Noble v Winter in the City Events Pty Ltd
[2004] QDC 567
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- Noble v Winter in the City Events Pty Ltd[2004] QDC 567
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Noble v Winter in the City Events Pty Ltd[2004] QDC 567
Noble v Winter in the City Events Pty Ltd[2004] QDC 567
[2004] QDC 567
DISTRICT COURT
CIVIL JURISDICTION
JUDGE ROBIN QC
No 2509 of 2002
RHYAN NOBLE by her Litigation Guardian TERRI NOBLE | Plaintiff |
and |
|
WINTER IN THE CITY EVENTS PTY LTD | Defendant |
BRISBANE
DATE 01/10/2004
ORDER
CATCHWORDS: | Practice and procedure - application to join sole director of defendant company as additional defendant under UCPR r 69 - no limitation issues, so that a separate proceeding could be commenced against him - his contention that a claim against him had no reasonable prospects of success rejected. |
HIS HONOUR: This is an application by the plaintiff, an infant, suing by her Litigation Guardian, under Rule 69, for the addition of a second defendant.
As required by Rule 70 sub-rule 2, service was effected on both the existing defendant company which did not appear when called and the proposed new defendant who did appear and vigorously contested the application. He is Mr Alfio Bucceri, the sole director of the present defendant.
On the 1st of July 2001, the plaintiff was injured in the course of a tobogganing activity at an event held in Brisbane which featured a slope covered in artificial snow. The action appeared to be proceeding satisfactorily, the defendant having admitted that it conducted the relevant event. It came to the notice of the plaintiff and/or her lawyers that the defendant company may well be without assets to satisfy a judgment and that its insurer had declined cover. That is the explanation for the interest in joining Mr Bucceri.
Notwithstanding the time that has elapsed between the date of the injury and today, there is no limitations issue, given that at the time when she was hurt, the plaintiff was only nine. That means that for several years yet the plaintiff is entitled to bring a fresh proceeding against Mr Bucceri.
In my opinion, having regard not only to common sense but also the philosophy of the UCPR set out in Rule 5, it would be indefensible to require the plaintiff to commence a new proceeding. No inconvenience is shown to or even alleged to flow from inclusion of Mr Bucceri in the existing one.
It is accepted by Mr Farrell who appeared for Mr Bucceri that there is really no distinction between the present application and one that might be imagined as being brought by his client if sued in a new proceeding for a summary judgment against the plaintiff under Rule 293. He would bear the onus of establishing the action had no reasonable prospects of success. If he could discharge such an onus today, I think he would be entitled to have the application refused.
The proposed amended statement of claim would allege the following against Mr Bucceri.
"3A. At all material times:
- (a)the Second Defendant was the sole director of the First Defendant;
- (b)the second Defendant was thereby responsible for arranging for the First Defendant to discharge the duty pleaded in paragraph 3 hereof;
- (c)the Second Defendant, or ought to have known, the facts alleged in paragraph 2(a) hereof;
- (d)the Second Defendant knew that the persons would be participating in riding toboggans in the course of the First Defendant's carrying out of the public amusement referred to in paragraph 2(a) hereof;
- (e)the Second Defendant knew or ought to have known, or ought to have foreseen, that unless the First Defendant discharged its duty pleaded in paragraph 3 hereof persons participating in the ride might be injured.
3B. In the premises:
- (a)the Second Defendant owed to persons participating in the ride, including the Plaintiff, a duty to take reasonable care for the Plaintiff's safety whilst she was participating in the ride; and
- (b)owed a duty to persons participating in the ride to see to it that the First Defendant discharged the duty pleaded in paragraph 3 hereof."
The case raises the very interesting question of when the director of a company may be held personally liable for the torts of a company. That is plainly an outcome arrived at more readily where the company is a "one man" affair and the director's actions and the company's are one and the same thing.
However, it by no means follows that the person behind the one man company is necessarily liable. That is graphically illustrated by the circumstances in Trevor Ivory Limited v. Anderson [1992] 2 NZLR 517 - a case in which Mr Ivory successfully appealed against the primary Judge's conclusion that he was personally liable, he having personally provided advice to the plaintiffs to use the herbicide Roundup which they did with adverse economic effects.
Mr Farrell submitted that the leading case in the area is the Court of Appeal's decision in C Evans and Sons Limited v. Spritebrand Limited [1985] 1 Weekly Law Reports 317. There the headnote includes the following:
"On the director's appeal:-
Held, dismissing the appeal, (1) that where a company director was sought to be made liable for the tortious acts of his company, the extent of his personal involvement in the company's tort had to be carefully examined; but that where the director had authorised, directed and procured the acts complained of it was not an essential precondition of his liability that he knew that the acts thus authorised were tortious, or was reckless as to whether or not they were likely to be tortious, unless the primary tortfeasor's state of mind or knowledge was an essential ingredient of the particular tort alleged (post, p.329B, D-F).
- (2)that, subject to the defences available by virtue of sections 17(2) and 18(2) of the Copyright Act 1956, there were circumstances in which a director could be held personally liable, without proof of knowledge or recklessness, for acts of his company which he had authorised, directed and procured and which constituted an infringement within section 1(2) of the Act of 1956; and that, accordingly, the facts pleaded by the plaintiffs were capable of founding a good cause of action against the director (post, pp.329G-HOLMES J: , 330A, 331B-C)."
That was a case of breach of copyright by the company. The considerable number of authorities in the area were considered at length by Redlich J fairly recently in Johnson Mathey (Australia) Pty Ltd v. Dascorp Pty Ltd [2003] VSC 291 - yet another instance of a claim made to vindicate property interests.
In the present situation that is not so. I note that in Trevor Ivory Limited v. Anderson at 524 Sir Robin Cooke P said:
"If the present case were in the personal injuries field I might have been disposed in alignment with Willmer L J in Yuille to have found a personal duty of care on Mr Ivory on the basis of the very obvious risk to health in handling herbicides."
In Yuille v. B&B Fisheries(Leigh) Ltd and Bates [1958] 2 Lloyds List Law Reports 596, the unfortunate plaintiff had his feet amputated by the action of ropes when after a grounding of one of the company's vessels it was to be towed by another. The headnote usefully summarises the situation:
"Held (1) that defective equipment of one vessel could
give rise to a cause of action at the suit of a person on board another vessel; (2) that the effective causes of the accident were: (i) the grounding of Radiant due to the negligent navigation of Margaret Hamilton; (ii) the inadequacy of the ropes; (iii) the defective condition of Margaret Hamilton's gear-box; (iv) the absence of a deck light on Radiant; and that these were all matters for which first defendants were liable (vicariously or otherwise); (3) that, in the circumstances, plaintiff was not contributorily negligent in respect of the defects on Radiant; and that therefore plaintiff was entitled to judgment in full against first defendants (subject to any limitation of liability); (4) that second defendant (admittedly, in this respect, the alter ego of the company) knew, or had the means of knowing, of the defects in the vessel which contributed to the accident; that there was, on the part of second defendant, a failure of management in that no adequate provision was made for periodical inspection; that, accordingly, first defendants had failed to discharge the burden of proving that the accident occurred without their actual fault or privity; and that therefore first defendants could not limit their liability; (5) that an officer of a company (whether a director or other official in the service of the company) was, in law, capable of being a joint tortfeasor with the company itself, which would also be vicariously responsible for his wrongful acts; that plaintiff had discharged the onus of proving that second defendant was a party to sending the vessels to sea in an unseaworthy condition, and that his injury resulted from that condition; that therefore second defendant was liable and, as plaintiff's right was a personal right against second defendant in his personal capacity and not in his capacity as owner of the vessels, there was no question of second defendant limiting his liability - Judgment for plaintiff against both defendants - Plaintiff awarded £7632 (including £632 agreed special damage), without interest."
While it may be seen as against the modern trend to assimilate what might previously had been regarded as discrete areas of the law, I find myself impressed by the distinction that Cooke P would have been inclined to make had he been asked to decide this matter.
It must be accepted that everything depends on the particular circumstances and the judgment ultimately made as to the extent to which a director has personally involved himself in circumstances which had an unhappy issue for the injured plaintiff. She is placed on notice of the case to be faced by Mr Bucceri's affidavit, sworn yesterday and the subject of leave to file and read today. Mr Dawson, appearing for the plaintiff, did have notice of its contents.
That affidavit may have Mr Bucceri resiling from the apparent admission in the company's defence that it conducted the event. He says it was incorporated to run an event known as Winter in the City in Brisbane in the year 2000, which happened, but that in respect of the event in the following year other people became involved, including a company called Select Contracts Limited. Another company which I shall assume is associated with him, called Bucceri Snowmaking Pty Ltd, is said to have
"supplied the equipment and Select was responsible for the running and management of the event. Neither the defendant, myself nor Bucceri Snowmaking Pty Ltd provided Select with any instruction, whether written or verbal as to how the snowmaking equipment should be set up or operated at the event. Select in practice, had the sole discretion as to the running of the event. It is my understanding that Select utilised employees flown in from Dubai, to set up and supervise the event."
Mr Bucceri concludes by saying he wasn't present at the event at the time of the accident nor was any other representative of the defendant. The affidavit exhibits copies, some in unsigned form, of various agreements involving the three companies' names relative to the 2001 event.
It may be noted that an agreement between Bucceri Snowmaking Pty Ltd and the existing defendant as lessor and lessee relates to the supply of equipment including a snowmaking machine a, "Children's mountain with steps", a snow foaming system, a snow tube matting system, a snow toboggan matting system and, "One hundred flying saucers and fifty snow tubes."
This gives an appearance that companies associated with Mr Bucceri were providing the physical environment in which activities leading to the plaintiff's injury were conducted.
It seems to me the plaintiff may establish that Mr Bucceri had personal responsibility for the design of relevant arrangements and for ensuring that others entrusted with setting them up and operating them were appropriately instructed as to how that could be done safely.
For all that appears at the moment one man companies may be involved. There is nothing to show that either of Mr Bucceri's companies had any other personnel, although of course they may well have.
Further, by an agreement (Exhibit B to Mr Bucceri's affidavit) between the existing defendant and Select Contracts it is provided in clause 2 that:
"The manager (being Select Contracts) further acknowledges the right of the said Alfio Bucceri to require variations, alterations or cessations of any part or parts of the operations if in his sole discretion he considers that it is dangerous, unworkable or not in the overall interests of the holders of the patents or the public. It is further acknowledged by the parties hereto that the sole purpose of inclusion of this provision is a form of protection from liability and of the rights of all relevant parties."
While in terms that provision confers rights on Mr Bucceri among other rights, including total and unfettered right to require full disclosure of the activities of the manager in relation to the contract and access to books, it seems to me potentially open to the Court in the future to regard it as a relevant factor in the total picture, when it emerges, from which a conclusion might be drawn, if appropriate, that Mr Bucceri had the kind of personal responsibility that the plaintiff seeks to attach to him.
I am making no judgment myself in relation to that.
Essentially, I approach the matter as did Judge McGill in Cooper v. Dexter [2003] QDC 031 as one in which the present plaintiff may sue whomever she will. Mr Farrell has done his job well in persuading me that it is incumbent on the Court not to permit the joinder of his client in circumstances where the claim against him seems hopeless or without reasonable prospects of success.
It cannot be said that he has satisfied the Court to that effect. The plaintiff, of course, has been placed on notice that Mr Bucceri contends he has no business being brought into this action at all. If he ultimately establishes that, it may go hard against the plaintiff or her litigation guardian if he proves to be correct. The outcome is that the application is granted. So what should the order be?
...