Here is a link to a presentation by Ross Macaw QC on proportionate liability. It is produced by benchTV, an enhancement to the long-excellent new case notification service, Benchmark, provided by AR Connoly & Co in Sydney. Mr Macaw considers Justice John Dixon’s beautifully written judgment in Fabfloor (Vic) Pty Ltd v BNY Trust Company of Australia Limited  VSC 99.
In that case, there was a fire in a warehouse and the plaintiffs’ goods and nearby land were damaged. They sued the occupier of the warehouse and others. The occupier said that if it was liable, then it was also the fire inspector’s, the builder’s, and others’ fault as well. The question was what a defendant needed to do in order to have alleged concurrent wrongdoers not sued as defendants by the plaintiffs joined. Was a mere pleading assertion sufficient, as in the case of a third party notice? Or was it necessary to produce some evidence sufficient to allow the Court to see a prima facie case against the alleged concurrent wrongdoers, and exercise a discretion to join? Even though those seeking to join are not usually forced to establish by evidence a prima facie case, is that just because it is often waived by the person resisting joinder?
The answer is: you need a pleading which is not hopeless; you generally don’t need to put on evidence; the power to join is in s. 24AL of the Wrongs Act 1958 and the Rules of the Supreme Court are not really to the point; the power is discretionary and evidence might be necessary if some point which goes to the discretion (e.g. prejudice by virtue of delay, or abuse of process) is enlivened, but that evidence would not generally be as to the merits of the claim sought to be brought). Continue reading “A defendant seeking in Victoria to join a concurrent wrongdoer need not establish a prima facie case by evidence”
In Taylor v Gosling  VSC 75, Justice Hargreave of the Supreme Court of Victoria has decided that whether the proportionate liability regime applies to a proceeding depends on whether the writ was issued before or after the end of 2003, even if some of the concurrent wrongdoer defendants were joined to the proceedings before and some after 1 January 2004. In other words a case started before the end of 2003 is governed by the old regime of joint and several liability between co-defendants, who may seek contribution against one another, and that is so even in respect of those defendants who come into the proceeding only in or after January 2004. My friend Tyson Wodak’s arguments on that question convinced Justice Hargreave not to follow an earlier decision of Justice Byrne of the same Court (Premier Building and Consulting Pty Ltd v Spotless Group Ltd (2007) 64 ACSR 111, see para 34(b)). His Honour’s reasoning was as follows: Continue reading “Victorian proportionate liability scheme: transitional provisions”
A Clayton Utz ‘Project Insight’ is worth a look. It considers whether the proportionate liability schemes around the country have operation in arbitrations. The answer, according to Tasmania’s Supreme Court in Aquagenics Pty Ltd v Break O’Day Council (No 2)  TASSC 89 is — Yes. The reason is that there is an implied term in the arbitration contract that the arbitrator will grant the relief which would be available in a court. As the authors Owen Hayford and Audrey Echevarria point out, the implication of an implied term may be prevented by an inconsistent express term. I am aware of a passing consideration of the matter in Victoria. In Wealthcare Financial Planningn Pty Ltd v Financial Industry Complaints Service Ltd  VSC 7, Justice Cavanough noted: Continue reading “Proportionate liability and arbitrations”
I have a nascent theory that the introduction of proportionate liability has made people think more about shifting blame, and doing so in more creative ways. Personal injury claims are not apportionable, though. The old law of contribution governs personal injury cases. In Tweed Shire Council v Howarth  NSWCA 103, a little girl sued the local council for compensation for injury she suffered when she wandered away from the gaze of her father and fell into a pond. Her dad and her grand-dad were laying turf at the family’s investment property. She sued through a tutor who was not her father, alleging a breach of a duty in the Council to fence off bodies of water within its territory. The Council sought leave to join the father as what we would call a third party and claim contribution, on the basis that the father breached a duty of care towards his child which also caused the injury. The content of the duty was said to require him to keep his eye on her so she did not wander off and fall into a pond. The trial judge dismissed the application. The Court of Appeal (Justice of Appeal Giles with whom Justices of Appeal Ipp and Basten agreed) allowed the Council’s appeal.
Suing the Council is one thing, but prosecuting a suit which requires a determination of your dad’s duty of care to you is another. Maybe it will all be a bit much for the family, and the thing will get resolved. I suppose the father will be checking the wording of the general liability cover in any home and contents insurance policy the family might have first though. Can anyone feel what we Victorians would call a fourth party claim against the grandfather coming on? And a fifth party claim against the grandmother for losing the grandfather’s spectacles?
Update, 4 May 2009: The costs decision (Sali v Metzke & Allen (No. 2) ) is interesting. I blogged about it here.
Original post: Sali v Metzke & Allen  VSC 48 is a decision of Justice Whelan in an accountants’ negligence case. It is an example of the proportionate liability scheme working as it was presumably intended. A professional firm sued for failing to detect wrongdoing was found liable, but instead of being liable for the victim’s entire loss (the deep pocket syndrome which proportionate liability is designed to avoid), it was found liable only for 30%. Because the victim did not sue the wrongdoer (the wrongdoer having been joined as a defendant by the professional firm), the victim did not recover damages for 70% of its loss. Continue reading “Proportionate liability in an accountants’ negligence case”
Here’s the latest proportionate liability case, from the Supreme Court of Victoria’s Justice Hargreaves: Atkins v Interprac Financial Planning Pty Ltd  VSC 445, decided just today.
I was already a fan of the first edition of Judge Stephen Walmsley SC, Alister Abadee, and Ben Zipser‘s excellent Professional Liability in Australia, published by Thomson, and had been waiting for the new edition with interest. I got myself a copy the other day. It’s good, and there are substantial additions since the first edition, including a lot on expert evidence, a new bit on professional discipline, analysis of the Financial Services Reform Act, 2001, analysis of the cases on the civil liability acts and a good analysis of proportionate liability.
It is a text which delves into all of the legislation which clusters around professional liability these days and grapples with it, a thankless task for an Australian text writer compelled to read and understand all of the states’ and territories’ regimes and then synthesise them. So the availability of compensation in professional discipline regimes is treated properly, as is the effect of professional standards legislation, which caps liability for scheme mebers. The research is wide-ranging and thorough: a VCAT decision is cited. It is written from a practical perspective rather than a theoretical perspective. There is not the over-reliance on English authority which sometimes characterises texts in this area. The writing tends to take positions rather than carrying on at great length about parallel or divergent lines of authorities without suggesting which is to be preferred. One suspects that bad decisions have simply been ignored in the hope that they will be forgotten. If only more text writers would operate in this fashion.
Professional negligence is one of those areas of law in which everyone claims to be a specialist. There are, for example, 387 barristers at the Victorian Bar who claim on their web profile to practise in professional negligence. Then there are undoubtedly many others, like me, who haven’t listed their practice areas using the scheme which allows for searching like that.
Thomson has kindly offered a 10% discount for readers of this blog if you go to their bookshop at 160 William St, Melbourne. Alternatively, the book can be purchased online, for $220 inclusive of postage and handling.
Continue reading “2nd edition of Professional Liability in Australia reviewed”
Melbourne’s Justice Middleton has dished out some serious interpretation of the Victorian and federal proportionate liability regimes and, what’s even more useful, their interrelationship, in Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd  FCA 1216, a decision at an early stage of the proceedings. It is a classy judgment in a matter right up Justice Middleton’s alley; before going to the bench, his Honour led a team of lawyers in Victoria’s biggest pure economic loss case.
The only relevant ratio decidendi is that Part IVAA of the Wrongs Act, 1958 (Victoria’s proportionate liability regime) cannot apply to causes of action under federal statutes which evince an intention not to allow apportionment. It is not that the Commonwealth statute prevails by operation of s. 109 of the Constitution over the state statute, the Commonwealth statute covering the field. Rather, the reason is that state Acts do not apply in courts exercising federal jurisdiction (such as the Federal Court in this case) unless s. 79 of the Judiciary Act, 1903 (Cth.) applies, and it only applies unless a Commonwealth Act otherwise provides. Drawing on the High Court case which said there can be no defence of contributory negligence against a claim for misleading or deceptive conduct under s. 52 of the Trade Practices Act, 1974, his Honour concluded that the relevant parts of the ASIC Act, 2001 and the Corporations Act, 2001 did ‘otherwise provide’.
Interesting dicta about the Victorian proportionate liability regime (relevant provisions here) includes:
- there is a question whether only state statutes are intended to be referred to in the definition of apportionable claim in the Wrongs Act, 1958, which says ‘a claim for economic loss … in an action for damages (whether in tort, in contract, under statute or otherwise) arising out of a failure to take reasonable care’ (at );
- ‘The provisions do not require that the claim itself be a claim in negligence or for a breach of duty — it [sic.] only requires that the claim arise from a failure to take reasonable care’ (at );
- a defendant seeking to apportion blame against a concurrent wrongdoer must plead out the basis for asserting that the concurrent wrongdoer is liable to the plaintiff (at );
- each concurrent wrongdoer must have a legal liability to the plaintiff (at );
- preliminary discovery might be had under the Federal Court correlate of Order 32.05 of the Supreme Court Rules against a person to ascertain whether they are a concurrent wrongdoer against whom apportionment might be claimed (at ). Continue reading “Federal Court Dishes Out Some Serious Proportionate Liability Interpretation”
In Woods v De Gabriele  VSC 177, Justice Hollingworth has tentatively unpicked some difficult parts of the federal and Victorian proportionate liability provisions in Part IVAA of the Wrongs Act, 1958 (the relevant provisions are here), and in the Corporations Act, 2001 (Cth) and Australian Securities and Investments Act, 2001 (Cth) Division 2, Subdivision GA. Her Honour held that the rule requiring leave of the Court before commencing proceedings against insolvent companies was no barrier to joining an insolvent concurrent wrongdoer under the Wrongs Act, 1958, and suggested the possibility that:
- if a claim is apportionable (for example because it could have been pleaded as a common and garden variety misleading or deceptive conduct claim under the Fair Trading Act, 1999), it may remain apportionable even if the plaintiff pursues some other cause of action in an attempt to avoid the proportionate liability regime;
- in the case of alternative causes of action pleaded in support of a claim for compensation for the same loss and damage, some apportionable and some not, all of the claims ought to be bundled up for the purposes of apportionment of that loss and damage, and treated as one apportionable claim; and
- it is appropriate, on a defendant’s application, to join an alleged concurrent wrongdoer as a defendant rather than a third party even if the plaintiff opposes the joinder. Continue reading “Justice Hollingworth unpicks the proportionate liability provisions”