Queensland Rail v Amaca Pty Ltd
[2011] QSC 289
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- Unreported Judgment
- Queensland Rail v Amaca Pty Ltd[2011] QSC 289
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Queensland Rail v Amaca Pty Ltd[2011] QSC 289
Queensland Rail v Amaca Pty Ltd[2011] QSC 289
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 5 October 2011 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 9 September 2011 |
JUDGE: | Boddice J |
ORDER: | 1. The plaintiff’s application is dismissed. 2. The defendants’ applications are allowed. 3. The defendants are granted leave to file and serve the third further amended defences. |
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SUMMARY JUDGMENT – where the third and fourth defendants plead counterclaims and claims for equitable set-off - where the plaintiff makes application pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld) for summary judgment on those counterclaims – whether there are no real prospects of succeeding on all or part of the claims – whether there is no need for a trial of the claim or part of the claim PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – OTHER MATTERS – where the plaintiff makes application pursuant to r 171 of the Uniform Civil Procedure Rules 1999 (Qld) for the counterclaims and equitable set-offs to be struck out – whether a set-off or counterclaim can be pleaded in a claim for statutory indemnity – whether there is no reasonable cause of action – whether those claims have a tendency to prejudice or delay the fair trial of the proceedings PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PLEADING – DEFENCE AND COUNTERCLAIM – where the defendants make application for leave to deliver further amended defences – where the plaintiff has been on notice of the equitable set-off claims since 2008 – where no steps were taken to strike it out – whether it is appropriate to grant the defendants leave to bring such claims at a late stage in the proceeding Law Reform Act 1995 (Qld) Uniform Civil Procedure Rules 1999 (Qld) Workers’ Compensation and Rehabilitation Act 2003 (Qld) Batistatos v Roads and Traffic Authority of New South Wales; Batistatos v Newcastle City Council (2006) 226 CLR 256 Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213 Coldham-Fussell v Commissioner of Taxation [2011] QCA 45 James Hardie & Co Pty Ltd v Seltsam Pty Ltd [1998] HCA 78 Neumann Contractors Pty Ltd v Traspunt No 5 Pty Ltd [2010] QCA 119 Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 Royalene Pty Ltd v Registrar of Titles [2007] QSC 59 Spencer v The Commonwealth (2010) 269 ALR 233 v Swain v Hillman [2001] 1 All ER 91 WorkCover Queensland v Amaca Pty Ltd [2009] QCA 72 |
COUNSEL: | R Morton for the plaintiff DG Russell SC with G O'Driscoll for the third and fourth defendants |
SOLICITORS: | Moray & Agnew Lawyers for the plaintiff Middletons for the 3rd and 4th defendants |
[1] Queensland Rail (“the plaintiff”) makes application pursuant to the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) for summary judgment in respect of proposed counterclaims and claims for an equitable set-off pleaded by the third and fourth defendants (“the defendants”). Alternatively, the plaintiff seeks to have those claims struck out. The defendants oppose that application, and make application for leave to file and serve further amended defences. The defendants’ applications are opposed by the plaintiff.
[2] The issues for determination are whether a counterclaim or set-off can be pleaded in a claim for a statutory indemnity and, if so, whether it is appropriate to grant the defendants leave to bring such claims at this stage in the proceeding.
The claim
[3] The plaintiff has instituted proceedings against the defendants seeking recovery of statutory compensation benefits paid consequent upon the illness and death of its employee, Frederick Wilfred Langer, on 8 December 2002 from mesothelioma. It is alleged this disease was contracted through exposure to asbestos in the workplace between 1948 and the mid 1980s. All six defendants are said to be common law tortfeasors liable to indemnify the plaintiff, as a self insurer.
[4] The plaintiff alleges that Mr Langer and his wife applied for, and received, statutory workers compensation benefits totalling $363,015.00 between 22 June 2001 and 26 February 2004. It is further alleged that the defendants would have been liable in damages to Mr and Mrs Langer had they taken proceedings to recover damages from the defendants, and that the plaintiff has a statutory right of indemnity from the defendants for the amounts paid pursuant to s 272(7) of the Workers Compensation and Rehabilitation Act 2003 (Qld) (“the 2003 Act”), now relocated to s 207B(7).
[5] The defendants filed further amended defences on 17 December 2008 in which pleas of equitable set-off were made. Those pleas alleged, inter alia, that Mr Langer’s injuries, loss and damage were caused, or alternatively contributed to, by the negligence of the plaintiff, that any compensation paid by the plaintiff would have gone in reduction of any such damages payable to Mr and Mrs Langer, and the defendants were entitled to, and did, set off against the plaintiff’s claim the plaintiff’s liability for contribution.
[6] On 27 July 2011, the defendants filed second further amended defences in which there were pleaded counterclaims. No extension of time or leave was sought prior to filing those second further amended defences. The counterclaims alleged that any injury, loss or damage sustained by Mr Langer resulted in whole or in part from the negligence of the plaintiff, and the defendants sought contribution and/or indemnity from the plaintiff pursuant to s 6 of the Law Reform Act 1995 (Qld).
Principles applicable to summary judgment/striking out
[7] A court may give summary judgment for a defendant in a proceeding if satisfied the plaintiff has no real prospects of succeeding on all or a part of the claim, and that there is no need for a trial of the claim or part of the claim.[1] The power is similar to that providing for a plaintiff to seek summary judgment against a defendant.[2]
[8] Rule 293 UCPR uses “clear and unambiguous language”, and is to be construed by applying its words, rather than tests under previous rules.[3] The key expressions are “no real prospect” and “there is no need for a trial of the claim”.[4] The word “real” distinguishes “fanciful prospects of success”.[5] The power must be applied in the context of the UCPR’s overriding purpose of facilitating “the just and expeditious resolution of the matter in dispute”.[6] Whilst the power to give summary judgment is to be determined having regard to the language in r 293, the power “is not to be exercised lightly”.[7]
[9] In Neumann Contractors Pty Ltd v Traspunt No 5 Pty Ltd,[8] Muir JA (with whom Holmes JA agreed), said of r 292:
“In Rich v CGU Insurance Ltd,[9] Gleeson CJ, McHugh and Gummow JJ cited with approval the following passage from the reasons of Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde:[10]
‘Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.’
In this case, whilst the primary judge dealt with the matter carefully and skilfully, if I may respectfully say so, the range and complexity of the issues before him and the existence of factual disputes rendered the granting of summary judgment overly bold.”
[10] The similarity in the criterion for the granting of summary judgment for a defendant render these observations apposite to an application under r 293.
[11] A Court also has power to strike out a pleading, or part thereof, if it discloses no reasonable cause of action or has a tendency to prejudice or delay the fair trial of the proceeding.[11] The discretion to strike out a pleading should only be exercised in clear cases.[12]
Plaintiff’s submissions
[12] The plaintiff’s primary contention is that as its claim is a statutory cause of action, separate to any cause of action Mr Langer may have had, and one vested in and pursued in the plaintiff’s name as a self insurer, the amount of the indemnity to be paid to the plaintiff is not to be reduced by any notional amount the plaintiff may have had to contribute to any liability of the respondents.
[13] The plaintiff submits this proposition was authoritatively determined in WorkCover v Amaca Pty Ltd.[13] In Amaca, the Court of Appeal was asked to consider five questions by a case stated. Relevantly, two questions asked:
“2.Whether, upon the proper construction of Section 272(7) of the Act the indemnity (if any) to which the Plaintiff is entitled against each of the Defendants is limited to that proportion which that Defendant (if liable to the worker) would be required to contribute to an assessment of damages in favour of the worker after taking into account the contributions which would have been required to be made by all tortfeasors (and in particular the other defendant and the worker’s employer)?
3.Alternatively to 2, what is the proper construction of the expression ‘to the extent of that person’s liability of the damages, so far as the amount of damages payable for the injury by that person extends’ in s 272(7)(a) of the Act in relation to the indemnity (if any) to which the Plaintiff is entitled against the Defendants?”
The Court of Appeal answered, respectively, “no” and “on the assumption to be made, the extracted words refer to the respective respondent’s liability for the whole of the damages”.[14]
[14] The plaintiff submits Amaca is binding authority for the proposition that the extent of the indemnity to be paid by defendants to a statutory insurer is not to be reduced to have regard to any contribution by the worker’s employer. Accordingly, any set-off and/or counterclaim is doomed to fail, and the Court ought properly to exercise its discretion under r 293 UCPR and give judgment on the counterclaims and equitable set-offs.
[15] The plaintiff further submits that the unavailability of a claim for contribution, whether by set-off or counterclaim, is made clear by the terms of s 6(c) of the Law Reform Act 1995 (Qld). That section provides:
“6Proceedings against, and contribution between, joint and several tortfeasors
Where damage is suffered by any person as a result of a tort (whether a crime or not) the following apply—
…
(c)any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by the person in respect of the liability in respect of which the contribution is sought.”
[16] The plaintiff contends the phrase “any tortfeasor liable in respect of that damage” only applies where there is an ascertained or established liability, and that a tortfeasor who is potentially liable has no right to obtain contribution.[15] Further, a claim in contribution is dependent on the plaintiff also being “liable in respect of the same damage” which is not the case in the present proceeding. Finally, the plaintiff submits that subsection (c) of s 6 specifically provides that a person is not entitled to recover contribution under the section from any person entitled to be indemnified by the entity seeking contribution.
[17] Alternatively, the plaintiff submits that pursuant to r 171 UCPR, the counterclaims and equitable set-offs should be struck out as disclosing no reasonable cause of action and having a tendency to prejudice or delay the fair trial of the proceedings. The plaintiff contends it is approximately four and a half years since the proceeding was commenced, a request for trial date is required to be filed by 25 November 2011, and the proposed counterclaims raise significant factual issues which render a fair trial of the proceeding impossible in the circumstances.
[18] Finally, the plaintiff submits that if the Court finds leave should be given to file and serve the third further amended defences, leave should only be given on the condition the amount of the claim, and interest, is paid into court or otherwise secured.
Defendants’ submissions
[19] The defendants submit the plaintiff’s application for summary judgment and/or striking out ought to be dismissed as the plaintiff is unable to establish that the defendants have no real prospects of succeeding on the counterclaims, and that there is no need for a trial of those counterclaims. The defendants submit there are numerous issues to be litigated on the counterclaim which give rise to an arguable cause of action such that the requirements of r 293 and r 171, UCPR cannot be met.
[20] The defendants further submit that leave to deliver further amended defences ought to be granted as the plaintiff has been on notice in respect of the equitable set-off claims since 2008, took no steps to strike it out, and those assertions form the basis for the proposed counterclaims. As such, the counterclaims do not raise new issues of which the plaintiff has had no notice. The plaintiff also does not provide any evidence of prejudice.
Discussion
[21] It is convenient to deal first with the plaintiff’s application for summary judgment and/or striking out as if its contentions are correct, there would be no utility in granting leave to file the third further amended defences. As the plaintiff is, in respect of any counterclaim, a defendant, it is appropriate to determine its application for summary judgment under r 293.
[22] Whilst the plaintiff submits that Amaca determined that a claim for contribution is not open in a proceeding based on recovery of a statutory indemnity, the plaintiff concedes that the issue of the availability of a claim for contribution in such proceedings was not considered by the Court of Appeal in Amaca. That this was so is clear from the following observation in the reasons of the Chief Justice:[16]
“Mr Sofronoff referred to the right of contribution between tortfeasors under s 7 of the Law Reform Act 1995 (Qld). That is not this situation …”
[23] Once it is understood that the availability of a claim for contribution in a proceeding seeking recovery of a statutory indemnity was not considered in Amaca, it cannot be said Amaca conclusively decided such a claim was not available. It is therefore necessary to consider whether the defendants’ contention that they are entitled to claim contribution is so fanciful as to not constitute a proceeding which has “real” prospects of success.
[24] The defendants contend there are a number of legal bases for contribution in the present case. These legal bases include a consideration of the terms of the applicable Act under which the plaintiff’s entitlement to statutory indemnity is to be determined, and a consideration of the proper interpretation of s 6(c) of the Law Reform Act 1995 (Qld).
[25] Whilst the plaintiff submits that the legislative provisions are clear and unequivocal, I am not satisfied that the matters raised by the defendants are so unarguable as to place the defendants’ prospects of success on a claim for contribution in the category of “no real prospects”. The range and complexity of the issues to be considered in any determination of the availability of a claim for contribution in a proceeding seeking recovery of a statutory indemnity are such that I cannot be satisfied the defendants have no real prospect of succeeding, and that there is no need for trial of the counterclaim. The granting of summary judgment, in such circumstances, would be “overly bold”. In that respect, the observations of Muir JA in Neumann Contractors[17] are apposite.
[26] This conclusion renders the plaintiff’s alternative relief, namely striking out pursuant to r 171 UCPR, equally inappropriate. For the reasons identified above, I am not satisfied the defendants’ counterclaim and/or equitable set-off can properly be described as giving rise to no reasonable cause of action, or that it would have a tendency to delay a fair determination of the proceedings.
[27] The plaintiff submits that in those circumstances it is appropriate that I decide the questions of law on the assumption that the facts will be as alleged by the defendants. Whilst that submission had an initial attraction, the application before me is for summary judgment and/or striking out of a pleading. To finally determine questions of law is an entirely different concept. It is not a course consented to by the defendants. In those circumstances, it is not appropriate to determine those questions in this application.
[28] Having regard to my findings in relation to the plaintiff’s application, it is necessary to consider whether the defendants ought properly to be granted leave to deliver the third further amended defences. The plaintiff opposes leave being granted on the basis that the proposed counterclaim has been brought too late in the proceeding, will result in an unnecessary and unfair delay in the determination of the proceedings, and will otherwise prejudice the plaintiff.
[29] Whilst the counterclaim has only recently been foreshadowed by the defendants, a plea by way of equitable set-off has existed in the pleading since 2008. The counterclaim is essentially based on the same facts. The plaintiff has therefore been on notice in respect of the issues sought to be relied upon as part of the counterclaim. There can be no claim of prejudice based on the introduction, for the first time, of issues years after the proceeding was instituted.
[30] The counterclaims are claims that ought appropriately to be determined between the parties, in this proceeding. Whilst the counterclaim raises complex legal issues, these issues can be determined within a reasonable time, and are unlikely to result in the need for significantly increased disclosure. I am satisfied they will not unduly delay any trial. I am also satisfied they can be determined fairly between the parties, notwithstanding the stage of the proceedings.
[31] The plaintiff contended leave should only be granted on condition that the amount of the claim, together with interest thereon, be paid into court or that payment of that sum be otherwise secured. The basis for that submission was:
“The history of litigation is littered with the wreckage of plaintiffs who have been defeated, not by the flaws in their own case, by the ravages of time on the finances of defendants who have managed to plead defences which whilst not able to be substantiated, have delayed payment of the plaintiff’s rightful entitlements until there were no funds. The Court ought to ameliorate the prospect of that in this case given the history of the matter.
… It would be most unjust if the plaintiff, having endured the delay to the present time, are now facing years of greater delay and prejudice, were to be defeated by the respondents having empty pockets at the end of the exercise. That should not be allowed to happen.”[18]
[32] Whilst the fourth defendant is in liquidation, there is no evidence before me to establish any basis for finding that the third defendant is at risk of likewise being placed in liquidation. I am not satisfied there is a basis to conclude that the pursuit of arguable counterclaims and defences will result in a real likelihood the plaintiff will ultimately not recover its claim should it succeed.
[33] There is otherwise no reason why the defendants, as parties to litigation brought by the plaintiff, should be denied the opportunity to pursue arguable counterclaims and defences except on conditions not usually imposed on a defendant to a proceeding. I decline to impose the conditions sought on the grant of any leave.
[34] I am satisfied, in the exercise of my discretion, that the defendants ought to be granted leave to file and serve the third further amended defence.
Orders
[35] The plaintiff’s application is dismissed. The defendants’ application is allowed. The defendants are granted leave to file and serve the third further amended defences.
[36] I shall hear the parties as to any other orders, and as to costs.
Footnotes
[1] UCPR, r 293.
[2] UCPR, r292; see Coldham-Fussell v Commissioner of Taxation [2011] QCA 45 at [97].
[3] Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at 236.
[4] Coldham-Fussell at [98].
[5] Salcedo at [11] per Williams JA, quoting, with approval, observations of Lord Woolf M.R. in Swain v Hillman [2001] 1 All E.R. 91 at 92.
[6] Coldham-Fussell [101].
[7] Coldham-Fussell at [102] adopting observations in Spencer v The Commonwealth (2010) 269 ALR 233 at [60] at 251; see also Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at [46].
[8] [2010] QCA 119 at [81]-[82].
[9] (2005) 79 ALJR 856 at 859 per Gleeson CJ, McHugh and Gummow JJ.
[10] (2000) 201 CLR 552 at 575-576.
[11] UCPR, r 171.
[12] Royalene Pty Ltd v Registrar of Titles [2007] QSC 59 at [6].
[13] [2009] QCA 72; an appeal to the High Court, on a different issue, succeeded: [2010] QCA 34.
[14] WorkCover Queensland v Amaca Pty Ltd [2009] QCA 72 at [46]
[15] See Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213 at 219; James Hardie & Co v Seltsam Pty Ltd [1998] HCA 78 at [30]; [78].
[16] Amaca at [45].
[17] [2010] QCA 119 at [82].
[18] Plaintiff’s outline of submissions in response, paras 48, 50.