Orcher v Bowcliff Pty Ltd (No 2) [2011] NSWSC 171

Supreme Court New South Wales

Medium Neutral Citation: Orcher v Bowcliff Pty Ltd (No 2) [2011] NSWSC 171 Hearing dates: 14 March 2011 Decision date: 14 March 2011 Before: Harrison J Decision: 1. Order that QBE be added as a defendant on the application of the plaintiff and the first defendant. 2. Order that QBE pay the costs of the applications. Catchwords: PRACTICE & PROCEDURE - application pursuant to s 6(4) Law Reform (Miscellaneous Provisions) Act 1946 - discretion - whether application should be refused for want of forensic diligence Legislation Cited: Civil Liability Act 2005 Law Reform (Miscellaneous Provisions) Act 1946 Limitation Act 1969 Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 James Hardie & Co v Seltsam Pty Ltd [1998] HCA 78; 196 CLR 53 Category: Procedural and other rulings Parties: John James Orcher (Plaintiff) Bowcliff Pty Ltd t/as The Bridge Hotel (First Defendant) Tamiano Paseka (Second Defendant) Richard Francis Keough (Third Defendant) Representation: Counsel: J E Sexton SC (Plaintiff) R S Sheldon SC (First Defendant) SG Campbell SC (QBE) Solicitors: Carneys Lawyers (Plaintiff) Wotton + Kearney (First Defendant) File Number(s): 2009/296392

Judgment - EX TEMPORE 1HIS HONOUR : On 23 November 2010 I declined an application by Mr Orcher and the first defendant to join QBE as a defendant pursuant to s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 . On 21 February 2011 the Court of Appeal allowed an appeal from my decision but deferred the question of any discretionary considerations touching the application to me . 2QBE now seeks to argue that, as a matter of discretion, I should decline to join it as a party. It relies upon material contained in the affidavit of Maria Rosman sworn 8 March 2011. That affidavit was read subject to objection on questions of relevance only. 3Ms Rosman is a liability claims manager employed by Proclaim Management Solutions and she has the conduct of the matter upon instructions from QBE. It will be recalled that QBE is the liability insurer of DSSS Cousins Pty Ltd, a former cross-defendant to the second cross-claim. DSSS went into external administration on 27 August 2010 and liquidators were appointed to administer its winding up. 4The original application by ACMS to join QBE was filed on 1 September 2010. Johnson J made orders that it be joined by consent. The matter was mediated on 3 September 2010. In due course, QBE agreed to bear its own costs of the proceedings against it by ACMS upon being given a verdict and judgment in its favour on that claim. That agreement was consummated on 15 September 2010 and on 24 September 2010 a verdict and judgment was entered in favour of QBE on an amended second cross-claim. 5QBE's costs and disbursements are said by that time to have amounted to almost $70,000. Ms Rosman says that QBE agreed to bear its own costs of the matter on the understanding that the entry of judgment effectively disposed of any further liability of either QBE or its insured in the proceedings. She said that if she had known that the judgment would not end QBE's involvement in the proceedings, but that it could be rejoined by another party, she would not have agreed that QBE would bear its own costs in the circumstances. 6The effect of the decision of the Court of Appeal is that the potential for QBE to be joined at the suit of Mr Orcher or the first defendant, was as real when the settlement took place as it ultimately became. In other words, any decision that QBE took to settle the proceedings then on foot against it, and on what terms, were matters entirely at the risk of QBE. It is not suggested that the decision taken by QBE to compromise the proceedings was induced by any representation by Mr Orcher or the first defendant so that any position in which QBE now finds itself is a position for which, on one view, it was solely responsible. Indeed, the terms of the pre-settlement correspondence make it clear that Mr Orcher at least was not prepared to undertake not to join QBE later. Put another way, if QBE was at the time of the settlement always liable to be joined or, as now, rejoined by Mr Orcher and the first defendant, that is something of which QBE at least ought to have been aware and which it should have factored into its decision to take the course it took. As I said in the course of argument, the settlement, in effect, took place in the ever present shadow of the events that in due course occurred. 7Ms Rosman does not depose to any procedural prejudice arising from QBE's absence from the proceedings when Mr Orcher gave evidence and was cross-examined upon his version of what occurred. That is unsurprising. Mr Orcher was cross-examined by experienced senior counsel. There is as well a full transcript of the proceedings available for use by all parties. In the event that QBE were able to satisfy me that Mr Orcher should be further cross-examined by counsel for it, I would naturally give consideration to that course. I would also give consideration to such other procedural concessions as may in the circumstances seem appropriate if QBE were to be rejoined to the matter. Subject to that, however, I do not consider that QBE has suffered or is likely to suffer any real or in particular any irremediable prejudice if that were to occur. 8Mr Campbell of senior counsel for QBE, however, promotes his present opposition to QBE's joinder upon the basis that Mr Orcher and by inference the first defendant lacked forensic diligence in failing to foresee or to anticipate the circumstances that arose in the course of the hearing last year that precipitated both an adjournment and the subsequent application to join QBE. It will be recalled that during the course of her evidence, Ms Williams deposed to having seen Mr Paseka yelling at Mr Orcher across the road at him when she returned from the service station where she had gone to withdraw money from an automatic teller machine. She said that she emerged from a short cut to hear what amounted to either an angry conversation or words of abuse shouted across the road in the way I have briefly described. 9Mr Paseka then came across the road and assaulted Mr Orcher. A portion of this is depicted in CCTV footage, which has always been available to all parties. That footage arguably shows Mr Paseka acting in a demonstrative, if not aggressive, manner in the company of a DSSS security guard. The CCTV footage has no audio, so that what was or may have been said by parties depicted upon it cannot be discerned in the absence of the evidence of witnesses such as Ms Williams. 10Mr Campbell contends that Ms Williams was effectively at all times in Mr Orcher's camp, having been in a relationship with him until September 2009, and that the material depicted on the CCTV footage, even without sound, was a sufficient indicator of what was occurring to have put Mr Orcher and the first defendant on notice to have taken earlier the course they have lately proposed. 11In brief, coupled with considerations of the sort to which s 56 of the Civil Liability Act 2005 refers, and in the light of principles more recently reaffirmed by the High Court of Australia in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 , Mr Campbell contends that Mr Orcher and the first defendant should have foreseen all of this much earlier, and correspondingly have appreciated the need to join DSSS, or now QBE, long ago. 12Mr Sexton of senior counsel for Mr Orcher says that any question of lack of forensic diligence is, in the circumstances of this particular case, subsumed in considerations that inform the provisions of the Limitation Act 1969 . In other words, for as long as Mr Orcher or the first defendant fall within the provisions of that Act that permit them to make the application to join QBE in a timely way, issues of lack of forensic diligence are in effect trumped by their conformity with the provisions of that Act. 13Mr Sheldon of senior counsel for the first defendant makes the same point in a slightly different way. In his submission the Limitation Act effectively infers forensic diligence on the part of any party whose application to join another is made within the time limits provided by that Act. 14Both Mr Orcher and the first defendant contend that the evidence of Ms Williams in any event could not have been anticipated, and that the events that fell out in the course of the proceedings last year represent a legitimate basis for the application to join QBE in the circumstances. 15Mr Sheldon makes a further point. He contends that even if QBE had not originally been joined, it always remained liable potentially to be joined in the way now being followed. Absent its previous role as a party to the proceedings and the terms of settlement that it entered into, QBE would have no basis on this argument now to contend that either Mr Orcher or the first defendant lacked some relevant forensic diligence. In other words, QBE would effectively be out of court on the argument it now seeks to promote. 16It does seem to me that the circumstances that energised the adjournment and the later application by Mr Orcher and the first defendant to join QBE could not reasonably have been anticipated from the material available before Ms Williams gave her evidence. Although Mr Campbell has asserted that Ms Williams and Mr Orcher were in the same camp, the evidence rather starkly suggests that their relationship had either come to an end, or had suffered at least from some violence, evidenced by the fact that she applied for an apprehended violence order against Mr Orcher in the recent past. 17Having viewed the CCTV footage myself, it is fair to say that precisely what is happening is not as clear as it might otherwise be with the benefit of a simultaneous audio recording of what occurred. To some extent at least, Ms Williams' testimony filled a gap in the evidence that might not otherwise reasonably have been foreseen. 18More generally however, it is apparent that, to the extent that the Limitation Act anticipates the timely joinder of parties to proceedings, Mr Orcher and the first defendant fall within its provisions. It would in one sense be a curious result if Mr Orcher and the first defendant could be sidelined for having failed to join QBE in what is said to be a forensically diligent fashion, even notwithstanding that the Limitation Act permitted them to do so later if they wished. 19In all of these circumstances, it seems to me that I should exercise my discretion in favour of Mr Orcher and the first defendant on their applications to join QBE as a defendant to the proceedings. 20Mr Orcher and the first defendant seek the costs of their successful application to join QBE as a defendant. The application required the leave of the Court, as will be apparent from the fashion in which the proceedings ran both before me and in the Court of Appeal, if not in any event from the well known provisions of s 6 of the Law Reform (Miscellaneous Provisions) Act itself. To that extent Mr Orcher and the first defendant were always obliged to commence the present applications and to conform in a formal sense with the requirements of the section. In so far as they incurred costs in so doing, I do not understand either of them to seek costs from QBE, for the simple reason that they were always liable to take those steps to join QBE in any event. 21However, the bulk of the costs sought by Mr Orcher and the first defendant do not relate to what occurred as a result of QBE's opposition to the making of the order at the leave stage. The relevant costs derive from the fundamental legal position taken by QBE following James Hardie & Co v Seltsam Pty Ltd [1998] HCA 78; 196 CLR 53, and the argument before me today based on discretionary grounds. 22The provisions of the rules and of the Civil Procedure Act make it clear that unless the Court otherwise orders, costs should follow the event. With the minor exception relating to the costs of formally seeking leave pursuant to s 6, it seems to me that the outcome both before me originally and in the Court of Appeal, as well as today, favour Mr Orcher and the first defendant and not QBE. The costs should follow those events. 23In those circumstances the costs associated with the applications to join QBE as a defendant should be paid by QBE.