New South Wales Supreme Court CITATION : Ucak v Avante Developments [2007] NSWSC 367 HEARING DATE(S) : 17th April 2007 JUDGMENT DATE : 19 April 2007 JUDGMENT OF : Hammerschlag J DECISION : Pars 20 and 21 of the defendant's Technology and Construction List Response be struck out CATCHWORDS : PRACTICE AND PROCEDURE – Pleading requirements for a person claiming to be one of two or more persons whose acts or omissions caused the loss that is the subject of an apportionable claim under Pt 4 of the Civil Liability Act 2002 (NSW) – principles applying to applications to strike out pleadings upon which Pt 14 r14.28 UCPR is based, apply with equal force to proceedings in the Technology and Construction List - CIVIL LIABILITY ACT 2002 – Pt 4 does not apply if the liability arose before 26 July 2004 and therefore cannot be pleaded as a defence to a liability arising before that date Civil Liability Act 2002 (NSW) Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) LEGISLATION CITED : Uniform Civil Procedure Rules 2005 (NSW) Civil Liability Amendment (Proportionate Liability) Regulation 2004 (NSW) Civil Liability Regulation 2003 (NSW) Legal Profession Act 2004 (NSW) Bestcare Foods Limited v Origin Energy LPG Limited [2007] NSWSC 354 Letang v Cooper [1965] 1 QB 232 Williams v Milotin (1957) 97 CLR 465 CASES CITED : Venning v Chin (1974) 10 SASR 299 Air Link Pty Limited v Patterson [2002] NSWCA 85 Hunt Contracting Co. Pty Limited v Roebuck Resources NL (1992) 110 ALR 183 Bond Corporation Pty Limited v Thiess Contractors Pty Limited (1987) 14 FCR 215 Ferdinand Nemeth v Prynew Pty Limited [2005] NSWSC 1296 PARTIES : Ugar (Harry) Ucak & 1 Or v Avante Developments Pty Limited & 1 Or FILE NUMBER(S) : SC 055090/2006 COUNSEL : N.A. Nicholls (Plaintiffs) G. O'Neil (Solicitor) (Defendant) SOLICITORS : Sagacious Legal Pty Limited (Plaintiffs) DLA Phillips Fox (Defendant) - 15 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST HAMMERSCHLAG J 19 APRIL 2007 55090/2006 UGAR UCAK & ANOR –v- AVANTE DEVELOPMENTS PTY LIMITED (IN LIQUIDATION) JUDGMENT Introduction 1 This is an application by motion to strike out two paragraphs of the defendant's Construction and Technology List Response ("the Response") invoking the Proportionate liability provisions in Pt 4 of the Civil Liability Act 2002 (NSW) ("the Act"). The Act came into force on 20 March 2002. Part 4 was introduced into the Act by the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) which came into force on 1 December 2004. 2 The application raises what might be considered to be the significant issue of what is required to be pleaded by a party wishing to raise the defence contemplated by ss 34 and 35 (within Pt 4) of the Act that his or her liability is to be limited because he or she is, in relation to the claim against him or her, a concurrent wrongdoer, that is, a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. 3 The motion prays in aid Pt 14 r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") which provides that the Court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if it discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or has a tendency to cause prejudice, embarrassment or delay in the proceedings, or is otherwise an abuse of the process of the Court. Although Pt 14 of the UCPR applies only to proceedings commenced by statement of claim and these proceedings are commenced in this List by summons, accompanied by a Technology and Construction List Statement ("Statement"), the Court has, as a necessary incident of its jurisdiction, the power to control its own proceedings and procedure in the same way as if the proceedings were conducted on pleadings in the strict sense. 4 Practice Note SC Eq 3 applies to these proceedings. Paragraphs 8 to 17 of the Practice Note deal with pleadings. The Practice Note requires a defendant in this List to file and serve a Technology and Construction List Response setting out in summary form, amongst others, its response to the plaintiffs' Statement including the legal grounds for opposition to the relief claimed in the summons. Both the Statement and Response must avoid formality. 5 Paragraph 51 of the Practice Note concerns applications to strike out or for summary judgment, which may be entertained when appropriate. Applications such as the present will not generally be entertained in this List and strictness will be applied in declining to entertain such applications unless appropriate. 6 Albeit that a plaintiff's Statement and a defendant's Response can and should avoid formality, the Practice Note does not dispense with the fundamental requirement that each disclose a reasonable cause of action and defence respectively. The legal grounds for opposition to the relief claimed must, even though informally expressed, disclose a cognisable defence. 7 The principle that the Court has as an incident of its jurisdiction the power to, and will, strike out a pleading which discloses no reasonable cause of action or defence, or which has a tendency to cause prejudice, embarrassment or delay in the proceedings or which otherwise is an abuse of the process of the Court, is recognised in par 51 of the Practice Note and applies to a Statement and Response in this List with no less force albeit Pt 14 of the UCPR does not strictly apply. 8 The management procedures in this List are directed to the just, quick and cheap disposal of proceedings. Those aims will not be achieved by permitting Statements and Responses which fail to comply with the Practice Note in material respects. Background 9 The plaintiffs, who are individuals, own a property situated at 164 Brooks Street, Coogee in the State of New South Wales. They allege that in about July 2003 the defendant company undertook excavation works in the course of developing residential units including basement car parking on the defendant's property next door. Those works, they say, had the effect of removing lateral support for their land. Their property was damaged and they have suffered economic loss as a consequence. 10 By summons dated 8 December 2006 accompanied by a Construction and Technology List Statement, which includes a section entitled The Plaintiffs' Contentions ("the Contentions") they sue the defendant company for damages under two heads; firstly, for breach of the duty of care not to do anything which would remove the lateral support for the plaintiffs' property and, secondly, for trespass committed by the installation of ground anchors beneath it. 11 Paragraphs 20 and 21 of the Response are in the following terms: "20. Further, and in answer to the whole of the Plaintiffs' Contentions, the Defendant says that if the Plaintiffs suffered loss and damage as alleged, which is not admitted, the liability of the Defendant for that such [sic] loss and damage must be limited to the extent of the Defendant's responsibility for the damage or loss in accordance with Part 4 of Part 4 [sic] of the Civil Liability Act 2002 (NSW). 21. Further, in answer to the whole of the Plaintiffs' Contentions and in accordance with section 35A of the Civil Liability Act 2002 (NSW) the Defendant says that if it is liable to the Plaintiffs ( which it denies), Henry & Hymas, Pile & Bucket Pty Limited, Geotechnique Pty Limited, Geoform Design Architect Pty Limited and SW Healey & Associates may be concurrent wrongdoers in respect of the claim." 12 On 16 March 2007, in a letter to the defendant's solicitors, the plaintiffs' solicitors complained that each of the paragraphs "is not in proper form and is liable to be struck out". They requested further and better particulars of par 20 including a request in the following form: "What are the facts, matters and circumstances relied upon which are alleged to limit your client's liability in the proceedings?" They complained that par 21 failed to comply with the requirements of s 35A(1)(b)(ii) of the Act, and in relation to that paragraph included a request in the following form: "What are the facts, matters and circumstances relied upon to assert that each of the named parties is or may be a concurrent wrongdoer in relation to the claim?" They threatened a strike out application if full particulars were not provided or the paragraphs were not amended so as to be pleaded in proper form. 13 The defendant's solicitors responded in a letter dated 21 March 2007. With respect to pars 20 and 21 of the Response they stated that: "The circumstances that make those other persons potential concurrent wrongdoers are detailed below: 1. Henry & Hymas were retained by the Defendant to act as structural engineers in relation to the development of 162 Brook Street, Coogee. Henry & Hymas oversaw the Excavations Works noted in paragraph 7 of the Summons. 2. Pile & Bucket were retained by the Defendant to carry out the Excavation Works noted in paragraph 7 of the Summons. 3. Geotechnique Pty Limited were retained to provide geotechnical engineering services in relation to the Excavation Works. 4. Geoform Design Architect Pty Limited were retained by the Defendant as architect for the Development Property. 5. SW Healey & Associates Pty Limited were retained by the Defendant as structural design certifier for the Development Property. If your clients' claim is successful and the Court accepts that the Excavation Works noted at paragraph 7 of the Summons were carried out in breach of a duty of care, this is a liability which should be attributed to the concurrent wrongdoers noted above. We do not believe there is any requirement on our client to identify the extent of the comparative responsibility of each party alleged to be a concurrent wrongdoer. Rather, the extent of the comparative responsibility of each party is a matter to be determined by the Court. We put you on notice we will oppose any Notice of Motion seeking to strike out paragraphs 20 and 21 of our client's Defence." The salient provisions of the Act 14 The Act makes provision, amongst others things, in relation to the recovery of damages for death or personal injury caused by the fault of a person. 15 Apart from substantive provisions, including those relevant to this application, which are set out below, the Act contains provisions enabling the Governor to make regulations. In particular, s 3B(3) provides as follows: The regulations may exclude a specified class or classes of civil liability (and awards of damages in those proceedings) from the operation of all or any specified provisions of this Act. Any such regulation may make transitional provision with respect to claims for acts or omissions before the commencement of the regulation. 16 Section 4(4) provides that Schedule 1 to the Act has effect. 17 The substantive provisions of the Act which are relevant to this application are ss 34, 35, 35(A), and pars 6 and 13 of Schedule 1. They provide as follows: Part 4 Proportionate liability 34 Application of Part (1) This Part applies to the following claims (apportionable claims): (a) a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury, (b) a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 1987 for a contravention of section 42 of that Act. (1A) For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind). (2) In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. (3) For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1). (4) For the purposes of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died. (5) (Repealed) 35 Proportionate liability for apportionable claims (1) In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss, and (b) the court may give judgment against the defendant for not more than that amount. (2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim: (a) liability for the apportionable claim is to be determined in accordance with the provisions of this Part, and (b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant. (3) In apportioning responsibility between defendants in the proceedings: (a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law, and (b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings. (4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings. (5) A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise. 35A Duty of defendant to inform plaintiff about concurrent wrongdoers (1) If: (a) a defendant in proceedings involving an apportionable claim has reasonable grounds to believe that a particular person (the other person ) may be a concurrent wrongdoer in relation to the claim, and (b) the defendant fails to give the plaintiff, as soon as practicable, written notice of the information that the defendant has about: (i) the identity of the other person, and (ii) the circumstances that may make the other person a concurrent wrongdoer in relation to the claim, and (c) the plaintiff unnecessarily incurs costs in the proceedings because the plaintiff was not aware that the other person may be a concurrent wrongdoer in relation to the claim, the court hearing the proceedings may order that the defendant pay all or any of those costs of the plaintiff. (2) The court may order that the costs to be paid by the defendant be assessed on an indemnity basis or otherwise. Schedule 1 Savings and transitional provisions Part 3 Provisions consequent on enactment of Civil Liability Amendment (Personal Responsibility) Act 2002 5 Definition In this Part: 2002 amending Act means the Civil Liability Amendment (Personal Responsibility) Act 2002 . 6 Application of amendments (1) The amendments to this Act made by the 2002 amending Act extend to civil liability arising before the commencement of the amendments, but do not apply to or in respect of proceedings commenced in a court before that commencement. (2) Despite subclause (1), the following provisions of this Act (as inserted by the 2002 amending Act) apply to and in respect of proceedings commenced in a court on or after 3 September 2002 (except in respect of a decision of the court made before the commencement of this clause): (a) Part 7 (Self-defence and recovery by criminals), (b) section 30 (Limitation on recovery for pure mental harm arising from shock). 13 Application of amendments concerning proportionate liability Clause 6 (1) extends to Part 4 (as inserted by the Civil Liability Amendment (Personal Responsibility) Act 2002 and amended by the amending Act). The exclusion regulation 18 On 1 December 2004 the Governor made the Civil Liability Amendment (Proportionate Liability) Regulation 2004 (NSW) under the Act which inserted into the Civil Liability Regulation 2003 (NSW) the following regulation: 3 Proportionate Liability Any civil liability to which Part 4 of the Act would have applied but for this clause is excluded from the operation of that Part, and from the operation of clauses 6 and 13 of Schedule 1 to the Act in their application to that Part, if the liability arose before 26 July 2004." 19 An attack, unsuccessful to this point, has been made on the validity of this regulation as being beyond the regulation making power contained in the Act: see Bestcare Foods Limited v Origin Energy LPG Limited [2007] NSWSC 354. 20 The terms of this regulation were drawn to the attention to the parties' legal representatives by the Court and the plaintiffs thereupon relied upon it. Submissions on the point were received. 21 The effect of the regulation is that the defendant cannot avail itself of Pt 4 of the Act in this case because the liability arose before 26 July 2004. 22 In those circumstances pars 20 and 21 of the defence must be struck out as disclosing no defence. 23 Because the decision in Bestcare Foods v Origin Energy LPG Limited may not be the last word on the matter and because of the significance to the practice in the Court of the pleading issue I will nevertheless deal with it. The attack on the "pleading" 24 The plaintiffs attacked par 20 of the Response both on the basis that it discloses no reasonable defence and also on the basis that it has a tendency to cause prejudice, embarrassment or delay in the proceedings. 25 By virtue of s 34(1)(a) of the Act, Pt 4 applies relevantly to apportionable claims being claims for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care. Section 34(3) limits apportionable claims to those claims specified in s 34(1). 26 The first attack was that par 20 purports to be an answer to the whole of the Contentions whereas Pt 4 of the Act (even if it is otherwise available to the defendant) applies only to claims arising from a failure to take reasonable care. The Contentions include a claim for trespass no element of which, it was submitted, is a failure to take reasonable care, and therefore Pt 4 of the Act cannot be invoked as a defence to it. 27 This is not a point which is appropriate to determine at the stage of a strike out application. It seems that old notions of trespass to land being a tort of strict liability may no longer hold good and that intention or negligence may well now be an element of the tort, depending on the circumstances: see R P Balkin and J L R Davis, Law of Torts, 3rd Ed (2004) Sydney, LexisNexis Butterworths, at [2.2]-[2.12]. The position is complex and unsettled, and this application is not an appropriate vehicle to embark on the exercise of trying to settle it. 28 The Contentions assert that the defendant requested consent for the installation of the ground anchors, which consent was refused. This is consistent with an allegation of intention, but may also comprehend a failure to take reasonable care. 29 By s 3B(1)(a) the Act does not apply in respect of civil liability in respect of an intentional act that is done with intent to cause injury. In England it was held in Letang v Cooper [1965] 1 QB 232 that for unintended injury, direct or indirect, a claim in trespass must now meet all the requirements of the modern tort of negligence but this is not clearly settled in this country: cf Williams v Milotin (1957) 97 CLR 465 and Venning v Chin (1974) 10 SASR 299 at 308. There is also a question as to what level of intent, if intent is asserted, must be proved. It may be that it is sufficient that there was an intention to do the act and that it is not necessary to prove an intent to cause injury. Again, this is not an appropriate vehicle to embark on an examination of these matters. 30 As the Contentions are presently framed I do not consider that reliance by the defendant on Pt 4 of the Act is hopeless and bound to fail, and I would not, if that were the only basis of the attack, strike out par 20 of the Response. 31 The second attack is that par 20 does not identify any act or omission on the part of any other person alleged to have caused, nor how such act caused, the damage or loss that is the subject of the claim, and therefore discloses no reasonable defence. 32 Under s 35(1) of the Act in any proceedings involving an apportionable claim, the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss. 33 If a right or defence depends, as is the case here, upon the provisions of a statute, the claim must state material facts demonstrating that entitlement: Air Link Pty Limited v Patterson [2002] NSWCA 85 at [20] per Sheller JA; Hunt Contracting Co. Pty Limited v Roebuck Resources NL (1992) 110 ALR 183 at 190; Bond Corporation Pty Limited v Thiess Contractors Pty Limited (1987) 14 FCR 215. 34 In order for a person to be a concurrent wrongdoer he must be one whose acts or omissions caused the damage or loss that is the subject of the claim. 35 It follows in my view, that for a defendant to assert that there is a person who is a current wrongdoer the defendant must plead the necessary elements which result in the asserted conclusion. Those elements are: a the existence of a particular person; b the occurrence of an act or omission by that particular person; and c a causal connection between that occurrence and the loss that is the subject of the claim. 36 What the defendant in this case has done is to assert a conclusion without the material facts upon which that conclusion depends. This is a course which is not permissible. 37 Here the material facts would have to be the identification of the particular person, the identification of the act or omission of that particular person and the facts which if proven at trial would establish that that act or omission caused the loss or damage that is the subject of the claim. 38 Paragraph 20 fails with respect of each of the elements and accordingly is liable to be struck out. 39 It was put on behalf of the defendant, and accepted by the plaintiffs for the purposes of this application, that the defendant is not yet in a position to plead the material facts with respect to the supposed concurrent wrongdoers. The approach which should be taken, it was submitted, was that the plaintiffs should seek to administer interrogatories with respect to the facts the defendant should have alleged. Support for this approach, it was said, is to be found in the decision of Einstein J in Ferdinand Nemeth v Prynew Pty Limited [2005] NSWSC 1296 in which His Honour gave leave to a defendant to plead in the following terms, "In the alternative, the third defendant's liability is limited to such other proportion as the Court determines is just and equitable, having regard to the extent of its liability for any damage." The plaintiff in that case opposed leave to amend unless as a condition the third defendant be required to identify the particular person or persons who the third defendant had reasonable grounds to believe may be the concurrent wrongdoer in relation to the claim. His Honour ordered interrogatories. 40 That decision does not assist the defendant in this case. There was apparently no opposition to the amendment based on the proposition that it did not disclose a defence, and His Honour was not asked to, and therefore did not, consider whether it did or did not. The third defendant was at that point apparently content to proceed on the basis of being satisfied with interrogatories. Plainly, had the terms of the proposed defence been subject to scrutiny on the basis that it did not properly plead or disclose a defence, it would have been found wanting. 41 I agree with the view expressed by R J McDougall J in his paper "Proportionate Liability in Construction Litigation" (2006) vol 22(6) Building and Construction Law Journal 394 at 400 that a defendant should plead with the same degree of precision and particularity as it would have done before the Act if it were bringing a cross-claim against an alleged concurrent wrongdoer. 42 This approach is consistent with s 345(1) of the Legal Profession Act 2004 (NSW) under which a law practice must not provide legal services on a defence of a claim for damages unless a legal practitioner reasonably believes, on the basis of provable facts, and a reasonably arguable view of the law, that the defence has reasonable prospects of success. The defence should not be put on before there are sufficient provable facts available to the practitioner to found the necessary belief. 43 Given my conclusion that par 20 of the pleading does not disclose a reasonable defence to the claim, it is not necessary to consider whether it could or should be struck out on another basis. 44 As to par 21, it has no part to play in a pleading. It has apparently been included in the defence as a means of complying with the statutory duty imposed by s 35A on a defendant to give information to a plaintiff about a person whom the defendant believes may be a concurrent wrongdoer. That obligation plays no role in any claim or any defence and is accordingly also liable to be struck out. Conclusion 45 The orders of the Court are accordingly that pars 20 and 21 of the defendant's Response are struck out and the defendant is to pay the costs of the motion. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.