GC Group Company Pty Ltd v Bingo Holdings Pty Ltd (No 3)

1. [1]

   The plaintiff, GC Group Company Pty Ltd, was a subcontractor in a large residential development project at Albion Park. GC Group purchased recycled aggregate from the defendants, to whom I will refer collectively as “Bingo”.

2. [2]

   GC Group alleges that aggregate supplied by Bingo was contaminated and that, as a result, GC Group was obliged to effect substantial reconstruction works at its own cost, thereby suffering loss and damage.

3. [3]

   By its Technology and Construction List Statement, GC Group alleges that Bingo is liable to it in damages for breach of contract and for breaches of alleged representations and consumer warranties under the Australian Consumer Law. [1]

4. [4]

   On 20 May 2020, I ordered that paragraphs in Bingo’s then Technology and Construction List Response that sought to establish that GC Group’s claim against Bingo was an “apportionable claim” for the purpose of s 34 of the Civil Liability Act 2002 (NSW) (“the Act”) be struck out. [2]

5. [5]

   By notice of motion filed on 31 July 2020, Bingo sought leave to amend its Response to re-plead an apportionable liability defence.

6. [6]

   On 6 October 2020 I refused to grant that leave. [3]

7. [7]

   Now, by notice of motion filed on 16 November 2020, Bingo makes a further application to amend its Response to re-plead an apportionable liability defence.

Decision

1. [8]

   I have concluded that Bingo should not be given leave to amend its Response as it proposes.

Must Bingo identify a particular concurrent wrongdoer?

1. [9]

   GC Group alleges that Bingo supplied the contaminated recycled aggregate between 1 June 2017 and 21 July 2017.

2. [10]

   In its proposed Response, Bingo identifies some 700 “Customers” who delivered “B&D Waste” (defined as waste generated from building and demolition activities) to its facility between 1 May 2017 and 1 July 2017.

3. [11]

   Bingo identifies those Customers in Part A and Part B of the Schedule to the proposed Response. The persons and companies listed in Part A are alleged to be persons who delivered B&D Waste to the facility during that period. The persons and companies identified in Part B to the Response are alleged to be the registered operators of motor vehicles used to deliver B&D Waste to Bingo’s facilities during the relevant period.

4. [12]

   Bingo has thus gone further than in the iteration of its proposed Response with which I dealt with in my 6 October 2020 judgment. In that iteration of the Response, Bingo went no further than identifying the registered owners of vehicles that delivered B&D Waste to its facility. I held that this was not sufficient to establish that such registered owners actually delivered material to the facility. [4]

5. [13]

   Now, in addition to identifying such parties in Part B of the Schedule, Bingo identifies, in Part A of the Schedule, parties it alleges actually delivered B&D Waste to the facility. For present purposes, I must assume that Bingo can establish this as a matter of fact.

6. [14]

   Mr Larkin SC and Mr To, for Bingo, summarised Bingo’s position as follows:

7. [15]

   In those circumstances, Bingo proposes to plead in its Response: [5]

8. [16]

   And: [7]

Part 4 of the Civil Liability Act

1. [17]

   Section 34(1) of the Act defines an “apportionable claim” as follows:

2. [18]

   Section 34(2) of the Act defines “concurrent wrongdoer” as:

3. [19]

   Section 35(1) of the Act provides:

4. [20]

   Section 35A of the Act provides:

5. [21]

   Thus, the scheme of the Act is that in a case involving an apportionable claim: [8]

6. [22]

   In order to be a “concurrent wrongdoer” for the purpose of s 34(2), Bingo must show that there is at least one other “person” whose acts or omissions have caused the loss of which GC Group complains. That is, Bingo must show that there is at least one other “concurrent wrongdoer”.

7. [23]

   The question is, is it necessary that Bingo identify, individually, and not merely as a member of a closed class, that other “concurrent wrongdoer”?

8. [24]

   This gives rise to a question of the proper construction of s 34(2) and s 35 of the Act.

9. [25]

   In that regard, in its proposed Response, Bingo proposes two alternative constructions of those sections: [12]

10. [26]

    That is, Bingo contends that on the proper construction of the definition of “concurrent wrongdoer” in s 34(2), Bingo is a “concurrent wrongdoer” because it is one of two or more persons whose acts or omissions have caused the damage of which GC Group complains. This notwithstanding the fact that it cannot identify, in the sense of name, which other person caused that damage.

11. [27]

    On the other hand, GC Group contends that Bingo must identify a particular person or persons as concurrent wrongdoers, and cannot refer to a class of persons, even a closed class of persons, as concurrent wrongdoers.

12. [28]

    My attention has not been drawn to any case dealing with this question, although in Perpetual Trustees Australia Limited v Paladin Wholesale Funding Pty Limited [13] Emmett J adverted to it [14] .

13. [29]

    The question posed by Bingo’s proposed pleading has high significance in this case.

14. [30]

    If Bingo is correct, it can name “persons” within a closed class (that is, WRBS or one or more of the Customers) as concurrent wrongdoers and seek to have its liability limited accordingly under s 35(2); and yet because the particular “persons” cannot be identified, GC Group is left unable to obtain redress by joining them as defendants.

15. [31]

    The question potentially has wider significance.

16. [32]

    The example given in argument was of a wholesaler sued for economic loss after having sold retailers punnets of strawberries into which an unknown and unidentifiable saboteur had secreted needles.

17. [33]

    If Bingo is correct, that wholesaler, for the purpose of s 34(2) could nominate the unidentifiable saboteur as a “person” whose acts caused the damage complained of, and seek to have its liability limited under s 35(1); but without the plaintiff retailer having any prospect of joining the saboteur as a defendant [15] .

18. [34]

    On the other hand, there are potentially serious consequences for Bingo if its contentions are not correct. In that event it will be exposed to a claim to compensate GC Group for all of the loss that GC Group has suffered, notwithstanding that Bingo itself did not cause any of the aggregate it supplied GC Group to be contaminated.

19. [35]

    The effect of the introduction of the proportionate liability regime into the Act in place of the solidary regime of the common law, was to shift the risk of a wrongdoer’s insolvency from the defendant to the plaintiff. [16] The point is emphasised by the provision of s 34(4) of the Act, that for the purposes of Part 4 of the Act:

20. [36]

    Bingo’s contentions here raise the question of whether the proportionate liability regime imposes a further risk on the plaintiffs, namely that the defendant may be able to have its liability limited by reference to the role played by wrongdoers whose role in causing the loss can be identified, but whose individual identity cannot be ascertained.

21. [37]

    Both parties sought to call in aid the provisions of s 35A in support of their competing contentions.

22. [38]

    Mr Corsaro SC and Mr Byrne, for GC Group submitted that:

23. [39]

    Section 35A does not, in terms, “require” a defendant to do anything. Rather it provides that if a defendant believes a “particular person” may be a concurrent wrongdoer but fails to identify that particular person to the plaintiff, the defendant may be ordered to pay costs that the plaintiff thereby unnecessarily incurs.

24. [40]

    However, the section has been construed as imposing a duty [17] on a defendant who invokes the proportionate liability provisions. The duty involves identifying the “particular persons” the defendant contends to be concurrent wrongdoers; thus complementing that defendant’s entitlement to seek to limit its liability by reason of those “particular persons’” alleged responsibility for damage.

25. [41]

    Thus, in Ucak v Avante Developments Pty Ltd, Hammerschlag J said: [18]

26. [42]

    And in HSD Co Pty Ltd v Masu Financial Management Pty Ltd, Rothman J held: [19]

27. [43]

    Those observations have been approved in many subsequent decisions, [23] including by the Queensland Court of Appeal in Meandarra Aerial Spraying Pty Ltd v GEJ Geldard Pty Ltd atf G&M Geldard Family Trust where Fraser JA (with whom White JA and Mullins J agreed) said: [24]

28. [44]

    All of this is consistent with the Commercial and Technology and Construction List Practice Note, [30] which requires that:

29. [45]

    Thus, s 35A should be seen as being complementary to s 35(1) and as requiring a defendant who seeks to invoke s 35(1) to limit its liability for the alleged damage by reference to the asserted responsibility of another person, to identify that other concurrent wrongdoer to the plaintiff with sufficient particularity to enable the plaintiff, if so advised, to join that party as a defendant.

30. [46]

    Here, the fact that Bingo is not able to identify the particular person that brought the contaminated B&D Waste to its facility means that it cannot follow the procedure set out in s 35A.

31. [47]

    In its proposed Response, it purports to do so, thus [31] :

32. [48]

    As the purported s 35A notice does not identify which of WRBS and the Customers, or which Customers, may be concurrent wrongdoers, it is of no assistance to GC Group in determining who it should join as a defendant.

33. [49]

    Bingo, on the other hand, points to the fact that s 35A speaks of a “particular person” who may be a concurrent wrongdoer, whereas s 34(2) speaks only of “persons” whose acts or omissions, along with those of the defendant, caused the damage in question.

34. [50]

    There is a presumption, although not a strong one, that “where legislature could have used the same word but chose to use a different word, the intention was to change the meaning”. [32] That presumption has less weight when an Act has been frequently amended. [33] All of Part 4 of the Act, including s 35A, came into effect on 1 December 2004 but s 35A was added to Part 4 after the legislation in which Part 4 was passed. [34]

35. [51]

    In those circumstances, any presumption that Parliament intended “persons” and “particular persons” to have a different meaning is not strong.

36. [52]

    To the contrary, in the context in which Parliament has used those expressions in Part 4 of the Act, they should in my opinion be read as having the same meaning, namely particular identified persons. This would ensure that ss 35 and 35A have the complementary and harmonious operation to which the authorities I have cited refer; and which Part 4 of the Act clearly calls for.

37. [53]

    Therefore, in my opinion, the construction of ss 34(2) and 35 for which Bingo contends is not correct and leave to amend the Response should be refused.

Is it necessary to plead that the plaintiff has a cause of action against the wrongdoer?

1. [54]

   As was the case when I dealt with the earlier iteration of Bingo’s Response, [35] a further matter that was debated before me was whether a defendant to an apportionable claim must show that the plaintiff has a cause of action against the parties named by the defendant as concurrent wrongdoers.

2. [55]

   There is very recent Court of Appeal authority that this is necessary. [36]

3. [56]

   Mr Larkin submitted that this authority was obiter, “made with insufficient attention to the clear words of the statute and without sufficient analysis” and contrary to High Court authority. [37]

4. [57]

   However, as was the case with that earlier iteration of the Response, Bingo in its proposed Response does plead that the Customers and WRBS owed a duty to third parties (such as GC Group) to ensure that the Existing Stockpile (in the case of WRBS) and the B&D Waste delivered to Bingo’s facility (in the case of the Customers) did not contain any contaminated material. [38]

5. [58]

   Further, unlike the earlier iteration of the Response, Bingo now alleges that third parties, such as GC Group, were relevantly vulnerable. [39]

6. [59]

   GC Group submitted that it was “unlikely” that Bingo would establish vulnerability. However, that would be a question of fact and not a matter apt to be determined summarily.

Conclusion

1. [60]

   I refuse to grant leave to the defendants to amend their Technology and Construction List Response in the manner set out in Annexure “A” to the affidavit of Dorian Kratsas sworn on 16 November 2020.

2. [61]

   The defendants’ notice of motion of 16 November 2020 is dismissed with costs.

3. [62]

   The matter will be listed for directions on 26 March 2021.