Part One: 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

This is a useful legal process to join a party to a proceeding; of particular relevance is joining a respondent on the Civil Division at VCAT, be that Domestic Building List, Owners Corporation List or the Retail List and Civil List.
The operation and scope of the proportionate liability scheme Part IVAA provides for the proportionate liability of concurrent wrongdoers in respect of claims for damages for economic loss, or damage to property, arising from a failure to take reasonable care or for contravention of s 18 of the Australian Consumer Law (Victoria) (previously s 9 of the Fair Trading Act 1999).
1. In general terms “(p)roportionate liability requires the court to consider what is just and apportion liability amongst wrongdoers. Defendants are only liable to compensate a plaintiff for that proportion of the damage for which they are responsible. Proportionate liability transfers the risk of being unable to recover from an unavailable, insolvent or impecunious wrongdoer from defendants to the plaintiff.
2. The liability of a concurrent wrongdoer is limited to the proportion of the claim which the court determines to be just having regard to the extent of the concurrent wrongdoer’s responsibility for the loss and damage suffered (s 24AI) and rights of contribution under Pt IV are excluded in relation to the proportion of the claim for which judgment is given against the concurrent wrongdoer (s 24AJ): Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd (2008) 21 VR 84; [2008] VSCA 208; BC200809232 at [1]–[3] per Nettle JA; and Ashley JA at [95] (Godfrey Spowers); Taylor v Gosling [2010] VSC 75; BC201001284 at [156].
3. As pointed out by Ashley JA in Godfrey Spowers at [98], “the key to the operation of the Part is the finding of relevant facts and the entry of judgment. The determination that a defendant is a concurrent wrongdoer in an apportionable claim triggers the limitation upon the amount of the judgment which can be entered against that defendant, and in turn protects the defendant against claims for contribution or indemnity by other concurrent wrongdoers”.
It is now critical for plaintiffs to have regard to Pt IVAA when considering whether to join a party as defendant and to ensure that each “concurrent wrongdoer” is joined as a party. Defendants must also be alive to the issue of proportionate liability and whether it is possible to raise a defence under Pt IVAA.
24AF Part applies to— a claim for economic loss or damage to property in an action for damages (whether in tort, in contract, under statute or otherwise) arising from a failure to take reasonable care; and a claim for damages for a contravention of section 18 of the Australian Consumer Law (Victoria).
1. If a proceeding involves 2 or more apportionable claims arising out of different causes of action, liability for the apportionable claims is to be determined in accordance with this Part as if the claims were a single claim.
2. A provision of this Part that gives protection from civil liability does not limit or otherwise affect any protection from liability given by any other provision of this Act or by another Act or law.
The purpose of Pt IVAA is to give effect to the legislative policy that in respect of certain claims for damages (claims for damages for economic loss or damage to property in an action for damages arising from a failure to take reasonable care and claims under s 18 Australian Consumer law) a defendant should only be liable to the extent of his or her responsibility. The court’s task is to apportion responsibility between “concurrent wrongdoers”: Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 296 ALR 3; [2013] HCA 10; BC201301509 at [16] (“Hunt & Hunt”). “(T)he legislation operates to limit the liability of a concurrent wrongdoer in respect of an apportionable claim to a court determined proportion of the relevant damage, having regard to the extent of that wrongdoer’s responsibility”: Woods v De Gabriele [2007] VSC 177; BC200704554 per Hollingworth J. The principal objective was to overcome the undesirable consequences of the joint and several liability rule: St George Bank Ltd v Quinerts Pty Ltd (2009) 25 VR 666; [2009] VSCA 245; BC200909697 at [57] (Quinerts). Under Pt IVAA the court is able to apportion liability between several wrongdoers in respect of an “apportionable claim” according to their respective responsibility for the plaintiff’s loss so that each is only liable for that proportion of the loss. Under the previous doctrine, a plaintiff was able to sue only one of several joint tortfeasors and obtain judgment against that defendant for the full amount of the loss.
The respective proportionate liability provisions are to be found in:
1. Competition and Consumer Act 2010 (Cth) Pt VIA ss 87CB–87CI
2. Australian Securities and Investments Commission Act 2001 (Cth) Pt 2 Div 2, Subdiv GA ss 12GP–12GW.
3. Corporations Acts 2001 (Cth) Pt 7.10 Div 2A ss 1041L–1041S.
4. Civil Liability Act 2002 (NSW) Pt 4
5. Civil Law (Wrongs) Act 2002 (ACT) Ch 7A
6. Proportionate Liability Act 2005 (NT)
7. Civil Liability Act 2003 (Qld)
8. Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) Pt 3
9. Civil Liability Act 2002 (Tas) Pt 9A
10. Wrongs and Other Acts (Law of Negligence) Act 2003 (Vic) Pt IVAA
11. Civil Liability Act 2002 (WA) s 4A and Pt 1F.
The objective of the part in the Wrongs Act is remedial and it dramatically changes the previous law.
1. Formerly, a plaintiff could choose to sue only one of several wrong doers who caused the same loss and the Court could enter judgment for the whole of that loss against that defendant.
2. Even if the defendant cross claimed in the proceed in indemnity or contribution against the other wrong doers, the plaintiff could enforce a judgment against the defendant alone for the whole of the loss, leaving the defendant to recover from the cross defendants, if it could.
3. The Part is designed to alleviate this perceived in justice. The Court must exercise a large discretionary judgment founded upon the facts proved in each particular case. T e principles upon which the Court will exercise this discretionary judgment will come to be developed on a case-by-case basis.
4. However, the policy of [the Part] is that a wrongdoer who is, in a real and pragmatic sense, more to blame for the loss than another wrongdoer should bear more of the liability. This calls for the exercise of the same kind of judgment as the Court exercises in apportioning responsibility as between a defendant sued in tort for negligence and a plaintiff who, by his or her own negligence, has been partly responsible for the injury.
The proportionately liability regime under Part IVAA of the Wrongs Act 1958 (Vic) (WrongsAct) is often utilised in domestic building disputes commenced in the Victorian Civil and Administrative Tribunal (VCAT).
1. Joinder – s60 of the VCAT Act allows an additional party to be joined; these decisions are made by the tribunal on the following criteria:
  1. It is a discretionary decision.
  2. If there is any prejudice to any party in joinder application outcome.
- Allegations must be open and arguable – not misconceived or hopeless
1. The party opposing joinder needs to adduce factual evidence to establish that allegations are without foundation
2. Who is to blame for the loss?
1. In complex proceedings involving multiple parties seeking various forms of relief and are dependent on the following:
  1. The ability of an applicant to choose whether to pursue a claim against a joined party;
    1. When a respondent successfully joins a party for the purposes of apportionment, the applicant has the choice as to whether to pursue a claim against the joined party directly.
    2. Unless the applicant pursues a claim, it will not be able to recover the portion of liability that is attributed to the joined party.
    3. Emphasised by Vice President Jenkins J in Adams v Clark Homes Pty Ltd (Building and Property) [2015] VCAT 1658.
    4. If a court or tribunal apportions responsibility amongst concurrent wrongdoers and the applicant has only made a claim against say, one respondent, then judgment will be entered against that respondent only.
  2. VCAT’s default position on the question of costs, namely that each party bears its own costs of the proceeding;
    1. Section 109 of the VCAT Act 1998 (VCAT Act), which sets out VCAT’s power to award costs and dealt with in Gillard J in Vero Insurance Ltd v The Gombac Group Pty Ltd [2007] VSC 117 as follows:
    2. In approaching the question of any application for costs pursuant to s.109 [of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT ACT)] in any proceeding in VCAT, the Tribunal should approach the question on a step by step basis, as follows –
      - The prima facie rule is that each party should bear their own costs of the proceeding.
      - The Tribunal may make an order awarding costs, being all or a specified part of costs, only if it is satisfied that it is fair to do so. That is a finding essential to making an order.
      - In determining whether it is fair to do so, that is, to award costs, the Tribunal must have regard to the matters stated in s.109(3). The Tribunal must have regard to the specified matters in determining the question, and by reason of paragraph (e) the Tribunal may also take into account any other matter that it considers relevant to the question.
    3. Application for costs will be awarded where apportionment of liability has been sought.
      1. No apportionment – the respondent joins a party for apportionment and the applicant elects not to pursue a claim;
      2. No apportionment – the respondent joins a party for apportionment and the applicant elects to pursue a claim;
      3. Apportionment – the respondent joins a party for apportionment and the applicant elects not to pursue a claim;
      4. Apportionment – the respondent joins a party for apportionment and the applicant elects to pursue a claim.
    4. Whether the joined party participates in a proceeding where it has been joined solely for apportionment of liability purposes.
      1. The joined party may elect not to participate at all or seek, at an early stage, an order from VCAT that it be excused from participation.

Daniel Epstein of Counsel