Ylisalo v Moodie
[2019] ACTMC 36
•27 November 2019
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Ylisalo v Moodie & Ors |
Citation: | [2019] ACTMC 36 |
Hearing Date: | 30 October 2019 |
DecisionDate: | 27 November 2019 |
Before: | Special Magistrate McCarthy |
Decision: | See [68] |
Catchwords: | PRACTICE AND PROCEDURE – PRELIMINARY DISCOVERY – application alleging failure to provide documents pursuant to s 68(1)(a)(i) of the Civil Law (Wrongs) Act 2002 (ACT) – whether documents produced were “about the accident” within the meaning of s 68(1)(a)(i) – whether the first defendant breached s 68(1)(a)(i) by late production of documents – application dismissed PRACTICE AND PROCEDURE – application for summary judgment – strike out – whether threshold for summary judgment is met – where plaintiff’s claim against first defendant gives rise to a real question to be determined – application dismissed PRACTICE AND PROCEDURE – application for summary judgment – strike out – where second defendant did not exist at the time of the accident – consideration of possible pre-incorporation contract – consideration of plaintiff’s potential future claim being statute barred – plaintiff’s claim against second defendant struck out |
Legislation Cited: | Associations Incorporation Act 2009 (NSW) s 27 Civil Law (Wrongs) Act 2002 (ACT) ss 68, 214 Companion Animals Act 1998 (NSW) Corporations Act 2001 (Cth) s 131 Court Procedures Rules 2006 (ACT) r 425 Domestic Animals Act 2000 (ACT) s 55 Limitation Act 1985 (ACT) s 16B Personal Injuries Proceedings Act 2002 (Qld) s 27 |
Cases Cited: | Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541 Cleary v Rinaudo [2013] ACTCA 32; 8 ACTLR 71 Connell v Australian Capital Territory [2019] ACTSC 307 DJ v RHS [2004] ACTSC 12; 182 FLR 76 Galea v Gillingham [1986] 2 Qd R 365 Haug v Jupiters Ltd [2007] QCA 199; [2008] 1 Qd R 276 Higgins v William Inglis & Son Pty Ltd [1978] 1 NSWLR 649 Howard v Lapwood [2018] ACAT 123 Whithear v Australian Capital Territory [2019] ACTSC 195 |
Texts Cited: | R P Austin & I M Ramsay, Ford’s Principles of Corporations Law (LexisNexis Butterworths, 15th ed, 2013) Commonwealth of Australia, Review of the Law of Negligence: Final Report (2002) |
Parties: | Lisa Ylisalo (Plaintiff) Debra Moodie (First Defendant) Pound Rescue Incorporated (Second Defendant) Brent Trenear (Third Defendant) |
Representation: | Counsel D Richards (Plaintiff) W Sharwood (First Defendant) A Costin (Second Defendant) |
| Solicitors Maliganis Edwards Johnson (Plaintiff) Elringtons (First and Second Defendants) | |
File Number(s): | CS 167 of 2019 |
SPECIAL MAGISTRATE McCARTHY:
By statement of claim dated 1 August 2019, the plaintiff alleges that on 4 August 2016 she was walking her dog on a pedestrian footpath in the suburb of Rivett. She alleges that another dog, later identified as a Staffordshire Bull Terrier with the unfortunate name “Lucky”,[1] was walking on the footpath without any care, control or supervision. The plaintiff alleges that Lucky attacked her dog, and then bit her while she was attempting to protect her dog and herself from Lucky.
[1] Affidavit of Deborah Moodie affirmed 15 October 2019, annexure "F".
The plaintiff brings a claim in negligence against the first, second and third defendants claiming damages for personal injury arising from the attack.
The plaintiff sues the first defendant as the (alleged) owner of Lucky.[2] She alleges that the first defendant “provided dog rehoming services”, meaning that the first defendant placed dogs “for a period of time into the care and control of another person.”[3] The plaintiff alleges that the first defendant rehomed Lucky with the third defendant at his residence in Rivett.[4] She alleges (in substance) that, when doing so, the first defendant owed the plaintiff a duty of care to ensure that any person who was temporarily caring for Lucky “could reasonably care, control, house and restrain Lucky” because the first defendant knew or ought to have known that if Lucky escaped she may “attack or bite persons” including the plaintiff who live near the third defendant’s residence.[5]
[2] Statement of claim, paragraph 1.4
[3] Statement of claim, paragraph 1.2
[4] Statement of claim, paragraph 1.6
[5] Statement of claim, paragraph 2.7
The plaintiff alleges that the first defendant breached her duty of care because she knew or ought to have known that the third defendant’s residence could not adequately prevent Lucky from escaping,[6] and that if Lucky escaped persons including the plaintiff would be “at the risk of a dog attack by Lucky”, as occurred.
[6] Statement of claim, paragraph 2.1
The plaintiff sues the second defendant on the same grounds that it sues the first defendant, save for the allegation that the first defendant owned Lucky.
The plaintiff sues the third defendant on the grounds that he too owed the plaintiff a duty of care to prevent Lucky from escaping because he too knew or ought to have known that if Lucky escaped he may “attack and bite persons” and that he breached his duty of care because he knew or ought to have known that his residence could not reasonably prevent Lucky from escaping (and by failing to prevent Lucky from escaping) which put persons including the plaintiff at risk of attack by Lucky, as occurred. As at 30 October 2019, the third defendant had not been served with the plaintiff’s claim.
The applications
On 30 October 2019, I heard three applications:
1. An application made by the plaintiff for orders that the first defendant failed to fully comply with her obligations under s 68(1)(a)(i) of the Civil Law (Wrongs) Act 2002 (the Wrongs Act).
2. An application made by the first defendant for summary judgment against the plaintiff or, in the alternative, an order that the plaintiff’s claim against the first defendant be struck out as disclosing no reasonable cause of action.
3. An application made by the second defendant for summary judgment against the plaintiff or, in the alternative, an order that the plaintiff’s claim against the second defendant be struck out.
The plaintiff’s application
Section 68(1)(a) of the Wrongs Act states:
68 Respondent to give documents etc to claimant
(1) A respondent must give a claimant—
(a)copies of the following in the respondent’s possession that are directly relevant to a matter in issue in the claim:
(i) reports and other documents about the accident claimed to have given rise to the personal injury to which the claim relates;
(ii) reports about the claimant’s medical condition or prospects of rehabilitation;
(iii) reports about the claimant’s cognitive, functional or vocational capacity; and
Section 68(2) and (3) state the time periods within which a respondent must give documents described in s 68(1) to the claimant. Section 68(4) enables the claimant to require a respondent to verify information it has provided. Section 68(5) states that if a respondent fails, without proper reason, to comply fully with s 68 the respondent is liable for costs to the claimant resulting from the failure.
The Supreme Court has handed down several decisions over the years regarding s 68. However, (as best I can tell) they have all arisen from an application for an order that the respondent provide documents that it has not provided and is unwilling to provide. The applications were decided according to the Court’s determination, in each case, about the ambit or kind of documents that must be produced pursuant to s 68. I refer, for example, to Cleary v Rinaudo [2013] ACTCA 32; 8 ACTLR 71, Whithear v Australian Capital Territory [2019] ACTSC 195 (‘Whithear’) and Connell v Australian Capital Territory [2019] ACTSC 307.
The plaintiff’s application in this case does not seek an order of that kind. It seeks the following order:
The First Defendant has failed to fully comply with her obligations, under section 68(1)(a)(i) of the Civil Law (Wrongs Act 2002 (ACT) (Act), to provide the Plaintiff or the Plaintiff’s Solicitors with documents, that were in her possession, directly relevant to matters in issue in the claim (emphasis added).
The plaintiff did not claim that the first defendant is withholding documents that she must produce. The order sought arises from the plaintiff’s complaint about late production of documents that she has produced.
The plaintiff relies on the affidavit of Ms Martiniello, solicitor, who has carriage of the matter on behalf of the plaintiff. In her affidavit, Ms Martiniello refers to an affidavit of Ms Flood, the secretary and public officer of the second defendant, sworn 4 October 2019 which contains 10 annexures. Ms Martiniello states that the plaintiff had not, prior to 14 October 2019,[7] seen seven of those ten annexures. Ms Martiniello does not identify which annexures the plaintiff had not previously seen. Ms Martiniello also refers to an affidavit of the first defendant affirmed 15 October 2019, which contains 22 annexures. Ms Martiniello states that, prior to 15 October 2019, the plaintiff had not seen 16 of the 22 annexures. She also states that four of the six annexures previously seen were “pieces of correspondence authored by the plaintiff’s solicitors”.
[7] I presume the reference to 14 October 2019 should be a reference to 4 October 2019.
Ms Martiniello states that the first and second defendants withheld information (which I presume to be the information that was not disclosed until the plaintiff received the affidavits of Ms Flood and the first defendant) which, she said, “would have assisted greatly in determining the appropriate defendants to the plaintiff’s pleadings”. Ms Martiniello states that the plaintiff has been “severely prejudiced” by the first defendant’s and second defendant’s (alleged) breach of s 68.
Referring to the first order sought in the application, Mr Richards explained that the plaintiff was not seeking declaratory relief, as it seemed on the face of the application. Rather, he was seeking a finding that the first defendant breached (or, to use the language of the subsection, failed to comply fully with) s 68 and so should pay the plaintiff’s costs resulting from the failure.
Mr Richards referred to many documents that are annexures to the affidavits of Ms Flood and the first defendant, which I accept had not been seen previously by the plaintiff, that relate to the ownership of Lucky and Lucky’s transfer from the Taree Pound to the third defendant.
Mr Richards referred to the Domestic Animals Act 2000 (ACT) (the DA Act) pursuant to which the “keeper” of an unregistered dog is defined to mean the owner of the dog. He then referred to s 55 of the DA Act, which provides that if a person suffers personal injury from a dog attack, the keeper is liable to pay the person injured any loss or compensation.
This may all be so, but s 68(1)(a)(i) did not require the first defendant to provide the plaintiff with documents in her possession generally that may or might be relevant to the claim, and especially not documents to assist the plaintiff in determining who she should sue. Section 68(1)(a)(i) required the first defendant to give the plaintiff documents in her possession “about the accident”.
In my view, none of the documents recently produced by the first defendant could be regarded as “documents about the accident claimed to have given rise to the personal injury”.
In Whithear, handed down on 30 July 2019, his Honour Crowe AJ commented on the “extent of the obligation imposed by” s 68. In the absence of any ACT authority that he could find, his Honour referred to the decision of the Queensland Court of Appeal in Haug v Jupiters Ltd [2007] QCA 199; [2008] 1 Qd R 276 (‘Haug’) in which that Court commented on the ambit of s 27(1)(a)(i) of the Personal Injuries Proceedings Act 2002 (Qld). His Honour Crowe AJ described the substance of that section to be “indistinguishable” from s 68(1)(a)(i) of the Wrongs Act.[8] His Honour noted the observation of his Honour Jerrard JA in Haug that s 27(1)(a)(i) required that the directly relevant documents be “about the incident”. Jerrard JA described this as “a limiting requirement”. Drawing on the Oxford English Dictionary definition of “about”, meaning “in connection with”, “on the subject” of, or “in relation to”, his Honour Jerrard JA concluded that most of the documents that the claimant sought were “demonstrably not” documents “about the incident”.[9]
[8] Whithear [2019] ACTSC 195 at [9].
[9] Haug [2007] QCA 199; [2008] 1 Qd R 276 at [23], quoted in Whithear [2019] ACTSC 195 at [11].
His Honour Crowe AJ found that the use of the word “accident” in s 68(1)(a)(i), rather than “incident”, made no difference to his Honour Jerrard JA’s analysis, and stated that the phrase “about the accident” is “one of limitation”.[10]
[10] Whithear [2019] ACTSC 195 at [13].
In Whithear, the applicant was claiming compensation from the Territory for injuries he suffered when he fell from his bicycle whilst participating in triathlon training. The Territory occupied and managed Stromlo Forest Park where the accident occurred. The applicant contended that the Territory was required, pursuant to s 68(1)(a)(i), to produce documents “about the contracts for and funding of the [triathlon] circuit, prior risk assessments, and prior incidents resulting in personal injury and the like”. His Honour ruled that those documents fell well outside the scope of “about the accident”.
Following his Honour Crowe AJ’s reasoning in Whithear and his Honour Jerrard JA’s reasoning in Haug, in my view all the documents concerning Lucky’s transfer from Taree to Canberra or about who owned Lucky at different times or his re-housing at the third defendant’s residence are, as Ms Martiniello states, about who could be potentially liable for the dog attack, but they are not “about the accident”. It follows that the plaintiff’s application should be dismissed. Costs should follow the event.
The first defendant’s application
The first defendant contended that the plaintiff’s statement of claim does not disclose that she owed the plaintiff a duty of care. She further contended that even if she owed the plaintiff a duty of care, the statement of claim does not disclose a reasonable cause of action. She also contended the statement claim is “frivolous or vexatious” and that there is a good defence to the claim on the merits.
The first defendant submitted that, for these reasons, the Court should strike out the plaintiff’s claim against her pursuant to rule 425 of the Court Procedures Rules 2006 (ACT).
The principles governing summary judgment applications are well-settled. They are set out by her Honour Jagot J in her decision Galovac Pty Ltd v Australian Capital Territory [2010] ACTSC 132 at [5] (‘Galovac’). Her Honour confirmed, for example, that as soon as it appears that there is a real question to be determined on which relief depends, the summary judgment procedure is not available. Improbability of success is insufficient. There must clearly be no real question to be tried in the sense that the claim is bound to fail. The application must be assessed on the assumption that every fact pleaded by the plaintiff is true. The application must be determined on the substance, not the mere form or expression, of the claim.
As Mr Sharwood noted, pursuant to s 214 of the Wrongs Act, the common law rules relating exclusively to liability for damages in tort for damage caused by a dog (or any other animal) have been abolished. He submitted that the defendants’ liability must therefore be determined according to ordinary principles of negligence.
Mr Sharwood submitted, on that basis, that liability lies firstly with the keeper of a dog (meaning the person who controlled it) and not the owner, although he accepted that there are cases where an owner not in control of an animal has been found liable for injury caused by the animal where there was something about the nature of the animal that raises the possibility of harm.[11]
[11] See Higgins v William Inglis & Son Pty Ltd [1978] 1 NSWLR 649.
He submitted that in order to succeed on a claim in negligence, the plaintiff needs to prove that the dog had at least “a special propensity”, or that there were “special circumstances” relating to the dog that the defendant ought to have foreseen as a risk of injury to the plaintiff. He relied upon a decision of the Queensland Court of Appeal in Galea v Gillingham[12] in support. He submitted that it is not enough to prove a failure by a defendant to guard against the possibility that a tame animal of mild disposition will do some dangerous act contrary to its ordinary nature.
[12] [1986] 2 Qd R 365.
Mr Sharwood then relied on the first defendant’s affidavit affirmed 15 October 2019 in which she states that “not less than 5 persons” understood that Lucky was not an aggressive dog and did not have any “special propensity” to attack.[13] He submitted that the first defendant could not have foreseen that the plaintiff was at risk of harm from Lucky. He also submitted that the first defendant did not have a duty of care to assess the suitability of the third defendant’s residence for housing Lucky.
[13] Exhibit FD1. The affidavit was taking without objection, and (appropriately) no one sought leave to cross-examine the first defendant.
In my view, assuming for present purposes that the propositions of law that Mr Sharwood states are correct, the pleadings and the affidavit evidence of the first defendant make plain that there are material and difficult questions of fact and degree to be decided. It cannot be said, at this point, that the plaintiff’s claim against the first defendant is bound to fail.
I start with Lucky. Referring to what appears to be a fact not in dispute, Lucky bit the plaintiff while she (the plaintiff) was walking on a public footpath. Referring to the first defendant’s affidavit, on 4 August 2016 ACT Domestic Animal Services (DAS) impounded Lucky following the attack. The first defendant states in her affidavit that DAS “intended to commence proceedings to have Lucky declared a dangerous dog which would likely result in Lucky being destroyed”. Why would DAS have that intention if it did not consider Lucky to be dangerous? The first defendant states that DAS did not proceed to have Lucky declared a dangerous dog, but I also note that Lucky was transferred to a “trusted volunteer and foster carer” in New South Wales.
I understand that the first defendant disputes that Lucky is or could be aggressive, but there are sufficient facts that make it at least arguable that she could be. It follows that a “real question to be determined” is whether Lucky was, at the time the plaintiff was bitten, a danger to people. It is a question for determination on the evidence.
I make the same observation about whether the first defendant knew or ought to have known that Lucky posed a risk to people: it is a question for determination at trial. Also, following Galovac, I am bound to proceed on the basis that the plaintiff’s pleading that the first defendant knew or ought to have known that Lucky posed a risk is true.
I accept that the statement of claim is, with respect, not a model of good pleading, but the substance of the claim is reasonably clear. For example, I accept that the plaintiff nowhere pleads the duty of care that the first defendant owed the plaintiff, but it is implicit in paragraph 1.5. The words “were responsible for ensuring” could be readily substituted with the words “had a duty of care to ensure”.
I accept too that the plaintiff does not plead, expressly, that the first defendant knew or ought to have known that Lucky might attack persons including the plaintiff, but that is implicit in paragraph 2.1 and other paragraphs. The plaintiff pleads that the first defendant breached her duty of care by rehoming Lucky with the third defendant when she knew, or ought to have known that the third defendant’s residence “could not adequately prevent Lucky from escaping, putting persons including the plaintiff … at the risk of a dog attack by Lucky”. A duty of care to prevent Lucky escaping could only make sense if people were put at risk of a dog attack if she did.
The submission that the first defendant was the owner, not the keeper, of Lucky and therefore could not be liable unless there was something about Lucky that raised the possibility of harm to others is also problematic in the context of a summary judgment application. Referring to Mr Sharwood’s submission about the respective liabilities of an owner and keeper, the very fact that Lucky escaped and bit the plaintiff (who, it seems, was simply out walking her dog in a public place) begs the question whether there was something about Lucky’s nature that should have alerted the first defendant to the possibility of harm to others.
There is also a statutory context to consider. As Mr Richards pointed out, pursuant to s 55 of the DA Act, where a dog attacks a person and the person suffers personal injury, the keeper of the dog “is liable to pay to the person … compensation for any loss or expense because of the attack”. “Keeper” is defined in the Dictionary to the DA Act. In the case of an unregistered dog (meaning unregistered for the purposes of the DA Act), as Lucky may have been at the time of the attack, the “keeper” is the “owner of the animal”. The first defendant states in her affidavit that she was the owner of Lucky. Difficult questions arise about the interaction between the statute and the common law of negligence regarding the respective responsibilities of an owner and a keeper of a dog. Questions also arise as to whether the third defendant was a “carer” or a “keeper” of Lucky.
I refer at this point to the decision of the ACT Civil and Administrative Tribunal in Howard v Lapwood.[14] That decision involved the respective responsibilities of four different respondents arising from dogs that had been re-housed in rented premises, that escaped from the premises and then bit the applicant. The decision has many factual similarities to the present case and illustrates how complex the respective liabilities of persons with one connection or another with a dog can be.
[14] [2018] ACAT 123 per Senior Member Beacroft.
Referring to the principles stated in Galovac, Howard v Lapwood also demonstrates why, in my view, there our real questions to be determined regarding the first defendant’s liability for Lucky’s attack on the plaintiff. It follows that the first defendant’s application should be dismissed. Costs should follow the event.
The second defendant’s application
Ms Costin made the short but powerful submission that the plaintiff’s claim against the second defendant should be dismissed on the grounds that the second defendant did not exist at the time Lucky (allegedly) bit the plaintiff and that the second defendant had “no involvement with rescuing the dog named Lucky”.
Ms Costin relied on the affidavit of Ms Flood sworn 4 October 2019, in which she states that she is the secretary and public officer of the second defendant. Ms Flood states that in September 2016 she and four other persons decided to form a voluntary ‘not for profit’ organisation “to rescue animals that were at imminent risk of being killed in council pounds”.
Ms Flood states that in September 2016, they reserved the name “Pound Rescue Incorporated” with NSW Fair Trading. She states that on 6 October 2016, Pound Rescue Incorporated was registered as an association under the Associations Incorporation Act 2009 (NSW) (the AIA Act). Ms Flood attached a copy of the second defendant’s certificate of incorporation confirming its incorporation on that date.
Mr Richards accepted that the second defendant was incorporated on 6 October 2016, many months after Lucky bit the plaintiff, but submitted that for the purpose of responding to the second defendant’s application for summary judgment it is at least arguable that the second defendant carries some responsibility for the attack. Mr Richards relied on s 131 of the Corporations Act 2001 (Cth) (‘Corporations Act’) and/or s 27 of the AIA Act.
Section 131 of the Corporations Act states:
131 Contracts before registration
(1) If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a company before it is registered, the company becomes bound by the contract and entitled to its benefit if the company, or a company that is reasonably identifiable with it, is registered and ratifies the contract:
(a)within the time agreed to by the parties to the contract; or
(b)if there is no agreed time—within a reasonable time after the contract is entered into.
(2) The person is liable to pay damages to each other party to the pre‑registration contract if the company is not registered, or the company is registered but does not ratify the contract or enter into a substitute for it:
(a)within the time agreed to by the parties to the contract; or
(b)if there is no agreed time—within a reasonable time after the contract is entered into.
The amount that the person is liable to pay to a party is the amount the company would be liable to pay to the party if the company had ratified the contract and then did not perform it at all.
(3) If proceedings are brought to recover damages under subsection (2) because the company is registered but does not ratify the pre‑registration contract or enter into a substitute for it, the court may do anything that it considers appropriate in the circumstances, including ordering the company to do 1 or more of the following:
(a)pay all or part of the damages that the person is liable to pay;
(b)transfer property that the company received because of the contract to a party to the contract;
(c)pay an amount to a party to the contract.
(4) If the company ratifies the pre—registration contract but fails to perform all or part of it, the court may order the person to pay all or part of the damages that the company is ordered to pay.
Section 27 of the AIA Act states:
27 Pre-registration contracts
(1)Contracts entered into before an association is registered under this Act are declared to be an applied Corporations legislation matter, for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001, in relation to Part 2B.3 of the Corporations Act 2001 of the Commonwealth.
(2)In subsection (1), the reference to an association does not include a reference to an association arising from the registration of an unincorporated body, the amalgamation of 2 or more associations or the registration of a registrable corporation.
Note.
Contracts entered into by an association arising from the registration of an unincorporated body or the amalgamation of 2 or more associations are unaffected by registration (see section 8 and Schedule 2) as are those of an association arising from the registration of a registrable corporation (see section 9).
Mr Richards’ argument appeared to entail the following steps. First, he relied on the first defendant’s affidavit in which she states that in mid-July 2016 she arranged for Lucky to be re-homed or at least re-housed with the third defendant.
Mr Richards then relied on a “Change of Owner/Details Form” dated 29 July 2016 lodged with the Taree Pound detailing Lucky’s current and new owner details.[15] The form is used under the Companion Animals Act 1998 (NSW) for changing recorded details about the ownership of a dog.
[15] The first defendant states in her affidavit that the form was backdated to 29 July 2016 to enable her to claim she was Lucky's owner and therefore defend DAS’s intention to declare Lucky to be a dangerous dog. The first defendant states that the form was in fact completed sometime after 12 August 2016, but in my view (if true) the backdating is not relevant for present purposes.
The first defendant states that another person (Ms Johnston) completed the form on behalf of the first defendant. Under the heading “New owner details”, in response to question 14 stating “Name of organisation if applicable”, Ms Johnston wrote “Pound Rescue”. In her responses to questions 15–21, Ms Johnston wrote the first defendant’s name and contact details. In response to question 24 stating “Signature of new owner nominated at questions 16 to 17”, Ms Johnston wrote “signed on behalf of Pound Rescue”.
Mr Richards submitted that, on the face of the change of ownership form, it is arguable that the first defendant did not take ownership of Lucky personally, but on behalf of “Pound Rescue”, and that it is therefore arguable that the first defendant’s placement of Lucky with the third defendant was also on behalf of “Pound Rescue”. He then submitted that the status of “Pound Rescue” is unclear and could be an unincorporated organisation that subsequently became the second defendant.
Mr Richards then submitted it is arguable that Lucky’s placement with the third defendant occurred as a matter of contract between the second and third defendants because the first defendant contracted with the third defendant, not personally, but on behalf of the second defendant.
Mr Richards then drew on s 27 of the AIA Act to submit that it is arguable that the second defendant is liable because of the “pre-incorporation” contract that it entered into with the third defendant.
I am prepared to accept, notwithstanding Ms Flood’s affidavit evidence to the contrary, that it is at least arguable with reliance on the change of ownership form that the first defendant took ownership of Lucky on behalf of an unincorporated organisation that called itself “Pound Rescue”. I am also prepared to accept it might be arguable that, on behalf of that unincorporated organisation, she entered into an agreement with the third defendant to house Lucky.
However, I was not persuaded that those facts, if proved, could raise an arguable case by the plaintiff against the second defendant.
Austin and Ramsay, in their work Ford’s Principles of Corporations Law, note that ss 131–133 of the Corporations Act “are derived from provisions first enacted in 1981, [and] are designed to meet inadequacies in the enacted law about pre-incorporation contracts”.[16] The sections enable the company, once incorporated, to ratify contracts formed prior to incorporation; to enable a person who entered into a pre-incorporation contract to claim compensation from the person who entered into the contract on behalf of the yet to be formed company when the company does not ratify the contract or does not enter into a substitute contract; and to withhold from the person who entered into a pre-incorporation contract all rights and liabilities in relation to the contract other than those provided by ss 131–133.
[16] R P Austin & I M Ramsay, Ford’s Principles of Corporations Law (LexisNexis Butterworths, 15th ed, 2013) 968–9 [15.200].
Section 27 of the AIA Act, in summary, adopts the statutory rights and liabilities provided for under ss 131–133 (which are within Part 2B of the Corporations Act) for the purposes of an association formed under the AIA Act.
This statutory structure to enable enforcement of pre-incorporation contracts, in my view, does not assist the plaintiff. The plaintiff sues the second defendant in tort, not contract. Even if the plaintiff were to prove the existence of a pre-incorporation contract that the first defendant entered into on behalf of the second defendant, and then prove that (under the contract) the second defendant accepted a contractual duty of care of some kind regarding Lucky, it would still not assist the plaintiff. Section 27 of the AIA Act preserves the rights and liabilities of parties to a contract and enables the parties and the association to enforce those rights and liabilities after the association is incorporated. It does not create third party rights in tort against an association that did not exist at the time the tort occurred.
Mr Richards impressed on me that the plaintiff’s claim was assembled in haste because it would soon have been statute barred under the Limitation Act 1985 (ACT) (the Limitation Act). I presumed in this respect that Mr Richards was referring to s 16B of that Act, which provides (in summary) that a cause of action for damages for personal injury is not maintainable if brought three years or more after the day the injury happened. Mr Richards submitted that, when deciding whether to strike out the plaintiff’s claim against the second defendant, I should take into account that the plaintiff would not be able to recast her claim against the second defendant.
I accept that s 16B of the Limitation Act would have that consequence, but I was not persuaded that I should therefore consider the second defendant’s application in a different way. In DJ v RHS and JF, his Honour Connolly J noted the legislature’s policy decision underpinning s 16B: personal injury claims resulting in a frank injury must be brought within the three-year limitation period without the Court having any discretion to extend time.[17] His Honour referred to the Commonwealth’s Review of the Law of Negligence, which stated:
Limitation periods provide a time limit for the bringing of legal proceedings. They should not be seen as arbitrary cut-off points unrelated to the demands of justice or the general welfare of society. They represent the legislature’s judgment that the welfare of society is best served by causes of action being litigated within a limited time, notwithstanding that their enforcement may result in good causes of action being defeated.
[17] DJ v RHS [2004] ACTSC 12; 182 FLR 76 at [12]–[20].
This passage is plainly drawn from remarks of the High Court, per his Honour McHugh J, in Brisbane South Regional Health Authority v Taylor.[18]
[18] [1996] HCA 25; 186 CLR 541 at 553.
I could not see any proper basis upon which the second defendant’s application should be refused on the grounds that the plaintiff’s claim against the second defendant would then be statute barred. That consequence is nothing more than an observation about the intended effect of s 16B.
Nevertheless, having regard to Mr Richards’ reliance on s 27 of the AIA Act, I considered whether the plaintiff might have an arguable case against the second defendant if it was re-pleaded as a claim in contract. It caused me to recognise why the plaintiff did not make such a claim. Even if the defendants in one combination or another entered into a contract for the re-housing of Lucky, I cannot envisage a basis upon which the plaintiff would have a claim in contract against any of them.
Notwithstanding the undisputed evidence that the second defendant was incorporated many months after the dog attack, Mr Richards submitted that it was possible that it nevertheless existed, in some form, because the Australian Business Register records that “Pound Rescue” held an Australian Business Number (ABN) as at February 2016. The entry records, under the heading “Entity name”, that “Pound Rescue” held that ABN from 2 February 2016 to 22 November 2016. It records that the second defendant held that ABN from 22 November 2016, and still does so.
I was not persuaded by this submission. Indeed, the entry in the Australian Business Register only confirmed, in my view, that the second defendant did not exist at the time of the attack. A question could be reasonably asked as to why “Pound Rescue” held an ABN or what it was, especially if it did not have any legal status, but what appears clear from the record is that the ABN was transferred from “Pound Rescue” to the second defendant on 22 November 2016.
For these reasons, notwithstanding Mr Richards’ imaginative arguments, I am satisfied that the plaintiff’s claim against the second defendant is bound to fail for the simple reason that the second defendant did not exist at the time Lucky bit the plaintiff.
On the question of costs, Ms Martiniello states that by letter dated 30 May 2019 Ms Flood informed her that the second defendant “did not exist” on 6 August 2016 when Lucky (allegedly) bit the plaintiff. Ms Flood attached a copy of the second defendant’s certificate of incorporation issued by NSW Fair Trading stating that the second defendant was incorporated on 6 October 2016.
Notwithstanding Ms Martiniello’s receipt of this information from Ms Flood on 30 May 2019, on 1 August 2019, the plaintiff commenced proceedings against the second defendant and opposed the second defendant’s application for the claim against it to be struck out. Costs should follow the event.
The orders of the Court will be as follows:
1. The plaintiff’s application dated 29 October 2019 is dismissed.
2. The plaintiff pay the first defendant’s costs of the plaintiff’s application dated 29 October 2019.
3. The first defendant’s application dated 15 October 2019 is dismissed.
4. The first defendant pay the plaintiff’s costs of the first defendant’s application dated 15 October 2019.
5. The plaintiff’s claim against the second defendant is struck out.
6. The plaintiff file and serve an amended statement of claim, having regard to order 5, within 28 days.
7. The plaintiff pay the second defendant’s costs of the second defendant’s application dated 8 October 2019.
| I certify that the preceding sixty-eight [68] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Special Magistrate McCarthy Associate: Angus Brown Date: 27 November 2019 |
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