in my mind that the Manager owed a duty of care, but not in the way submitted by Mr Moulds. It occurs to me that if the Manager, for instance, had been instructed to take a step to eliminate a risk identified by the Body Corporate and it failed to do so, resulting in injury to a person entering the Body Corporate property, then he would be liable for breach of a duty of care and in negligence. The Regulation contemplates no more than he would have insurance to indemnify him against such a claim.
65 The definitions from The Macquarie Dictionary have limited relevance. The definitions do no more than inform me of what a manager does when a manager engages in undertaking the task of managing. The definitions do not assist in determining the limits of what a manager does when engaging in the task of managing. General knowledge of what a manager does and what it is to manage is all very well, but I do not see that the definitions inform me of anything which I did not know before the definitions were referred to. The specifics of what a manager does and what it is to manage must then be determined by the contractual arrangement between the manager and the person engaging the manager to undertake management.
66 Mr Moulds sought to derive some benefit from the episode involving The Minders proposing that a couple of rubber mats be purchased for anti-slip purposes and to protect the tiling at the southern entrance. In essence, Mr Moulds submitted that the Manager acquired knowledge of the state of the tiles being a risk to a person entering the southern entrance, and by reason of the acquisition of that knowledge, he knew or ought to have known that there was a reasonably foreseeable risk to someone like the plaintiff.
67 That submission ignores the statutory duty imposed on the Body Corporate, which I have analysed and discussed above based upon Regulations 201 and 207, and the conclusions I have reached that essentially the Manager occupied an administrative role and was there to execute the directions of the Body Corporate, and, of course, to advise the Body Corporate on such matters as affected its liability, for instance, under Section 26 of the OHS Act.
68 It is clear enough to me from the second agreement and the minutes of meetings I have referred to above that where action was suggested, it was for the Body Corporate to decide what action it would take and then have Manager execute that direction.
69 It is conceivable that if the Manager made a suggestion gratuitously that there was some risk which needed attention, that the Body Corporate could reject the suggestion. What then would be the position of the Manager? Would the Manager be required to go and do something to eliminate the risk? How could he do that against the decision of the Body Corporate? In this case, the Body Corporate new that rubber mats had been placed at the entrances and it was for it to decide whether there was a risk which was adequately eliminated by the placing of rubber mats or that something else should be done to eliminate the risk, not the Manager.
70 In the course of his submissions, Mr Moulds referred me to a number of authorities. He referred me to Voli v Inglewood Shire Council[28] and to the judgment of Windeyer J, who held that the terms of an architect's engagement and a building contract did not operate to discharge an architect from a duty of care; however, the facts upon which his observations were based are in stark contrast to the facts of this case.
[28] (1963) 110 CLR 74
71 In Voli a stage collapsed in the respondent’s shire hall due to the floor joists being of insufficient size to support the floor with a large number of people on it. The hall had been built in accordance with the plans and specifications of a qualified and experienced architect. It is understandable, on these facts, why Windeyer J observed that the terms of the architect's engagement and a building contract could not operate to discharge him from a duty of care to persons who were strangers to the contract. He also observed that the contract with the building owner is not irrelevant because, and he made this observation by example, if the architect designed a stage to bear only a specified weight then he would not be liable for the consequences if someone thereafter negligently permitted greater weight to be put on it.[29]
[29] at 85
72 Voli is clearly distinguishable on its facts from the present case. In Voli the architect was directly involved in the construction of the stage through the provision of plans and specifications, whereas the Manager had nothing whatsoever to do with design of the southern entrance of the premises. The only basis upon which it is said that Manager is liable is contractually, and I have dealt with that at length, and through the acquisition of knowledge when The Minders suggested the provision of a couple of rubber mats. I have also dealt with that at length.
73 The other authorities of Hill v Van Erp,[30] which was a proceeding against a solicitor who prepared a will and had the husband of an intended beneficiary attest to it which rendered the will null and void under the Succession Act 1981 (Qld);[31] Hawkins v Clayton[32] which was a proceeding against a solicitor who made no attempt to locate the executor of the testatrix’s will until March 1981 when she had died January 1997, and Suncorp Metway Insurance Ltd v Landridge Pty Ltd, which was a proceeding brought by a tenant against the landlord and the real estate agent as a result of the tenant suffering injury at the tenanted premises with the real estate agent’s liability based upon the failure to pass on a complaint by the tenant regarding the defect in the premises which ultimately was the cause of the tenant’s injury.[33]
[30] (1997) 188 CLR 159
[31] (supra) at 182
[32] (1998) 164 CLR 539
[33] [2005] VSCA 223, at paragraphs 9 and 19-21 and 30-32
74 Those authorities are also distinguishable from the facts of this case for the same reasons as I consider that Voli is distinguishable from this case. The nature of the relationship between the parties in those authorities spoke of circumstances where a duty of care was undoubtedly owed, irrespective of the existence of a contractual relationship.
75 Mr Heath referred me to Hawkins v Clayton,[34] and in particular to the joint judgement of Mason CJ and Wilson J, where they observed:
"It is clear that any relationship of proximity that exists in this case would not have arisen but for the professional relationship between the respondents and the testatrix. In determining the precise nature of the relationship giving rise to the alleged duty of care, we find it helpful to start with the contract under which the will was drawn and retained in the custody of the respondents. It is that contract which ‘indicate[s] the nature of the relationship that gives rise to the common law duty of care’ (Central Trust Co v Rafuse (1986) 31 DLR (4th) 481 at 521): cf Bowen v Paramount Builders [1977] 1 NZLR 394, per Richmond P, at 407. It was said by Windeyer J in Voli v Inglewood Shire Council (1963) 110 CLR 74 at 85, in the context of ascertaining the duty of care which an architect owes to one who is a stranger to the contract between the architect and the building owner, that the contract ‘is not an irrelevant circumstance. It determines what was the task upon which [the architect] entered.’ So it is here. In the case of solicitors, the remarks of Oliver J in Midland Bank Trust Co Ltd v Hett, Stubbs and Kemp [1979] Ch 384 at 402–3, are particularly pertinent:
‘The extent of [a solicitor's duties to his client] depends upon the terms and limits of [the] retainer and any duty of care to be implied must be related to what he is instructed to do.
Now no doubt the duties owed by a solicitor to his client are high, in the sense that he holds himself out as practising a highly skilled and exacting profession, but I think that the court must beware of imposing upon solicitors — or upon professional men in other spheres — duties which go beyond the scope of what they are requested and undertake to do.’
… .”[35]
[34] (supra)
[35] (supra) at 544
76 Although in the minority, the principle enunciated by Mason CJ and Wilson J was not a controversial one. Mr Heath referred me to an observation of Deane J, who was in the majority, where he said:
"The existence or content of a duty of care owed by a professional man to his client under the common law of negligence can, subject to the possible effect of particular overriding policy considerations or statutory provisions, be excluded or modified by the terms of any contract between them. As has been seen, there was no express term of the contract between the firm and the testatrix which could be construed as having directly or indirectly had such an effect in the present case. It is necessary, at this stage to return to the question of the identification of any relevant implied terms of that contract."[36]
[36] (supra) at 582
77 These observations are directly relevant to the contractual relationship between the Body Corporate and the Manager. Unlike the earlier authorities I have referred to, the second agreement established the precise terms upon which both the Body Corporate and the Manager were to work. The observations of Oliver J, quoted with approval by Mason CJ and Wilson J, capture the conclusion I have reached concerning the relationship between the Body Corporate and the Manager, that the second agreement establishes the terms of their relationship and delineated the limits of the Manager's engagement, to the extent that any duty of care owed by him can only be related to what he was contractually obliged to do.
78 The conclusion I have reached, which I have stated on a number of occasions already, is that Regulations 201 and 207 impose obligations upon the Body Corporate, which obligations are reiterated in the second agreement, making it crystal clear the precise position of the Body Corporate and the limitations on the responsibilities of the Manager through Clause 10 which is the prism through which the Manager's obligations under Clause 5 and Schedule 1 are to be defined.
Conclusion
79 For the reasons set out, above I dismiss the third party proceeding and I enter judgement for first third party against the defendant.
80 After discussion with counsel, I will pronounce formal orders and will hear the parties on the question of costs.
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