TOPICS FOR DISCUSSION

•Getting the parties right and pleadings•Directions•Offers to settle

Section 32

• (1) A person (claimant) who makes a claim to which this part applies is to make the claim against all persons the claimant has reasonable grounds to believe may be

liable for the loss or damage;• (2) A concurrent wrongdoer, in relation to a claim involving an apportionable claim,

must give the claimant any information that the concurrent wrongdoer has –• (a) that is likely to help the claimant to identify and locate any other person (not being a

concurrent wrongdoer known to the claimant) who the concurrent wrongdoer has reasonable grounds to believe is also a concurrent wrongdoer in relation to

the claim; and• (b)about the circumstances that make the concurrent wrongdoer believe the other

person is or may be a concurrent wrongdoer in relation to the claim.

• The purpose of the s. 32 is to ensure that all defendants that may have some liability to the claimant are included in the original proceedings, so that the liability of each to the claimants can be considered separately.

• The touchstone is “reasonable grounds”.

• This must be considered in the context of s. 28 “arising from a breach of duty of care” and the definition of “duty” and “duty of care” as contained in the dictionary.

• To determine if “reasonable grounds” exist the claimant must consider the elements of the cause of action pleaded against each “concurrent wrongdoer.”

• That might be “in tort ... under contract that is concurrent or coextensive with a duty of care in tort ... or a duty under statute”: the dictionary.

• Careful consideration must be given to not only identifying the concurrent wrongdoer, but also the nature of the cause of action against that respondent which is independent of each other.

• Consistent with the general law the onus would be on a claimant to plead the necessary factual foundation for liability of each “concurrent wrongdoer”.

• “The general rule which obtains in our courts, namely that those who assert must prove”: Platt v. Nutt (1988) 12 NSW LR 231 @ 238 Kirby J.

• This could be a costly exercise to the plaintiff if there are multiple defendants, some of whom may not be able to meet any judgment for damages, even on a proportionate basis.

• Similar considerations apply as between “concurrent wrongdoers” who plead affirmative facts in defence of the claimant’s claim or to shift the liability to another potential wrongdoer.

• That for a defendant to assert that there is a person who is a concurrent wrongdoer the defendant must plead the necessary elements which result in the asserted conclusion. Those elements are:

• the existence of a particular person;

• the occurrence of an act or omission by that particular person;

• a causal connection between that occurrence and the loss that is the subject of the claim.

• - Hammerschlag J: Ucak v. Avante Developments Pty Ltd (2007) NSW SC 367

• If such a pleading emerges, in circumstances where the potential wrongdoer is not already a defendant, then it seems the Act requires a plaintiff to join that potential “concurrent wrongdoer”, as the defendant, irrespective of whether third party proceedings are on foot. Similar considers apply to a defendant as occurred in Keith Foods v. Rodney Mario de Gabriele (2007) VSC 177 (see below).

• However, practical considerations also apply, although s. 30(2) states that for “this part” (proportionate liability):

• “It does not matter that a concurrent wrongdoer is insolvent, is being wound up, has ceased to exist or has died.”

• It may be futile to reinstate a corporation, or proceed against the estate of a deceased person, because of costs issues, as the court can still make a finding of breach of duty on such entities on a proportionate basis, thereby reducing the recoverable damages by a plaintiff.

• There may be pre-trial skirmishes, in directions hearings, where defendants seek to add other defendants (as companies).

• The obvious intention is to spread the risk on liability.

Sanctions under s. 32 against Claimant

• Section 32 also contains sanctions for failure to comply, by the claimant which include:-

• - adjustment of proportionate liability claimable;

• - and adverse costs orders.

• It is submitted that the normal penalty for failure to comply would be adverse costs orders. In an extreme case, perhaps by way of example, where an obvious concurrent wrongdoer has been joined not made a defendant, and the defendant has been put to the expense of running a trial to seek indemnity in circumstances where a direct cause of action lies by a plaintiff against an unjoined concurrent wrongdoer, the court is permitted to vary presumably by diminution, the damages recoverable by the plaintiff from the joined defendant.

Obligations on concurrent Wrongdoer

• Disclosure: Presumably upon receiving notice of a possible claim a potential concurrent wrongdoer must give to the claimant any information:-

• to help and locate any other person who the concurrent wrongdoer “has reasonable grounds to believe” is a concurrent wrongdoer in relation to the claim; and

• the circumstances to support that belief, again, presumably the circumstances must establish the “reasonable grounds”;

• the information is to be provided in writing as soon as practicable after becoming aware of the claim or the information, whichever is the latter.

• It is submitted that the same criteria relating to establishing a “breach of a duty of care” as referred to in s. 28 and referred to above, applies to the determination of what are “reasonable grounds”.

• Again costs sanctions apply to a delinquent respondent to the claim as to the claimant with one further sanction:

• “Order the concurrent wrongdoer severally liable for any award of damages made.”

• The application of this sanction is discretionary.

• Subsections (4),(5) & (6) make reference to the discretion in the court to make orders that are “just and equitable”.

• The scope of the exercise of the discretion will depend on the particular circumstances, but there is potential for the court to:- increase a concurrent wrongdoer’s liability to a plaintiff, both in damages and costs, for failure to comply with this Part; or award costs to the defendant identifying another person to the claimant, and it is subsequently adjudicated that the identified person is not liable, particularly if it is found there were no reasonable grounds for the joinder.

Directions

• Section 33 gives the court power to give directions on application by a party about the way a matter not dealt with by the rules is to proceed.

• Directions might include, after the commencement of an action and before a Defence is filed, a direction requiring a potential wrongdoer to provide information in compliance with s. 32(2).

• Another direction might be by a plaintiff seeking an order relieving it from an obligation from making a claim against a particular defendant in circumstances where the claimant has reasonable grounds to believe that a defendant may be liable. This might be for reason of costs, impracticality (the defendant cannot be served or is out of the jurisdiction), or convenience (urgency).

• Directions would be apt if there are multiple defendants, or a mixture of causes of action. An example is seen in Keith Woods v. Rodney Mario de Gabriele (2007) VSC 177 where the defendants applied to have a party added because of allegations contained in the Statement of Claim that the proposed defendant (Strategic Projecting Marketing Ltd) (“SPM”) was a servant or agent of the second defendant and an authorised representative of the third defendant. SPM was in liquidation and an application was made for leave to commence proceedings against a company in liquidation (s. 417B Corporations Act).

• The application was opposed by the plaintiff. He delivered two amended Statements of Claim wherein he attempted to “plead down” the facts giving rise to a beach of duty by SPM. It is clear from the judgment the plaintiff did not want SPM in the litigation because of the possible apportionment of liability amongst the defendants, one of which, is probably impecunious. It is an example of the ducking and weaving which parties can engage in under the directions power.

Offers to Settle

• In proceedings involving multiple parties costs can be decisive as the utility and benefit of the litigation.

• If a plaintiff loses against multiple defendants the costs burden can be huge.

• The protection afforded to all parties by Formal Offers to Settle made pursuant to UCPR Part 5, must be considered as early as possible in the litigation.

• Any offer made must be capable of acceptance within fourteen (14) days.

Offers from the Plaintiff’s Perspective

• Obviously it is only relevant where there are two or more defendants. Accepting that the defendants are likely to be found liable proportionally, the plaintiff must make an assessment as to the degree of liability and pitch the offer so as to beat it at trial.

• So what if one or more defendants accept the offer and one or more do not?

• The effect of this will depend largely on the degree of liability. Example: A plaintiff’s claim is for $300,000 against defendant A and defendant B. Having regard to the circumstances, the plaintiff makes an offer to defendant A of $200,000 and to defendant B of $100,000 – defendant A accepts the offer .. the plaintiff can then continue to litigate against defendant B for the balance.

• If the offer is contingent of the other accepting and defendant B still resists, what is the effect at trial if, on the costs argument, defendant A indicates it sought to accept the offer? Will defendant B be penalised because of its conduct?

• The answer probably lies in the fact that defendant A should be making a formal offer to defendant B in a similar vein.

• Difficulties for a plaintiff might arise if a concurrent wrongdoer is only potentially liable to a small extent. Commerciality comes into play here. If the plaintiff in the same matter offers to settle with defendant A, for say, $250,000 and to defendant B for $50,000 – and defendant A accepts, is it commercially viable for the plaintiff to continue?

Offers from the Defendant’s Perspective

• This is probably more important because the defendants will not only want protection from the plaintiff’s costs but protection inter se.

• Again any offer to settle must be capable of immediate acceptance but if they are contingent on the plaintiff or other defendants accepting the offer, then they are of little value unless the defendants agree in putting a joint offer to the plaintiff.

• A situation can arise whereby the defendants can agree to resolve the claim with the plaintiff and continue to litigate the degree of proportionate liability as between themselves.