The Owners – Strata Plan No 84674 v Pafburn Pty Ltd

1. [1]

   WARD P: I have had the advantage of the reasons of each of Adamson JA and Basten AJA and I can therefore be brief. I agree that, for the reasons given by Basten AJA, leave should be granted. I also agree that the appeal should be allowed and that the orders proposed by Basten AJA should be made. I agree that the fact that the duty of care in s 37 of the Design and Building Practitioners Act 2020 (NSW) is non-delegable (see s 39) excludes by necessary implication the provisions of Part 4 of the Civil Liability Act 2002 (NSW) dealing with proportionate liability; and with the conclusion drawn by each of Adamson JA and Basten AJA in that regard.

2. [2]

   ADAMSON JA: I have had the benefit of reading the reasons of Basten AJA in draft. I agree with the orders proposed by his Honour and gratefully adopt his Honour’s summary of the issues and the submissions made. My reasons for agreeing with the orders proposed by Basten AJA are as follows.

3. [3]

   The Owners – Strata Plan No 84674 (the applicant) claimed damages against the respondent Pafburn Pty Ltd (the builder) for breach of the duty of care imposed by s 37 of the Design and Building Practitioners Act 2020 (NSW). In its defence, Pafburn Pty Ltd nominated several alleged “concurrent wrongdoers” and relied on Part 4 of the Civil Liability Act 2002 (NSW) which, if applicable, will have the consequence of excluding from the builder’s liability for damages any damage for which a concurrent wrongdoer is responsible, whether joined as a defendant or not.

4. [4]

   The applicant sought to strike out the builder’s defence on the basis that Part 4 of the Civil Liability Act did not apply to the duty owed to it by the builder, because the duty was non-delegable. The primary judge rejected the submission and dismissed the notice of motion. The applicant seeks leave to appeal against that dismissal.

5. [5]

   For the reasons given by Basten AJA, leave to appeal ought be granted. For the reasons which follow, the appeal ought be allowed.

6. [6]

   Section 37 of the Design and Building Practitioners Act provides:

7. [7]

   Section 39 of the Design and Building Practitioners Act provides that “a person who owes a duty of care under this Part is not entitled to delegate that duty.” Section 41(3) provides that the Part is subject to the Civil Liability Act.

8. [8]

   Section 5Q of the Civil Liability Act provides:

9. [9]

   Section 39(a) of the Civil Liability Act, which is contained in Part 4 of that Act, entitled “Proportionate liability”, provides:

10. [10]

    The primary judge construed the words “liability in tort” and “breach of a non-delegable duty” in s 5Q(1) of the Civil Liability Act, respectively, to be confined to liability for a common law tort and breach of a common law duty. Accordingly, her Honour did not consider that s 5Q of the Civil Liability Act affected breaches of the duty of care imposed by s 37 of the Design and Building Practitioners Act. Her Honour held, accordingly, that there was no impediment to the builder’s reliance on Part 4 of the Civil Liability Act in its defence to the applicant’s claim.

11. [11]

    Section 37 of the Design and Building Practitioners Act evinces a clear legislative intention not only to extend the scope of the common law duty of care to owners and subsequent owners of land on which building work is done but also to create a new cause of action deriving from statute which is to be treated as if it were a cause of action in tort. This intention is evident from the deeming words in s 37(3) that “[a] person to whom the duty of care is owed is entitled to damages for the breach of the duty as if the duty were a duty established by the common law” (emphasis added). Effect must be given to these words. Section 39 provides that the duty may not be delegated: that is, the duty in s 37 is non-delegable. This is sufficient to exclude Part 4 of the Civil Liability Act by necessary implication.

12. [12]

    Further, there is no basis for confining the words “tort” and “duty of care” in s 5Q of the Civil Liability Act. The word “tort” is apt to refer to a civil wrong (other than a breach of contract or breach of equitable obligation) for which a remedy of damages to compensate the injured party may be obtained in a court and includes an action for breach of statutory duty: see Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 424 (Brennan CJ, Dawson and Toohey JJ); [1995] HCA 24. The present case does not call for an exhaustive identification of the defining features of a “tort” since the legislature plainly intended to extend common law concepts of duty of care and its breach to actions such as the present brought by the applicant against the builder for breach of the duty of care imposed by the Design and Building Practitioners Act. Thus, breach of the duty in s 37 of that Act is actionable at the suit of the person who suffers loss as a consequence. In these circumstances, s 5Q of the Civil Liability Act applies to the applicant’s claim against the builder, which is a claim in tort for breach of a duty of care imposed by statute. The builder is, accordingly, vicariously liable for the breaches of concurrent wrongdoers.

13. [13]

    I reject the builder’s argument that the consequence of accepting the applicant’s argument that it was not entitled to the benefit of the proportionate liability provisions in Part 4 of the Civil Liability Act would be both unfair and contrary to public policy. For the reasons given above, this consequence flows from the character of the duty owed by the builder to the applicant as non-delegable. The purpose of the proportionate liability provisions is to enable the amount for which the named defendant is liable to the plaintiff to be adjusted to reflect the named defendant’s responsibility for the damage suffered by the plaintiff, having regard to the responsibility of concurrent wrongdoers for that damage. It is neither unjust nor contrary to public policy for a wrongdoer which breaches a non-delegable duty to remain liable to the injured party for the whole of the loss since this is the purpose and effect of a non-delegable duty. To read Part 4 of the Civil Liability Act as applying to an action for breach of a non-delegable duty, whether imposed by the common law or, as in the present case, imposed by statute, would be entirely inconsistent with the character of the builder’s duty as non-delegable. In these circumstances, the proportionate liability provisions of the Act can have no sensible application. While it would have been open to the legislature to expressly exclude causes of action such as the present from Part 4 of the Civil Liability Act, it was not imperative that it do so in terms, since the exclusion arises by necessary implication.

14. [14]

    Thus, although the builder is entitled to cross-claim against concurrent wrongdoers, it cannot reduce its own liability to the applicant for the whole loss suffered by the applicant by reference to such wrongdoers: see Woodhouse v Fitzgerald (2021) 104 NSWLR 475; [2021] NSWCA 54 at [100]-[102] (Basten JA).

15. [15]

    I reject the builder’s submission that there were issues of fact to be tried as to whether the alleged concurrent wrongdoers identified in its defence meet that description. The reason these persons and entities have been identified in the defence is because they are alleged to be concurrent wrongdoers for the purposes of Part 4 of the Civil Liability Act. As such, the builder is vicariously liable for any breaches by them (s 5Q of the Civil Liability Act), since the duty it owed to the applicant is non-delegable (s 39 of the Design and Building Practitioners Act). In these circumstances, there is no relevant issue to be tried relating to proportionate liability on the defence as pleaded (the Technology and Construction List Response filed on 21 September 2022) or the proposed amended list response.

16. [16]

    For the reasons given by Basten AJA, there was no discretion to refuse to dismiss those paragraphs of the builder’s defence sought to be struck out since, as a matter of law, the proportionate liability defences were not available to the builder.

17. [17]

    Accordingly, the orders proposed by Basten AJA ought be made.

18. [18]

    BASTEN AJA: Pursuant to the Design and Building Practitioners Act 2020 (NSW) (“Design and Building Act”) the duty of care owed by a person carrying out construction work is now extended to subsequent owners of the land, including, in the case of a strata development, an owners corporation. The applicant, The Owners – Strata Plan No 84674 (“Owners Corporation”), has commenced proceedings in the Equity Division against the respondents, being the developer and head contractor responsible for the construction of a building at 197 Walker Street, North Sydney, now the subject of a residential strata scheme under the Strata Schemes Management Act 2015 (NSW).

19. [19]

    The respondents have pleaded in their defence that nine independent contractors were “concurrent wrongdoers” for the purposes of Pt 4 of the Civil Liability Act 2002 (NSW) amongst whom liability should be apportioned. By a notice of motion first filed on 11 November 2022, and amended on 15 December 2022, the applicant sought to strike out the proportionate liability defences. The motion was heard by Rees J in the Technology and Construction List on 16 February 2023, judgment being delivered on 23 February 2023, dismissing the strike out application. [1] That being an interlocutory judgment, the applicant requires leave to appeal. [2]

Application for leave to appeal

1. [20]

   The respondents oppose a grant of leave, but primarily on the basis that the primary judge was correct and the challenge has insufficient merit to warrant a grant of leave. A secondary argument appears to have been that there was an anterior question of fact and law to be decided, namely whether any of the persons listed as independent contractors was a “delegate” of the respondents, and if so which respondent. Arguably the question is misconceived, but in any event, if the defence is not available, that “anterior question” will not need to be decided.

2. [21]

   The issue sought to be raised by the applicant is of general public importance with respect to the operation of novel legislation conferring rights on an owners corporation with respect to defective construction work, over a period of 10 years prior to the commencement of the legislation. The answer to the question may have significant impact on the conduct of a trial. In those circumstances, a grant of leave to appeal is appropriate.

3. [22]

   Further, it may be noted that in written submissions opposing a grant of leave, the respondents referred to the decision as involving a “discretionary, interlocutory matter”. It was said that the principle of restraint in House v The King [3] should be applied. If correct, that principle would no doubt reduce the likelihood of the applicant’s success on any appeal. However, that principle should not be applied. In accordance with the reasoning of the High Court in GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore, [4] the constrained standard only applies where there is a range of answers which can be provided, rather than a binary choice. Even where there is a binary choice and the binary choice involves an evaluative judgment, the “correctness standard” applies. [5]

4. [23]

   This was not a case involving a discretion with a possible range of outcomes: either the defence was struck out, or it was not. It was also not a case which involved an evaluative judgment: the question whether to strike out the defence depended on the proper construction of the relevant statutory provisions. Accordingly, there can be no doubt that the correctness standard applies.

Statutory scheme

1. [24]

   The relevant operative provision in the Design and Building Act is s 37, which provides as follows:

2. [25]

   The term “construction work” is broadly defined in s 36 to mean any of the following:

3. [26]

   The provisions in Pt 4 were given retrospective effect for a period of up to ten years, pursuant to Sch 1, cl 5 which provides:

4. [27]

   Both Pt 4 and cl 5 of Sch 1 to the Design and Building Act came into operation on the date of assent, namely 10 June 2020. Consistently with the 10-year period referred to in cl 5(2)(a), the limitation period in s 6.20(1) of the Environmental Planning and Assessment Act 1979 (NSW) provides that “[a] civil action for loss or damage arising out of or in connection with defective building work or defective subdivision work cannot be brought more than 10 years after the date of completion of the work”. There is, presently, no dispute that the Design and Building Act applies and that the proceedings were commenced within the relevant limitation period.

5. [28]

   It is convenient next to set out three further provisions from the Design and Building Act:

6. [29]

   First, the principle of non-delegation contained in s 39 was relied on by the applicant as a basis upon which the provisions of Pt 4 of the Civil Liability Act, dealing with proportionate liability, were either not engaged or did not have the effect of removing the liability of the defendants for any harm caused by the negligence of their contractors. There was an assumption that s 39 applied to the statutory duty of care contained in s 37 the common law concept of a “non-delegable duty”, a term which also appeared in s 5Q of the Civil Liability Act.

7. [30]

   Secondly, s 41(3) assumed the possibility of inconsistency between the provisions of Pt 4 of the Design and Building Act and provisions of the Civil Liability Act, and gave priority to the latter. However, a significant dispute arose as to the extent to which the Civil Liability Act applied.

8. [31]

   It is necessary then to turn to the relevant provisions in the Civil Liability Act. The submissions treated two provisions as of paramount significance in the present circumstances. First, the title to Pt 1A, Div 7, and s 5Q, read as follows:

9. [32]

   First, although it referred to breach of a “non-delegable duty” it appeared to assume that the obligation to take reasonable care could be “delegated or otherwise entrusted” to another person. It is apparent that the concept of delegation is a shorthand for the retention of liability in the person subject to the duty, in circumstances where the work is carried out by an independent contractor. The form of liability which retained in the principal is described as a “vicarious liability” of the party subject to such a duty. The language is manifestly inapt: the duty is never delegated; nor is a vicarious liability the liability of a deputy or delegate. To treat these legal labels as if they used words in the ordinary English meaning would be to invite error, which may be seen in the respondents’ formulation of the anterior question referred to at [20] above.

10. [33]

    Secondly, unlike other provisions in Pt 1A of the Civil Liability Act, s 5Q is expressly limited to “liability in tort” and to “an action in tort”, being phraseology used in subs (1) and (2) respectively. That in turn gave rise to a question as to whether a breach of s 37 of the Design and Building Act gives rise to a claim in “tort”, the respondents submitting that a claim in tort did not encompass a claim for breach of a duty imposed by statute. That question can only be addressed by identifying the purpose of s 5Q in its statutory context.

11. [34]

    Constraints imposed by the Civil Liability Act on claims for civil liability were to apply equally to those primarily responsible for their own negligence and to those vicariously responsible for the negligence of others. To effect that purpose, s 3C provides:

12. [35]

    As discussed below, the purpose, or at least one purpose, of s 5Q is to ensure that the operation of s 3C was not undermined by a claim that liability arose from the imposition of a non-delegable duty, rather than a vicarious liability.

13. [36]

    In addressing the meaning of the term “tort”, both as a general law term and as used in the Civil Liability Act, it is appropriate to note the statutory context, including s 5A dealing with the application of Pt 1A generally:

14. [37]

    The second tranche of relevant provisions are to be found in Pt 4 of the Civil Liability Act dealing with “proportionate liability”. The basic principles by which joint and several liability for the whole of any economic loss suffered by the plaintiff is removed may be found in two primary provisions, namely s 35(1) and s 36:

15. [38]

    With respect to Pt 4 generally, the application provisions are both restrictive and complex. The first, s 34, states:

16. [39]

    There is a second provision dealing with the application of Pt 4, namely s 39:

17. [40]

    Inconsistently with the generality of s 3C, s 39 states that a concurrent wrongdoer who is otherwise vicariously liable for the harm done by another remains vicariously liable for any portion of the claim for which the other person is found liable. Thus, the defendant is not limited in its liability (to the extent that the liability is vicarious) to the proportion of the damage for which it is found to be responsible under s 35(1), nor, if s 39 is engaged, can the defendant avoid being required to contribute to the damages of the other concurrent wrongdoer pursuant to s 36.

Issues on appeal

1. [41]

   The primary judge identified the Owners Corporation’s case as depending upon the combined effects of s 39 of the Design and Building Act and s 5Q and s 39(a) of the Civil Liability Act. Those provisions, it was submitted, precluded the defendants from utilising the proportionate liability provisions where the statutory duty was described as “non-delegable”. [6] The contrary submission of the respondents, which was successful in the Court below, was that the statutory duty created by s 37(1) of the Design and Building Act is not a “tort” for the purposes of s 5Q, with the result that there was no conversion of the liability of the respondents into a form of “vicarious liability”, without which s 39(a) of the Civil Liability Act was not engaged. The critical step in the respondents’ case was that a “tort” was a cause of action arising under the general law, and did not include statute, even if the statute operated by creating a “duty of care”.

2. [42]

   For reasons explained below, the respondents’ construction should not be accepted. That course of reasoning, however, involves a potentially arid consideration of what is meant by a term derived from the general law referring to a “non-delegable duty”, and a distinction between that and “vicarious liability”. In circumstances where it has been said (with some justification) that a “non-delegable duty” is a misnomer, because the possibility of delegation is inappropriate, and where the term “vicarious liability” is a misnomer because there is no question of the liability of the employer standing in for the liability of the employee, it is desirable not to engage too closely with the precise meanings of those terms, to the extent that it is possible to avoid doing so.

3. [43]

   There is an alternative approach which turns on the uncontroversial principle of statutory interpretation that seeks to read harmoniously two statutes of the same legislature. The basic proposition is that for s 36 of the Civil Liability Act to be construed as preventing a defendant who is a concurrent wrongdoer being liable for damages for which another concurrent wrongdoer is liable, is to render the imposition of a non-delegable duty on the former incoherent. That conclusion, it may be accepted, requires an understanding of the concept of a “non-delegable duty”, but it does not require engagement with the concept of a “tort”, as the term is used in s 5Q of the Civil Liability Act.

4. [44]

   As the same conclusion is reached on either approach, it will be convenient to note aspects of the various statutory provisions as they arise, but in the context of addressing the harmonious construction approach first.

A non-delegable duty

1. [45]

   The nature of the duty under s 37(1) of the Design and Building Act requires no analysis for present purposes beyond noting that it is a duty imposed on a person who carries out construction work to exercise reasonable care to avoid economic loss caused by defects in the building. The duty is owed to each owner of the land, including owners subsequent to the owner for whom the construction work was carried out: s 37(2). Section 39 (set out at [28] above) states that the person who owes the duty “is not entitled to delegate that duty”.

2. [46]

   The concept of non-delegation has long been used in applying the common law. As observed above, it is a term used to indicate that a principal who owes a duty to a third party, but engages an independent contractor to carry out the work, will be vicariously liable for a breach of duty by the independent contractor.

3. [47]

   In Wilkinson v Rea Limited [7] Luxmoore LJ stated that the duty of an invitor to an invitee cannot be "escaped by delegating its performance to an independent contractor”. Voli v Inglewood Shire Council [8] involved a claim against the Council as occupier and owner of a structure used for entertainment, which was found liable to a person who was injured when a stage in a hall collapsed. In Voli, Windeyer J referred to the judgment of Luxmoore LJ, approved by the House of Lords in Thomson v Cremin, [9] and identified the question as being, “Is the case one of those in which there is vicarious liability for the fault of an independent contractor?”.

4. [48]

   In The Commonwealth v Introvigne, [10] addressing the liability of a school authority in negligence for an injury suffered by a pupil attending the school, Mason J stated that the liability was “not a purely vicarious liability” and continued:

5. [49]

   The language of “non-delegable duty” became commonplace in discussing the liability of road authorities involved in the construction or repair of roads and footpaths. The primary judge referred to the explanation of the concept given by Gleeson CJ in Leichhardt Municipal Council v Montgomery, [13] which it is convenient to set out in full:

6. [50]

   The idea of “outflanking” the general rule that a defendant is not vicariously responsible for the fault of an independent contractor envisages that, once the general rule is put aside, the defendant is vicariously liable for the fault of the independent contractor. That is consistent with the description of the duty as one involving strict liability, not in the sense that the defendant is liable to ensure that no harm befalls the plaintiff, but rather is liable for any harm caused by a breach of duty by a party also having a duty to take reasonable care with respect to the plaintiff. Importantly for present purposes, liability is not limited to a failure by the defendant to take reasonable care, for example by engaging a competent and responsible agent.

7. [51]

   Turning to Pt 4 of the Civil Liability Act, four provisions are important. First, pursuant to s 34(2), there must be at least two parties, each of which is a “concurrent wrongdoer”. That requires two parties whose “acts or omissions … caused, independently of each other or jointly, the damage or loss that is the subject of the claim”. That language is not apt to include the liability of one person who undertook no act (and made no omission) which caused the loss the subject of the claim.

8. [52]

   Secondly, where there is an apportionable claim, s 35(1) requires the court to consider what proportion of the damage or loss claimed may justly be attributed to the defendant, “having regard to the extent of the defendant’s responsibility for the damage or loss”. It is at least awkward to construe that provision in such a way as to permit the attribution of responsibility for a tort involving a breach of a duty of care where one defendant has not failed to exercise reasonable care, and whose liability is entirely vicarious.

9. [53]

   Thirdly, s 36 precludes a concurrent wrongdoer from being required to contribute to any damages payable by the defendant, or being required to indemnify the defendant. Thus, assuming that some small proportion of the liability were attributed to the defendant in a proceeding, on the ground that it was liable for breach of a non-delegable duty, the plaintiff would be able to recover only that small amount. Such an outcome renders incoherent the concept of a non-delegable duty, which should render the party subject to the duty liable for the whole of the loss or damage caused by a breach of duty by a third party.

10. [54]

    Fourthly, and consistently with s 35(1), s 39(a) states that nothing in Pt 4 prevents a person from being held vicariously liable for a proportion of an apportionable claim for which another person is liable. Thus, if a non-delegable duty is understood as a mechanism for rendering a principal liable for the failure of its independent contractor to take reasonable care, the principal owing a non-delegable duty will remain liable for the whole of the loss suffered. In short, s 39(a) reflects a statutory intention that Pt 4 will not affect the imposition of vicarious liability. Accordingly, it will not prevent a person from recovering from an employer the economic loss caused by an employee for whom the employer was vicariously liable. On the basis that the general law concept of a non-delegable duty, as reflected in s 39 of the Design and Building Act, merely places the principal’s position with respect to independent contractors in the same position as that of an employer and employee, it follows that Pt 4 will not prevent recovery in full from the principal who is subject to a non-delegable duty.

11. [55]

    Finally, as a matter of statutory construction, it should be accepted that in using the concept of a non-delegable duty, in a statute passed in 2020, the Parliament was conscious of the legal significance of that concept and intended it to have the well-established effects reflected in the case law, including the passages set out above by way of example.

12. [56]

    That is a sufficient basis on which to conclude that the reasoning of the primary judge was in error and defences based upon Pt 4 of the Civil Liability Act should properly have been struck out. The claims to rely on the apportionment of liability under Pt 4 of the Civil Liability Act could not succeed if Pt 4 was not engaged.

Application of s 5Q of the Civil Liability Act

1. [57]

   The argument accepted by the primary judge approached the matter differently. It assumed that the exclusion of vicarious liability from the operation of Pt 4 of the Civil Liability Act, pursuant to s 39(a), turned on the operation of s 5Q, converting liability for a breach of a non-delegable duty into a vicarious liability by a deeming provision, “as if the liability were the vicarious liability of the defendant”. However, so the argument ran, s 5Q was not engaged because the statutory duty imposed under the Design and Building Act was not a liability “in tort” but a liability arising under the statute.

2. [58]

   Before addressing the substance of that approach, it is convenient to address the effect of “application” provisions in each Act. Thus, s 41(3) of the Design and Building Act, contained in Pt 4, states that “this Part is subject to the Civil Liability Act 2002”. The primary judge noted that that provision had been considered by Stevenson J in Boulus Constructions Pty Ltd v Warrumbungle Shire Council (No 2), [14] in the following terms:

3. [59]

   Having set out that passage, the primary judge continued:

4. [60]

   Nevertheless, those statements assume, rather than explain, the manner in which Pt 4 of the Civil Liability Act is engaged. To note that Pt 4 of the Design and Building Act is “subject to” the Civil Liability Act says nothing unless the latter is engaged in circumstances to which the former applies.

5. [61]

   The primary judge appears to have found support for her conclusion in the application provision in Pt 4 of the Civil Liability Act, namely s 34(3A), set out at [38] above. That provision excludes from the operation of the proportionate liability provisions a claim for damages for breach of a statutory warranty arising under Pt 2C of the Home Building Act 1989 (NSW). The judge thought it “[n]oteworthy” that s 34(3A) excluded such a claim, but did not exclude a claim for breach of statutory duty under the Design and Building Act. She continued:

6. [62]

   This reasoning draws on an implication arising from an omission. However, the implication assumes the correctness of the conclusion, namely that Pt 4 of the Civil Liability Act would, absent exclusion, apply. If Pt 4 of the Civil Liability Act did not otherwise apply, there would be no need for the exclusion and no inference could be drawn from an omission to exclude it.

7. [63]

   It is convenient then to turn to the substantive argument relied on in the court below, disregarding the several bases set out above on which it might have been concluded that Pt 4 of the Civil Liability Act did not, in its terms, apply to a cause of action under s 37 of the Design and Building Act.

8. [64]

   The primary judge started with the proposition that “[a] non-delegable duty and vicarious liability are similar but not the same”. [16] In fact, the two terms serve different functions. A vicarious liability, as described by Professor Giliker, “represents not a tort, but a rule of responsibility which renders the defendant liable for the torts committed by another”. [17] By way of contrast, the “non-delegable duty” is an inelegant label given to circumstances where a form of strict liability is imposed on a principal for the negligence of a person to whom it has in fact “delegated” the performance of a function, without freeing itself from the liability for that performance.

9. [65]

   The label is applied to relationships other than that of employer and employee, because the principle developed at a time when strict liability for the negligence of an employee was already established. It was the label, however, which gave rise to a concern on the part of the authors of the Ipp Report [18] that by imposing a duty which was not a duty of care, a plaintiff could invite a court to find liability on a basis which was not subject to the constraints of the proposed legislation. Further, courts were believed to be susceptible to imposing non-delegable duties as if “they are not imposing a form of strict liability … although it is clear that a non-delegable duty is not a duty of care”. [19] The Report concluded:

10. [66]

    This recommendation was effected by two provisions operating in tandem. The first is s 3C which ensures that where the Act excludes or limits civil liability of a person for a tort, it also operates to exclude or limit the vicarious liability of another person for that tort. The second provision is s 5Q, which deems the liability for a breach of a non-delegable duty to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work.

11. [67]

    Subject to specific limitations and exclusions, there is little doubt that the drafter of the Civil Liability Act intended the legislation to be comprehensive in its coverage. For example, the purpose of s 5A(1) was not to identify four discrete categories of claim, namely those brought in tort, contract, under statute or otherwise, but to cover all conceivable bases of a claim in negligence. The fact that s 5Q was expressed by reference to claims in tort is unlikely to have been intended to have a limited operation. Rather, viewing the legislative scheme as a whole, and read against the background of the reasoning in the Ipp Report, it is tolerably clear that the language of s 5Q was intended to address the full scope of the problem of non-delegable duties. The references to “liability in tort” and “an action in tort” were not intended to exclude some circumstances in which non-delegable duties were imposed, but rather reflected an understanding that the concept only arose with respect to actions in tort. Furthermore, that understanding was legally correct. To read down the language of s 5Q would undermine the statutory purpose, as revealed by the extrinsic material. In principle, that course is wrong.

12. [68]

    History confirms this conclusion. To the extent that the purpose of s 5Q is revealed as the need to prevent judicial sidelining of principles relating to vicarious liability, by imposing a non-delegable duty, in many cases they did so by construing statutes. It would therefore verge on the bizarre to think that s 5Q was not intended to apply to such cases.

13. [69]

    By way of example, in Hole v Sittingbourne and Sheerness Railway Co, [20] Cockburn CJ, and then the Court of Exchequer in discharging a rule nisi challenging the judgment of the Chief Justice, concluded that a statute empowering a railway company to construct a railway, including an opening bridge, but making it unlawful for the company to detain beyond a specified period vessels seeking to use the river, was found liable in damages to the owner of a vessel when, due to the negligence of its contractor, the mechanism for opening the bridge failed to operate. The Court found the railway company liable for the omission of the contractor. In Gray v Pullen [21] the defendant had a statutory authority to dig up a public highway in order to make a drain from his premises to a sewer. He employed a contractor who negligently failed to restore the surface as a result of which the plaintiff fell into the trench and was injured. Hole was distinguished, but the principle was described by Cockburn CJ in the following terms: [22]

Was the claim brought in tort?

1. [70]

   There are five, not entirely independent, reasons for thinking that a claim relying upon s 37 of the Design and Building Act is a claim “in tort” for the purposes of s 5Q of the Civil Liability Act. The first is that s 37(3) provides that a person to whom the duty of care is owed is entitled to damages for breach of the duty “as if the duty were a duty established by the common law”. According to the respondents, the deeming phrase, “as if”, demonstrates that this is not a common law duty; were it otherwise, the deeming would not be necessary. Accepting the premise, the conclusion does not follow. That is, assuming that it is not in fact a common law duty, the statute requires that it be treated as such: the deeming cannot be ignored. There is nothing in s 37 which restricts the operation of the deeming, nor was any necessary implied restriction identified by the respondents. To give effect to the deeming, the claim must be treated as one brought under the common law for all purposes, including in addressing the application of the Civil Liability Act. The fact that the claim may also be said to be brought “under statute” within s 5A(1), so as to engage Pt 1A of the Civil Liability Act, does not affect the deeming provision. If the cause of action created by Pt 4 of the Design and Building Act is a claim “in tort”, it is a claim arising under the common law.

2. [71]

   Secondly, to describe the cause of action as one brought in tort accords with basic principles. The meaning of “tort” can only be usefully addressed by understanding the function it plays within the general law. As the authors of Winfield & Jolowicz on Tort explain, it is best to begin with a general description, rather than a definition. [23] They conclude their initial description by stating:

3. [72]

   In attempting a definition, Winfield stated: [24]

4. [73]

   It is appropriate to talk of “tortious liability” rather than a “tort” because there is no cause of action unless the breach of duty results in harm to an individual to whom the duty is owed. The primary function of the categorisation is to distinguish tortious liability from criminal liability and from other categories within the civil law of obligations, being primarily liability arising from a breach of contract or bailment, which depend upon an agreement between the parties, or at least the consent of the defendant, [25] and breach of trust. [26] Tortious liability does not cease to be tortious liability because the content of the duty, or the circumstances in which the liability may arise, is defined or controlled or regulated by statute. That has been acknowledged since in a plethora of cases, some of which were discussed by J C Campbell 20 years ago. [27] In Downs v Williams, [28] concerning the liability of the State for breach of the Factories, Shops and Industries Act 1962 (NSW) Windeyer J stated:

5. [74]

   Indeed, the liability of the State and the Commonwealth in tort can only be a consequence of statute. Leeming has argued that the duty of care as an element in the tort of negligence generally owes much to English statutes regulating canals, highways, railways and carriers. [31]

6. [75]

   The respondents’ case is that s 5Q operates with respect to liability in tort under the general law; understandably, they do not submit that s 5Q has no operation because the general law liability for tort is varied in many respects by the Civil Liability Act itself (although arguably not by s 5Q). Nor does defamation cease to be a tort because most of its elements are now found in a statute. In any event, the restriction excluding duties imposed by statute is inconsistent with standard explanations of the scope of torts.

7. [76]

   Thirdly, the duty imposed by s 37(1) is, as the heading to the section indicates, not a novel or freestanding duty of care, but an “extension” of an existing duty. [32] Although the duty arises in a contractual context, it does not depend on a contractual term requiring the exercise of reasonable care to avoid economic loss caused by defects, but rather provides that a contractual term which purports to exclude the extended duty will be ineffective: s 40.

8. [77]

   Fourthly, the operation of these principles is illustrated by their application with respect to the common form of statutory provision providing for apportionment of liability for contributory negligence. Astley v Austrust Ltd [33] held that there could be concurrent obligations under an implied term in a contract imposing a duty to take reasonable care in the provision of services, and in tort where such a duty is imposed by law. There was a further question as to whether apportionment legislation dealing with contributory negligence applied to a breach of the implied contractual term. The Court held that it did not, a conclusion which has since been overridden by statute in this State. [34] At the time the claim arose in Astley, s 27A of the Wrongs Act 1936 (SA) defined “fault” as “negligence, breach of statutory duty or other act or omission which gives rise to a liability in tort or would, apart from this Act, give rise to the defence of contributory negligence”. Despite the breadth of the definition, the reasoning in Astley was replete with comparisons between tortious liability, which was imposed by law, and contractual liability, which turned upon the intention, actual or implied, of the parties to a contract. The Court held that “on any fair reading of the apportionment legislation against the background of the mischief it was intended to remedy, it is clear to the point of near certainty that the legislation does not and was never intended to apply to contractual claims”. [35]

9. [78]

   The Court in Astley referred to the reasoning in two cases in the Victorian Supreme Court. In the first, Belous v Willetts, [36] Gillard J concluded that “the word ‘negligence’ should be construed as meaning the tort of negligence, and not mere carelessness, or negligent breach of contract which would not give rise to a liability in tort.” The joint reasons in Astley further observed:

10. [79]

    Barker et al, in considering the nature of the liability for breach of statutory duty identify three ways in which such a statute may be relevant to an action in tort. The first two will be noted shortly. The third was described as follows: [38]

11. [80]

    That description is sourced to the reasoning of Windeyer J in Downs v Williams, [39] noting that “a statutory duty may be more rigorous, as well as more precise, than the requirements of reasonable care.” Windeyer J continued: [40]

12. [81]

    Much of the case law regarding breach of statutory duty turns on the last element, namely whether the statute was intended to create a civil right of action in an individual. However, that question cannot arise given the express terms of Pt 4 of the Design and Building Act. The inevitable conclusion of these principles is that a cause of action for a breach of a duty imposed by a statute invokes liability in tort.

13. [82]

    Fifthly, to suggest that liability in “tort” is a product of the common law is fundamentally wrong. To the extent that the Civil Liability Act itself does not contradict that assumption, perhaps the best that could be contended is that the duty of care is a concept which owes its origins to judge-made law. However, as Leeming has explained: [41]

14. [83]

    After referring to the judgment of Tindal CJ in the 1839 decision of Parnaby v Lancaster Canal Co, [42] Leeming referred to the following statements by Winfield (writing in 1934): [43]

15. [84]

    In considering the contemporary role of statute, Leeming describes “[d]uty as a necessary element of a claim for negligence” as “now entrenched by statute”. [44] He continued:

16. [85]

    In addressing statutes which mandate a duty of care, Leeming observes: [47]

17. [86]

    Barker et al note in a passage referred to above, breach of a duty imposed by a statute or statutory regulation can affect an action in tort in various ways. [48] First, in relation to actions against public authorities, the statute may define “to whom and in what respects the authority is under a common law duty of care”. Secondly, “breach of a statutory duty may provide evidence of negligence”.

18. [87]

    It is not necessary for present purposes to expand the discussion or the examples: it is sufficient to note the statement by Gleeson CJ in Brodie v Singleton Shire Council: [49]

19. [88]

    It follows that a reference in s 5Q of the Civil Liability Act to an action “in tort” cannot sensibly be construed as excluding tortious liability dependent to some extent, or even in all respects, upon statute.

Two other cases

1. [89]

   First, it should be noted that this conclusion is consistent with the reasoning in Woodhouse v Fitzgerald, [52] a case dealing with liability of the owners of land on which a fire broke out, following a back-burn undertaken by the Rural Fire Service (RFS), for damage to the property of a neighbour, Mr Woodhouse. In considering the vicarious liability of the owners, on the assumption that there had been negligence, the Court held that the owners would have remained liable for the full amount of the damages, and not merely for their part based on an apportionment under Pt 4 of the Civil Liability Act. In the course of reaching that conclusion, the following reasoning appears:

2. [90]

   The primary judge found that this reasoning was not applicable, stating:

3. [91]

   On the basis that the Court in Woodhouse found there was no lack of reasonable care, [53] (and the alternative finding that, if it were necessary, the Court was affirmatively satisfied that reasonable care had been taken [54] ) it could be said that the remaining discussion in Woodhouse was obiter. However, where an intermediate court of appeal deems it appropriate to address all of the issues raised on an appeal, in accordance with the practice discussed in Boensch v Pascoe, [55] a trial judge should be cautious in deciding not to follow a legal principle stated by this Court. Further, the point made in Woodhouse at [99] concerned a question as to whether s 5Q varied the effect of the general law, or whether, as described in the Ipp Report, it merely reflected an established understanding of the general law. To the extent that the answer was said in some circumstances to depend upon the proper construction of a statutory scheme, that statement assumed that a non-delegable duty conferred by statute would be subject to the operation of s 5Q, subject to consideration of the interrelationship between the two statutes. For the reasons discussed above, the assumption was correct.

4. [92]

   Secondly, the respondents supported their defence of the primary judgment by reliance on a passage in the reasons of Spigelman CJ in Commissioner of Police v Estate of Russell. [56] That case concerned a claim under the Anti-Discrimination Act 1977 (NSW) arising from the treatment by police of a young Aboriginal man. The Tribunal which heard the claim found in his favour, but a question arose as to whether either the State of New South Wales or the Commissioner of Police was vicariously liable, either pursuant to s 53 of the Anti-Discrimination Act or pursuant to the general law as amended by provisions of the Law Reform (Vicarious Liability) Act 1983 (NSW). The Law Reform (Vicarious Liability) Act deemed a police officer to be a person “in the service of the Crown”: s 6. Section 8 relevantly provided:

5. [93]

   The term “independent function” was defined to mean “a function conferred or imposed upon the … person, whether or not as the holder of an office by the common law or statute independently of the will of the servant’s master or the Crown”: s 5(1).

6. [94]

   Although, as appears from the reasoning at [62]-[63], a number of aspects of the case were not fully argued in this Court, nor in the Court below, Spigelman CJ held that “proceedings for unlawful discrimination should not be regarded as a ‘tort’ for purposes of the Law Reform (Vicarious Liability) Act. However, it is not necessary to finally determine this matter in these proceedings.” [57]

7. [95]

   That conclusion turned on two propositions, neither of which arises in the present case. First, the Chief Justice referred to the definition of tort in Halsbury in the following terms:

8. [96]

   The second referred to the purposes of the Anti-Discrimination Act, addressed in the following passage:

9. [97]

   The identification of the purpose of the legislation may have been thought surprising in circumstances where the Tribunal was then empowered under s 113(1)(b) [58] to order payment of “damages … by way of compensation for any loss or damage suffered by reason of the respondent’s conduct”. In Hall v A & A Sheiban Pty Ltd [59] a Full Court of the Federal Court held that the complainants having proved loss and damage as a result of unlawful discrimination, the Human Rights and Equal Opportunity Commission had erred in law in not declaring that the respondent should pay damages, a refusal based on the view that “public exposure of the complaints” was sufficient to give relief to the applicant, and that a “finding of discrimination offered vindication to the plaintiff”. [60] Lockhart J held that the approach of the Commission was “untenable and demonstrates an error of law”. [61]

10. [98]

    French J said in Hall: [62]

11. [99]

    Nevertheless, accepting Spigelman CJ’s reasoning in Estate of Russell, neither of the reasons for his conclusion have any application in the present case. [63] Nor were they to be generalised to other statutory contexts. As the Chief Justice also stated:

12. [100]

    Estate of Russell provided no assistance to the respondents.

Conclusions

1. [101]

   Whether as a matter of general law principle, or by operation of s 5Q, the liability of the respondents in the present case should be treated as a form of vicarious liability which is not subject to any limitation on their liability by apportionment as between them and concurrent wrongdoers under Pt 4 of the Civil Liability Act. There are two available pathways, but they reach the same conclusion.

2. [102]

   Accordingly, the Court should make the following orders:

   1. (1)

      Grant the appellant leave to appeal from the judgment in the Equity Division given on 23 February 2023.

   2. (2)

      Allow the appeal and set aside the orders in the Equity Division.

   3. (3)

      In place thereof:

   4. (4)

      Order that the respondents pay the appellant’s costs of the proceedings in this Court.