The recent case of Bingo Holdings Pty Ltd v GC Group Company Pty Ltd [2021] NSWCA 184 (Bingo Holdings) has highlighted the importance in a proportionate liability defence of identifying specific concurrent wrongdoers rather than ‘classes of persons’, one of whom may be a concurrent wrongdoer.

Proportionate liability vs joint and several liability

At common law, joint and several liability provides that where defendants are established to be ‘jointly and severally liable’, each is individually liable for the entire loss or damage caused, not just for the proportion of loss or damage to which their acts or omissions contributed.

Conversely, proportionate liability refers to the legislative regime whereby liability for loss is divided between each wrongdoer based on the proportion to which their acts or omissions contributed to the loss or damage in question.

Background

GC Group Company Pty Ltd (GC Group) was a subcontractor in large residential development project at Albion Park. GC Group purchased recycled aggregate (a building material) from at least one of several entities that formed part of the Bingo Group (collectively, Bingo). GC Group alleged that the aggregate supplied by Bingo was contaminated.  GC Group claimed Bingo was liable to it in damages for breach of contract, consumer guarantees and for engaging in misleading and deceptive conduct.

On 20 May 2020, the primary judge ordered certain paragraphs in Bingo’s List Response (Response) claiming GC Group’s claim against them was an “apportionable claim” be struck out.

On 31 July 2020, Bingo sought leave to amend its Response to re-plead a proportionate liability defence, identifying 710 registered owners of vehicles that delivered the aggregate to Albion Park as “concurrent wrongdoers”. The primary judge refused to grant leave on the basis that the pleading “was not sufficient to establish that such registered owners actually delivered material to the facility.” The primary judge again refused leave to amend on 18 March 2021. Bingo appealed from that refusal.

The Court of Appeal (Meagher, Payne and Brereton JJA) observed that Bingo brought part of its claim under s 18 of the Australian Consumer Law (Cth) (ACL). Because Bingo brought its claim under the Commonwealth law (as opposed to under the Fair Trading Act 1987, which applies the ACL as a State law), the Civil Liability Act 2005 (CLA) provisions concerning proportionate liability did not apply. Instead, Pt VIA of the ACL applied. This highlights the traps and complexity of the proportionate liability legislation.

The Court refused leave on an additional ground: At [15], the Court explained that the CLA provisions concerning proportionate liability (as well as Pt VIA of the ACL) do not permit a defendant to limit their liability in respect of concurrent wrongdoers who cannot be identified.  At [20], Meagher, Payne and Brereton JJA, citing Ucak v Avante Developments Pty Ltd [2007] NSWSC 367, held that “it is long settled that Part 4 of the Civil Liability Act requires the act or omissions of a particular person who caused the same loss as that claimed by the plaintiff be identified”.

Further, at [30], the Court held that “a defendant seeking to rely on a proportionate liability defence must plead that claim with the same degree of particularity as if bringing a cross-claim against the alleged concurrent wrongdoer, setting out the relevant material facts. It is not sufficient merely to identify a class of persons one of whom may be a concurrent wrongdoer. ”

What can we learn from this judgment?

This judgment highlights the importance of adequately identifying concurrent wrongdoers in a proportionate liability defence. A proportionate liability defence identifying vague classes of wrongdoers will likely be found to be deficient by the court. The differences between proportionate liability under the Commonwealth ACL and the State CLA also need to be observed.

If you are interested to read or hear more about the defence of proportionate liability, please get in touch with Mark Yum of our Construction + Projects team.