Multiplex Constructions Pty Limited v Irving & 2 Ors; Fugen Holdings Pty Limited v Irving & 2 Ors (No 2) [2005] NSWCA 1 (4 March 2005)

CITATION: Multiplex Constructions Pty Limited v Irving & 2 Ors; Fugen Holdings Pty Limited v Irving & 2 Ors (No 2) [2005] NSWCA 1

FILE NUMBER(S):

40669/03; 40732/03

HEARING DATE(S): On written submissions

JUDGMENT DATE: 04/03/2005

PARTIES:

CA 40669/03

Multiplex Constructions Pty Limited (Appellant)

Stuart Irving (First Respondent)

Fugen Holdings Pty Limited (Second Respondent)

Royal & Sun Alliance Insurance Australia Limited (Third Respondent)

CA 40732/03

Fugen Holdings Pty Limited (Appellant)

Stuart Irving (First Respondent)

Multiplex Constructions Pty Limited (Second Respondent)

Royal & Sun Alliance Insurance Australia Limited (Third Respondent)

JUDGMENT OF: Santow JA Ipp JA Pearlman AJA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 3171/01

LOWER COURT JUDICIAL OFFICER: Walmsley DCJ

COUNSEL:

CA 40669/03

P Deakin QC/T To (Appellant)

M Bozic SC/F V Fletcher (First Respondent)

K Andrews (Second Respondent)

I G Harrison SC/E C Muston (Third Respondent)

CA 40732/03

K Andrews (Appellant)

M Bozic SC/F V Fletcher (First Respondent)

P Deakin QC/T To (Second Respondent)

I G Harrison SC/E C Muston (Third Respondent)

SOLICITORS:

CA 40669/03

Moray & Agnew (Appellant)

Taylor & Scott (First Respondent)

Gillis Delaney Brown (Second Respondent)

Abbott Tout (Third Respondent)

CA 40732/03

Gillis Delaney Brown (Appellant)

Taylor & Scott (First Respondent)

Moray & Agnew (Second Respondent)

Abbott Tout (Third Respondent)

CATCHWORDS:

COURTS - Discretion to allow a new argument to be raised after judgment is delivered but before formal orders have been entered - Policy involving finality of litigation precludes raising the argument. D

LEGISLATION CITED:

Law Reform (Miscellaneous Provisions) Act 1946, s 5(1)(c)

Workers Copensation Act 1987 (NSW), s 151E

Motor Accidents Act 1988, s 3D

Motor Accidents Compensation Act 1999, s 5A

DECISION:

(1) The first and second appeals by Multiplex and Fugen are allowed as against Mr Irving (2) The first and second appeals by Multiplex and Fugen are dismissed as against Royal (3) The orders made by the trial judge in relation to Mr Irving's future economic loss and superannuation on future economic loss be varied as follows: (a) In lieu of the assessment of future economic loss, substitute the sum of $163,075.90 against Fugen and the sum of $198,214 against Multiplex (b) In lieu of the assessment of superannuation on future economic loss, substitute the sum of $17,612.20 against Fugen and $21,407.11 against Multiplex (4) In lieu of order (1) made by the trial judge, judgment be entered for Mr Irving against Multiplex in the sum of $434,735.11 (5) In lieu of Order (2) made by the trial judge, judgment be entered for Multiplex against Fugen in the sum of $434,735.11 (6) Mr Irving to pay Multiplex's costs in the first appeal insofar as those costs relate to grounds 1 to 4 stated in the Notice of Appeal With Appointment dated 4 November 2003 in the first appeal (7) Mr Irving to pay Fugen's costs in the second appeal insofar as those costs relate to grounds 1 to 3 stated in the Notice of Appeal With Appointment dated 24 November 2003 in the second appeal (8) Multiplex to pay Royal's costs of the first appeal and Fugen to pay Royal's costs of the second appeal.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40669/03

CA 40732/03

DC 3171/01

SANTOW JA

IPP JA

PEARLMAN AJA

Friday, 4 March 2005

MULTIPLEX CONSTRUCTIONS PTY LIMITED v Stuart IRVING & ORS

FUGEN HOLDINGS PTY LIMITED v Stuart IRVING & ORS (NO 2)

Judgment

1 SANTOW JA: I agree with Ipp JA.

2 IPP JA: On 28 October 2004, in [2004] NSWCA 346, this Court delivered judgment in regard to two appeals. In my reasons delivered on that date I set out the background to those appeals as follows:

“The issues in the appeal

These two appeals concern proceedings brought in the District Court and determined by Walmsley DCJ. The proceedings arise out of an accident on a building site in Sydney on 9 September 1998. On that date, Mr Stuart Irving suffered a serious injury to his wrist when he fell while employed as a bricklayer by Fugen Holdings Pty Ltd (“Fugen”). Fugen was a sub-contractor to Multiplex Constructions Pty Limited (“Multiplex”). Multiplex was the occupier of the building site. Royal & Sun Alliance Insurance Australia Limited (“Royal”) was Fugen’s workers’ compensation insurer.

Mr Irving sued Multiplex for the damages he sustained, alleging common law negligence on Multiplex’s part. Multiplex joined Fugen in the proceedings by way of cross-claim. Relevantly, Multiplex relied on two causes of action. Firstly, it claimed an indemnity from Fugen in respect of the full amount it was required to pay Mr Irving. This claim was based on a contract which Multiplex had entered into with Fugen whereby Multiplex asserted Fugen was obliged to indemnify it as claimed. Alternatively, Multiplex asserted that Fugen had negligently caused Mr Irving’s injury and claimed an indemnity or contribution from Fugen under s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946.

Fugen brought a cross-claim, the second cross-claim, against Royal. By that cross-claim Fugen alleged that Royal, as its workers’ compensation insurer, was obliged to indemnify it under the “common law extension” to that policy against the claims brought against it by Multiplex.”

3 The trial judge found that Multiplex had breached the duty of care it owed Mr Irving and ordered judgment in favour of Mr Irving in the sum of $504,003. His Honour held that Fugen had also owed Mr Irving a non-delegable duty of care that it had breached. His Honour assessed Multiplex’s share of responsibility for Mr Irving’s damages at 50% and Fungen’s share at 50% as well. His Honour determined that, by reason of a contract between Multiplex and Fugen, Fugen was obliged to indemnify Multiplex for the whole of Mr Irving’s judgment against it.

4 Royal insured Fugen for workers compensation, with a common law extension, in accordance with the form of policy provided by the Workers Compensation (General) Regulation 1995. Relying on Nigel Watts Fashion Agencies Pty Limited v GIO General Limited (1995) 8 ANZ Insurance Cases 61-235, his Honour held that the policy issued by Royal did not cover “a claim under an indemnity provided by contract”. Hence, the policy did not cover Fugen in respect of its contractual indemnity of Multiplex.

5 After the trial judge had delivered judgment, Royal admitted liability to Fugen in respect of 50% of the amount that, by the judgment, Fugen was required to pay Multiplex. This 50% represented Fugen’s share of its common law liability to Mr Irving. In effect, Royal denied liability for the remaining 50% that Fugen was obliged to pay Multiplex in terms of the contractual indemnity Fugen had given Multiplex.

6 The issues before this Court in [2004] NSWCA 346 concerned, firstly, Fugen’s right to obtain from Royal indemnity under the workers compensation policy for the remaining 50% that Fugen owed to Mr Irving and, secondly, the quantum of the damages awarded to Mr Irving.

7 In the judgment delivered on 28 October 2004 this Court dismissed the appeal against the rejection of Fugen’s claim for indemnity in respect of the remaining 50%. Further, the Court made various findings in favour of Fugen in relation to the arguments it raised as to the quantum of damages.

8 During the course of argument in the appeal, the parties requested the Court not to make any orders and said that they would bring in draft minutes of orders after the findings of the Court had been considered. The Court acceded to this request and ordered that, within a specified time, the parties bring in a draft minute of orders and, failing agreement, their respective proposed draft minutes together with written submissions supporting the draft minutes.

9 When Multiplex filed its written submissions, it raised a further argument concerning the merits of the appeal that had not previously been mentioned. No leave had been given (or, indeed, sought) for the making of this new argument.

10 The new argument was based on s 151E of the Workers Compensation Act 1987 (NSW) which provides:

“Application – modified common law damages

(1) This Division applies to an award of damages in respect of:

(a) an injury to a worker, or

(b) the death of a worker resulting from or caused by an injury,

being an injury caused by the negligence or other tort of the worker’s employer.

(2) This Division does not apply to an award of damages to which Part 6 of the Motor Accidents Act 1988 or Chapter 5 of the Motor Accidents Compensation Act 1999 applies.

Note: However, this Division will generally apply in the case of an injury to a coal miner if the injury is caused by an off-road motor accident and there is no motor accident insurer on risk (as described in section 3D of the Motor Accidents Act 1988 and section 5A of the Motor Accidents Compensation Act 1999).

(3) This Division applies to an award of damages in respect of an injury caused by the negligence or other tort of the worker’s employer even though the damages are recovered in an action for breach of contract or in any other action.

(4) Subsection (3) is enacted for the avoidance of doubt and has effect in respect of actions brought before as well as after the commencement of that subsection.”

11 Multiplex, in its written submissions, argued that (notwithstanding the reasons given by the Court in [2004] NSWCA 346) the effect of s 151E(3) was that:

“[Royal’s] workers compensation insurer’s liability for damages is not confined to liabilities in tort, or even liabilities under an employment contract but extends to a liability for damages in ‘any other action’ provided the damages remain ‘in respect of an injury caused by the negligence or other tort of the worker’s employer’.”

Accordingly, Multiplex argued, Royal was obliged – under its workers compensation policy – to indemnify Fugen in respect of its contractual obligations to Multiplex.

12 The argument based on s 151E(3) was not raised before the trial judge and was not raised, in any form, in the course of argument on appeal. As mentioned, it was raised for the first time, without leave, by way of written submissions invited for the purpose of determining the proper orders that should be made in the light of the Court’s reasons. Royal disputes the right of Multiplex to raise this new argument at this stage.

13 Multiplex submits that, “whilst it is unfortunate that no reference was made to the section at any time prior to publication of the Court’s reasons”, this Court should now consider the fresh argument.

14 The Court has a discretion to allow a new contention to be raised as no relevant orders have, as yet, been entered.

15 Multiplex submits that the scope of the discretion is to be discerned from the following remarks of Mason CJ in Auto Desk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 (at 301 to 302):

“The exercise of the jurisdiction to reopen a judgment and to grant a rehearing is not confined to circumstances in which the applicant can show that, by accident and without fault on the applicant’s part, he or she has not been heard ... [T]hese statements do not exclude the exercise of jurisdiction to reopen a judgment which has apparently miscarried for other reasons, at least when the orders pronounced have not been perfected by the taking out of formal orders”.

See also Smits v Buckworth (No 2) (NSWSC, 14 November 1997, unreported per Young J).

16 Multiplex, in contending that the Court’s discretion should be exercised in its favour, points out that the new issue is one of pure statutory construction “arising from a provision of the Act different to the provision to which the Court’s attention had previously been drawn”. According to Multiplex, s 151E(3) was overlooked in the authorities previously cited to the Court. No evidence would be required to be adduced in connection with the point now raised and, Multiplex argues, the appeal would not have been conducted differently had the section earlier been drawn to the Court’s attention. Multiplex argues that, should the Court allow the new argument to be raised, no party would suffer any appropriate prejudice.

17 Royal, in opposing Multiplex’s argument, points out that Multiplex has not offered any explanation for its failure to raise the s 151E(3) argument. In regard to Multiplex’s reliance on Auto Desk Inc v Dyason (No 2), Royal points out that in that case (at 303) Mason CJ emphasised that the jurisdiction to reopen a judgment is not to be exercised “simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put”.

18 Moreover, Royal draws attention to the fact that, in making the remarks relied upon by Multiplex, Mason CJ was in dissent. In this regard, Brennan J (at 309) in Auto Desk Inc v Dyason (No 2) observed:

“It is one thing to reopen an appeal after judgment if the Court has reached a conclusion by adopting a proposition of fact or law which the unsuccessful party has not had an opportunity to argue. In that event, natural justice is denied and it can be said that the Court’s jurisdiction to hear and determine the matter is not exhausted. But that is not the present case. Here the ground on which the appeal was determined had been argued in the courts below and had been the subject of submissions in this Court. The appeal was determined after it was fully heard. That being so, I find no jurisdiction to set aside the judgment already pronounced merely because it is submitted by the unsuccessful party that, on further argument, the Court would be satisfied that it had reached the wrong conclusion in law. In University of Wollongong v Metwally [No 2] [1985] HCA 28; (1985) 59 ALJR 481 (at 483) this Court said:

‘Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.’

The decision of this Court in the present case was not given in ignorance or forgetfulness of some statutory provision or of some critical fact. To entertain an application to reopen an appeal after judgment in order to consider further argument on an issue already decided would be to subvert the finality of litigation and to invite interminable arguments about the importance of the legal questions to be recanvassed and the correctness of the answers to those questions already given.”

19 Dawson J (at 317) expressed similar views and cited Wentworth v Woollahra Municipal Council [1982] HCA 41; (1982) 149 CLR 672 (at 684). His Honour stressed that the jurisdiction to reopen a judgment that had been pronounced would be exercised cautiously, bearing in mind the public interest in the finality of litigation.

20 In Wentworth v Woollahra Municipal Council the High Court said (at 684) that the circumstances in which the Court would reopen a judgment which it had pronounced were “extremely rare” and “[t]he public interest in maintaining the finality of litigation necessarily means that the power to reopen to enable a rehearing must be exercised with great caution”.

21 The English Court of Appeal in Robinson v Fernsby [2003] W.T.L.R. 529 has recently considered the scope of the Court’s discretion to reopen a judgment already handed down. In that case, May LJ followed the majority in Stewart v Engel [2000] EWCA Civ 362; (2000) 3 All ER 518 where it was held that the exercise of the jurisdiction required proof of exceptional circumstances. May LJ pointed out:

“Once a judgment has been handed down or given, there are obvious reasons why the Court should hesitate long and hard before making a material alteration to it.”

The “obvious reasons” to which his Lordship referred involved the strong public interest in the finality of litigation.

22 In Robinson v Fernsby May LJ said, further:

“The cases also acknowledge that there may very occasionally be circumstances in which a judge not only can, but should make a material alteration in the interests of justice. There may for instance be a palpable error in the judgment and an alteration would save the parties the expense of an appeal. On the other hand, reopening contentious matters or permitting one or more of the parties to add to their case or make a new case should rarely be allowed. Any attempt to do this is likely to receive a summary rejection in most cases. It will only very rarely be appropriate for parties to attempt to do so. This necessarily means that the Court would only be persuaded to do so in exceptional circumstances, but that expression by itself is no more than a relatively uninformative label. It is not profitable to debate what it means in isolation from the facts of a particular case.”

23 I would add that the Court of Appeal in Gravgaard v Aldridge and Brownlee (per May and Arden LLJ) Times, December 2, 2004 followed Robinson v Fernsby.

24 In the light of the approach enunciated in these authorities, I see no good reason to allow the new issue now to be raised. This is not a case where there is any suggestion of an inadvertent denial of procedural fairness (see Auto Desk Inc v Dyason [No 2] at 314). Multiplex has had a clear and full opportunity to place before this Court all the submissions that it wished to make at the appropriate time. Full and detailed oral argument took place before judgment was delivered. The omission to raise s 151E(3) earlier was due solely to the conduct of Multiplex itself. The argument now raised is simply an afterthought and a contentious one at that. In the circumstances of this case, to allow the new point to be raised would subvert the appeal process itself: see Noga v Abacha (2001) 3 All ER 513. Accordingly, I would refuse to allow Multiplex to raise the new argument based on s 151E(3).

25 Save in two respects, the parties have agreed on the orders that should be made should the s 151E(3) argument be unsuccessful.

26 The first of the two orders that are in dispute is order 8 sought by Royal, namely, that:

“[Multiplex] pay [Royal’s] costs of the first appeal and that [Fugen] pay [Royal’s] costs of the second appeal”.

27 Multiplex argues as follows in this regard:

“Given that [Fugen] commenced the second appeal, if [Royal] were successful it would at all times have been exposed to the risk of not recovering its costs from [Fugen] in that appeal. [Multiplex] submits that it should not be required to effectively indemnify [Royal] for the risk that it may now not be able to recover costs from [Fugen]. The exercise of quantifying [Royal’s] costs in each appeal should not alter that position and, those costs should be left for agreement or assessment in the usual way.”

Multiplex submits that the following order should be made in this regard:

“[Multiplex] to pay [Royal’s] costs of the first appeal and [Fugen] to pay [Royal’s] costs of the second appeal. [Fugen] to indemnify [Multiplex] for all costs incurred in relation to the first and second appeals and of the trial below, including its liability for costs of the first appeal and any liability for the costs of the trial below.”

Multiplex asserts that the last sentence of its proposed order is justified by Fugen’s contractual indemnity to Multiplex.

28 Fugen submits, on the other hand, that the question of it indemnifying Multiplex in respect of costs was not a matter before the Court and, hence, no order in relation to such an indemnity should be made. I accept this submission and would make an order in the terms propounded by Royal.

29 The next order in dispute is order 11.

30 The background to this dispute is as follows. Royal has admitted liability to Fugen for $199,890.55, being 50% of Fugen’s share of its common law liability to Mr Irving. Mr Irving has been paid $231,146.50 by Royal and $20,856 by Multiplex. These amounts were paid in accordance with conditions imposed by the trial judge when granting a stay of the judgment pending the outcome of the appeal.

31 It is apparent that Royal has paid Mr Irving $31,255.95 more than the amount of liability admitted by Royal. It did so on account of Fugen’s liability to Mr Irving. Royal proposes that Mr Irving repay it this sum.

32 Multiplex submits that Royal should look to Fugen for repayment of the $31,255.95 and not to Mr Irving. Multiplex argues:

“Firstly, [Mr Irving] is still entitled to the balance of damages, as adjusted by these Orders. No occasion for repayment by [Mr Irving] should arise. Secondly, to require repayment by [Mr Irving] would effectively put [Multiplex] at risk of having to pay to [Mr Irving] that additional amount if [Fugen] were unable to satisfy the balance of the judgment (bearing in mind [Fugen] is required to indemnify [Multiplex] fully by virtue of the contractual indemnity). The fact that [Royal] made the payment directly to [Mr Irving] but on account of [Fugen’s] liability is a matter between those parties and should not now result in [Multiplex] being prejudiced.”

Multiplex accordingly submits that no order should be made in this regard or, alternatively, an order should be made that “Fugen to repay to Royal the sum of $31,255.95”.

33 Mr Irving submits that the payments in question were made in partial satisfaction of the verdict in his favour against Multiplex. He says that he will give credit to Multiplex for the amount actually received, and if there is some adjustment to be made that is properly to be regarded as a matter to be sorted out between Multiplex, Fugen and Royal. Mr Irving submits that the legal basis for Royal’s claim is not apparent and it would not be appropriate for the Court to make any order in this regard at this stage.

34 I am persuaded by Mr Irving’s argument and accept that the proposed order 11 should not be made.

35 Having regard to the parties’ agreement and to the views I have expressed above, I propose that the following orders be made:

(1) The first and second appeals by Multiplex and Fugen are allowed as against Mr Irving.

(2) The first and second appeals by Multiplex and Fugen are dismissed as against Royal.

(3) The orders made by the trial judge in relation to Mr Irving’s future economic loss and superannuation on future economic loss be varied as follows:

(a) In lieu of the assessment of future economic loss, substitute the sum of $163,075.90 against Fugen and the sum of $198,214 against Multiplex.

(b) In lieu of the assessment of superannuation on future economic loss, substitute the sum of $17,612.20 against Fugen and $21,407.11 against Multiplex.

(4) In lieu of order (1) made by the trial judge, judgment be entered for Mr Irving against Multiplex in the sum of $434,735.11.

(5) In lieu of order (2) made by the trial judge, judgment be entered for Multiplex against Fugen in the sum of $434,735.11.

(6) Mr Irving to pay Multiplex’s costs in the first appeal insofar as those costs relate to grounds 1 to 4 stated in the Notice of Appeal With Appointment dated 4 November 2003 in the first appeal.

(7) Mr Irving to pay Fugen’s costs in the second appeal insofar as those costs relate to grounds 1 to 3 stated in the Notice of Appeal With Appointment dated 24 November 2003 in the second appeal.

(8) Multiplex to pay Royal’s costs of the first appeal and Fugen to pay Royal’s costs of the second appeal.

The Court notes that:

(9) Royal has admitted liability to Fugen in the amount of $199,890.55, being 50% of Fugen’s share of its common law liability to Mr Irving arising out of these orders.

(10) As at the date of these orders, Mr Irving has been paid:

(a) $231,146.50 by Royal and

(b) $20,856 by Multiplex.

36 PEARLMAN AJA: I agree with Ipp JA.

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LAST UPDATED: 04/03/2005