Libra Collaroy Pty Ltd v Bhide

1. [1]

   McCOLL JA: The applicant, Libra Collaroy Pty Limited trading as Elders Real Estate (Elders), seeks leave to appeal against a decision of his Honour Judge Curtis sitting in the District Court of New South Wales in which his Honour found that Elders was liable for damage suffered by four people (plaintiffs) who were injured in the collapse of a balcony on the evening of 15 June 2012 at a residential property in Collaroy (property). [1] The balcony collapsed, in short, because of weathered deterioration of the structural beams and metal fixings.

2. [2]

   Elders managed the property pursuant to an Exclusive Management Agency Agreement Residential executed on 14 June 2005 (Management Agreement) with its owners, the first and second respondents, Deepak and Alka Bhide (the Bhides, unless the context otherwise requires). At the time the balcony collapsed, the property was leased to the third respondent, Ms Joanne Gillies.

3. [3]

   The plaintiffs, Ms Gillies’ daughter, Sanchia Gillies, Scott Baker, Wade Farmer and Naomi Monfrooy, each commenced separate proceedings in the District Court against Elders and the Bhides seeking to recover damages in respect of their injuries. Ms Gillies commenced proceedings for the same purpose against Elders and the Bhides. She was not on the balcony when it collapsed, but claimed to have suffered psychiatric injury as a consequence of seeing those injured, one of whom was her daughter, in pain and fear at the accident scene. There were a number of cross-claims as between Elders, the Bhides, Mr Windred (a carpenter who did some maintenance work on the deck of the balcony in 2008) and Ms Gillies which I outline later in these reasons. All the proceedings were dealt with as one for directions and hearing purposes. On 8 April 2015 a Registrar of the District Court directed that the question of liability be determined separately in advance of damages issues in the proceedings.

4. [4]

   The competing contentions as identified in the pleadings are referred to in more detail below. In short, however, the primary judge held, and consequentially ordered, that:

   1. (1)

      In the plaintiffs’ proceedings:

   2. (2)

      In Ms Gillies’ proceedings:

   3. (3)

      On Elders’ cross-claim against the Bhides and Mr Windred in the Gillies proceedings, judgment for the Bhides and Mr Windred against Elders.

5. [5]

   Elders does not challenge the primary judge’s finding that it was negligent in each of the plaintiffs’ and Ms Gillies’ proceedings. However, it contends that his Honour erred in determining that the Bhides and Ms Gillies were not also liable as tortfeasors, and in determining that the Bhides were entitled to a contractual indemnity in respect of their liability to Ms Gillies for breach of the tenancy agreement.

6. [6]

   Elders seeks to recover contribution from the Bhides and Ms Gillies to the extent that the Court considers it just and equitable pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (1946 Act). Insofar as the Bhides are concerned, and in respect of the findings that they were entitled to a contractual indemnity, it seeks apportionment by reason of what it contends was their contributory negligence in accordance with s 9 of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW) (1965 Act).

7. [7]

   Leave to appeal is required because the primary judge’s decision did not determine all the rights of the parties that were at issue and left undetermined the question whether any, and what, damages are payable. [2]

8. [8]

   Leave to appeal should be granted, as the case involves the final determination of the parties’ liability, and resolution of that issue determines the parties who will participate in the damages hearing(s) which have yet to proceed and the manner in which the burden of any damages awards should ultimately be borne.

9. [9]

   For the reasons that follow, I would allow the appeal.

The pleadings

1. [10]

   The appeal papers included what appear to be all the pleadings in Ms Gillies’ proceedings and the pleadings in one of the plaintiff’s proceedings. I have assumed the latter are representative of the pleadings in the other three plaintiffs’ proceedings.

2. [11]

   As I have said, Ms Gillies sued Elders and the Bhides. In her statement of claim she pleaded, relevantly, that she had suffered injury, loss and damage by reason of the negligence of the Bhides and Elders in failing properly to inspect and repair the balcony. She also alleged the Bhides had breached the tenancy agreement in failing to maintain the premises fit for habitation and in a reasonable state of repair, in consequence of which she was injured and claimed compensatory damages.

3. [12]

   In defence to her claim, Elders pleaded, among other matters, that she was guilty of contributory negligence in a number of respects, including failing to take reasonable steps to ensure the safety of persons on the balcony and permitting the use of the balcony when she knew, or ought to have known, that it posed a risk of injury.

4. [13]

   There were two cross-claims in Ms Gillies’ proceedings. First, the Bhides brought a cross-claim seeking, relevantly, indemnity from Elders by reason of its failure to use reasonable care and skill in managing the property and breach of the Management Agreement including for breach of an implied term to use reasonable care and skill in performing the work for which it provided in the event they were found liable to her in any of the proceedings (First Bhides’ cross-claim) and contribution pursuant to s 5 of the 1946 Act in respect of any liability to Ms Gillies. Insofar as the breach of the Management Agreement was concerned, the Bhides pleaded that they were entitled to be indemnified by Elders. They also cross-claimed against Mr Bruce Windred, a carpenter who performed maintenance work on the balcony in 2008 seeking, again, to recover from him any damages for which they might be found liable to Ms Gillies. It is not necessary to set out the details of this cross-claim as the primary judge found in Mr Windred’s favour, a finding which is not challenged.

5. [14]

   In defence to the Bhides’ cross-claim in the Gillies proceedings, Elders pleaded that, to the extent the Bhides suffered any loss or damage in the manner particularised in their cross-claim, and if that loss or damage was due to Elders’ negligence, any damages to which they might be entitled should be reduced by reason of their contributory negligence

6. [15]

   Secondly, Elders brought a cross-claim seeking indemnity from the Bhides pursuant to an indemnity provision in the Management Agreement and also contribution both from them and from Mr Windred as joint tortfeasors pursuant to s 5 of the 1946 Act (First Elders’ cross-claim). Elders relied upon the plaintiffs’ pleadings to found its allegations of breach of duty of care. Those particulars included allegations that the balcony was not properly inspected, not kept in a state of proper repair and knowledge of those matters whether actual, constructive or by reason of reckless indifference, that the balcony had not been properly maintained and allowing the balcony to be used despite knowing it was in a state of disrepair.

7. [16]

   The plaintiffs each sued the Bhides and Elders. There were two relevant cross-claims in their proceedings. The first was filed by the Bhides seeking contribution from Mr Windred, Elders and Ms Gillies pursuant to s 5 of the 1946 Act (Second Bhides’ cross-claim). Once again, insofar as the Bhides cross-claimed against Elders, they claimed indemnity in respect of Elders’ breach of the Management Agreement for any liability to the plaintiffs and Ms Gillies, the measure of damage for which was any damages, interest or costs awarded to any plaintiff and contribution pursuant to s 5 of the 1946 Act. The second cross-claim was filed by Elders seeking contribution from the Bhides, Mr Windred and Ms Gillies as joint tortfeasors pursuant to, inter alia, s 5 of the 1946 Act (Second Elders’ cross-claim).

8. [17]

   Elders filed a similar defence to the Second Bhides’ cross-claim to that filed in the Gillies’ proceedings.

9. [18]

   Ms Gillies did not file any cross-claims. She filed a defence to the Second Elders’ cross-claim in each of the plaintiffs’ proceedings denying the allegations and particulars of negligence against her and denying the Bhides’ cross-claim in Elders’ entitlement to contribution. She did not file a defence to the Second Bhides’ cross-claim in each of the plaintiffs’ proceedings.

Statement of the case

1. [19]

   There were six lay witnesses: Mr and Mrs Gillies, Mr and Mrs Bhide, Mr Windred and Ms Hopton, a former Elders’ employee and the property manager at Elders with responsibility for the property from about November 2011 to September 2012. The liability hearing proceeded on the basis of statements given by each of the lay witnesses and their cross-examination. Three experts gave concurrent evidence. [3]

2. [20]

   The liability hearing came before the primary judge on 29 September 2015. His Honour granted leave for Ms Gillies to have separate legal representation by reason of the two capacities in which she was before the Court, both as plaintiff in her proceedings and alleged joint tortfeasor for the purposes of the cross-claims in the plaintiffs’ proceedings.

3. [21]

   In his reasons, the primary judge referred to much of the evidence concerning the construction of the balcony and its lengthy maintenance history. However, the evidence was more extensive than that to which his Honour referred. It is necessary, in order to deal with the appeal, to set out some evidence to which his Honour did not refer.

4. [22]

   In 1999, the Bhides bought the property through Elders, presumably as the vendor’s agent. The house on the land is a two-storey residence with a timber balcony on the north side of the upper level (balcony) and a lower deck extending out from the first level.

5. [23]

   On 20 September 1999, the Bhides entered into an agency agreement with Elders in respect of the management and leasing of the house (1999 Management Agreement). The 1999 Management Agreement was superseded by the Management Agreement. The Management Agreement was still on foot at the time of the relevant events.

6. [24]

   According to Ms Hopton’s evidence, Elders was a network of real estate agencies with over 320 offices operating in all capital centres, major regional and rural centres across Australia. She agreed that Elders had expertise in property management and, among other matters, was responsible for protecting rental property from damage and other unfortunate circumstances. She accepted that, as property manager, she acted as the main point of contact with tenants and dealt with issues they raised to mitigate problems that arose. She also accepted that Elders had access to a “stable of tradesmen” including builders, engineers and architects and, generally, that all sorts of building and construction expertise was available to her.

7. [25]

   The Management Agreement relevantly provided:

8. [26]

   On 9 November 2005 the Bhides entered into the tenancy agreement to lease the house to Ms Gillies and her husband, Mr Malcolm Gillies. Ms Gillies became the sole lessee when the lease was renewed on 10 December 2010. Pursuant to cl 12 of the tenancy agreement, the Bhides agreed to make sure the premises were reasonably clean and fit to live in and to keep the premises in reasonable repair considering their age, the rent and the prospective life of the premises. Pursuant to cl 14.1, the Gillies agreed not to “renovate, alter or add to the residential premises without the [Bhides’] written permission”. Pursuant to cll 16 and 17, the Bhides agreed to pay the Gillies any reasonable costs (not exceeding $1,000) incurred for making urgent repairs, among others, in respect of “any fault or damage that causes the premises to be unsafe or not secure”.

9. [27]

   The balcony was constructed in 1995 with untreated Oregon timber which, due to its lack of durability, is unsuited for weather-exposed structural members and is highly prone to rot. [5] As the following narrative reveals, many of the problems identified following the Bhides’ purchase of the property related to the deck of the balcony, that is to say, the walking area most exposed to the elements. I use the word “deck” to refer to that area and “balcony” to refer to the entire structure. It is not clear that those who inspected or commented about the structure prior to the accident drew that distinction.

10. [28]

    A building inspection the Bhides obtained prior to buying the property observed that the balcony was “in generally satisfactory condition for age and type, however top edges of softwood support joists are vulnerable to fungal decay. We recommend preservative paint protection to all exposed softwood timbers” [emphasis in original]. The advice as to painting was repeated in the report’s summary, identifying items recommended for attention as part of ongoing maintenance.

11. [29]

    By June 2001, the deck was in poor condition. Elders arranged for repairs to be effected by Pittwater Maintenance Service. This included removing and replacing the worst of rotting deck boards and digging out rotting timber from parts of the deck bearers exposed by removing deck boards. In the notes section of its invoice for the work done dated 14 June 2001, Pittwater Maintenance Service recorded:

12. [30]

    In cross-examination, Mr Bhide accepted that he received and read this invoice.

13. [31]

    Notwithstanding this note, in its property inspection report dated 19 December 2002, Elders wrote under the section “Recommended Repairs/Renovations”, “Nil to Mention”.

14. [32]

    In April 2003, Pittwater Maintenance Service provided a quote for various matters including, bracing the balcony to minimise sideways movement. This was undertaken by the installation of metal cross braces under the deck.

15. [33]

    On 10 November 2004 Northern Group (Aust) Pty Ltd (Northern Group) provided two quotes, one to repair the balcony, in the amount of $1,784.38, for repairing the joists (the bearing beams under the walking planks) and another to “replace the deck” with one made of pine, in the amount of $5,294.63. The quote indicated that there was “wood rot in the top of 50% of the joists.” It stated that the cheaper option of repairing the joists was a temporary measure. [6] Again, in cross-examination, Mr Bhide accepted that he received and read this quote, but had not accepted it.

16. [34]

    On 8 December 2004, Pittwater Maintenance Service advised that the “[d]eck has wood rot to the top of many of the joists [which has] caused the boards to sag or lift in various places.” It provided a quote in the amount of $1,542.00 to replace the worst of the joists with new treated pine joists and to saddle the remainder with treated pine bolted to the existing floor joists to provide support for the floor boards. It advised this was the alternative solution to dismantling and building a new deck. Mr Bhide accepted in cross-examination that he received and read this invoice. Elders accepted this quote and Pittwater Maintenance Service performed the work. From the date of its invoice, it appears the work was carried out in late February 2005.

17. [35]

    On 9 November 2005, the Bhides entered into the tenancy agreement with Ms and Mr Gillies.

18. [36]

    On 26 March 2007 Mr and Ms Gillies informed Elders by email that the “upper timber deck is showing signs of wood rot due to exposure to the weather”. Three days later, on 29 March 2007, Elders conducted a periodic inspection the report for which ticked the box advising the property was “in a clean and tidy condition”.

19. [37]

    On 25 May 2007 Elders conducted a further periodic inspection, the report of which also noted for the Bhides’ “information and consideration” the “upper timber deck is showing signs of wood rot and needs attention”. It asked the recipient to contact Elders to discuss the matter. In response to the report, Mr Bhide said that, in accordance with usual practice, Elders instructed contractors to inspect the property and provide a quote.

20. [38]

    On 18 and 20 June 2007 Mr Graham of Elders sought quotes from Twenty Four Seven Building Maintenance Service and North Property Repairs & Maintenance in respect of rotting timber boards “on the balcony”.

21. [39]

    On 22 June 2007 North Property Repairs & Maintenance provided a quote which stated, relevantly:

22. [40]

    The quote from Twenty Four Seven Building Maintenance Services recommended replacing the decking timber. It noted that the bearers appeared sound, “however will need to be checked upon removal of decking timber.”

23. [41]

    On 3 July 2007 Ms Bobanovic, then apparently the property manager at Elders responsible for the property, emailed Mr Bhide advising him that she had checked the warranties on both the above quotes (referring to each by name) and asked if he sought any more information. In response Mr Bhide sought “exact details … in writing” of both quotes. Mr Bhide was not taken to this document in cross-examination. However, Mr Priestley submitted in this Court that an inference should be drawn from that exchange of emails that the Bhides saw both quotes. I would accept that submission.

24. [42]

    Neither quote was accepted, it appears because Mr Bhide was dissatisfied with the warranty each provided.

25. [43]

    On four occasions in September and October 2007, in the course of negotiating an extension to the tenancy agreement, Mr Gillies referred in emails to Elders to the fact that there were patches/areas of wood rot in the deck and his understanding that the Bhides would attend to its repair.

26. [44]

    Between November 2007 and January 2008 Elders sought further quotes in respect of the rotting decking boards. One received from Inside Out Maintenance Services, indicated that the “[d]ecking is rotting, front steps are broken. Both are an OH&S hazard, will need replacing.” The primary judge inferred that, as the quote was for $5,500.00, the work envisaged was the replacement of the entire deck and supports. [7]

27. [45]

    On 12 March 2008, Ms Bobanovic wrote to the Bhides in the following terms:

28. [46]

    Mr Bhide was asked whether at the time he received this letter and in the light of the history of complaints he considered somebody should inspect the structure of the deck. His response was “if that was required. I was waiting for advice from the agent, what needs to be done.” He said he had contacted Ms Bobanovic and asked her to get a quote to fix the problem. The evidence does not disclose why the quote obtained in late 2007 was not accepted.

29. [47]

    It appears to have been common ground that Mr Bhide knew Mr Windred through their respective sons’ sporting endeavours and suggested to him, or to Elders, that he may quote for the work Elders was recommending. On 9 April 2008, Elders asked Mr Windred to provide a quote for replacing the decking boards. On or about 16 April 2008, he submitted a quote which included not only replacing the decking, but also to “replace rotted 135 by 35 deck roof beams …”. On 7 May 2008 Mr Bhide instructed Elders to accept his quotation.

30. [48]

    Mr Windred was not licensed to carry out structural work to balconies. He was contracted to apply new decking boards over the existing structure. He gave evidence that when he removed the decking, he observed that the main structure had previously been worked on by way of treated pine joists being positioned on either side of the existing joints secured to the front barge. Although he accepted he was not qualified to comment on the main structure of the balcony, he said “that there were no obvious or dangerous structural deficiencies that I observed on replacing the decking boards.” He also said that “if I had seen anything that I had considered dangerous or if I had any doubt regarding the structural stability and safety of the front balcony, I would have raised this issue with the agent immediately.” [8]

31. [49]

    On 13 June 2008, Mr Gillies sent an email to Elders advising that the work to the timber deck had been completed the previous day “including the pergola, and replacing the bottom tread on the lower deck.” The email explained that “[m]y wife who’s an architect and myself have inspected at the completed work [sic, as in original] and it all appears to be in order.”

32. [50]

    Further routine property inspections were carried out by Elders on 7 October 2008, 14 April 2009, 5 November 2009 and 5 April 2011. The inspection reports indicated to the Bhides that the property was in “a clean and tidy condition”, with no mention of any problems with the balcony or deck. [9]

33. [51]

    In late 2010, it appears that the Gillies were considering entering a new tenancy agreement. On 22 November 2010, Mr Gillies emailed Ms Penfold, then the property manager at Elders managing the property (copied to Mrs Gillies), concerning the matter. The email gave reasons why a new agreement for a further committed 12 month period would not be signed including that:

34. [52]

    The following day Mr Gillies sent another email to Ms Penfold advising they were “prepared to consider a fresh 12 month lease once our concerns and requests … have been addressed, especially the safety and structural issues attached to the timber deck” and asked that the email be discussed with the owner.

35. [53]

    On 26 November 2010 Mr Gillies sent an email (again copied to Ms Gillies) to Ms Penfold advising that a new lease would be signed, relevantly, “upon receiving a satisfactory report from one of our builders that the timber deck is stable and will remain so for the duration of the new lease. In good faith and at our expense we are arranging the inspection as soon as possible next week to have the supporting beam checked for its structural safety based on the extent of the current wood rot and the rate at which it may progress during the term of the lease if left unattended by the Owner.” The email concluded by saying “we will keep you advised.”

36. [54]

    On 6 December 2010, Ms Gillies emailed Ms Penfold at Elders advising that the 12 month lease would be signed in her name only and stating:

37. [55]

    Ms Penfold forwarded Ms Gillies’ email to Mr Bhide on 6 December 2010 and asked him to “let me know your thoughts.”

38. [56]

    On 8 December 2010 Mr Bhide emailed Ms Penfold apparently in response to her email of 6 December 2010. He did not refer to Ms Gillies’ comments about the structural beam. He advised Ms Penfold that she needed to write to the tenants that they needed to sign the lease by the following weekend or they would receive a 60 day notice. Ms Penfold responded the same morning advising that she had communicated Mr Bhide’s advice to the tenant. Mr Bhide said that after his conversation with Ms Penfold, he “never heard about any building quote”, but that “if the work is required then Elders get the quote and we fix the problem.”

39. [57]

    Mr and Mrs Gillies separated in late 2009. He moved out of the property but visited his children there following his departure. On 10 December 2010 Ms Gillies entered into a new tenancy agreement with the Bhides. Ms Gillies accepted in cross-examination that she had not arranged an inspection as referred to in her 6 December 2010 email. She did not advise Elders of this.

40. [58]

    There is no evidence that Mr Gillies’ email of 26 November 2010 was sent to Mr Bhide. He was not cross-examined to suggest it was. Indeed, an exchange between Mr Priestley and the primary judge in the course of Mr Bhide’s cross-examination about the events of 2010 appeared to recognise that there was no evidence that Mr Gillies’ email had been sent to him. Mr Bhide’s only evidence in this respect was to the effect that any work at the property was not related to entry into a lease, he had agreed that if the tenants signed the lease they could do an inspection and, in effect, that the tenants then appeared to have let the issue go.

41. [59]

    As I have said, between about November 2011 and September 2012, Ms Hopton was the property manager at Elders responsible for the management of the property. Most, if not all, of her dealings were with Mr Bhide by telephone or email.

42. [60]

    Ms Hopton had no qualifications in property management when she joined Elders. She learned on the job with another agent sitting beside her. Her training included being told that when tenants raised concerns she had to consider what type of tradesman might be able to deal with those concerns. At the time she started to manage the Bhides’ property, she was responsible for hundreds of files.

43. [61]

    On 11 January 2012, Mr Gillies sent Ms Gillies an email saying:

44. [62]

    This email was not admitted as against the Bhides as there was no suggestion they had received it. It was admitted only as against Ms Gillies. When cross-examined about it, Ms Gillies said she also observed the front of the deck was weather damaged and warped, but she had no concern it would eventually give way. She wanted Elders to inspect it. While she understood Mr Gillies was warning that the nailing plate attached to the post would eventually give way, she said that “not in my wildest dreams would I have thought the whole thing would collapse, and I did raise it with Elders continually.”

45. [63]

    Nevertheless, on 24 February 2012 Ms Gillies sent an email to Ms Hopton stating:

46. [64]

    In cross-examination, Ms Gillies explained that her reference to “timber strutting” should be read as “metal bracing”.

47. [65]

    Elders kept the maintenance records relating to the house in a paper file to which Ms Hopton had access. However, Ms Hopton said that she did not “study it” when she took up her duties as property manager for the property. At the time she received Ms Gillies’ email, she had not conducted an inspection of the property. She looked at the file. She formed the view that the work required to address Ms Gillies’ email was “replacement of the deck”. It is apparent that by that she meant the deck surface, rather than any structural aspect of the balcony. This was made apparent in her evidence that she summarised Ms Gillies’ email to her supervisor who instructed her to “get a carpenter to quote to replace the decking”.

48. [66]

    On 28 February 2012, Ms Hopton sent an email to Mr Bhide setting out Ms Gillies’ email and asked him to “[l]et me know what you think.” The Bhides were in India when the email arrived. Mr Bhide saw it about a week after his return. In his trial statement, Mr Bhide said he needed “to know what the best way was to fix the deck.” He said that if he had been given any indication that it was in any way unsafe, he would have considered removing or replacing it, and blocking it off from use in the meantime.

49. [67]

    Mr Bhide spoke to Ms Hopton on about 7 March 2012 about the emails. At the time of her conversation with Mr Bhide, Ms Hopton was aware from speaking to her supervisor that the deck had been replaced previously, but otherwise was unaware of the history of previous quotes, previous repairs and previous complaints by the tenant about the deck. She suggested getting a carpenter. He accepted that advice. He said he instructed her to obtain two quotes regarding the deck and to advise Ms Gillies “meanwhile to use the deck carefully”.

50. [68]

    In cross-examination, Mr Bhide was asked whether, having read Ms Gillies’ email, he thought there should be some inspection of the deck by someone qualified to assess its structure. His response was :

51. [69]

    Ms Gillies gave evidence that Ms Hopton inspected the premises on about 16 March 2012. She said she showed her the things that looked bad under the deck, the wood rot in the joists, the corrosiveness on the metal affixers and the lack of spacing on the decking planks.

52. [70]

    In early April 2012, Mr Gee from Gee & Son Carpentry inspected the deck. Ms Gillies was present. She gave evidence that she assumed his qualifications were suitable to make an assessment to tell Elders and the Bhides what needed to be done. This gave her comfort with respect to her concerns about the deck.

53. [71]

    The evidence did not reveal what instructions Ms Hopton gave Mr Gee, however it is tolerably apparent from the advice she had received from her supervisor and conveyed to Mr Bhide that it was to quote for replacing the decking. On 10 April 2012 Mr Gee gave Ms Hopton a quote:

54. [72]

    Ms Hopton said that she conducted a periodic inspection of the property at which Ms Gillies was present on 16 April 2012. She could not recall when she prepared her statement that there was any mention of the deck, which appears to be borne out by her letter to Mr Bhide reporting on the inspection in which she noted that “we found the property to be in a clean & tidy condition” and “the tenant had no problems to report”. The letter also advised that the inspection was “not to be construed as a building … inspection”. [10]

55. [73]

    On 20 April 2012, Ms Gillies sent an email to Ms Hopton complaining, among other matters that “the deck has gotten worse since the rain and is hugely slippery and mossy …The carpenter who came last week to assess the top deck thought it was the bottom deck that was worse…” After this email was received, the Bhides sought a more extensive quote to put a cover over the deck so it did not get wet.

56. [74]

    On 26 April 2012 Mr Gee provided a further quote to construct a new pergola.

57. [75]

    The two Gee quotes were first forwarded to Mr Bhide on 15 June 2012, the morning of the day on which the balcony collapsed after he contacted Ms Hopton about not having received them. [11] In his reasons, the primary judge observed that the delay between the quotes being obtained in April 2012 and the date they were sent to Mr Bhide was irrelevant as “[t]he work commissioned from Mr Gee did not address the underlying structural problem that caused the collapse.” [12]

58. [76]

    When asked in cross-examination what he was doing about dealing with the structural issue in about April 2012, Mr Bhide’s response was that “[e]verybody was telling me it’s a problem with the decking, not the – if it requires structural fixing then agent will get me the quote to deal with that problem.” He accepted that the first quote from Mr Gee did not cover the structural problem and that he “had asked to get the quotes to fix the problem, which about the structural or the decking” [sic, as in original]. However, when asked in terms by the primary judge what he had said to Ms Hopton when she telephoned about Mr Gee’s carpentry quote, Mr Bhide’s response was that “we need to get the quote for the pergola so that the slippery part of the complaint the tenant made won’t happen again, that water won’t get on the deck at all.”

59. [77]

    Mr Bhide accepted in cross-examination that the works that were outlined in the two 2012 quotes did not address the structure of the deck, although he knew by that time that people had expressed concern about that issue. He said he was content to proceed on the basis of the two quotes in the expectation that “if Gee & Sons start the replacement work, maybe they will discover something for which they can find a fix or something. Even if though this wasn’t going to fix the structural problem of the beam, they could have given a further quote to fix the problem they see after removing the boards.” He agreed that “[he] thought they should go in and do that work and if they saw any structural problem then they could tell [him] or [he] could get them to do some more work.”

Liability judgment

1. [78]

   At the conclusion of the liability hearing on 1 October 2015, the primary judge delivered an ex tempore judgment. He granted liberty to the parties to bring in Short Minutes to reflect his reasons. This does not appear to have occurred. Rather, there was a further hearing on 16 December 2015 dealing with the questions of orders and costs, with findings and final orders made on 3 February 2016. [13]

2. [79]

   By reason of s 5A of the Civil Liability Act 2002 (NSW) (CLA), the proceedings were subject to Pt 1A (Negligence) of that Act. That is because the plaintiffs’ and Ms Gillies’ claims and, relevantly, the Bhides’ cross-claims seeking indemnity from Elders in respect of their liability to any plaintiff by reason of its breach of the implied term to exercise reasonable care and skill were claims for damages for harm resulting from negligence, being Elders’ and the Bhides’ failure to exercise reasonable care and skill. [14] In the case of the Bhides’ cross-claim, they relied upon both an implied term of the Management Agreement, and a common law duty of care, each of which required Elders to use reasonable care and skill. The effect of that is that all claims of that kind are treated in the Act as if they were claims for the tort of negligence. [15]

3. [80]

   However, save for a passing reference in Elders’ written submissions and two equally passing references in oral submissions to the CLA, no party drew any of its provisions to his Honour’s attention. His Honour did not refer to any of its provisions.

4. [81]

   The primary judge first set out substantially all of the history I have recounted. He made no credit findings. He did not refer to any of the lay witnesses’ oral evidence.

5. [82]

   The primary judge then turned to the evidence given by the experts in respect of the causes of the collapse which they generally agreed was as follows:

6. [83]

   Three of the experts gave concurrent evidence from which his Honour concluded a common position was reached “to the effect that recognition of the extent of deterioration required some skill and training in construction, and that Mr Windred’s limited experience and expertise may not have equipped him with sufficient knowledge to recognise such problems as may have been apparent.” [16]

7. [84]

   No expert was of the opinion that Mr Windred’s work caused or contributed to the collapse. [17]

8. [85]

   The primary judge first dealt with Elders’ liability. In doing so, his Honour set out the provisions of the 1999, rather than the 2005, Management Agreement. [18] It was common ground on appeal that there was no relevant difference between the 1999 Management Agreement and the 2005 Management Agreement.

9. [86]

   The primary judge found that it was beyond dispute that Elders, “having accepted the delegation and authority to arrange repairs and maintenance in accordance with the Principal’s obligations to repair” [emphasis in original] owed to the plaintiffs a duty to exercise reasonable care in maintaining the premises. [19] His Honour considered that, in the light of the balcony’s maintenance history, and pursuant to the express terms of the Management Agreement, Elders was liable in negligence to each of the plaintiffs and Ms Gillies. In particular, his Honour placed weight on the information Elders received from Northern Group in November 2004, [20] indicating that repairing the joists instead of replacing the deck was a temporary measure, from North Property Repairs & Maintenance in June 2007, [21] indicating the percentage of timber that was “completely rotted to a dangerous level”, and from Twenty Four Seven also in 2007 that if only the decking was removed the bearers would need to be checked. [22]

10. [87]

    His Honour found:

11. [88]

    In the costs judgment, the primary judge also found that “the collapse of the balcony resulted from breach of the contractual duty to exercise reasonable skill and care” Elders owed to the Bhides pursuant to the Management Agreement. [24]

12. [89]

    The primary judge then considered the Bhides’ liability to the plaintiffs and Ms Gillies.

13. [90]

    Counsel for Elders had submitted that the Bhides were liable because their delegation of responsibility for maintenance of the premises to it was incomplete, relying on Laresu Pty Ltd v Clark where Macfarlan JA held that a general delegation to an agent cannot absolve the principal “of responsibility for the state of the premises to the extent that such a state reflected its express instructions.” [25]

14. [91]

    The primary judge saw no evidence that the Bhides gave any express instructions to Elders inconsistent with them accepting Elders’ recommendations for necessary repairs. His Honour held that they had “no cause to doubt that Elders possessed the skill and experience to properly maintain the premises”. His Honour held that they had “discharged their duty of care to the plaintiffs by engaging a competent contractor to fulfil [their] duty”. [26]

15. [92]

    Accordingly, his Honour held that the Bhides, if sued, would not have been held liable to the plaintiffs in tort. [27]

16. [93]

    The primary judge held that the Bhides were, however, liable to Ms Gillies in contract for breach of their contractual obligation under the tenancy agreement to maintain the premises in a reasonable state of repair. However, he held that the Bhides were entitled to a contractual indemnity from Elders in respect of this liability. [28]

17. [94]

    As to the Bhides’ liability to Elders, the primary judge held that the indemnity provision was against liability arising out of the proper performance of the agent’s duties, but that it did not apply where, as in the present case, Elders had failed to perform its duties properly. [29] Elders does not challenge this finding.

18. [95]

    As to the liability of Mr Windred to the plaintiffs and Ms Gillies, his Honour found that Mr Windred was not a tortfeasor who, if sued, would have been liable. His Honour held that the scope of Mr Windred’s duty was to be measured against the nature of the specific work that he was engaged to perform. He was retained to replace the decking boards, not to advise on the structural integrity of the balcony for which he was not qualified. [30]

19. [96]

    Finally, the primary judge dealt with Ms Gillies’ liability as occupier of the property to the plaintiffs. Although none of the plaintiffs had sued her, the question whether she was a tortfeasor was relevant to the cross-claims for contribution brought against her, relevantly, by Elders and the Bhides.

20. [97]

    The primary judge accepted that Ms Gillies owed the plaintiffs a duty of care as occupier. [31]

21. [98]

    Counsel for Elders submitted that Ms Gillies had failed to discharge her duty of care to the plaintiffs in three respects:

    1. (1)

       As a qualified architect she had a special expertise and failed to exercise that expertise to detect the problems with the balcony;

    2. (2)

       In the alternative, she should have commissioned an independent inspection; and

    3. (3)

       Further in the alternative, she should have closed and locked the balcony.

22. [99]

    His Honour rejected Elders’ submissions for the following reasons:

23. [100]

    Elders does not challenge his Honour’s finding at [59], although it does rely on the proposition that Ms Gillies was an experienced, registered and practising architect.

24. [101]

    Accordingly, the primary judge concluded that, if the plaintiffs and Ms Gillies had suffered injuries, Elders was solely liable to them in tort, the Bhides were only liable to Ms Gillies in her case for breach of contract, for which they were entitled to a contractual indemnity from Elders, and the Bhides and Ms Gillies were not liable on Elders’ cross-claims. [32]

Costs judgment

1. [102]

   In the costs judgment, the primary judge made what he described as “findings”. Most, if not all, repeated findings made in the liability judgment.

2. [103]

   Insofar as Ms Gillies’ case was concerned, those findings included that the balcony’s collapse resulted from breach of the contractual duty to repair the Bhides owed to Ms Gillies pursuant to the tenancy agreement, and, too, from breach of the contractual duty to exercise reasonable skill and care Elders owed to the Bhides pursuant to the Management Agreement, and breach of the common law duty Elders owed to Ms Gillies. In addition to the liability judgment findings, his Honour held that Ms Gillies had not failed to take reasonable steps to ensure her own safety. However, his Honour considered that, because the Bhides and Elders asserted that Ms Gillies suffered no damage as a result of their breach of duty, it was premature to enter a verdict or judgment in her favour. [33]

3. [104]

   As to the First Bhides’ cross-claim, pursuant to which the Bhides sought contribution from Elders and Mr Windred, it was similarly premature to enter a verdict or judgment for the Bhides against Elders where Elders might not be liable to Ms Gillies in damages. [34] However, his Honour was prepared to enter judgment for Mr Windred and order that the Bhides pay his costs.

4. [105]

   As to the First Elders’ cross-claim, pursuant to which Elders claimed contribution from the Bhides and Mr Windred, his Honour entered judgment for the Bhides and Mr Windred against Elders, ordering that the latter pay the costs of the other parties. [35] Elders was ordered to pay the costs incurred by the Bhides in defending the cross-claim on an indemnity basis from 21 September 2015, [36] being the date of an offer of compromise made by the Bhides and unreasonably rejected by Elders. [37]

5. [106]

   In respect of the remaining plaintiffs’ proceedings, the primary judge repeated that the balcony’s collapse resulted from the breach of a duty Elders owed to the plaintiffs to exercise reasonable skill and care in maintaining the balcony and not from any breach of duty owed by Mr Windred, Ms Gillies or the Bhides. [38] His Honour gave verdict for each of the plaintiffs against Elders and judgment for the Bhides against each of the plaintiffs, with Elders to pay the Bhides’ costs incurred in defending the plaintiffs’ claims. [39] That costs order was based on his Honour’s finding that Elders’ subsequent conduct in continuing to deny liability and asserting that the Bhides were responsible was sufficient reason to enliven the discretion to make a Sanderson order in favour of the plaintiffs against Elders. [40]

6. [107]

   In respect of the Second Bhides’ cross-claim in each of the plaintiffs’ proceedings, the primary judge ordered judgment for Mr Windred and Ms Gillies against the Bhides with costs. [41]

7. [108]

   In respect of the Second Elders’ cross-claim in each of the plaintiffs’ proceedings, the primary judge ordered judgment for the Bhides, Mr Windred and Ms Gillies against Elders, with Elders paying the costs of the other parties. [42]

Issues on appeal

1. [109]

   As I have said, Elders does not challenge the finding that it was negligent, but contends that the Bhides and Ms Gillies should also have been held liable to the other plaintiffs in negligence, and therefore liable to contribute to Elders on its cross-claims pursuant to s 5 of the 1946 Act. In its notice of appeal, Elders relied on the following grounds of appeal:

   1. (1)

      The primary judge erred in finding the Bhides and Ms Gillies not liable to the plaintiffs, and hence not liable to Elders on its cross-claims.

   2. (2)

      The primary judge erred in finding:

   3. (3)

      The primary judge failed to consider and apply the principles of s 5B of the CLA to Elders’ respective cases against the Bhides and Ms Gillies.

   4. (4)

      The primary judge failed to provide adequate reasons for his finding as to the liability of the Bhides and Ms Gillies.

2. [110]

   In the event the appeal is allowed, Elders seeks orders:

   1. (1)

      setting aside each of the judgments in favour of the Bhides as against the plaintiffs and the judgments in the Bhides’ favour against Elders on its First and Second cross-claim in each of the plaintiffs’ and Ms Gillies’ proceedings;

   2. (2)

      judgment in its favour against the respondents in its Second cross-claim in each matter;

   3. (3)

      that the respondents contribute to its liability to the plaintiffs in each proceeding to the extent the Court considers just and equitable.

3. [111]

   During the oral hearing, the Court drew to Elders’ attention the necessity to address the primary judge’s finding that the Bhides were entitled to contractual indemnity from it with respect to their liability for breach of the tenancy agreement with Ms Gillies. The Bhides’ entitlement to a contractual indemnity against Elders was essentially an entitlement to damages for breach of the Management Agreement in order to indemnify the Bhides for any loss arising from their liability to Ms Gillies for breach of the tenancy agreement – the only person to whom they had been found liable.

4. [112]

   Leave was granted to Elders to amend its notice of appeal in order to insert a fresh ground of appeal addressing this finding. Ground 4A, as so inserted, complains:

5. [113]

   The Bhides subsequently sought, and were granted, leave to file a notice of contention addressing a related point arising out of the amended notice of appeal. The notice of contention asserts that the decision entering judgment for them on their cross-claim against Elders ought to be upheld on the additional basis that the primary judge ought also to have found they were entitled to a contractual indemnity from Elders for any contribution they would otherwise have been required to make towards the liability of Elders to any plaintiff.

6. [114]

   In its written submissions, Elders accepted that its submission that Ms Gillies was a joint tortfeasor from whom it was entitled to obtain contribution pursuant to s 5 of the 1946 Act might give rise to a finding of contributory negligence in her own case. However, to avoid the costs of her being separately represented on appeal in her capacity as plaintiff, Elders did not appeal against the primary judge’s rejection in the costs judgment of its plea that she had been guilty of contributory negligence.

7. [115]

   During the oral hearing, the Court also drew to the attention of Elders its concern that the forensic choice Elders had chosen to make in this respect could lead to the vice of inconsistent or conflicting judgments between a finding that Ms Gillies was a joint tortfeasor liable to make contribution and the primary judge’s finding that she had not been guilty of contributory negligence.

8. [116]

   Elders accepted that that was a possibility. To guard against it, it said that if it succeeded on its contribution claim against Ms Gillies in the plaintiffs’ proceedings, to the extent that gave rise to an inconsistency which might theoretically require the contributory negligence assessment to be changed, it did not rely on its contributory negligence defence.

9. [117]

   In respect of costs, Elders contends that if the liability appeal is upheld, his Honour erred in finding that Elders unreasonably rejected the offers of compromise made by the Bhides on 21 September 2015 and by Ms Gillies on 25 September 2015, and in making a Sanderson order for costs against Elders with respect to the Bhides’ costs payable by the plaintiffs.

Elders’ submissions

1. [118]

   Elders first submitted that the Bhides, as landlords, owed a duty of care to their tenants and tenants’ visitors, of the nature of that considered in Jones v Bartlett. [43] Elders accepted that this duty of care was capable of discharge by delegation, but argued that to be effective, such discharge required exercising reasonable skill and care in appointing an independent contractor, in arranging the terms of their engagement, in setting out the scope of the matters delegated, and in supervising or confirming the appropriateness of the work.

2. [119]

   Elders contended that any delegation by the Bhides to it was insufficient to discharge the Bhides’ duty to the plaintiffs, because:

3. [120]

   Elders submitted that the primary judge’s only reasoning addressing its submissions in this respect was at [45] of the liability judgment, where his Honour held there was “no evidence that the owners gave any express instructions to Elders inconsistent with accepting their recommendations for necessary repairs.”

4. [121]

   Elders submitted the primary judge’s reasoning on the delegation issue was unsatisfactory for four reasons. First, as a general proposition, his Honour’s reasons did not adequately canvass the relevant evidence and submissions. Secondly, the primary judge did not expressly undertake any analysis of the terms of the Management Agreement to consider to what extent the Bhides’ delegation was implemented, or circumscribed, by those terms. Thirdly, his Honour made no reference to “numerous pieces of evidence which tended at least to suggest” that the Bhides had not fully delegated their duties, but instead continued independently to consider and provide instructions to Elders as to matters of maintenance and repair. Finally, Elders asserted that the primary judge’s reference to “express instructions” drew from Macfarlan JA’s language in Laresu, but that in doing so, his Honour failed to acknowledge that Elders’ contractual discharge of the Bhides’ obligations was continually subject to instructions from them.

5. [122]

   Secondly, Elders submitted that the primary judge was required, in considering the liability of the defendants to its cross-claims, to determine whether the elements or pre-conditions to liability contained in s 5B of the CLA had been met. However, Elders contended that the primary judge did not expressly consider and apply the principles of s 5B to the case against the Bhides (or indeed any of the cross-defendants). If the primary judge had turned his mind to s 5B, Elders contended his Honour should have concluded that:

6. [123]

   On this analysis, Elders submitted that the Bhides breached their duty of care because the relevant risk was clearly foreseeable to them and not insignificant and, in general terms, their responses to the risk were not reasonable or adequate. It contended that this conclusion could only be avoided if it could be found that the Bhides’ delegation itself was an adequate discharge of, and response to, the risk. [44] That required a close consideration of the nature of the purported delegation.

7. [124]

   Elders submitted that the following provisions of the Management Agreement were relevant, and confined Elders’ duties and authorities with respect to determining if repairs were required, what repairs or inspection should be made, by whom and at what cost:

8. [125]

   Elders submitted that the Bhides retained ultimate authority as to what repairs or inspections were undertaken. While it accepted that the expression “usual property management services” in cl 4(c)(i) might encompass some activity by the agent in choosing appropriate experts to assess aspects of the property, Elders submitted that was an exercise necessarily to be undertaken in consultation with the owners.

9. [126]

   Elders submitted that a practice developed whereby when it became aware of a matter apparently necessitating repair this would be conveyed to the Bhides. They would invariably ask Elders to obtain two quotes to address the issue, then either select and approve one of the quotes for performance, or ask for more information, or further quotes, or quotes for different/additional work. Elders acknowledged that this process was revealed to be inadequate for dealing with the risk at hand, but argued that the Bhides should not escape responsibility for that state of affairs, for the following reasons:

10. [127]

    In addition, Elders relied on Mr Bhide’s evidence that he suggested to the agent in March 2012 that she should advise the tenant “meanwhile to use the deck carefully.” It relied upon his concession that this advice made little sense, but also argued that the fact he gave it suggested the Bhides appreciated that the balcony might collapse imminently, and also reflected an acknowledgment that they considered it was a matter for them to consider the safety of the tenants and other entrants independently, and to provide advice in certain circumstances.

11. [128]

    Accordingly, Elders submitted, having regard to these matters the Bhides did not act as if they had fully delegated the discharge of their duty of care.

12. [129]

    Elders also submitted that the primary judge failed adequately to consider the circumstances which happened between Ms Gillies’ 24 February 2012 email and June 2012 during which period no repairs of any sort had been attempted. Elders submitted that the primary judge’s conclusion that the four months or so delay was irrelevant because the work commissioned from Mr Gee did not address the underlying structural problem and failed to address the real issue could be accepted as correct. In this respect Elders noted that Mr Bhide had conceded in cross-examination that he had appreciated Mr Gee’s April 2012 quote was simply for decking and was not going to remedy anything about the structure but, nevertheless, rather than commissioning a structural inspection or asking for a quote for structural repair or replacement, had simply sought a quote for a pergola.

13. [130]

    Elders submitted that the primary judge ought to have concluded that the Bhides’ delay was causally relevant as, too, was their conduct during this period. Elders contended that Mr Bhide was unable to provide any cogent explanation for simply seeking a quote for a pergola during this period, rather than commissioning a structural inspection or asking for a quote for structural repair or replacement. Although Mr Bhide ultimately said that he expected that Mr Gee’s decking might reveal what needed to be done structurally, Elders submitted that this only highlighted the fact that it was unreasonable not to authorise any work while being aware of the structural risk. In such circumstances, Elders argued, the Bhides had failed to discharge their duty of care to the plaintiffs and to Ms Gillies because they had failed to confirm that Elders had taken appropriate steps in undertaking its delegated authority. [46]

14. [131]

    Finally, in this respect, Elders submitted that the primary judge’s liability determination in relation to the Bhides did not turn on any findings related to any witnesses’ credit, nor was there much by way of factual dispute upon which the ultimate liability finding turned. Rather, it was the primary judge’s determination of the legal effect of the facts which was contentious and which Elders submitted ought to have resulted in a finding that the Bhides were joint tortfeasors liable to bear a substantial portion of responsibility for the plaintiffs and Ms Gillies’ injuries to the extent of at least fifty per cent.

15. [132]

    In respect of Ms Gillies’ liability, Elders submitted that as a primary occupier of the property, she was subject to the duty of care to the plaintiffs referred to in Australian Safeway Stores Pty Ltd v Zaluzna. [47] It argued that, accordingly, she had an obligation to respond reasonably to any suspected dangerous defect. It contended she breached that duty when she passed on the concerns Mr Gillies expressed in January 2012, because her email of 24 February 2012 to Ms Hopton failed to include all of the relevant details – for example, there was no mention of fixings.

16. [133]

    Elders also submitted that even though Ms Gillies was aware that Mr Gee who inspected the balcony in 2012 was merely a carpenter, whereas structural inspection by an engineer was necessary, she took no steps to prevent use of the balcony between February and June 2012. Elders argued that Ms Gillies’ explanations that she had never expected the balcony to collapse and that she had expected that, if there was a structural concern, presumably as a result of Mr Gee’s inspection, the Bhides or Elders would have advised her, were inadequate.

17. [134]

    This was, first, because Ms Gillies knew that Mr Gee was not qualified to opine on the structural adequacy of the balcony. Secondly, Ms Gillies received no affirmative advice from Mr Gee, Elders or the Bhides before or after his inspection that the balcony was safe to use, leading to the conclusion that it was doubtful Mr Gee’s inspection was an operative cause of Ms Gillies’ behaviour or could have allayed her suspicions. Thirdly, it was relevant that Ms Gillies was an architect. She conceded some familiarity with the structure of the balcony, building standards, and an awareness that timber structures can deteriorate such that their structural integrity is affected. In communications with Elders, she and her husband cited her profession as an apparent basis upon which her opinions about matters of building safety ought to be accorded weight. Ms Gillies was not cross-examined on her knowledge of structural engineering, although in the discussions concerning her knowledge of engineering generally, she merely stated that she was not a “structural person” and would “defer to engineers”.

18. [135]

    Elders asserted that these factors demonstrated that Ms Gillies’ conduct was negligent by the standard dictated by s 5B of the CLA. On Elders’ case, Ms Gillies was aware of circumstances which would have alerted a reasonable person to the relevant risk in this case. Her only response to that risk was to complain to the agent. In such circumstances, Elders argued, Ms Gillies’ failure to prevent others from using the balcony or warn them against it, or to arrange an inspection by an engineer or other suitable expert, was not reasonable.

19. [136]

    Elders contended that both the Bhides and Ms Gillies ought to have been held liable in negligence to the plaintiffs and should contribute to any damages in the order of fifty per cent and thirty per cent respectively. The primary basis for the Bhides’ fifty per cent was the fact that they owned the property, were making a gain from it and had control to effect repairs on it. The lesser proportion for Ms Gillies recognised that she did not have the same control as the Bhides, but was nonetheless negligent.

20. [137]

    Elders accepted that it was orthodox that an implied term to take reasonable care and exercise reasonable skill arises as a matter of law in a contract for the provision of services of a skilled or professional nature such as the Management Agreement.

21. [138]

    However Elders complained that it was not apparent that the primary judge considered whether such a contractual obligation to exercise reasonable skill and care should be implied as a term of the Management Agreement, its precise scope, how it might operate with the express terms, precisely what conduct constituted breach (whether the same as the conduct identified as negligent or not), whether causation was established, the nature of the damages, or the defence of contributory negligence.

22. [139]

    Rather, Elders submitted that the primary judge’s finding that the Bhides were entitled to a contractual indemnity from it in respect of their liability to Ms Gillies for breach of their contractual obligation under the tenancy agreement was not supported by any reasons in the liability judgment and, to the extent it was referred to in the costs judgment merely found reflection in his Honour’s statement that “[t]he collapse of the balcony also resulted from breach of the contractual duty to exercise reasonable skill and care owed by [Elders to the owners] pursuant to [the Management Agreement]”. [48]

23. [140]

    Elders submitted that the absence of reasoning constituted an error of law such that, I infer, Elders contended, the process of fact finding miscarried. Elders conceded that other reasoning in the liability judgment directed to negligence on its part may have been relevant.

24. [141]

    Elders submitted that no term requiring it to take reasonable care and exercise reasonable skill should be implied in the Management Agreement having regard to its limited duties, limited remuneration and limited authority to effect repairs. It contended it did not contract to provide skilled services such as building work but, rather, to provide “all ongoing usual property management services in respect of the premises” pursuant to cl 4(c), but not to arrange for non-emergency repairs without the Bhides’ prior approval. It also submitted that there was no evidence as to what the expression “usual property management services” entailed.

25. [142]

    In such circumstances, Elders submitted, any contractual duty said to arise from an implied term did not extend to providing advice to the Bhides about matters of structural integrity, or as to what expert assessment might be necessary, when it possessed and offered no particular expertise in such areas itself. It pointed out that the Management Agreement did not require any structural or safety inspections, and at least one inspection report, in April 2012, expressly stated that the inspection was not, relevantly, to be construed as a building inspection.

26. [143]

    Next, Elders submitted that, in any event, the only findings the primary judge made which might be reflected in his Honour’s finding that Elders breached its contractual duty appeared to be those matters referred to in paragraphs [40] and [41] of the liability judgment.

27. [144]

    As to each, Elders submitted that no provision of the Management Agreement or any implied term thereof, required it to advise the Bhides to accept a quote to replace the deck, to obtain advice from a properly qualified person in 2008 to assess the structural integrity of the deck, or in 2012, to review its file and retain a structural expert as opposed to a carpenter.

28. [145]

    Insofar as the 2008 failures were concerned, Elders submitted that the evidence did not support a clear finding as to what would have happened had Elders acted in the manner contemplated in [40] of the liability judgment. It contended that even if it had given the contemplated advice, it could not be said that the owners would have accepted it. Elders submitted that it had passed onto the Bhides over the years quotes which identified “the problem” but that the Bhides had eschewed overhauling or replacing the deck. Indeed, Elders submitted, there was no evidence that the Bhides had expended any large amounts on repairs over the period they had owned the property prior to the accident.

29. [146]

    Elders made substantially the same submission concerning Ms Hopton’s omissions in 2012. Once again, it contended that a finding was not open on the evidence that a structural inspection commissioned shortly after Ms Gillies’ 28 February 2012 email would have led to structural works being done, or the deck being closed, prior to the accident. It noted that the expert evidence which might have cast a light on this issue was not before the Court. While it recognised that the “problems were obvious to some extent”, Elders submitted that in light of Mr Gee’s apparent failure to identify any imminent danger, a conclusive causation finding would appear to require speculation.

30. [147]

    Insofar as causation was concerned, Elders complained that the primary judge had not addressed that issue at all, even in respect of the negligence findings. It submitted that even if it was found to have breached an implied term of the Management Agreement in the terms hitherto discussed, it could not be said that any such breaches caused the Bhides to incur a liability to Ms Gillies. Furthermore, it argued that causation in contract between defendants required separate determination, and could not be determined as necessarily in accordance with causation findings in negligence.

31. [148]

    Elders submitted that the more conventional approach to a breach of contract claim would be for a Court to consider and award the appropriate damages available for such a breach, which would not necessarily lead to a full indemnity for the loss. Insofar as the extent of any indemnity was concerned, Elders submitted that any such damages for breach of the Management Agreement should only extend to its proportionate share of liability to the plaintiffs and Ms Gillies on a just and equitable basis in the event the Court was to find that the Bhides had not fully delegated to it responsibility for selecting the appropriate and qualified experts to assess the structural adequacy of the balcony. It contended that if the Court found it and the Bhides were joint tortfeasors, it would be appropriate for the damages to be assessed under s 5(1)(c) of the 1946 Act. Alternatively, Elders submitted that the same result could be achieved by application of the principles of contributory negligence pursuant to s 9 of the 1965 Act and s 5R of the CLA.

32. [149]

    Elders submitted that even if the primary judge’s finding that the Bhides were entitled to a contractual indemnity in respect of Ms Gillies’ proceedings and the Bhides’ notice of contention asserting the contractual indemnity in all the plaintiffs’ proceedings are upheld, this would have no effect on any finding of apportionment on just and equitable grounds for two reasons.

33. [150]

    First, Elders accepted that the fact, assuming it obtained such a finding on appeal, that the Bhides were found to have been negligent was not a bar to the Bhides recovering damages for breach of contract by way of a contractual indemnity. However, it contended that this did not mean they would be entitled to complete indemnity, particularly if this Court found that the tasks whose negligent performance caused the injuries and loss were not fully delegated.

34. [151]

    Secondly, Elders argued that the defence of contributory negligence operated in respect of any claim for damages in contract to permit apportionment on a just and equitable basis between it and the Bhides, relying on s 9 of the 1965 Act. It noted that the Bhides had pleaded the same particulars for negligence and breach of contract, such that its breach of the Management Agreement was a breach of a contractual duty of care co-extensive with the tortious duty the Bhides propounded. It submitted that having regard to the modification s 5R of the CLA effects to the way in which contributory negligence operates under the 1965 Act, there should be equal apportionment between it and the Bhides.

35. [152]

    Further, Elders submitted that the requirement that the loss should flow naturally from the breach or should be within Elders’ contemplation was not satisfied. Elders argued that the possibility that failure to perform the usual management services with reasonable care might lead to the collapse of the balcony, personal injury, and a claim against the Bhides who would subsequently look to them for indemnification, would probably not be within its contemplation, especially if the Bhides indeed did not fully delegate their responsibilities. This was supported by the “modest fees” being charged by Elders, which did not reflect that this risk had been assumed. In such circumstances, Elders argued any damages the Bhides sought to recover were too remote.

36. [153]

    Finally, Elders submitted that any indemnity considerations were subject to the parties’ attempt to allocate responsibility for loss in the Management Agreement pursuant to the indemnity provision in cl 17. Elders submitted that the wide terms of cl 17 contradicted the proposition that the parties intended Elders would indemnify the Bhides with respect to an action where Elders had breached an implied term to act with reasonable care in the performance of its duties, even where the loss was also caused by the Bhides’ negligence.

The Bhides’ submissions

1. [154]

   The Bhides submitted that there was a complete delegation by them of their duty of care by engaging a competent contractor, Elders, as found by the primary judge. They argued that, unlike Laresu, they gave no express instruction negativing any effective delegation. Should Elders overturn this finding on appeal, making them potentially liable, the Bhides relied on the contractual indemnity for breach of the Management Agreement as found by the primary judge.

2. [155]

   The Bhides submitted that the only independent consideration they undertook in relation to the Management Agreement was to consider quotes Elders obtained from persons it selected and recommended and, generally, accept one of those quotes. As the primary judge found, at no time did the Bhides reject any advice Elders gave, or give any instructions inconsistent with any such advice. Other than requiring two quotes to be obtained, the Bhides left compliance with their legal obligations to the agent, who they accepted was best placed to decide the appropriate course of action to respond to matters within the purview of the Management Agreement.

3. [156]

   The Bhides accepted that the primary judge should have considered the relevant provisions of the CLA, but submitted that, had his Honour done so and, assuming that the risk was foreseeable and not insignificant, they had nonetheless taken reasonable precautions by engaging a competent contractor, Elders, to fulfil their duty. The Bhides contended that Elders’ criticism that the primary judge failed to advert to s 5B(2) went nowhere if there had been complete delegation as delegation to a capable agent must be an adequate response to their obligations.

4. [157]

   The Bhides submitted that, contrary to Elders’ submission that its duties were confined by the terms of the Management Agreement, the only confinement of Elder’s powers was in the matter of the Bhides selecting one of the quotes it obtained and recommended. Any suggestion that the dollar amount above which the Bhides’ approval was required was unspecified and therefore nil was addressed by the practice that two quotes were required to address any issue identified by Elders in the execution of its delegation.

5. [158]

   In response to Elders’ specific reasons as to why the Bhides had breached their duty of care, the Bhides submitted that:

6. [159]

   As to Elders’ criticism of the Bhides’ failure to progress quotes Elders obtained in 2012, the Bhides submitted that the delay at this time was irrelevant as the quote Elders obtained would not have addressed the structural issue. Rather, as the primary judge found, the failure at this time, was on Elders’ part. The Bhides were not responsible for commissioning a structural inspection as that would have countermanded the delegation.

7. [160]

   The Bhides submitted that Elders’ claim that the Bhides should be jointly liable as they failed to ensure that Elders took appropriate steps was without basis as the delegate could not be heard to complain that the delegating party failed to supervise and detect breaches by the delegate.

8. [161]

   The Bhides submitted that the primary judge’s finding concerning their entitlement to a contractual indemnity for their liability under the lease to the tenant was correct and inevitable given the finding that Elders was negligent. They also submitted in relation to their notice of contention, that as a matter of logic, the primary judge should have held the contractual indemnity applied to any contribution they would otherwise have been required to make towards Elders’ liability to any of the plaintiffs.

9. [162]

   The thrust of the Bhides’ argument on this point was that to overturn the finding that they were entitled to the contractual indemnity would be inconsistent with the negligence findings against Elders. The effect of those findings was that Elders must also be seen to have acted in breach of the implied term to exercise reasonable care and skill in performing the services required under the Management Agreement in the ways reflected in the negligence findings. In the Bhides’ submission, if it was negligent conduct by Elders in breach of a duty of care it owed to the plaintiffs to have failed to advise, or obtain advice, in the respects found by the primary judge in 2008 and in 2012 (and if those actions caused damage to the plaintiffs), the primary judge’s contractual indemnity finding could not be overturned.

10. [163]

    Further, the Bhides submitted it was a necessary step in Elders’ failure to challenge the negligence finding against it, that its negligence caused any damage which had occurred to the plaintiffs and Ms Gillies.

11. [164]

    The Bhides contended that it was fanciful for Elders to submit that there was no evidence that they would have accepted advice to replace the deck or take proper engineering advice, noting that no such proposition was ever put to either of them in cross-examination. They pointed to Mr Bhide’s statement that in 2008 he thought all necessary work had been done and that in 2012, had he understood that there was a safety issue with the deck, he would have considered removing or replacing it and blocking it off in the meantime and that he had always acted on Elders’ advice. The Bhides observed that there was no evidence that they ever refused advice to do work or to obtain advice, rather, the highest the evidence went was that they wanted more, not less, work done in 2012 and additional quotes in 2007 – 2008 caused by the unsatisfactory warranties being offered.

12. [165]

    Should the Court decide the delegation point against the Bhides, they submitted in respect of Elders’ contribution that the primary judge held the collapse of the balcony did not result from any breach of duty the Bhides owed any plaintiff, and the plaintiffs had not appealed against that decision. Further, Elders had not challenged the finding that it was not entitled to enforce the indemnity provision in the Management Agreement.

13. [166]

    In addition, the Bhides submitted that any claim for contribution under s 5 of the 1946 Act could not succeed as they were not an “other tortfeasor who is, or would if sued have been, liable in respect of the same damage” because the plaintiffs’ claims against them were brought, dismissed and not appealed against, and the “would, if sued” alternative was not applicable as they were in fact sued.

14. [167]

    The fresh appeal ground should therefore, in the Bhides’ submissions, be dismissed as inconsistent with the accepted rejection of Elders’ own breach of contract claim, and the underlying factual and legal basis of the accepted finding of its own negligence.

15. [168]

    The Bhides submitted that, in the event that the delegation finding was overturned, this Court ought to determine the “just and equitable” share of each party, for reasons of cost to the parties and convenience, based on the available evidence. They argued that the contribution of Elders and Ms Gillies ought be significant on the basis that Elders were experienced professionals paid to do a task, whose own shortcomings had caused them to have failed to discharge their duty by retaining an apparently competent agent, and Ms Gillies on the basis of her professional knowledge and qualifications, and daily opportunity to have taken precautions.

16. [169]

    The Bhides did not address any submissions to Elders’ contention that, notwithstanding the contractual indemnity, s 9 of the 1965 Act permitted the Court to apportion liability as between them and Elders, should the Court find they had been guilty of contributory negligence.

Ms Gillies’ submissions

1. [170]

   Ms Gillies submitted that the only duty of care she owed was to take such care as was reasonable in the circumstances. She argued that she discharged that duty by making numerous complaints to Elders and thus satisfied her obligation to place the landlord on notice of any defects necessitating repairs or inspection. She also relied on the fact that the primary judge rejected the assertion that, as a qualified architect, she had specialist expertise and pointed to the lack of expert evidence to establish that, as a design architect, she ought, in all of the circumstances, to have appreciated the risk of the deck collapsing.

2. [171]

   Ms Gillies submitted that the primary judge did not err in rejecting Elders’ submission that she should have commissioned an independent inspection. Ms Gillies submitted that knowledge that Mr Gee’s attendance was insufficient could not be imputed to her simply because of her occupation.

3. [172]

   Ms Gillies accepted that it would have been possible to close and lock the balcony to prevent its use or to warn others against it. However, she submitted such a step was necessary only if she ought to have been aware of the risk which existed. She argued that it was apparent she was not so aware as, had she believed there was a risk of the balcony collapsing imminently, she would not have used it herself, let alone permitted her children to use it. She emphasised that she was not privy to the information indicating the danger associated with using the deck

4. [173]

   In the light of these factors, Ms Gillies submitted that Elders’ case against her must fail on the basis that s 5B(1)(a) of the CLA requires that the risk be relevantly foreseeable which, she submitted, the risk of the balcony collapsing was not. Further, she submitted a reasonable person in her position would not have taken the precaution of locking off “the only external living area that they enjoyed” within the meaning of s 5B(1)(c). Finally, she submitted that, in the circumstances, she would not have known of the true extent of the risk or probability that the harm would occur pursuant to s 5B(2). She also contended that the appointment of, and attendance by, Mr Gee in April 2012 severed the chain of causation.

5. [174]

   Ms Gillies adopted Elders’ submissions on the issue of causation. She submitted that, in the light of what actually occurred with Mr Gee and the absence of evidence concerning whether an inspection would have led to structural works being done or the deck being closed, a conclusive finding as to causation would require speculation. Such speculation would contradict the notion that Ms Gillies knew or ought to have known that the deck was actually at risk of collapse.

6. [175]

   In the event that this Court found against Ms Gillies, she submitted that any responsibility attributed to her by way of contribution should be minimal, no more than five per cent. She argued that the overwhelming culpability lay with Elders and the Bhides who failed to discharge their obligations once Ms Gillies had discharged her obligation by notifying them.

Consideration

1. [176]

   A landlord of residential premises owes a duty of care to take reasonable care to avoid foreseeable risk of injury to tenants and members of their household. [50]

2. [177]

   As occupier, Ms Gillies owed a duty under the general law to take reasonable care to avoid a foreseeable risk of injury to other occupants and to entrants exercising reasonable care for his or her own safety. [51]

3. [178]

   For both landlords and occupiers, what constitutes the exercise of reasonable care depends on the circumstances of each case. [52]

4. [179]

   The landlord is not subject to a non-delegable duty of care, [53] or, to put the point in positive language, the landlord’s duty of care is delegable “in the sense that it may be discharged in whole or in part by the [landlord’s] exercise of reasonable skill and care in engaging someone else to take steps to keep the property safe either generally or in particular respects” [54] and in confirming that the person does take appropriate steps. [55] Accordingly, if it was reasonable for a landlord to seek to discharge or partly discharge the landlord’s duty in this way, and the landlord did exercise reasonable skill and care in all these respects, then if a person coming on to the property was injured due to the failure of the other person engaged to exercise reasonable skill and care to keep the property safe, the landlord may escape liability. [56]

5. [180]

   A general delegation an owner of property makes to an agent to manage the premises is implicitly subject to any express instructions that the owner might give in respect of the management of the premises. Accordingly, the owner’s general delegation of management responsibility to the agent cannot absolve it of responsibility for the state of the premises to the extent that such a state reflects its express instructions. [57]

6. [181]

   A corollary of the delegability of the landlord’s duty of care is that the person engaged to discharge, or partly discharge, the landlord’s duty of care may, in turn, come under a duty of care to persons coming on to the property, particularly when the person engaged has specialist skill. If that person knows, or reasonably should know, that he or she has been engaged to keep the property safe for persons coming on to it (and the exercise of reasonable skill and care by the landlord would require that this be conveyed to that person), then the person so engaged would appreciate that if he or she does not exercise reasonable skill and care, there is a risk of injury to persons coming on to the property. That person’s understanding of the engagement and risk gives rise to a relationship with persons coming on to the property sufficient to support a duty of care. [58] Albeit that the primary judge did not say so, this is the basis of the duty of care Elders was found to have breached.

7. [182]

   The evidence the Bhides relied upon on the issue of delegation was principally led from Mr Bhide. His evidence was that it was he who liaised with Elders and dealt with issues at the property. In his trial statement he said that he instructed Elders to “[g]et two quotes and then I will authorise necessary work.” He also said he expected Elders to contact him when there was a problem whether by phone or by email. He said Elders had authority to carry out repairs without his agreement for work undertaken that was less than $100 and also to undertake emergency work without his authority if required. He and his wife went to the house on average perhaps once each year by appointment with Elders to see that the property was well maintained. During such inspections they went inside the property and onto the deck. He said he did not see anything wrong with the deck, did not feel unsafe on it and saw no signs that there were any structural issues. Mrs Bhide gave evidence to similar effect.

8. [183]

   Mr Bhide accepted in response to a broadly expressed question from the primary judge that problems with the balcony were ongoing from 2001. In response to questions from Elders’ counsel, he accepted that problems with the condition of the deck had been raised on a number of occasions. He said that on each occasion that occurred, he asked Elders “to get the two quotes to fix the problem.” When asked why, having regard to the number of complaints which were relayed to him about the condition of the deck over many years, he had not got someone to inspect its structure, Mr Bhide said that if that was a requirement, Elders could have arranged it and given him the choice. He accepted he did not regard Elders as having the ability to assess the structure of the deck, but insisted that Elders could appoint anybody they wanted. He said he had “relied on the agent to do the work required.”

9. [184]

   In my view, Elders’ submissions that the Bhides did not, at least initially, delegate to it their duty of care to tenants and tenants’ visitors as landlords should be rejected.

10. [185]

    The fact that the Bhides’ arrangement with Elders was that where there was a problem Elders would get two quotes and Mr Bhide would authorise the necessary work was not challenged in cross-examination and, in any event, was borne out by the evidence. In no case was there any suggestion that Mr Bhide identified the nature of the expertise of the person to be consulted about resolving issues at the property. Rather, it is apparent that it was Elders which was responsible for identifying a suitable expert and that the Bhides relied upon Elders to do so. That was made clear by Ms Hopton’s evidence that in 2012 it was she who suggested to Mr Bhide that quotes be sought from a carpenter to address the matters of which Ms Gillies was complaining.

11. [186]

    Contrary to Elders’ submissions, the evidence I have set out above does not tend to suggest that the Bhides independently considered and provided instructions to Elders as to arranging matters of maintenance and repair. On one occasion in 2008, Mr Bhide may have suggested to Mr Windred, an acquaintance, that he quote for work Elders was recommending. That isolated incident does not, in my view, detract from the conclusion that the Bhides delegated their duty of care insofar as the identification of suitable experts to investigate and repair problems at the property was concerned.

12. [187]

    Nor does the fact that the Bhides visited the property annually detract from the conclusion that they had delegated their duty of care to Elders. Rather, that conduct was consistent with them confirming that Elders had taken appropriate steps to address problems. [59] On each occasion when they visited the property, they saw nothing wrong with the deck. Further, so far as they were aware, Elders drew their attention to matters requiring attention at the property.

13. [188]

    It is clear that Elders had the capacity to organise suitable tradespeople to investigate problems at the property. As Ms Hopton’s evidence confirmed, Elders is a national real estate agency network with expertise in property management, including rental properties with wide access to a range of tradespeople with expertise in building and construction. Not surprisingly, Elders did not submit that in selecting its agency, the Bhides did not engage a manager apparently competent and qualified to undertake the management role referred to in the Management Agreement.

14. [189]

    In my view, the terms of the Management Agreement to which Elders referred do not detract from the proposition that the Bhides, again initially, delegated their duty of care to Elders. Pursuant to cl 4(c) Elders was entitled to fees “for the provision of all ongoing usual property management services in respect of the premises”, while cl 12 authorised Elders “to arrange and pay for repairs and maintenance to be done in accordance with the [Bhides’] obligations or as otherwise instructed …”

15. [190]

    The evidence to which I have referred concerning the obtaining of two quotes with the quotes approved by the Bhides, suggests that Elders was authorised to arrange for repairs and maintenance in accordance with the Bhides’ obligations under the tenancy agreement with the lessees. It was that agreement which was the focus of the Management Agreement which conferred on Elders the exclusive right to let and manage the property.

16. [191]

    As Macfarlan JA held in Laresu, [60] the provisions in the Management Agreement empowering Elders “to let and manage the premises in accordance with this Agreement” and the payment of fees to it for providing “all ongoing usual property management services in respect of the premises” emphasise the breadth of Elders’ appointment. The responsibility Elders undertook under the Management Agreement in respect of repairs was confirmed by cl 12 authorising it “to arrange and pay for repairs and maintenance to be done in accordance with the [Bhides’] obligations”.

17. [192]

    The concept of “management of the premises” extended to the taking of, or recommending that the Bhides take, reasonable steps to have the premises fit for the purpose for which they were used, namely, as a residence. They would not be fit for that use if they were not safe for the property’s use as such. [61]

18. [193]

    However for reasons I explain when dealing with the Bhides’ breach of duty, the finding that they initially delegated their duty of care to Elders does not absolve them of liability as, in my view, they ought, at least by 2010, have formed the view that Elders had not discharged, and was not discharging, its delegated duties competently.

19. [194]

    As I have said, by reason of s 5A of the CLA, the proceedings were subject to Pt 1A (Negligence) of that Act. The proper starting point for the inquiries as to breach and causation the case posed accordingly was the relevant provisions of the CLA. [62]

20. [195]

    Section 5B of the CLA operates on the basis that the Court has identified the “risk of harm” for duty of care purposes. The effect of s 5B(1) of the CLA was that the Bhides and Ms Gillies were not negligent in failing to take precautions against a risk of harm unless the risk was one of which they knew or ought to have known, the risk was not insignificant, and in the circumstances, a reasonable person in their position would have taken those precautions.

21. [196]

    The primary judge failed to refer to any of the relevant provisions of the CLA. Thus, his Honour failed to identify the relevant risk of harm and whether either the Bhides and/or Ms Gillies knew, or ought to have known of it (s 5B(1)(a)) and, further, failed to apply the standard s 5B(1)(c) imposed to test the question of their breach by reference to what precautions a reasonable person in their respective positions would have taken in the circumstances, including by reference to the matters set out in s 5B(2).

22. [197]

    Accurate identification of the actual risk of harm the plaintiffs and Ms Gillies faced was necessary as it was only through the correct identification of the risk that his Honour could determine what a reasonable response to that risk would be. [63] The inquiry, being a prospective one, with a view to identifying what risk a reasonable person in the defendant’s position would foresee and evaluate to determine what, if any, precautions ought be taken, involves identifying the “true source of potential injury.” [64]

23. [198]

    In my view, the risk of harm is sufficiently identified as that of people being injured due to the failure properly to investigate, and maintain, the structural integrity of the balcony. [65] Such a formulation both identifies “a risk of harm, against which a person has failed to take precautions” and, too, “takes account of the precautions which it is alleged should have been taken and identifies the risk or risks of harm which the plaintiff alleges eventuated and to which those precautions should have been directed”. [66]

24. [199]

    Neither the Bhides nor Ms Gillies submitted that if found to have breached their respective duties of care, it was not appropriate for the scope of their respective liability to extend to the harm caused by the breach. [67]

25. [200]

    The conclusion that the Bhides delegated their duty of care to Elders is not, in my view, a sufficient answer to the question whether they breached the duty of care they owed Ms Gillies, as tenant, and the plaintiffs.

26. [201]

    In Jones v Bartlett members of the High Court made statements not essential to the outcome (which concerned a collision with an internal glass door which was not defective) concerning the content of the duty owed by the landlord in respect of defects on the premises. Nevertheless, their Honours’ dicta are clearly relevant to the issue of breach which arises in this case.

27. [202]

    Gaudron J repeated the view she had expressed in Northern Sandblasting Pty Ltd v Harris that, before the tenancy commenced, it was reasonable for the landlord both to inspect the premises and to remedy existing defects that gave rise to a foreseeable risk of injury and, in the case of defects or potential defects which posed special dangers, it was reasonable to have an inspection carried out by persons skilled or expert in that regard. [68] So far as defects which were not present at the commencement of the lease were concerned, her Honour was of the view that reasonable care required only remedying those defects of which the landlord was or ought to have been aware. [69]

28. [203]

    Gummow and Hayne JJ were of the view that “[b]roadly, the content of the landlord's duty to the tenant will be conterminous with a requirement that the premises be reasonably fit for the purposes for which they are let, namely habitation as a domestic residence.” [70] That standard would not be satisfied where “the ordinary use of the premises for that purpose would, as a matter of reasonable foreseeability, cause injury.” The duty required a landlord:

29. [204]

    Thus, in their Honours’ view, the notion of reasonable fitness prompted three inquiries: as to the presence of dangerous defects, the taking of reasonable care to ascertain them and the exercise of reasonable care to remove them or otherwise to make the premises safe. [72]

30. [205]

    Their Honours identified dangerous defects as those which “will, or may, cause injury to persons using the premises in an ordinary way [which] … are defects in the sense that they are more than dangerous; they are dangerous in a way not expected by their normal use.” [73] Illustrations of such defects sufficient for the present case are a stage which collapsed because the joists supporting its flooring were not, having regard to their span, strong enough to carry the load that was upon it, [74] stairs that could not bear the weight of a person, [75] and a roof that could not support a tenant authorised to be or to work upon it. [76] In their Honours’ view, liability for disrepair would ordinarily fall upon the party with the obligation to repair, which could, depending upon the terms of the lease, be the tenant. [77] Neither Elders nor the Bhides suggested Ms Gillies bore any obligation to repair the balcony.

31. [206]

    Whether a landlord should have a part of the leased premises inspected by an expert, would, according to Gummow and Hayne JJ, turn on whether an ordinary person in the landlord’s position would, or should, have known that there was any risk; whether that person would, or should, have known of steps that could be taken in response to that risk; and the reasonableness of taking such steps. [78] In some cases, the landlord may have sufficient knowledge or suspicion to make it unreasonable to fail to act, including requiring the attendance of experts. [79]

32. [207]

    Finally, Gummow and Hayne JJ expressed the view that the landlord's duty to take reasonable care that the premises contained no dangerous defects, owed to the tenants, extended to guests or invitees of the tenant or persons present on the tenant’s business or for their business with the tenant if the defect was one of which the landlord knew or ought to have known. [80] In their Honours’ view, there would be a breach of a landlord’s duty of care if a defect was detectable by a landlord inspecting the property, or if its existence or likely existence was known to the landlord. [81]

33. [208]

    Kirby J held that a landlord may discharge the duty of care by undertaking an inspection of the premises prior to each lease or renewal of a lease, by responding reasonably to defects drawn to notice, and by ensuring that any repairs were made which such inspection or notice disclosed to be reasonably necessary and that a landlord might ordinarily discharge its duty by delegating such inspection and repair to a competent person. [82]

34. [209]

    Although his Honour was in dissent, it is also relevant to note McHugh J’s view, which substantially accorded with that of Gummow and Hayne JJ, that the exercise of the landlord’s duty of reasonable care would often require the landlord to obtain the services of experts to inspect the premises, depending on factors such as the age of the premises, the known or suspected risks, and the time that had elapsed since there had been a previous inspection by a professionally competent person. [83]

35. [210]

    The effect of the primary judge’s unchallenged finding as to Elders’ breach, is that by January 2008 (and possibly as early as 2004), the risk of harm due to the balcony collapsing was sufficiently identified such that Elders ought to have advised the Bhides to accept the quote from North Property Repairs & Maintenance to replace the balcony completely or obtain advice from an expert suitably qualified to assess its structural integrity. [84]

36. [211]

    Absent any intervening work or investigation as to the structural integrity of the balcony, of which there was none, that risk continued until the balcony collapsed in 2012. Further, in 2010 Ms Gillies raised serious concerns about the structural integrity of the balcony and complained the structural beam had “wood rot through it all”.

37. [212]

    It is true Ms Gillies said that she would arrange for an inspection of the deck, but the lease did not require her as tenant either to arrange such an inspection, let alone to undertake any necessary repair. Mr Bhide simply ignored the concerns Mr and Ms Gillies raised at this time, apparently shrugging it off as something that concerned the tenants, but not him as a landlord.

38. [213]

    In my view, the repetition in 2010 of doubts about the structural integrity of the deck earlier raised in 2008 ought to have reminded the Bhides, should they have forgotten, of the questionable structural integrity of the balcony as identified in 2004 and 2007. Further, had they turned their minds to it, they ought to have been concerned in 2004 when issues concerning the structural stability of the balcony was raised, that the bracing of the balcony undertaken recently in 2003 had apparently been ineffective.

39. [214]

    The 2010 complaints ought to have brought home to the Bhides that Elders had not acted competently in discharging its delegated obligation to arrange for repairs and maintenance in accordance with the Management Agreement. They ought to have appreciated that whatever repairs Mr Windred had undertaken in 2008 had not resolved the issues raised in 2007 – 2008 about structural issues with the balcony and that, in that respect, Elders had not engaged a qualified expert to investigate what was clearly a dangerous defect on the premises which posed a significant risk of harm to persons present on the balcony.

40. [215]

    The 2010 complaints ought also to have brought home to the Bhides that there were potential structural issues with the balcony which they were not personally able to recognise on their annual inspections of the property.

41. [216]

    In my view, by either 2008, or at the latest 2010, a reasonable person in the Bhides’ position ought expressly to have instructed Elders to engage an expert to investigate the structural integrity of the balcony and, if necessary to have taken steps to have rectified any deficiency identified, including, if necessary, by replacing the balcony. It cannot sensibly be said that any such investigation and any remedial action could not have been undertaken by June 2012.

42. [217]

    The views the Bhides ought to have formed in 2008/2010 would have been confirmed by Ms Gillies’ 2012 complaints. By that time, consistently with the primary judge’s finding concerning what Elders could have done at that time, there is no doubt an expert should have been retained to investigate the structural integrity of the balcony, even if any work to repair it by June 2012 was not practical.

43. [218]

    However, even if in 2012 remedial action might not have been taken between February 2012 and June 2012, there was a simple precaution a reasonable person in the Bhides’ position could have undertaken to guard against the risk of harm: they could have prevented anybody having access to the balcony pending remedial work by barring access to it, whether by instruction or, if necessary, by placing a lock on whatever doors led to it to which only, say, Elders had the key.

44. [219]

    In my view, by failing to take any of these precautions the Bhides breached the duty of care they owed the plaintiffs and Ms Gillies.

45. [220]

    Pursuant to s 5D(1)(a), the question whether their negligence was a necessary condition of the occurrence of harm is entirely factual, turning on proof by the plaintiff of relevant facts on the balance of probabilities in accordance with s 5E. [85] The determination of factual causation in accordance with s 5D(1)(a) involves nothing more or less than the application of a "but for" test of causation. [86]

46. [221]

    As Gleeson JA observed in Smith v South Western Sydney Local Health Network, factual causation as referred to in s 5D(1)(a) involves the application of common sense to the proved primary facts, it requires the consideration of the probable course of events had the omission (breach of duty) not occurred and, in a case of negligent omissions, requires the plaintiff to establish some underpinning factual circumstance that either of itself, or by inferential reasoning, enabled the Court to find that “but for” the negligent omission, the harm to the respondent would not have happened. [87]

47. [222]

    It is apparent as Elders submitted at trial (and as is implicit in the primary judge’s findings concerning Elders’ negligence [88] ), that the balcony collapsed “because at no time was any, or any adequate, action taken to address the structural integrity of the balcony as opposed to the condition of the boards that comprised the walking surface” and “the possibility of a structural problem was in fact brought to light from time to time without ever being formally addressed in a report”.

48. [223]

    There can be no doubt that the Bhides’ failures to take reasonable care in the respects I have identified were a necessary condition of the harm the plaintiffs and, if established at the damages hearing, Ms Gillies suffered as a result of the balcony collapse. [89] But for their failure to have the structural integrity of the balcony investigated and remediated, and/or their failure to prevent people having access to the balcony until that had happened, the harm to the plaintiffs would not have occurred.

49. [224]

    Thus, Elders and the Bhides were, in my view, joint tortfeasors.

50. [225]

    This conclusion does not mean the Bhides were not entitled to contractual indemnity. As I explain later in the reasons, that entitlement arises where, although both parties to a contract are joint tortfeasors, one party, in this case Elders, has breached its contractual obligation to exercise due care and skill, leading to the plaintiff’s harm. Accordingly, insofar as the notice of contention is concerned, the Bhides had pleaded their entitlement to a contractual indemnity from Elders in each of the cross-claims they filed in the plaintiffs’ proceedings. The primary judge did not need to hold they were entitled to contractual indemnity in that respect, because he had held the Bhides had not breached the duty of care they owed those plaintiffs. However, as, in my view, this Court should hold the Bhides have breached their duty of care to the plaintiffs, they are also entitled to contractual indemnity in that respect.

51. [226]

    In my view, accordingly, the primary judge erred in not finding that the Bhides had breached the duty of care they owed to the plaintiffs and Ms Gillies. There should have been a verdict for each plaintiff against the Bhides. Consistently with the approach taken in Ms Gillies’ case, subject to her establishing that she suffered damage by virtue of the Bhides’ breach of duty, there should be verdict in her favour as against the Bhides as well as Elders.

52. [227]

    Insofar as Ms Gillies is concerned, she was subject to the occupier’s duties identified in Australian Safeway. It might be accepted that a tenant is best placed to inform third party entrants of any dangers or defects on the property, and “is more directly in touch with emerging repair needs than a landlord who has surrendered possession”. [90] However, in the case of dangerous defects of which the landlord was, or ought to have been, aware, the question of what may be involved in the tenant’s discharge of the occupier’s duty of care must also take into account the landlord’s obligations. [91]

53. [228]

    In considering the question of breach by a tenant occupier of residential premises, it is relevant to consider that such a person may have a comparatively limited capacity to rectify defects in the premises. [92] In this case, for example, the tenancy agreement did not permit Ms Gillies to undertake substantial alterations to the premises such as might have involved replacement of the balcony as had been advised in 2007, albeit not, of course, to the Gillies.

54. [229]

    However, leaving aside Ms Gillies’ expertise as an architect, a reasonably prudent occupier does not rely merely on his or her own judgment and skill in a situation where technical expertise which the occupier does not possess is required, but should at least obtain technical advice about matters of concern. [93] That is what the Gillies contemplated doing in 2010, but for reasons which the evidence does not explain did not.

55. [230]

    Nevertheless, Ms Gillies was fully aware of her husband’s concerns about the major supporting beam of the balcony in 2010, made substantially the same observations in her 2010 emails and, herself, expressed the view in effect that its structural integrity could not be determined until a building report was obtained. Notwithstanding that knowledge, she did nothing.

56. [231]

    By 2012, the position had not improved. Mr Gillies again expressed concern about the balcony’s load-bearing capacity, while Ms Gillies formed the view that the balcony was “also precarious and the deck … not fully supported”. It was never suggested that any of Ms Gillies’ complaints about the balcony were not genuine.

57. [232]

    It does not appear from Ms Gillies’ evidence that Mr Gee’s attendance would, or should, have provided her any comfort. She did not give any evidence that he discussed the concerns she had expressed about the precarious nature of the metal strutting under the deck or the fact that the deck was not fully supported, or that she drew his attention to those matters. It is consistent with the instructions I infer Ms Hopton gave Mr Gee that his focus was to quote on replacing the deck. There is no evidence he was aware of the structural issue of which Ms Gillies had complained.

58. [233]

    In my view, the primary judge erred in not finding Ms Gillies had breached the duty of care she owed the plaintiffs. His Honour relied in this respect on her subjective opinion about the deck. However, in my opinion, a reasonable person in Ms Gillies’ position who had formed the opinion she expressed in her February 2012 email concerning the precarious support for the deck ought to at least have taken the simple precaution the Bhides ought also to have taken, by refusing anybody access to the deck until the position as to its structural integrity had been properly investigated and the patent defects Mr Gillies drew to her attention, which she herself observed, and any latent defects revealed on investigation, had been rectified.

59. [234]

    Once again, there can be no doubt that Ms Gillies’ breach of duty was a necessary condition of the harm the plaintiffs suffered.

60. [235]

    Thus, the primary judge ought to have found Ms Gillies was also a joint tortfeasor liable to contribute to Elders’ liability to the plaintiffs.

61. [236]

    The consequence of these conclusions is that:

    1. (1)

       The primary judge should have found the Bhides liable in tort to the plaintiffs and Ms Gillies (subject to her proving damages);

    2. (2)

       The primary judge should have determined pursuant to s 5(2) of the 1946 Act that, as tortfeasors, the Bhides were liable to contribute to Elders’ liability to the plaintiffs and, if damage was proved to Ms Gillies, to such extent as his Honour found to be just and equitable having regard to the extent of their responsibility for the damage;

    3. (3)

       The primary judge should have determined the Bhides were entitled to contractual indemnity from Elders in respect of their liability to the plaintiffs and potential liability to Ms Gillies;

    4. (4)

       The primary judge should have held that Ms Gillies was a tortfeasor for the purposes of s 5 of the 1946 Act and liable to contribute to Elders’ liability to the plaintiffs to such extent as his Honour found to be just and equitable having regard to the extent of her responsibility for the damage; [94]

    5. (5)

       For the reasons I explain below, the primary judge should have considered Elders’ plea of contributory negligence insofar as the Bhides were concerned in connection with their entitlement to contractual indemnity.

Contractual indemnity

1. [237]

   The primary judge found the collapse of the balcony resulted from Elders’ breach of its tortious duty of care to the plaintiffs and also from its breach of an implied term to exercise reasonable care and skill it owed to the Bhides pursuant to the Management Agreement. They were, accordingly, entitled to be indemnified by Elders for their liability to Ms Gillies for breach of the covenant for repairs in the tenancy agreement. For the reasons I have given, they are also entitled to be indemnified by Elders for their liability to the plaintiffs.

2. [238]

   In so doing, although his Honour did not refer to authority, he was giving effect, by analogy as I shall explain, to the principle that where, although a principal and an agent have both been found liable in negligence to a third party and, under torts law, the responsibility has been, or could have been, apportioned, the principal has been held entitled to recover from the agent by reliance on contractual indemnity the whole of the principal’s loss including the sum payable by the principal to the injured person. [95] The rationale is that the damages the principal is liable to pay the third party are fairly within the contemplation of the parties within the meaning of the second limb in Hadley v Baxendale. [96]

3. [239]

   The indemnity the primary judge ordered in the Bhides’ favour was consequent upon his Honour’s finding that their breach of their contractual obligation in the tenancy agreement to Ms Gillies to keep the property in repair was caused by Elders’ breach of the Management Agreement. Elders did not submit that the fact his Honour did not find the Bhides to be a tortfeasor, a finding which in any event I would reverse, vis-à-vis Ms Gillies led to any different result. That implicit concession was correct in my opinion. Whether the Bhides’ liability to Ms Gillies sounded in tort, or in breach of contract, the damages they are liable to pay her for any injury she suffered as a result of the balcony’s collapse were fairly within the parties’ contemplation at the time they entered into the Management Agreement.

4. [240]

   Elders does complain that the primary judge failed to consider whether a duty to exercise reasonable skill and care should be implied as a term of the Management Agreement, its precise scope, how it might operate with the express terms, precisely what conduct constituted breach (whether the same as the conduct identified as negligent or not), whether causation was established, the nature of the damages, or the defence of contributory negligence.

5. [241]

   As to the first point, an implied term of reasonable care in a contract of professional services arises by operation of law, being a term the law attaches as an incident of contracts of that class. Persons who give consideration for the provision of services expect that those services will be provided with due care and skill. However, it is an implied term the parties can “bargain away or limit as they choose”. [97]

6. [242]

   Elders did not challenge that proposition at trial, indeed it made no submissions before the primary judge challenging the proposition that the Bhides’ were entitled to a contractual indemnity from it. His Honour was entitled to assume, accordingly, that, to the extent relevant, these matters were not in issue. This was hardly surprising having regard to his negligence findings against Elders.

7. [243]

   Elders does not submit, correctly in my opinion, that such an implied term was inconsistent with the express terms of the Management Agreement. [98]

8. [244]

   Further, it is apparent from the liability judgment, that causation was not in issue at trial. It is implicit in the primary judge’s finding that Elders was negligent and in Elders’ acceptance that it was appropriate that there be a verdict for each plaintiff, that his Honour found Elders’ negligence caused some loss to the plaintiffs, the precise amount to be determined at the damages hearing.

9. [245]

   In my view, having accepted the primary judge’s entry of a verdict against it in the plaintiffs’ proceedings, and once any damages are determined, in Ms Gillies’ proceedings, Elders cannot now be heard to complain about that implicit finding that its breach of the Management Agreement caused any loss to which the Bhides were exposed by breach of their contractual duty of care to Ms Gillies and, too, their breach of their tortious duty of care to the plaintiffs.

10. [246]

    However, even accepting the differing tests for causation in tort and contract, [99] the damage the Bhides suffered could not, in my opinion, be regarded as too remote. [100]

11. [247]

    Further, as the Bhides’ claim for contractual indemnity, being one for breach of the implied term to exercise reasonable care and skill pursuant to the Management Agreement, was governed by Pt 1A of the CLA, the concept of causation which was applicable, was that found in s 5D of that Act. [101] For the reasons I have given in relation to the Bhides’ liability, it cannot be doubted that Elders’ breach of the implied term to exercise reasonable care and skill was a necessary condition of the plaintiffs’ and Ms Gillies’ harm.

12. [248]

    In my view, accordingly, his Honour did not fail to give adequate reasons for his conclusion that the Bhides were entitled to contractual indemnity for their liability to Ms Gillies for their breach of the tenancy agreement. Elders did not submit at trial that any different principles in tort and contract, such as those concerning remoteness of damage, could affect the outcome. It does not lie well in its mouth for it to assert, in effect, that it was deprived of that opportunity because the issue of contractual indemnity was only raised at the heel of the hunt in the course of his Honour delivering his ex tempore reasons. The issue had been pleaded and was clearly on the table at all times.

13. [249]

    Having regard to his Honour’s conclusion that the collapse of the balcony was due to Elders’ breach of its duty of care and breach of the implied term of reasonable care in the Management Agreement, the conclusion that the Bhides were entitled to a contractual indemnity in respect of their liability for breach of their contractual obligation to Ms Gillies to keep the premises in repair was inevitable. [102]

14. [250]

    Subject to the issues of contributory negligence and contribution to which I now turn, the measure of damages flowing from Elders’ breach of the Management Agreement will be the damages and costs the Bhides are held liable to pay to the plaintiffs and Ms Gillies and the costs they incurred in defending the proceedings. [103]

Contributory negligence

1. [251]

   Elders submits that its liability to the Bhides in respect of the contractual indemnity can be reduced by reason of the Bhides’ contributory negligence pursuant to s 9 of the 1965 Act.

2. [252]

   In Barisic v Devenport, [104] the Court of Appeal held that the apportionment exercise under s 10 of the 1965 Act (as then in force) should be completed before the Court considered contribution claims by defendants, whether against each other or third parties. Although the circumstances of Barisic, in which the plaintiff was an injured worker against whom none of the three defendants claimed contribution rather than as between each other, do not find reflection here, I have adopted that approach.

3. [253]

   The 1965 Act relevantly provides in Pt 3 (Amendment of doctrine of contributory negligence):

4. [254]

   In Astley the majority in the High Court held that s 27A of the Wrongs Act 1936 (SA) which was in substantially the same terms as the then s 10 of the 1965 Act did not apply to an award of damages for breach of contract awarded in favour of a plaintiff even though that plaintiff had, or could have, also sued in tort. [105]

5. [255]

   Following that decision, and no doubt taking up the suggestion for legislative reform in Astley, [106] the Standing Committee of Attorneys-General (SCAG) moved to amend the apportionment legislation in the various jurisdictions. SCAG developed model provisions intended to overcome the effect of Astley by enabling damages awards in actions for breach of contract to be reduced for contributory negligence. [107]

6. [256]

   In 2000 the 1965 Act was amended by inserting the current Pt 3 which was based on the model provisions. [108] As Kunc J said in ASF Resources Ltd v Clarke, [109] the new Pt 3 “made a plaintiff's contributory negligence relevant to the assessment of damages for ‘a breach of a contractual duty of care that is concurrent or co-extensive with a duty of care in tort.’”

7. [257]

   Despite their relative antiquity there do not appear to have been any decisions in which the operation of the 2000 amendments has been considered. The parties did not refer the Court to any. Nor did their submissions engage in any analysis of its provisions or operation.

8. [258]

   Elders submits that the Court can apportion responsibility as between it and the Bhides for the plaintiffs and Ms Gillies’ loss and damage pursuant to s 9 of the 1965 Act because, pursuant to s 8 of the 1965 Act, “wrong” includes its breach of its contractual duty of care and that was concurrent and co-extensive with the duty of care in tort it owed the Bhides. Elders submits that that is the nature of the tortious breach alleged in the Bhides’ First and Second cross-claims against it.

9. [259]

   The Bhides did not contest that proposition and, in my view, Elders’ submission should be accepted. The law recognises that concurrent liabilities in both contract and tort may arise in cases of professional negligence. [110]

10. [260]

    Elders’ submissions assumed that the Bhides fell within the description of “claimant” in s 9. Again, the Bhides did not contest that proposition. [111]

11. [261]

    In my opinion, having found the Bhides to be liable in tort to the plaintiffs and Ms Gillies, they have suffered damage in the sense to which s 9 refers, such as to be a “claimant” as there referred to, albeit that the quantum of their exposure has yet to be determined. That exposure has been the result partly of their failure to take reasonable care and, too, partly by reason of Elders’ breach of the implied term of the Management Agreement, which, as I have said, is concurrent and co-extensive with the duty of care Elders owed the Bhides.

12. [262]

    Neither Elders nor the Bhides made any submissions about the meaning of “damage” in s 8. The definition of “damage” in s 9 of the 1965 Act prior to the 2000 amendments was the same as that now found in s 8.

13. [263]

    The word “damage” also appears in both s 5 of the 1946 Act dealing with contribution between tortfeasors and in s 35 of the CLA dealing with proportionate liability for apportionable claims.

14. [264]

    In Mahony v J Kruschich (Demolitions) Pty Ltd, [112] the High Court held in a unanimous judgment, that “damage” in s 5 of the 1946 Act referred to what in a negligence claim the plaintiff suffers as the foreseeable consequence of the tortfeasor’s act or omission. Thus, for example, where a tortfeasor’s negligent act or omission causes personal injury, “damage” includes both the injury itself and other foreseeable consequences suffered by the plaintiff.

15. [265]

    In Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd, [113] the majority applied Mahony in construing the word “damage” where it appeared in s 35 of the CLA also to mean “the injury and other foreseeable consequences suffered by a plaintiff”.

16. [266]

    Although the word “damage” in s 9 appears in a different context to that in s 5 of the 1946 Act and s 35 of the CLA, in my view the legislature’s use in the 1965 Act of the word “damage” as opposed to “damages” as the criterion for the apportionment by reason of contributory negligence indicates an intention that it bear a similar construction.

17. [267]

    On that basis, “damage” in s 9 refers to the foreseeable consequences to which the Bhides were exposed by reason of Elders’ breach of the implied term to use reasonable care, including, once assessed in the damages hearings, the damages the plaintiffs are entitled to recover from them.

18. [268]

    Because the proceedings are governed by the CLA, the question of what constitutes contributory negligence for the purposes of s 9 of the 1965 Act has to be determined in accordance with s 5R of the CLA. That provision requires the court to apply the “principles that are applicable in determining whether a person has been negligent … in determining whether the person who suffered harm has been contributorily negligent in failing to take precautions against the risk of that harm.”

19. [269]

    The correct legal question in determining the issue of contributory negligence in accordance with s 5R is “whether a reasonable person in the position of the [plaintiff], i.e. having the knowledge which the [plaintiff] had or ought to have had, was negligent”. [114] That is because, as at common law, “[c]ontributory negligence, like negligence, ‘eliminates the personal equation and is independent of the idiosyncrasies of the particular person whose conduct is in question.’” [115]

20. [270]

    In Astley, the joint judgment said:

21. [271]

    For the reasons I have given in finding the Bhides breached their duty of care, in my view, they failed to take reasonable care thus leading to the damage I have identified. They failed to take that degree of care an ordinary reasonable person with knowledge of the history of issues raised about the structural integrity of the balcony would take. [116]

22. [272]

    Where a plaintiff is found to have been guilty of contributory negligence, the relative culpability of the plaintiff and defendant are determined in accordance with s 9 of the 1965 Act. [117]

23. [273]

    The question of apportionment the “just and equitable” test in s 9(1)(b) invokes requires attention to be given to the “degree of departure from the standard of care of the reasonable man”. [118] Thus, the just and equitable apportionment test requires:

24. [274]

    In considering the Bhides’ culpability accordingly, it is relevant to take into account the duty of care Elders owed them. However, in my opinion, they ought also to have determined that the regular complaints about the structural integrity of the balcony indicated Elders was not competent in identifying experts qualified to address that issue.

25. [275]

    At the same time, it was Elders, not the Bhides, who, on the evidence, had access to a range of experts, including engineers, who, it appears to have been common ground at trial, ought to have been engaged to investigate the issue. Elders, too, should have been conscious of the history of complaints about the structural integrity of the balcony and reminded the Bhides of the significant occasions on which tradespeople called to investigate the balcony drew attention to concerns about the supporting structure. [120] Elders, too, ought to have recommended to the Bhides that they engage persons suitably qualified to investigate the balcony’s structural integrity, rather than continually only recommending carpenters be engaged.

26. [276]

    Taking all these matters into account, including the Bhides’ reliance on Elders, in my view, it is just and equitable to find that the Bhides’ damages recoverable in respect of Elders’ breach of the Management Agreement should be reduced by thirty per cent.

Contribution: the Bhides

1. [277]

   Section 5 of the 1946 Act relevantly provides:

2. [278]

   The Bhides submitted, albeit faintly, and only in submissions filed in response to Elders’ submissions on its amended notice of appeal, that Elders’ claim for contribution pursuant to s 5 of the 1946 Act could not succeed because the Bhides were not “any other tortfeasor who is, or would if sued have been, liable in respect of the same damage …”. [121]

3. [279]

   This submission was based on the proposition that the Bhides had been sued and found not liable by judgments entered in their favour in each of the plaintiff’s proceedings. Accordingly, they contended that no aspect of what has come to be known as the second limb of s 5(1)(c) of the 1946 Act [122] can be established. No authorities were cited for that submission nor, in response, did Elders address its legal merits.

4. [280]

   It is true that as long as the judgments finding the Bhides not liable to the plaintiffs are on the record, Elders is unable to assert that the Bhides are tortfeasors who are, or would if sued have been, liable. [123] Nevertheless, the Bhides’ submission that Elders cannot bring them within the second limb as a matter of law should be rejected.

5. [281]

   Elders is “directly interested in the question whether [the Bhides were] … tortfeasor[s] who [were] liable to the plaintiff” in each of their proceedings in which judgment was entered in the Bhides favour. [124] The consequence of that direct interest is that it is open to Elders on this appeal to challenge the judgments entered in the Bhides’ favour. [125] This conclusion also follows from the fact that it is the duty of this Court to rehear the case and give the judgment which ought to have been given below. [126]

6. [282]

   To determine whether a party is entitled to contribution when a claim for contribution is made, it is necessary that the following be satisfied:

7. [283]

   As I have said, in s 5(1) “damage” refers to “what the plaintiff suffers as the foreseeable consequence of the tortfeasor’s act or omission”. [128] The “same damage” in respect of which Elders seeks contribution, is “that damage” as referred to in s 5(1). [129]

8. [284]

   On the findings of breach I have made, Elders, the Bhides and Ms Gillies are joint tortfeasors liable for the same wrongful act or tort leading to a single damage. [130] That is because they breached a joint duty to use reasonable care for the safety of persons coming onto the property. But, even if that is not correct, and they are concurrent tortfeasors, whose separate acts combine to produce damage, “that damage” is the “same damage” referred to in s 5(1).

9. [285]

   Accordingly, using Lord Bingham’s criteria, in the plaintiffs’ proceedings, each plaintiff is A, Elders is B, the Bhides are C and Ms Gillies is D. In Ms Gillies’ proceedings, she is A, Elders is B and the Bhides are C.

10. [286]

    Thus, Elders is prima facie entitled to seek contribution from the Bhides and Ms Gillies pursuant to s 5(1)(c) of the 1946 Act. However, in my opinion, the passage in s 5(1)(c) I have emphasised does not permit a tortfeasor to recover contribution from a person entitled to be indemnified by it in respect of the liability in respect of which contribution is sought.

11. [287]

    That is the position here insofar as the Bhides are concerned. Elders seeks contribution in respect of its liability to the plaintiffs and Ms Gillies. The Bhides are entitled to a contractual indemnity from Elders in respect of the same damage, being their liability as joint tortfeasors to the plaintiffs and Ms Gillies. Accordingly, in my view, s 5(1)(c) of the 1946 Act disentitles Elders from recovering contribution from them.

12. [288]

    If that conclusion was not correct, I would be of the view that Elders could not be entitled both to have the damages it is liable to pay the Bhides reduced by reason of their contributory negligence, and also recover contribution from them pursuant to s 5 of the 1946 Act. That would be akin to double recovery.

Contribution: Ms Gillies

1. [289]

   The just and equitable test for determining contribution in s 5 of the 1946 Act is “substantially similar” to that applied for apportionment in respect of contributory negligence, save in at least two respect. First, in the latter case, the Court is reducing the recovery of an injured party. [131] Secondly, and again in the latter respect, possibly in circumstances where the injured party is not a tortfeasor. [132]

2. [290]

   Nevertheless, generally, the test applied in both circumstances is substantially the same. [133] Thus, in Pantalone v Alaouie, [134] Giles J (as his Honour then was) applied the test for contributory negligence stated in Podrebersek [135] to assess what contribution was just and equitable as between tortfeasors.

3. [291]

   Applying that approach in Ms Gillies’ case, I would take into account the fact that, although she was the occupier of the property, she was a tenant with limited ability to repair the balcony. Nevertheless, she had been occupier of the property for approximately 7 years at the time the balcony collapsed and, over that period, had had the opportunity to observe the general poor maintenance of the balcony insofar as its supporting structures were concerned. It was she who, in February 2012, drew attention to its precarious nature and, despite that, did not take the elementary precaution of preventing access to the deck of the balcony. Having regard to those matters and the conduct of both Elders and the Bhides as found by the primary judge and discussed in these reasons, I would assess Ms Gillies’ contribution at twenty per cent.

4. [292]

   In my view, a finding that Ms Gillies was liable to contribute to Elders’ damages in this respect is not inconsistent with the finding by the primary judge that she was not guilty of contributory negligence in her own proceedings. The latter was a finding that she had not failed to take reasonable care for her own safety, whereas the finding of contribution is based upon her breach of the duty of care she owed as occupiers to those present on the premises.

Conclusion

1. [293]

   The prima facie consequence of my conclusions is that, in any of the damages hearings, it will be necessary for the trial judge:

   1. (1)

      First, to determine the plaintiff’s damages against the Bhides and Elders as joint tortfeasors and enter judgment against each of them for the entire amount;

   2. (2)

      Secondly, as between the Bhides and Elders on the Bhides’ cross-claims, reduce the amount the Bhides are entitled to recover from Elders by reason of its breach of the Management Agreement by thirty per cent on account of their contributory negligence;

   3. (3)

      Thirdly, as between Elders and Ms Gillies in the plaintiffs’, but not her, proceedings, order that Ms Gillies contribute to Elders’ liability to the plaintiffs to the extent of twenty per cent.

2. [294]

   This is because, the consequence of the findings I have made is that the primary judge should have found the Bhides liable on the plaintiffs’ and Ms Gillies’ claims. Instead his Honour entered judgment in favour of the Bhides against each of the plaintiffs. Further, in Ms Gillies’ proceedings, his Honour only found in her favour because of the Bhides’ breach of the tenancy agreement. However, he declined to enter a verdict or judgment in her favour because it was premature as Elders and the Bhides asserted she had suffered no damage. Nevertheless, his Honour’s contingent orders should have proceeded also on the basis that the Bhides were liable to Ms Gillies as a tortfeasor.

3. [295]

   However, the possibility of these outcomes is not apparent in Elders’ draft orders in the amended notice of appeal. Rather, as to the plaintiffs’ proceedings, the draft orders seek to set aside the judgments in favour of the Bhides, but not to replace them with judgments in the respective plaintiff’s favour against the Bhides. The logic of that approach is not apparent. If judgment is not entered in the individual plaintiff’s favour against the Bhides, then there will have been no order on that aspect of their case. That is unsatisfactory. However, if the judgment in the Bhides’ favour in each plaintiff’s proceedings stands, it is inconsistent with the finding that the Bhides are tortfeasors.

4. [296]

   Insofar as Ms Gillies’ proceedings are concerned, the draft orders do not contemplate any alteration to the contingent orders made in the Bhides’ favour. In my view, that position has to be corrected to be consistent with the findings I have made.

5. [297]

   These are not the only complexities.

6. [298]

   The consequence of Elders amending its notice of appeal to add ground 4A dealing with the contractual indemnity point was that it was challenging a ruling in the Bhides’ favour on the Bhides’ cross-claims in Ms Gillies’ proceedings. As I would uphold the Bhides’ notice of contention that they should have the benefit of a wider contractual indemnity in each of the plaintiffs’ proceedings, Elders has been unsuccessful in resisting the First and Second Bhides’ cross-claims, save to the extent that their entitlement to recoup whatever amounts for which they may be found to be liable to any of the plaintiffs is to be reduced by thirty per cent.

7. [299]

   At the time it amended the notice of appeal, it is apparent that Elders did not consider the orders which would have to be made if the Bhides were held to be joint tortfeasors and if the contractual indemnity in Ms Gillies’ proceedings was upheld and, so too was the Bhides’ notice of contention, albeit with a finding of contributory negligence. Both findings presuppose, as did the Bhides’ cross-claims in the plaintiffs’ proceedings, that they were held liable to the plaintiffs.

8. [300]

   However, the primary judge did not enter judgment in the Bhides’ favour on the First Bhides’ cross-claim in Ms Gillies’ proceedings, holding that that would be premature because Elders may not be liable to pay Ms Gillies damages.

9. [301]

   In all the circumstances, apart from indicating that the appeal is allowed, I would direct the parties to bring in short minutes of order reflecting the reasons, including, if necessary entering judgment in each plaintiff’s favour against the Bhides.

10. [302]

    Insofar as costs are concerned, because the effect of these reasons is to alter the outcome of the trial substantially, the parties should have the opportunity of addressing both as to the costs orders which should be made in relation to the costs of the trial and the costs in this Court.

Orders

1. [303]

   I propose the following orders:

   1. (1)

      Grant leave to appeal.

   2. (2)

      Appeal allowed.

   3. (3)

      Parties to bring in short minutes of order reflecting these reasons within 14 days.

   4. (4)

      In the event the parties are unable to agree on short minutes of order as to the liability issues, they are to file and serve written submissions setting out the orders they propose and their reasons for disagreeing with the orders any other party proposes. Such submissions are to be filed and served in accordance with the timetable in 6(a) – (c).

   5. (5)

      Insofar as costs are concerned, if the parties can agree as to the orders for costs to be made, they are to set out that agreement in the short minutes of order referred to in (3).

   6. (6)

      If the parties cannot agree as to the orders for costs to be made, they are to file and serve written submissions addressing the costs of the appeal and of the trial, such submissions are not to exceed six pages, in accordance with the following timetable. Costs questions will be determined on the papers unless compelling submissions to the contrary are made in the written submissions.

2. [304]

   MEAGHER JA: I agree with the reasons and proposed orders of McColl JA.

3. [305]

   WARD JA: I agree with McColl JA.