Bingo Holdings Pty Ltd v GC Group Company Pty Ltd

1. [1]

   THE COURT: On 10 August 2021 the Court heard an application for leave to appeal from an interlocutory decision of Stevenson J (GC Group Company Pty Ltd v Bingo Holdings Pty Ltd (No 3) [2021] NSWSC 252). At the conclusion of the hearing the Court made the following orders:

   1. (1)

      Dismiss the summons seeking leave to appeal filed 19 April 2021.

   2. (2)

      Order the applicants pay the costs of the summons.

2. [2]

   These are the reasons of the Court for making those orders.

Brief facts

1. [3]

   GC Group Company Pty Ltd (GC Group) was a subcontractor in a large residential development project at Albion Park. GC Group purchased recycled aggregate (a building material used in concrete and the construction of roads and retaining walls) from (at least one of) the applicants, Bingo Holdings Pty Ltd, Bingo Recycling Pty Ltd, Bingo Waste Services Pty Ltd and Wollongong Recycling (NSW) Pty Ltd (collectively, Bingo).

2. [4]

   GC Group alleges that the aggregate supplied by Bingo between 1 June 2017 and 21 July 2017 was contaminated and that by using the contaminated aggregate in construction GC Group suffered loss and damage because it was obliged to effect substantial reconstruction work at its own cost.

3. [5]

   By its Technology and Construction List Statement filed on 19 December 2019, GC Group alleges that Bingo is liable to it in damages for breach of contract, for engaging in misleading or deceptive conduct contrary to s 18 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law) and for breaches of the consumer guarantees provided by ss 54, 55 and 56 of the Australian Consumer Law.

4. [6]

   On 20 May 2020, the primary judge ordered that certain paragraphs in Bingo’s Technology and Construction List Response that sought to establish that GC Group’s claim against Bingo was an “apportionable claim” for the purposes of s 34 of the Civil Liability Act 2002 (NSW) be struck out: GC Group Company Pty Ltd v Bingo Holdings Pty Ltd [2020] NSWSC 598.

5. [7]

   By notice of motion filed 31 July 2020, Bingo sought leave to amend its Response to re-plead a proportionate liability defence. In the proposed Response, Bingo relied upon Annexure A to the affidavit of its legal representative sworn on 17 July 2020 which identified 710 registered owners of vehicles that delivered waste generated from building and demolition activities (defined as B&D Waste) to its waste transfer and processing facility at Kembla Grange between 1 May 2017 and 1 July 2017. On 6 October 2020, the primary judge held that this was not sufficient to establish that such registered owners actually delivered material to the facility (at [19]-[20]) and refused to grant leave to amend the Response: GC Group Company Pty Ltd v Bingo Holdings Pty Ltd (No 2) [2020] NSWSC 1360.

6. [8]

   By notice of motion filed 16 November 2020, Bingo made a further application to amend its Response to re-plead a proportionate liability defence for the purposes of s 34 of the Civil Liability Act. On 18 March 2021, the primary judge refused to grant leave to amend the Response: GC Group Company Pty Ltd v Bingo Holdings Pty Ltd (No 3) [2021] NSWSC 252. Bingo’s present application for leave to appeal to this Court is from that refusal.

7. [9]

   Bingo’s position was that any contaminated material it delivered was supplied to it by one or more of 710 customers or was sourced from a stockpile it had acquired when purchasing the business. Bingo wished to assert that each of the 710 customers and/or the vendor of the business who had created the stockpile may be a concurrent wrongdoer. Bingo did not, and submitted it was not required to, plead that any one or more of those people was a concurrent wrongdoer.

8. [10]

   The contention that these 710 customers, and/or the vendor, may be a concurrent wrongdoer depended on Bingo’s allegation that, to the extent that the contamination came from B&D Waste supplied to Bingo by any of them, the supplier(s) owed a duty of care to Bingo’s customers.

Consideration

1. [11]

   At the outset of the application for leave to appeal Mr P W Larkin SC, who appeared with Mr T To and Mr A L Jucha for Bingo, accepted that the only apportionable claim made by GC Group was the claim made under s 18 of the Australian Consumer Law. That is, Bingo accepted that the contract claim and the consumer guarantee claim were not apportionable claims. This means that the question of apportionment would only arise if GC Group were to fail on its contract and consumer guarantee claims, yet succeed on its misleading and deceptive conduct claim.

2. [12]

   In relation to the claim under s 18 of the Australian Consumer Law, Mr Larkin SC also accepted that as GC Group’s claim was made under Commonwealth law, the question of proportionate liability was governed by Part VIA of the Competition and Consumer Act, and not by the Civil Liability Act. This was not, however, the basis upon which the proposed amended Technology and Construction List Response had been drafted, nor the way both parties had addressed the issue before the primary judge. In each case it had been asserted that the claim under s 18 of the Australian Consumer Law was apportionable under the Civil Liability Act.

3. [13]

   It follows that the basis upon which the primary judge had been asked to consider the proposed amendment to the Technology and Construction List Response to add an apportionable claim proceeded on a misapprehension about the relevant law. There was no proportionate liability defence available under s 34 of the Civil Liability Act. The proposed pleading the subject of the application for leave to appeal did not refer to Part VIA of the Competition and Consumer Act. It followed that the application for leave to appeal to this Court should be dismissed for that reason alone.

4. [14]

   We consider, however, that as a matter of principle Bingo’s argument is not correct, and for that additional reason the application for leave to appeal should be dismissed. Bingo’s essential point, made in relation to s 34 of the Civil Lability Act and repeated in relation to Part VIA of the Competition and Consumer Act, was that if it is liable to GC Group, then it is a “concurrent wrongdoer” for the purposes of s 87CB(3), because it is one of two or more persons whose acts or omissions have caused the damage of which GC Group complains. It was submitted that the definition was satisfied notwithstanding that Bingo could not identify individually or at all (and not even as a member of a closed class of persons each of whom had caused such damage) any another person who had caused, or was alleged to have caused, the damage of which GC Group complains. As the primary judge explained, the consequences of Bingo’s contention are as follows:

5. [15]

   We have concluded that Bingo’s construction of s 34 of the Civil Lability Act and repeated in relation to Part VIA of the Competition and Consumer Act is not correct. The effect of Part 4 of the Civil Liability Act and Part VIA of the Competition and Consumer Act is to place the risk of a concurrent wrongdoer’s insolvency upon the plaintiff. An identified concurrent wrongdoer does not need to be joined to the proceedings. The provisions do not, however, permit a defendant to limit their liability in respect of alleged concurrent wrongdoers who cannot be identified.

6. [16]

   Proportionate liability provisions were not originally included in the Civil Liability Act but were informed by a report by Professor J L R Davis, Inquiry into the Law of Joint and Several Liability (Report of Stage Two), (January 1995). Whilst the report provides important context, it does not support the construction advanced by Bingo. Professor Davis said:

7. [17]

   We are unable to accept the suggestion that in referring to economic loss caused by another person, even if that other person is not a party, or is insolvent or “untraceable”, Professor Davis was contemplating that a concurrent wrongdoer could be a person who had not caused the loss claimed by the plaintiff; but merely a person who might have caused the loss. In context, Professor Davis’ report, and the Canadian authorities to which Bingo referred, go no further than suggesting that a court should decide on the apportionment of liability among all those who are found to have been at fault, whether they are parties to the action or not. Even in Wells v McBrine (1988) 54 DLR (4th) 708; (1988) CanLII 3087 (BC CA), the British Columbia case referred to by Bingo as the high point of their argument, all of the wrongdoers were identified.

8. [18]

   The introduction of the proportionate liability regime into the Civil Liability Act in place of the solidary regime of the common law effectively shifted the risk of another concurrent wrongdoer’s insolvency from the defendant to the plaintiff: Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613; [2013] HCA 10 at [10], [16]-[17] (French CJ, Hayne and Kiefel JJ). The provisions nevertheless require the identification of an alleged wrongdoer, not merely an alleged potential wrongdoer.

9. [19]

   It is clear that the primary judge’s construction of the provisions of the Civil Liability Act was consistent with the intention of the Minister expressed in the Second Reading Speech (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 23 October 2002 at 5766):

10. [20]

    It is long settled that Part 4 of the Civil Liability Act requires that the acts or omissions of a particular person who caused the same loss as that claimed by the plaintiff be identified. In Ucak v Avante Developments Pty Ltd [2007] NSWSC 367, Hammerschlag J explained that a defendant had to take particular care to identify a particular person as a concurrent wrongdoer to maintain that defence:

11. [21]

    Whilst it is correct that the particular pleading being considered in Ucak was fundamentally deficient, Bingo’s attempts to distinguish the decision were unpersuasive. On the presently relevant question, the need to identify a particular concurrent wrongdoer, Ukak has been consistently followed for well over a decade: see for example HSD Co Pty Ltd v Masu Financial Management Pty Ltd [2008] NSWSC 1279 at [18] (Rothman J); Permanent Custodians Limited v King [2010] NSWSC 509 at [17]-[19] (Schmidt J); The Owners Strata Plan v Brookfield Multiplex Limited [2010] NSWSC 360 at [3]-[4] (McDougall J); Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450; [2007] FCA 1216 at [31] (Middleton J). In The Owners – Strata Plan No 87265 v Saaib [2021] NSWSC 150, Henry J said:

12. [22]

    Part VIA was added to the Competition and Consumer Act (which at that time was the Trade Practices Act 1974 (Cth)) by the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth). The Explanatory Memorandum to the Bill explained:

13. [23]

    As this Court explained in Johnson v Mackinnon [2021] NSWCA 152 (Brereton JA, Macfarlan JA and Simpson AJA agreeing), citing Ucak with approval.

14. [24]

    Part VIA of the Competition and Consumer Act provides, relevantly:

15. [25]

    A defendant seeking to rely upon a proportionate liability limitation of recovery under Part VIA of the Competition and Consumer Act must identify each particular alleged concurrent wrongdoer. Part VIA does not allow a defendant to describe a population of individuals and assert that within that class there may be one or more concurrent wrongdoers. Bingo’s construction, if correct, would make the concurrent wrongdoer provisions incoherent. Dealing first with the text, s 87CB(3) defines “concurrent wrongdoer” as:

16. [26]

    The critical integers of “concurrent wrongdoer” are the identification of a person whose acts or omissions caused the loss or damage the subject of the claim. The satisfaction of all three integers (acts or omissions, cause and damage or loss the subject of the claim) by a particular person is required to meet the statutory description. Each must be pleaded. The word “is”, in identifying a person with those characteristics, suggests that the concurrent wrongdoer defence requires a defendant to plead and establish that there is one or more other persons who caused the damage or loss the subject of the plaintiff’s claim.

17. [27]

    Section 87CD is the section which, where the defendant is a concurrent wrongdoer, restricts the ability of a court to award damages for loss claimed by a plaintiff to no more than the 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. The gateway to the calculation is a finding that, in relation to any damage or loss claimed, there are “concurrent wrongdoers”. This harks back to an identification of the three elements to which we have referred in relation to a person as a “concurrent wrongdoer”:

    1. (1)

       acts or omissions;

    2. (2)

       which caused;

    3. (3)

       the damage or loss the subject of the claim.

18. [28]

    This conclusion accords with the construction of the same or equivalent provisions by the Federal Court and the Victorian Court of Appeal: see for example F.Y.D. Investments Pty Ltd v Promptair Pty Ltd (No 2) [2019] FCA 419 (White J) where his Honour said:

19. [29]

    It is also consistent with decisions of this Court construing the provisions in the Civil Liability Act. In Woodhouse v Fitzgerald [2021] NSWCA 54, Basten JA said (Meagher and Payne JJA agreeing) that:

20. [30]

    Text and context requires that a defendant seeking to rely on a proportionate liability defence must plead that claim with the same degree of particularity as if bringing a cross-claim against the alleged concurrent wrongdoer, setting out the relevant material facts. It is not sufficient merely to identify a class of persons one or more of whom may be a concurrent wrongdoer or wrongdoers.

21. [31]

    Bingo’s suggested construction is not correct. For these additional reasons the application for leave to appeal to this Court was dismissed.

22. [32]

    Although strictly unnecessary to decide, we also doubt that it could ever be established that the class of Bingo’s so-called customers (or any identified customer) owed a duty of care to third parties, such as GC Group, supplied with recycled material by Bingo. Resolution of this question should await a case where the issue needs to be determined.

Conclusion

1. [33]

   For the foregoing reasons, on 10 August 2021, the Court made the orders set out at [1].