District Court New South Wales Medium Neutral Citation: Westfield Shopping Centre Management Company Pty Ltd v Rock Build Developments Pty Ltd [2013] NSWDC 305 Decision date: 18 October 2013 Before: Cogswell SC DCJ Decision: Dismiss the notice of motion Catchwords: Procedure - summary judgment - not a "high degree of certainty about the ultimate outcome of the proceeding" - contributory negligence in the context of indemnity. Cases Cited: Agar v Hyde [2000] HCA 41; 201 CLR 552; 173 ALR 665. Category: Interlocutory applications Parties: Westfield Shopping Centre Management Company Pty Ltd (Applicant) Rock Build Developments Pty Ltd (Respondent to Application) Representation: Counsel: C J Peadon (Applicant) B Hull (Respondent to Application) File Number(s): DC 2013/00249768 Judgment 1This is a case about an accident which happened at a work site. Westfield engaged Rock Build Developments to do some work at one of their shopping centres. Rock Build engaged another firm to perform part of that work. During the work a pipe burst and parts of the shopping centre were flooded. There is evidence that Westfield had to pay around $250,000 for the damage. 2Westfield has sued Rock Build because it says that Rock Build is liable to indemnify Westfield under the contract between Westfield and Rock Build. In particular, Westfield says that Rock Build has promised to indemnify Westfield against any loss or damage such as the kind which happened in this case. 3The statement of claim by Westfield was filed only a couple of months ago, on 16 August 2013. Rock Build has not put on a defence yet. That is because on the same day as filing the statement of claim, Westfield filed a notice of motion asking for summary judgment against Rock Build. It is that notice of motion which has come before me today. 4Westfield is represented by Mr C J Peadon of counsel and Rock Build by Mr B Hull of counsel. I have been assisted significantly by the competence of both counsel. Mr Hull has, through his client, exhibited a draft of a defence to the claim which pleads, amongst other things, some form of contributory negligence by Westfield. Mr Peadon, in his helpful written submissions, referred to the relevant authorities on obtaining summary judgment and the proposition that it should only be exercised where there is a "high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go trial in the ordinary way." He was quoting from the judgment of Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde [2000] HCA 41; 201 CLR 552; 173 ALR 665, at [57]. So if I am to grant Mr Peadon's client the relief that it seeks in this notice of motion, I must be satisfied that there is such a high degree of certainty about the ultimate outcome of the proceeding. 5I need not be convinced of all of the defences which are anticipated in the draft document, but if I think there is some reasonable argument about some of the issues, then I would refuse the relief. I asked Mr Hull to address me in his submissions about the principal defences he relies upon. He referred to a number of them. One concerned contributory negligence. He in particular put the argument about contributory negligence in the context of the indemnity. 6There is a document which is said to be part of the contract and the document contains a clause numbered 3.1. The first part of that clause Mr Peadon relies upon as the indemnity and there is a very good argument for that reliance. Mr Hull, however, relies upon the last sentence of clause 3.1. It provides that in this case Rock Build's "indemnity will exclude any liability resulting from the negligence of Westfield." Mr Hull argues that in this case there has been some negligence of Westfield and that his client could rely upon that as an exclusion from any liability to which it is exposed in the indemnity. Mr Peadon says that "liability" in that sentence refers to any liability of Westfield and not of that of Rock Build. He has a fair point there, but Mr Hull argues that that is not entirely obvious, and I think he is right. I think there is room for argument that the liability which that word refers to is the liability of, in this case, Rock Build. 7Mr Peadon argues that the word "negligence" also has some significance, in that I should be satisfied that there is some duty of care owed by his client, Westfield, to Rock Build. I am not convinced that in the context of this commercial contract I should necessarily interpret the word "negligence" as meaning that one party owes some duty of care to the other party. It may be that the word has a broader meaning in the context of a contract and means some carelessness or fault on the part of one of the parties to the contract which contributed to the damage. 8The reason I have referred to that clause and those arguments is this. Mr Hull called his client, Mr James Kaplanis, who is the principal of Rock Build. He was examined and cross examined by counsel, and at one stage Mr Peadon asked him a question to the effect of what his plans were to prevent the escape of water, which in this case caused the damage. 9Apparently what happened is that a workman knocked a pipe which was protruding from the ceiling and the water flowed. Mr Kaplanis said that he asked an employee of Westfield what further he should do and that the employee said that he, Mr Kaplanis, should leave it. Mr Kaplanis added that there was another means by which the flow of water may have been stopped, because the shop from which the water escaped had a large glass frontage which would have contained the flow of water. However, in further cross examination Mr Kaplanis acknowledged that that glass wall had been removed after the original conversation. Mr Peadon says that changed the context of the original conversation; it meant that Mr Kaplanis's company assumed obligations or became exposed to its obligations under cl 5 of the document that I have referred to which sets out a list of responsibilities which should have ensured that Rock Build took further steps to make sure that there would be no water flow in the event of an accident, given that the glass wall had been removed. However, he also gave evidence that he had been asked to remove the glass wall by another employee of Westfield's, and he made it clear that his, Mr Kaplanis', opinion was that the accident was due to that glass being removed. 10This is where the significance of the word "negligence" in the document which may be the basis of the contract is important. It seems to me that there may be an argument that the first employee, by saying to Mr Kaplanis when asked what more he could do to prevent any accident said that Mr Kaplanis should "leave it" along with the direction of the second employee to remove the glass wall, meant that the responsibility for any contingencies such as the escape of water may become shared between Rock Build and Westfield. This is because its representatives had been part of the conversations about the steps which were being taken. 11Now it may be that, given any contract which is eventually proved by Westfield and the evidence which is called, there is no basis for what I have just suggested - that it might be a shared liability - but at this interlocutory stage I have heard evidence only from one witness and he has given an account of conversations he had with representatives of the plaintiff, Westfield, which suggest that there may be some shared responsibility. 12The question whether the responsibility should be shared is yet another question which no doubt would be argued by reference to the provision which I have referred to about the indemnity excluding any liability resulting from the negligence of Westfield, but these are both factual and legal arguments which to my mind are potentially available and which, in my opinion, means that I am not satisfied that there is a high degree of certainty about the ultimate outcome of these proceedings. 13For those reasons I would refuse the relief sought in the notice of 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. Decision last updated: 27 March 2014