Part Three: Wrongs Act 1958 Part IVAA Proportionate Liability with a Focus on the Civil Division of VCAT where an Additional Respondent is Joined Pursuant to s.60 VCAT Act - VCAT Barrister

24AI Proportionate liability for apportionable claims include:
1. the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just having regard to the extent of the defendant’s responsibility for the loss or damage; and
  1. judgment must not be given against the defendant for more than that amount in relation to that claim.
2. If the proceeding involves both an apportionable claim and a claim that is not an apportionable claim—
  1. liability for the apportionable claim is to be determined in accordance with this Part; and
  2. liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.
3. In apportioning responsibility between defendants in the proceeding the court must not have regard to the comparative responsibility of any person who is not a party to the proceeding unless the person is not a party to the proceeding because the person is dead or, if the person is a corporation, the corporation ‘has been wound-up.
Section 24AI(1)(a) does not prevent a defendant who has settled an apportionable claim from claiming a contribution, under Pt IV (Wrongs Act 1958), from a person who is liable in respect of the same damage. “Sections 24AI to 24AJ of the Act apply to apportionable claims where judgment is given against a concurrent wrongdoer (as defined in s 24AH) and not to situations where the claim is settled.
Section 24AO preserves the operation of Pt IV in other circumstances. The language of these provisions may be compared with ss 23(4) and 24(2B) which deal specifically with cases where a person makes a payment in settlement of a claim.
Accordingly, s 24AI(1)(a) of the Act applied to the claim so as to limit the liability of the defendant to the plaintiff to an amount reflecting the proportion of the loss or damage which is considered to be “just” having regard to the extent of the defendant’s “responsibility” for the loss and damage. Kaye J held that in determining apportionment, it was proper to take into account both a comparison of the culpability of the parties and also the relative importance of their acts in causing the injury which was the subject of the claim. These were the same principles which the courts applied in determining questions of apportionment (both in respect of an issue of contributory negligence under s 26 of the Wrongs Act and contribution between wrongdoers under s 24 of the same). His Honour agreed with the approach of Whelan J to Pt IVAA of the Act, which was in accordance with the long-standing approach by the courts to the construction of the apportionment provisions of Pts III and V of the Act and accorded with its evident intent.
Part IVAA does not apply to a concurrent wrongdoer unless the concurrent wrongdoer is a defendant in a proceeding: s 24AI(3).
1. A concurrent wrongdoer whom is a defendant in a proceeding may only claim the benefit of apportionment in respect of other concurrent wrongdoers who are defendants (unless the concurrent wrongdoer is dead or, if the person is a corporation, the corporation has been wound up.
Despite anything to the contrary in Part IV, a defendant against whom judgment is given under this Part as a concurrent wrongdoer in relation to an apportionable claim:
1. cannot be required to contribute to the damages recovered or recoverable from another concurrent wrongdoer in the same proceeding for the apportionable claim; and
2. cannot be required to indemnify any such wrongdoer.
24AK in relation to an apportionable claim, nothing in this Part or any other law prevents a plaintiff who has previously recovered judgment against a concurrent wrongdoer for an apportionable part of any loss or damage from bringing another action against any other concurrent wrongdoer for that loss or damage. However, in any proceeding in respect of any such action the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the loss or damage, would result in the plaintiff receiving compensation for loss or damage that is greater than the loss or damage actually suffered by the plaintiff.
24AL subject to subsection (2), the court may give leave for any one or more persons who are concurrent wrongdoers in relation to an apportionable claim to be joined as defendants in a proceeding in relation to that claim. Although the court is not to give leave for the joinder of any person who was a party to any previously concluded proceeding in relation to the apportionable claim.

Reasonable care’ requirement in proportionate liability cases:

In Tanah Merah Vic Pty Ltd v Owners Corporation No 1 of PS613436 [2021] VSCA 72 (Lacrosse Appeal), the Victorian Court of Appeal was required to decide whether a claim against a builder who had been found, at first instance, to have breached certain statutory warranties under the Domestic Buildings Contracts Act 1995(Vic) (DBCA), was in fact an apportionable claim.
1. There was a fire at the Lacrosse apartment tower at 673-675 La Trobe Street, Docklands, Victoria.
2. The owners brought the claim after the external cladding of the Building caught fire (ignited by an errant cigarette), causing damage to apartments and common property.
3. Judge Woodward (sitting in the VCAT) determined that the builder (L U Simon Pty Ltd) by using certain inflammable aluminium composite panel cladding in the construction of the Building, breached several of the warranties in the DBCA.
4. The warranties held to have been breached were those as to: suitability of materials (s 8(b)); compliance with the law (s 8(c)); and fitness for purpose (s 8(f)). Importantly, there was (purposefully) no claim by the owners (and no finding by VCAT) that the Builder failed to carry out the works in a proper and workmanlike manner (s 8(a)) or without reasonable care and skill (s 8(d)).
5. This aspect of the owners’ claim was important because, by eschewing any reliance on ss 8(a) and 8(d) of the DBCA (each of which requires the application of care and skill), the owners carefully and deliberately did not allege that the Builder failed to take reasonable care, so as to avoid any finding that the claim against the Builder was apportionable. By proceeding in this manner, the owners sought to recover all their losses from the Builder, alone, without having to make claims against all other putative wrongdoers (such as the architect and fire engineer, against whom the Builder had brought cross-claims).
6. Had the owners relied on ss 8(a) or 8(d) of the DBCA, involving as they do an allegation of a failure to take reasonable care, Part IVAA of the Wrongs Act 1958(Vic) would have applied to those claims. This is because the proportionate liability provisions (Part IVAA) apply (subject to certain exceptions) to a claim for economic loss or damage to property arising from a failure to take reasonable care.
On appeal, the fire engineer (Tanah Merah Pty Ltd, trading as Thomas Nicolas) and the architect (Elenberg Fraser Pty Ltd) both argued that, despite the owners not claiming any breach of duty of care by the Builder, the claim against the Builder was nevertheless apportionable and the Builder was a concurrent wrongdoer (along with the fire engineer/architect, both of whom had been found to have been concurrent wrongdoers who had breached a duty of care).
1. It was, of course, in the fire engineer’s and the architect’s interests to so argue because if the Builder was also a concurrent wrongdoer, then the extent of each of the fire engineer’s and architect’s liability would be reduced.
2. The Court of Appeal did not agree and upheld VCAT’s finding that the claim against the Builder was notapportionable for several reasons. First, the Court rejected the fire engineer’s submissions that, because the Builder had made an alternative plea based on proportionate liability (which plea was secondary/alternative to the Builder’s primary position and contingent on VCAT finding that the claim was apportionable), there was an apportionable claim and that Part IVAA of the Wrongs Act 1958 (Vic) applied.
3. Further the fire engineer and the architect relied on authority (e.g. Justice Barrett’s judgment in Reinhold v NSW Lotteries Corporation [No 2](2008) 82 NSWLR 762) to the effect that a claim may be one arising from a failure to take reasonable care if the Court makes a finding to that effect, regardless of any plea of negligence, or any plea of a failure to take reasonable care.
4. However, noting the more recent remarks of Barrett J in Perpetual Trustee Company Limited v CTC Group Pty Ltd [No 2][2013] NSWCA 58, the Court of Appeal rejected this contention and said at [113] that the “claim itself must arise from a failure to take reasonable care”. The Court of Appeal also held at [115] that: “… the terms in which the claim is framed [i.e. how the pleadings put the claim] are the starting point for deciding whether the claim is” an apportionable claim. The Court at [117] endorsed the view that “the terms in which the claim is framed are an essential determinant of whether a claim can be said to arise from a failure to take reasonable care”. Put slightly differently, this means, in effect, that the plaintiff must allege (for the claim to be apportionable) that the defendant failed to take reasonable care.
One important consequence of Court of Appeal’s decision is that plaintiffs will now need to (more) carefully consider the causes of action relied on (and how the pleading is put), because the way the claim is pleaded will be the starting point to determine whether the claim is apportionable or not.

Handle the client who wants everyone at the party:

The most effective way to manage the overenthusiastic litigant client is to provide them advise on whom they should join and why.
1. Who they have the most affective claim against and why plus why a claim against another party might be weak.
2. Once that is read and then you walk them through the logic I have not come across many clients who will not accept counsel advice.

Daniel Epstein of Counsel