Plaintiff must properly plead its claim against concurrent wrongdoers

Facts

In COI Building v 100 Percent Plumbing, Vickery J dealt with an application by the plaintiff to amend its Statement of Claim, which was opposed by the second defendant.

The plaintiff, COI Building Group, sought damages for losses suffered in respect of water leaks at a development in Toorak. The first and third defendants, 100 Percent Plumbing and Combined Plumbing, had been engaged by the plaintiff to provide plumbing services and works. The second defendant, Meinhardt, was engaged to carry out periodic inspections and to ensure that the works complied with the drawings and specifications.

The plaintiff brought an action against the first defendant. In its amended defence, the first defendant raised the defence of proportionate liability and alleged that the second and third defendants were concurrent wrongdoers who were proportionately liable for the same loss and damage. The first defendant applied to join the second and third defendants as parties to the proceeding.

The plaintiff sought leave to amend its pleading by reference to the first defendant’s defence. The relevant section of its pleading was headed “Claims against second and third defendants conditional upon success of the first defendant’s defence of proportionate liability under Part IVAA of the Wrongs Act 1958.”

In its proposed amended pleading, the plaintiff referred to the relevant paragraphs of the first defendant’s defence, in which the first defendant had pleaded that the plaintiff’s claim was an apportionable claim and then pleaded relevant facts in relation to the plaintiff’s retainer of the second and third defendants and allegations that the second and third defendants had breached the terms of those retainers and their common law duty of care to the plaintiff.

The plaintiff then pleaded that if the court determined the plaintiff’s claim to be apportionable and found the second and/or third defendants to be concurrent wrongdoers, then it sought judgment against each of the defendants in accordance with the court’s determination as to the proportion of each defendant’s responsibility for the plaintiff’s loss and damage.

Although not referred to by his Honour, the plaintiff’s proposed amended pleading was in accordance with a practice followed at VCAT, referred to in Brady Constructions Pty Ltd v Andrew Lingard & Associates Pty Ltd [2008] VCAT 851.

Second defendant’s arguments

The second defendant opposed the proposed amendments, relying on three arguments. The first was that the amendments did not disclose the plaintiff’s cause of action against the second defendant, and also purported to place the burden of proving the claim against the second defendant on the first defendant (“cause of action point”).

The second argument was that the plaintiff had the option to proceed against the first defendant and, at the conclusion of that proceeding, to bring a claim against the concurrent wrongdoers; if it chose to proceed against all concurrent wrongdoers at the outset it must properly plead its claim against each of them. To proceed without doing so would result in prejudice to the second defendant, as it would be forced to proceed to trial without knowing what the plaintiff’s claim against it was, and it was not safely able to make an offer of compromise because the plaintiff’s position was unclear (“election point”).

The third argument was that the plaintiff must plead its claim in the usual way (“proper procedure point”).

Outcome

Justice Vickery dismissed the application to file and serve an Amended Statement of Claim. His Honour referred to what had been said by Osborn J in Wheelahan v City of Casey (Ruling No 10) [2011] VSC 546 (Wheelahan), which was relied upon by both parties.

In Wheelahan, Osborn J noted that a plaintiff who had raised contingent claims against concurrent wrongdoers in its reply pleading should be directed to plead its claims against them directly in an amended Statement of Claim: [33].

Justice Vickery noted that in this case the real question was whether the plaintiff had adequately pleaded its claim against the second and third defendants. It had failed to do so: [34]. His Honour accepted the second defendant’s “cause of action” and “proper procedure” arguments. The plaintiff’s pleading did not state the material facts it relied upon in its claim for damages against the second and third defendants, but relied upon facts pleaded by the first defendant: [37].

The proposed amended pleading did not state what the terms of the retainer with the second defendant were, how the second defendant was said to have breached those terms, what evidence the plaintiff would lead, or what defences were applicable. Further, no damages claim was made or quantified against the second and third defendants such that those parties could not know what evidence to lead on causation or quantum: [38]-[39].

The overarching purpose of the Civil Procedure Act 2010 would be compromised if the plaintiff were permitted to proceed with its amendments. The second defendant would not be in a position to make any offers of compromise and would be forced to proceed to trial in circumstances where, ultimately, the plaintiff may make no claim against it. Further, the court would not be able to properly manage the case without knowing what evidence was to be led by which parties: [40]-[43].

His Honour noted that a plaintiff may make contingent claims as long they are pleaded appropriately: [49].

Conclusion

The effect of Vickery J’s decision is that a plaintiff who wishes to claim damages against a concurrent wrongdoer joined by a defendant must properly plead its claim against the concurrent wrongdoer. It will not usually be sufficient simply to make reference to the first defendant’s pleading. The pleading must state the material facts of the plaintiff’s claim against the concurrent wrongdoer/s as well as the damages sought against them.