Pafburn Pty Limited (ACN 003 485 505) & Anor v The Owners - Strata Plan No 84674 [2024] HCATrans 70 (15 October 2024)

Last Updated: 16 October 2024

[2024] HCATrans 070

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S54 of 2024

B e t w e e n -

PAFBURN PTY LIMITED (ACN 003 485 505)

First Appellant

MADARINA PTY LIMITED (ACN 080 675 627)

Second Appellant

and

THE OWNERS – STRATA PLAN NO 84674

Respondent

GAGELER CJ
GORDON J
EDELMAN J
STEWARD J
GLEESON J
JAGOT J
BEECH‑JONES J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 15 OCTOBER 2024, AT 9.59 AM

Copyright in the High Court of Australia

____________________

MR N.C. HUTLEY, SC: If your Honours please, I appear with my learned friends MR G.A. SIRTES, SC and MR A. DI FRANCESCO for the appellants. (instructed by M&A Lawyers)

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friend MR D.S. WEINBERGER for the respondent. (instructed by Grace Lawyers)

GAGELER CJ: Yes, Mr Hutley.

MR HUTLEY: Thank you, your Honours. Your Honours, the appeal involves three essential issues which we have identified in the outline of argument. The second issue can be broken up to reflect the three grounds of appeal it covers; that leads to some degree of artificiality, so we will deal with it as an issue.

The facts are simple. They appear in the judgment of her Honour Justice Rees at core page 8, paragraphs 6 to 12. Her Honour there summarised the proportionate liability defence, which your Honours will find in the first amended technology and construction list response at core 136, the relevant paragraphs being 27 and 29A. Paragraph 27 commences at page 152 and continues over to core 180. It is unnecessary at this point to go through the detail of that defence; what her Honour set out is adequate, although I will go to some parts of it in relation to issue 3.

Your Honours may have seen in the orders of the Court of Appeal at core page 71 ‑ ‑ ‑

GORDON J: Is that the book of further materials or the core appeal book?

MR HUTLEY: The core, your Honour, page 71. When setting aside her Honour’s judgment, the court struck out paragraphs beyond paragraphs 27 to 29A; paragraphs 20 to 24. Paragraphs 20 to 23 dealt with time bars. Paragraph 24 pleaded contributory negligence. They were removed as a result of an agreement between the parties, which your Honours will not find reflected in the court book, to replead those issues, and that was an agreement which had been reached before Justice Rees, and that is why they are reflected in that order. Your Honours, concerned with those as a matter of law, that was done as a matter of agreement. So, your Honours are concerned with paragraphs 27 – it says to 29A, but 28 is struck out, so it is only 29A, which we will come to.
BEECH-JONES J: Just 29A, is that what you said, Mr Hutley?

MR HUTLEY: Paragraphs 27 and 29A, your Honour.

BEECH-JONES J: Thank you.

MR HUTLEY: Now, whilst our learned friends have agitated a pleading point in their submissions at paragraphs 8, 19 and 27, we have responded to it at paragraph 3, and we do not propose to say anything further about it. A further point was raised by our learned friends in their submissions at paragraphs 13 to 17, which dealt with the issue of what is called “control” under section 36 of the Design and Building Practitioners Act, which I will refer to, if I might, as the Building Act or an acronym, DBPA. That point turns on the meaning of:

or otherwise having substantive control –

in section 36. We have dealt with that issue in our reply submissions at paragraph 4. Nothing in that debate, we submit, has anything to do with the issues in the appeal as “having substantive control”. Whatever it means refers to a state which may or may not exist at a point in time. Having substantive control assumedly includes the power to control, and the extent of it will be questions of fact and degree in particular cases, and do not go to what we say is the central issue in this appeal any further – I will go through that point when I come to the Act, but I do not say that we submit that there is simply no, as it were, pleading issue in relation to this case because, in any event, as regards to the second appellant, we deny that we had any control. So, the issue which lies at the heart of the appeal remains.

We propose to follow this course. Firstly, we will take your Honours as shortly as we can through the relevant legislation, making some observations about the issues in the appeal, and then proceed to address the three essential issues as we see them. Can I start with the Building Act, that Act was introduced in the second reading speech on the Bill in these terms, it was:

to introduce a suite of new obligations on design and building practitioners –

Your Honours will find that at the joint book of authorities part E, volume 6, page 1682 in the first paragraph. The consideration of the central, as your Honours appreciate it, Part 4 of the Building Act was addressed in the speech – at joint book of authorities volume 6, pages 1687 to 1688 – in terms which, in our respectful submission, will not assist your Honours with the issues in this appeal.

GAGELER CJ: You might have told us that before you gave us the page references.

MR HUTLEY: But your Honours may not have complete faith in me, so I thought I thought I would let your Honours ‑ ‑ ‑

GAGELER CJ: Turn it up anyway.

MR HUTLEY: I was not suggesting – I thought I was speaking quick enough so that your Honours did not go there then. Parts 2 and 3 of the Act – and your Honours will find this in the joint book of authorities, Part A, volume 1, page 113 it commences – which we will come to, imposed obligations on building, design and engineering practitioners in the building sphere. A central concept in the Act relating to those parts is the concept of “building practitioner”, and your Honours will see that defined in section 7 of the Act. Your Honours will see that there is the concept in 7(1)(a) of:

a person who agrees under a contract or other arrangement to do building work –

And then (b):

if more than one person agrees to do building work –

Then, there is an issue about how the contractors which need not delay your Honours. If your Honours then go to 7(3), it says:

In this Act, a building practitioner is taken to do building work if the practitioner—

(a) agrees to do building work under a contract or other arrangement, or

(b) is the principal contractor for the work.

Now, “building work”, your Honours will find ‑ ‑ ‑

GLEESON J: So, more than one person can do the same building work?

MR HUTLEY: Quite. Yes, but the person who is taken to do it is the principal contractor, your Honours will see. Your Honour sees that from 7(1)(b). That is the building practitioners. “Building work”, if your Honours go back to page 120, your Honours see it is defined by reference to section 4 at 123, and it is defined in terms; it means:

work involved in, or involved in coordinating or supervising work involved in, one or more of the following –

Your Honours will see it refers to types of buildings:

A class or type prescribed by the regulations –

I just want your Honours to be aware of that section, we will come back to it. Concentrating, if I can, on building practitioners for the moment, your Honours will see if your Honours turn over to section 15 in the Act, that is the first of series of obligations imposed on building practitioners under the Act, and it says:

A building practitioner who does building work must ensure that the relevant documents for the building work are provided –

So, the concept of ensuring appears. “Relevant document” your Honours will find defined below in (4), and would your Honours note it says:

relevant document means—

(a) each regulated design for which a design compliance declaration has been provided that reflects the building work that was carried out –

The concept of “carried out” appears in the first two sections in contradistinction to the notion of doing building work, i.e., it is actual activities. Similarly, if your Honours would go to section 18, it says:

A building practitioner who does building work must take all reasonable steps to ensure that—

(a) each regulated design for the building work is prepared –

Et cetera, and again this concept of “must take all reasonable steps to ensure”, words which are ‑ ‑ ‑

BEECH-JONES J: What section was that again, Mr Hutley?

MR HUTLEY: Section 18, your Honour.

BEECH-JONES J: Section 18, sorry.

MR HUTLEY: It is on page 132. Again, words which your Honours will obvious see are redolent of a classic common law non‑delegable duty. One then moves to 19.

EDELMAN J: Well, it is not really a non‑delegable duty.

MR HUTLEY: I am saying they use the words – I am accepting that, your Honour, but they have to ensure – and remember a building practitioner doing building work is the person who contracts to do the work, in contradistinction, have to ensure that reasonable steps are taken to ensure. That all I am seeking – I accept your Honour’s observation.

GORDON J: What does section 18 do?

MR HUTLEY: It sets up a norm to require the relevant building practitioner to ensure that steps are taken that certain things take place. That is, for example, a regulated design – we will come to that in time – for building work is prepared by a registered design practitioner. They have to take reasonable steps to ensure that a person who is not, as it were, a registered design practitioner does not do that sort of work, and similar matters in the rest of the subsections. Then section 19, if I can take your Honours to that, says – I think we can pass over 19. Section 20(1) says:

A building practitioner who does building work must take all reasonable steps to ensure –

various matters, and subsection (2), a similar form of words. Again, in section 21:

A building practitioner who does building work must take all reasonable steps to ensure that building work relating to a building element or performance solution for which a regulated design is to be used is carried out in accordance with a design –

Et cetera.

GLEESON J: So, there is a contrast there between section 19, where the building practitioner cannot carry out building work, and section 20, which talks about a building practitioner doing building work.

MR HUTLEY: Quite. Then, your Honour, at 21 you will notice a similar concept. And 22, again:

A building practitioner who does building work must take all reasonable steps to ensure that the building work, or any part of that work, complies with the requirements –

Now, obligations are imposed by the Act on design practitioners in section 9 and section 10 of the Act, and section 12 – I do not need to go through the detail of that – but also on professional engineers, in sections 32 and 33. Your Honours will see here that the concept of carrying out appears in 32:

A person must not carry out professional engineering work in a prescribed area of engineering unless –

Et cetera. So, in effect, that is looking to the doing of the Act, not the contracting.

GORDON J: Do we make anything of the change in language in the sections you just took us to in relation to design practitioners? Because 12 seems to suggest “must ensure that”. It seems to be a different form of obligation. Does that matter?

MR HUTLEY: Yes, I was not taking your Honours to them. We say they are of a piece with the other concept of “must ensure”, in our respectful submission. Now, 32 deals with carrying out, which is, we submit, dealing with the act of performance of an activity, and similarly 33. Section 35 deals with what is called “specialist work”, which is defined in section 34, and 35 presides that:

A person must not carry out specialist work –

Et cetera. So, in other words, the first two sections draw a distinction between doing, which has an extended meaning, and then carrying out, which we say has its ordinary meaning – or, in effect, performing – doing an activity.

BEECH‑JONES J: Do you mean in your own right?

MR HUTLEY: The person doing it, yes. Then, if your Honours please, we come to Part 4. Now, as your Honours will appreciate, the heart of this case is concerned with sections 37 and 39, but it is necessary to go through the definitions, if we might. At 36, “building” is defined by reference to the Environmental Planning and Assessment Act 1979. The materials do not include the definition, but a broad definition of a building – that is, a construction, et cetera – I do not think your Honours need to go to it.

“Building product”, your Honours will find defined in the Building Products (Safety) Act 2017. That is in the joint book of authorities, Part B, volume 2, page 202, section 5. It is expressed in very broad terms, and your Honours do not need to go to it. I just want to tell your Honours where you will find these things. Now, “building work”, returning to 36:

includes residential building work within the meaning of the Home Building Act 1989.

Your Honours will find that in joint book of authorities, Part B, volume 2, page 237. Can we go there shortly. The relevant definition your Honours will find in clause 2, towards the bottom of the page:

In this Act, residential building work means any work involved in, or involved in co‑ordinating or supervising any work involved in—

(a) the construction of a dwelling –

“Dwelling”, your Honours will find defined at page 239, in clause 3:

(b) the making of alterations or additions to a dwelling –

Et cetera. And that it has various other matters in (2) which are included, and then various matters which are excluded – so, in other words, activities.

Then we come to “construction work” – that means “building work”, and “building work” includes, as your Honours have seen, that as defined in the Home Building Act. I have taken your Honours to section 4(1). Your Honours will have seen 4(1), but one should note in this regard, it is not necessarily determined in this case, 36(2) says:

In this Part, a reference to building work applies only to building work relating to a building within the meaning of this Part.

“Building work”, under 41, is defined by reference to regulations which were not then – which may or may not – I just thought your Honours should know that. That is building work in the definition of construction work.

One then moves to the preparation of regulated designs. “Regulated designs”, your Honours, are defined in section 5 of the Act, at page 123. Then, one next moves down to the supply – back to the section 36 definition:

the manufacture or supply of a building product used for building work –

In that regard, one also needs to note subsection (4) of section 36:

a reference to a person who carries out construction work includes a reference to a person who manufactures, or is a supplier . . . of, a building product ‑ ‑ ‑

GLEESON J: Is there an allegation here that either of your clients carried out construction work within the meaning of subsection (c)?

MR HUTLEY: No, but it is – no. There is – and I will take your Honours to the pleading – an organisation, the name of which is Chief, which manufactured the relevant panels. I will take your Honours to those when I am dealing with issue 3. My client, as your Honours appreciate, was the owner and what might be called the head contractor.

GLEESON J: So, your client is alleged to have done construction work within – the owner is alleged to have done construction work within the meaning of (d), and Pafburn is alleged to have carried out construction work within the meaning of (a).

MR HUTLEY: Yes.

GLEESON J: All right.

MR HUTLEY: What that construction work is is not defined in the pleading. In fact, we have denied in the Scott schedule all – but we accept we would have done some construction work, at least with respect to the first appellant.

BEECH‑JONES J: Do you mean some building work?

MR HUTLEY: Building work. Construction work within the meaning of ‑ ‑ ‑

BEECH‑JONES J: Within subparagraph (a).

GLEESON J: I thought your client had admitted to carrying out building work.

MR HUTLEY: Quite. Yes, we have.

GLEESON J: Yes.

MR HUTLEY: Yes. What that is – because, you see, building work is in effect a series of activities as defined. It has not been specified what activities it did. That has not been particularised. That is why we say the pleading points do not go anywhere in this case, and it is really in effect a question of principle. So, I have dealt with (c). Then finally:

supervising, coordinating, project managing or otherwise having substantive control over the carrying out of any work referred to in paragraph (a), (b) or (c).

That is a relationship to the carrying out of work with (a), (b) or (c). I will come back to those when I deal with – I think the balance of 36 – there is a reference to “owner”, I do not think your Honours need to be delayed by that. Subsection (5) provides for the regulations extending:

additional work that is construction work –

and exclusion of work. Then it provides, at 37:

A person who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects—

(a) in or related to a building for which the work is done –

We say that is the construction work carried out by the relevant person, and:

(b) arising from the construction work.

GORDON J: That is down the line, “defects”. It extends the liability.

MR HUTLEY: Yes. The duty, as your Honour knows, which is in subsection (2), is that:

The duty of care is owed to each owner of the land in relation to which the construction work is carried out and to each subsequent owner of the land.

GORDON J: So, there is an expansion in two ways. Vertically, in terms of expansion by owner, and one itself expands it to pick up defects for work done, and also other works or other defects arising from the work. So, if one work affects something else, that is picked up as well.

MR HUTLEY: This creates a bespoke duty which relevantly, for the purposes of this case, is concerned with extending that duty in a way which this Court’s decision in Brookfield did not allow of; being a duty to subsequent purchasers of buildings constructed under a contract or arrangement. That is essentially what this is. In respect of economic loss, it is only to economic loss. Subsection (3) provides that:

A person to whom the duty of care is owed is entitled to damages for the breach of the duty as if the duty were a duty established the common law.

The duty in subsection (4), is owed:

whether or not the construction work was carried out—

(a) under a contract or other arrangement . . . or

(b) otherwise than under a contract or arrangement.

The central point, which we will develop, is that this is a duty which attaches to a person who carries out work, and we say whilst they are carrying out the work. It is a duty owed by that person or organisation in relation to the work that they carry out.

BEECH‑JONES J: Just so I am clear, do you say it does not extend to a principal contractor who subcontracts to others?

MR HUTLEY: It may, to the extent that that principal contractor is engaged with supervising or coordinating or managing or otherwise having substantial control, but that is the construction work. They owe a duty of care to exercise reasonable care in respect of that activity.

BEECH‑JONES J: Right. The case of substantial control – the scope of the duty is in performing that task of exercising control.

MR HUTLEY: Yes.

GAGELER CJ: Just to be clear, a person who is the project manager in relation to another person who actually carries out the physical construction is a person who carries out that construction within the meaning of section 37(1)?

MR HUTLEY: Yes, they carry out the act of project managing. That is their construction work. So, it is a defined term. They owe a duty to carry out construction work, but construction work is a defined term, and it is defined by reference to particular activity. So, you insert the particular activity which is asserted the particular individual was carrying out, and in respect of that activity he, she or it owes the relevant duty of care.

EDELMAN J: So, your submission is that the Act is calibrated so that for any activity there can only be one statutory actor?

MR HUTLEY: Well, there may be people who do it jointly together. In that sense, you may have a partnership doing it – it could be that – but it concentrates on determining who is carrying out the work. For example, a company can be carrying out the work even though its employees are doing the work. The question is you have to say of a person: is it carrying out the work? If it is not carrying out the work, then it does not owe the duty. If it never carried out the work, it never owed the duty, and if it ceases to carry out the work and other work is done, it ceased to owe the duty. That is how we put it.

BEECH‑JONES J: So, if the principal contractor contracted someone to do the concrete pour, the principal contractor’s scope of their duty under 37(1) does not extend to the contract pour?

MR HUTLEY: Whatever the scope of its work is, if it is not carrying out the contract pour its duty is not in respect of that building work. It may have other duties, “having substantive control”, whatever that means, and that will be a function of such things as the contract, maybe laws, as to how much control you can have over activities such as welding or contract pouring and the like.

BEECH‑JONES J: But when you say it carries out you mean through its agents, not its contractors.

MR HUTLEY: We say the question is this: who is carrying out the work? If, as a matter of determination, what your Honour has referred to as a contractor is carrying out the work to the exclusion of – in respect of that particular work – the person it contracted with, then it is carrying out the work and the person. Now, in other words, there could be nuanced facts to determine who is the entity “carrying out” the work, but that will be a factual inquiry, maybe a mixed question of fact and law, depending upon a consideration of the relations between what – if I can use in a neutral sense – the actors in any given situation.

GORDON J: So, is the focus on the work or is the focus on the defect? I ask that for this question: if it is the work, then because the work is defined in section 36(1) in such broad terms, you may have one or more people doing the work in relation to the pour; you may have someone actually doing the pour, you may have someone supervising or coordinating the pour.

MR HUTLEY: Your Honour may well have that, but that is ‑ ‑ ‑

GORDON J: So, what is the focus for the purposes of the subsequent ‑ ‑ ‑

MR HUTLEY: The question is – I do apologise, your Honour.

GORDON J: It is all right.

MR HUTLEY: The focus is on the whole phrase “carrying out the work”. Who is it that carries out the construction work as defined?

GORDON J: That is my point. Do we then take each (a), (b), (c), (d) separately?

MR HUTLEY: Yes, because for example put it this way. If I am a plumber, I am doing building work, but building work is also preparing designs. I am not doing preparing designs; I am doing whatever work I am doing.

STEWARD J: Can I ask you, Mr Hutley, in identifying the person who is carrying out the work, is that done by looking at the contractual arrangements?

MR HUTLEY: That may be part of it, your Honour.

STEWARD J: Is there any other way?

MR HUTLEY: It may be the facts, as your Honours looked at in dealing with the labour hire cases – sometimes the facts may give an overlay to gainsay or augment ‑ ‑ ‑

STEWARD J: But to take a simple example of a company that an owner contracts with to build a building, it would be the contractor that would tell you that it is the company that is carrying out the building work, and not the company’s employees.

MR HUTLEY: Correct, if it is doing the work. But if it subcontracts, for example, the plumbing to a plumbing company, it is not doing the plumbing building work.

STEWARD J: Can I ask you, what if it appoints a plumber as its agent?

MR HUTLEY: Then there will be an inquiry as to whether the company is carrying out the work.

STEWARD J: If the contract provides the company to do all relevant works including plumbing, and then it appoints an agent, it is still the company, on your model?

MR HUTLEY: Quite. In other words, there would be a legal and factual inquiry as to who it is, and in the circumstances your Honour has posited for me, the conclusion may well be that the company is carrying out the work.

GLEESON J: Or both. Both the principal and the agent might be carrying ‑ ‑ ‑

MR HUTLEY: Precisely, your Honour, because the person – sorry, I am directing attention to the inquiry and, yes, your Honours are of course quite right, two people may.

BEECH-JONES J: But on your example, if you subcontract to the independent plumber, you do not carry out the plumbing work.

MR HUTLEY: Our submission is, depending upon the circumstances, a true subcontract at the conclusion of law is the person who is carrying out the work is the subcontractor, and we would say that is the person to whom the duty in respect of that work attaches.

GLEESON J: So, what is the difference between the independent contractor and the agent?

MR HUTLEY: I am sorry, your Honour?

GLEESON J: What is the difference between the independent contractor and the agent?

MR HUTLEY: Because traditionally an agent is somebody for whom you are liable, his or her behaviour, in performance of their agency, whereas an independent contractor – because they are not you, they are not doing it on your behalf in the sense given, that person is said to perform the act, not you.

BEECH-JONES J: And then you have to come to how you reconcile that with section 39.

MR HUTLEY: Your Honour, we will come to section 39, and we say that 39 is merely making clear, to take the example that your Honour Justice Gleeson observed, and Justice Steward, if I appoint an agent I cannot turn around and say I took really good care in employing an agent, so I am not in breach of this duty.

BEECH-JONES J: But you could not, though, because the agent’s acts would be attributed to you, so you would never get to that point. You could only say that if it was a contractor.

MR HUTLEY: But, your Honour, this is a statutory provision where the legislature has been at pains to say you cannot delegate your duty, to make sure there are not arguments along the lines that your Honour has indicated. For example, in the contract labour case, there are real issues being debated in these courts as to who was working for whom, and what the court has said is as long as – whatever the factual circumstance is, that a person is carrying out the work.

BEECH‑JONES J: But you use “agency” at 37(1). You accept the person in 37(1) includes the person including their agents who carry out the work.

MR HUTLEY: Your Honour, all I say is if the conclusion of fact is, on the true construction, a person is carrying out the work, which will involve a consideration if they are using an agent does that mean they are still carrying out the work? If it does mean that they are carrying out the work, then the duty falls on them. What this is, and the important point to appreciate – and I am coming to 39 – 39 takes as its point of departure: is a person who owes the duty of care under that part?

Section 39 does not create the duty. The duty and its content is found in 37. Section 37 says it falls on he, she or it who carries out the work, and then they say he, she or it who carries out the work is a non‑delegable duty. If they cease to carry out the work, they are no longer under the duty.

GORDON J: I wonder if it is even just simpler than that, and I keep harping on this, but there are four elements to construction work. Subsection (a) is “building work” – let us take (a) and (d) as the contrast – subsection (d) is someone who supervises, coordinates, project manages. Each of them is under a duty, each of them may be under the duty in respect of, in general terms, the same work. One is doing the concrete pour, one is supervising the concrete pour because contractually they are obliged to project manage it.

MR HUTLEY: But they may have completely different responsibilities ‑ ‑ ‑

GORDON J: I accept that. That is my point. Then one gets to 39 and then one says, you are both under a separate duty of care in respect of your respective obligations, and you cannot blame each other.

MR HUTLEY: With respect, that is not a question of delegating the duty.

GORDON J: It may not be delegating it, but what it is saying is that you are each on the hook for your respective obligations.

MR HUTLEY: Can I say, totally, your Honour. We accept that one does not get out. If, for example, another person is doing the pour, in your Honour’s example, and one person is supervising, they are both under their respective duties. But 39 is directed towards, you cannot delegate the duty you are under. We say that is given content by saying you cannot satisfy your duty of supervising by taking reasonable care, for example, to choose or bring ‑ ‑ ‑

GORDON J: That is my point. That is exactly right. What is that you cannot discharge your duty of supervision by saying, I chose a good person to do the concrete pour.

MR HUTLEY: Your Honour, with respect, I am in complete agreement. But what it is is that they are both under several duties.

GORDON J: It shows with precision the way in which it needs to be pleaded, though.

MR HUTLEY: Your Honour, Justice Rees has struck out our pleading, has said that we are to bring in a new pleading. The precision that your Honour is referring to will be brought to bear in the repleaded document. I take your Honour’s point with respect. That is why I say this is not a pleading case. This is a case about what is the meaning of the Act, because ultimately, it is about ‑ ‑ ‑

GORDON J: To enable you to replead it.

MR HUTLEY: Quite. Our learned friends’ position is that the proportionate liability provisions of the Civil Liability Act simply cannot be deployed when one is under a non‑delegable duty under 37, and the Court of Appeal said implicitly under any non‑delegable duty, you cannot plead the proportionate liability provisions. The first point to understand is what is the content of this duty, because that one, as I will come to in due course, to 5Q ‑ ‑ ‑

GLEESON J: Before you get to that, you have ‑ ‑ ‑

MR HUTLEY: I am just telling your Honours where I am going. I am not there, your Honour, but please – I do apologise, your Honour, I spoke over you.

GLEESON J: I am sorry. The content is going to depend on the facts about the construction work, and who carries out the construction work.

MR HUTLEY: I wholly agree, your Honour. That is why this is not a question for strike‑out. It is a question of strike‑out if you cannot, once 37 is involved because of 39, ever have proportionate liability. We just say the court is simply wrong in relation to that. But there are two routes the Court of Appeal got to that question: one through 5Q – and we say they erred there – and secondly, and principally, in the judgment of Justice Basten, he said it is implied from the structure of the Civil Liability Act that non‑delegable duties cannot be the subject of proportionate liability. That is why I am starting here with the first issue: what is the meaning of this duty, and does 5Q apply to it? To do that, I have to go first through the duty. That is the course I am proceeding.

EDELMAN J: Do you accept that section 39 and the non‑delegable to which it refers, is the ordinary sense of a non‑delegable duty, which is a duty to ensure that reasonable care is taken?

MR HUTLEY: So far as it goes, yes.

EDELMAN J: So, why could not one then just read that into section 37? So, 37 would read effectively as though it said that a person who carries out construction work has a duty to exercise reasonable care, to ensure that care is taken to avoid economic loss.

MR HUTLEY: Quite. But if they are not doing the work, or they cease to do the work ‑ ‑ ‑

EDELMAN J: Well, then there is no duty at all.

MR HUTLEY: Quite. But the court held that this non‑delegable duty attaches to us fully such that my client is, in a sense, responsible for all the activities on this site.

BEECH-JONES J: Of the subcontractors you engaged.

MR HUTLEY: Subcontractors found – as we understand, on one view of the council – but anyway, it is a bit obscure. The Court of Appeal seems to treated this as identical fully to, for example, an intervened sort of duty, i.e., a relationship duty – that is, if you add a relationship of student and school, you owe a duty to see that reasonable care is taken by everybody inside the school. It appears that the Court of Appeal – that is one of the reasons why they struck out the proportionate liability defence.

BEECH-JONES J: Mr Hutley, what I am struggling with is, if you say 37(1) is confined to the actual work that you and your agents undertake ‑ ‑ ‑

MR HUTLEY: Not necessarily agents, your Honour – other people who undertake whereby you are still able to be said that you are carrying out the work.

BEECH-JONES J: Well, who is that, other than an agent?

MR HUTLEY: There could be issues, for example – and I referred to the position with respect to labour hire. It was an issue as to whether hired labourers became your employee or not your employee. Even if they were not your employee, the court may have concluded that, still, the company which was using them, through them, was still carrying out the work.

STEWARD J: Can I ask, Mr Hutley ‑ ‑ ‑

MR HUTLEY: That may be an agency analysis, your Honour. If it is, I accept that. That was not how it was usually expressed because the word “agent” gets somewhat confused in this field of discourse.

BEECH‑JONES J: Assuming that you are talking about a person who carries out construction work in their own right or through their agents, if that is how that is to work, then what is the scope for section 39? Because the non‑delegable duty is usually applied to invoke responsibility for contractors, whereas, on your argument, if that is the case, the rocket does not launch under 37(1).

MR HUTLEY: But the problem is, your Honour – I understand the argument, your Honour, but can I deal with it this way. Section 39 only applies to a person who owes a duty of care under the Act – that is 37. The legislation, for whatever reason, has chosen to limit that duty to a person who carries out work; not to a relationship, but to a person who carries out work.

That duty owed by the person who carries out work is non‑delegable. Let that be accepted. Take the example of the classic contractor with a subcontractor. The subcontractor is carrying out the concrete pour. It follows, we say, from 37 that the head contractor is not carrying out the concrete pour. Therefore, they do not owe a duty to exercise reasonable care in respect to the concrete pour. And 39 cannot change that, because 39’s point of departure is a person who owes a duty of care under this part.

Our learned friend says he is not entitled to delegate it – acts as some form of structural transmogrification in ways which are wholly unexplained to alter the content of the duty under 37.

GAGELER CJ: Mr Hutley, I suppose I am struggling with paragraph (d) of the definition of “construction work”, not so much with the supervision, coordination, project management, but with the words that follow:

or otherwise having substantive control –

The way I read that is that one is looking for someone who has substantive control over, say, the concrete pour. Now, what does that mean – if that is the person who you are concerned with when you get to 37, what is the content of the duty that that person has?

MR HUTLEY: Can I give your Honour an example? It will be deeply fact‑dependent. I am a construction company; I have no expertise over concrete pours; I have a contract with a concrete pouring company that says they will undertake it, they will supervise it, they will do certain things, and at the end of it, it will be sent to a certifier to check whether it is all right. A question that would then arise is: on the true construction of that relationship in the circumstances, does the head contractor have substantive control over the concrete pour, and if so, to what extent? In other words, it could be a deeply factual inquiry.

GAGELER CJ: I understand that, but what is the duty – what is the content of the duty?

MR HUTLEY: To exercise substantive control with reasonable care, what substantive control you have. In other words ‑ ‑ ‑

EDELMAN J: You cannot choose the contract pourer that is not regulated or licensed and has, to your reasonable knowledge, no expertise or skill.

MR HUTLEY: Quite. Or, in the circumstances, if I see that the pourer is using inferior‑grade concrete, I may have substantive control to terminate the contract, and reasonable care may require me to do so. There may be a whole series of other circumstances where the control may be total. It may be slight; it may be limited by legal requirements. For example, to go to some of the examples given in the case, as Chief Justice Gleeson observed, the traditional non‑delegable duty was a responsibility for every casual act of neglect.

GLEESON J: Is there any pleading that can only be understood as a delegation by one or both of your clients of this duty?

MR HUTLEY: No, in our respectful submission. They have pleaded we have control ‑ ‑ ‑

GLEESON J: Would that issue just be joined by the absence of a reply?

MR HUTLEY: One, we have admitted we had control, but it really has not been fleshed out to this extent, your Honour, as to what the degree is, what reasonable care would require of that control. One of the difficulties with the strike‑out, your Honour, which was allowed, is that we said you should not strike these things out now. One should, in effect, allow for what we say is a rich‑textured analysis of the circumstances, but the Court of Appeal said – and that is where I want to go – at the end of the day, you can never have proportionate liability defence to anyone sued under section 37.

STEWARD J: Mr Hutley, can I ask you just a pragmatic question. At paragraph 8 of your outline, there is an important sentence about section 39, when you say it:

operates where a defendant has itself carried out “construction work” through an employee, agent or other person whose activities did not change the defendant as being the identity of the person –

I understand employee and agent. Can you give a practical example where there would be another person who might be ‑ ‑ ‑

MR HUTLEY: The reason why we said that, your Honour, is because the word “agent”, in this field of endeavour, becomes somewhat complex. “Employee” maintains identity. “Agent” is usually a person who is entitled to affect legal relations. “Agent” is used in a very broad sense sometimes to mean people who are working on your behalf. We did not want to, in effect, limit it by the word “agent”, because other people may say that it can go beyond that to circumstances where people are doing things in your interest, but it is not appropriate to call them an agent.

STEWARD J: Can I then ask – so, “other person” analogues to agency?

MR HUTLEY: Another person who is doing an act in circumstances which does not, on the true construction of this Act, mean that you have ceased to carry on the work.

STEWARD J: Just on that issue – sorry to harp on it – but you will know that the other person’s activities have not changed the defendant as the identity of the person carrying on the construction work because of the contractual or other arrangements.

MR HUTLEY: Generally, that will precisely be the case, your Honour.

STEWARD J: Right. Okay.

BEECH‑JONES J: Mr Hutley, your starting premise, I think, for this was that the scope of the duty under 37 correlates to the scope of the form of construction work that you undertook. So, as I understand it, you say that if your job is to supervise the concrete pour, your scope of your duty under 37(1) is only in and about the act of supervision.

MR HUTLEY: Yes. You have to exercise reasonable care to avoid – in relation to which the work is done – arising from your work.

BEECH‑JONES J: Arising from the work.

MR HUTLEY: It is the same construction work.

BEECH-JONES J: Well, if it is the defect of someone who actually did the pour, that may be, in a broader sense, still arising from your supervision.

MR HUTLEY: It could. It could be both. In other words, our whole point is ‑ ‑ ‑

BEECH-JONES J: Not your fault, but it arises from the work. In other words, (a)and (b) provide the scope of the duty, not an implication drawn from how you get there.

MR HUTLEY: I am not saying there is an implication, your Honour. I have to exercise reasonable – in relation for which the work is done. I have to exercise reasonable care to avoid economic loss arising from the work.

GORDON J: There are two things: in relation to the work done and arising from the work. As I said to you earlier, there are two expansions. There is the vertical expansion and then there is the (b) expansion.

MR HUTLEY: I now understand your Honour’s (b) expansion. I accept that, your Honour. But your duty is tied to your carrying out work and defects which arise in a sense directly or indirectly arising from your work.

BEECH-JONES J: So, if you are the principal contractor and you start and you have, as it were, some substantial control over the entirety of the work, but you have divested it through various subcontracts, it may be that your duty extends, does it not, to economic loss caused by defects in or related to a building for which the work is done, and arising from the construction work, to be the entirety of the project, would it not?

MR HUTLEY: No, with respect, because the construction must be the construction work which I have carried out.

BEECH-JONES J: Which is where we come back to.

MR HUTLEY: Which we come back to, otherwise one ends up in, with respect, absurdities that some subbie who is given a contract which is known to subcontract to others and subcontractors to others, and so on, and so on – matters totally beyond his supervision, et cetera, et cetera, and so it goes on.

GORDON J: Well, that is fact‑dependent. It may very well be, on Justice Beech‑Jones’ example, that the head contractor or the principal contractor would be on the hook on the sum facts because of the extent of their – I think his Honour put to you “substantial control over”.

MR HUTLEY: Your Honour, if they have substantial control and they have not exercised reasonable care in relation to that substantial control, I wholly agree. But one could exercise reasonable care in respect of substantial control while somebody over whom one had control was negligent in respect of their task, such as the pour. So, in other words, you could exercise substantial control or have substantial control with reasonable care, and yet the pour is through an incidental act, unobservable, not reasonably able to be observable, not reasonably able to be controlled, but still negligent by the pourer.

GAGELER CJ: Mr Hutley, you took us carefully through Part 2 of the Act to emphasise, I think, that the principal contractor has many duties to ensure that things are done.

MR HUTLEY: Yes.

GAGELER CJ: And yet when we get to Part 4, the effect of your submission is quite the opposite.

MR HUTLEY: No. Well, your Honour, the language used is wholly different, firstly, and 39 attaches only to the person who is under the duty. They do not say that the person who owes a duty of care is under a duty to ensure that – it could, but the problem is that it is tied to the activity of construction work. The real problem uses traditional – and that is why I took your Honours to “doing”. Traditionally, a non‑deliverable duty type relation – and we have referred to the case, and I am not going to take you through them – attached to a relationship. They do not attach to activities; they attach to relationships, and they say that you have to take reasonable care – you have to ensure that reasonable care is taken in that relationship.

That is why the hospital is liable for the independent surgeon who comes into the hospital and performs an operation, because their relationship and their duty to their patient arises when the patient becomes a patient of the hospital, not when the patient appears on – comes, as it were, under the knife. For whatever reason, the legislature has chosen to define this duty by reference to carrying on work. That is the fundamental difference between it and all other cases. Even the statutory cases where there was found a non‑delegable duty have all used the word “ensure” some outcome.

That is why I took your Honours to the first Part, to show, firstly, that the legislature was acutely aware of obligations to ensure outcomes – one. Secondly, in the first two Parts, the legislature was acutely aware of the distinction between ensuring an outcome, or taking reasonable steps to ensure an outcome, and carrying out that outcome, because that distinction is in Parts 2 and 3. The important point we seek to make is that very distinction is carried into – excuse the pun – Part 4, and the activity of carrying out is shown to be that which defines the scope of the duty which, as this Court has said, is the first step you have to undertake before you try to work out what is the scope of a non‑delegable duty.

You firstly have to work out the scope of the duty, as I think was indicated by Chief Justice Gleeson – I have forgotten the name of the case for a moment, but I will get it for you. In two seconds I will give your Honours the name of the case – he says the first thing is the scope of the duty. We say you start with 37: what is the scope of the duty?

GORDON J: It is Lepore.

MR HUTLEY: Your Honour is too kind. And that is the essential first step. That is done by working out the metes and bounds of section 37. The non‑delegable aspect which attaches to that duty is constrained to operate within the scope of the duty. What our learned friends would have the Court do is say that 39, in some magical way, alters 37 in a way which is wholly unclear in its operation.

GLEESON J: But another way that it operates is to say that you will not be able to rely on any facts that involve delegation of the duty in your defence, because you are not entitled to delegate performance of that duty.

MR HUTLEY: I accept that completely, but engaging a subcontractor to do the pour is not delegating anything, it is just determining that somebody else will carry out the activity.

GLEESON J: This is why it comes back to the facts.

MR HUTLEY: Yes, your Honour. I think I am about to outlast my welcome.

GORDON J: It is quite difficult – this appeal is quite difficult in that sense. In one sense it is ‑ ‑ ‑

MR HUTLEY: I am sorry, I missed the beginning of your Honour’s question.

GORDON J: This appeal is quite difficult because we are being asked to, in effect, determine a question of construction of an intersection of two really important Acts without many facts.

MR HUTLEY: Your Honour, the Court of Appeal did not feel ‑ ‑ ‑

GORDON J: I am sorry, I should say I speak only for myself.

MR HUTLEY: An application was made to prevent us from pleading these proportionate liability defences. It was successful in the Court of Appeal, and I will take your Honours through the Court of Appeal’s judgment in due course, and it was successful by saying that one could pass through 5Q, which was essentially the view taken by her Honour Justice Adamson, and Justice Basten took the view that there was an implied preclusion of non‑delegable duties from the proportionate liability defence and section 5Q.

So, I have to go through this. Your Honour, this is, I can tell your Honour, a case of enormous importance in New South Wales, because I am told that many, many cases are awaiting the outcome of this because the Court of Appeal’s judgment remains one simply cannot plead a proportionate liability defence when section 37 is involved, and that means a whole lot of cross‑claims against people have to be started. If it is wrong – ultimately wrong – and one ran the case, it would also have the result that people would be harmed because, as I will come to it, under 34A(3) of the Civil Liability Act, unless expressly excluded, you have to apply the Civil Liability Act and the proportionate liability defences.

So, I accept, your Honour, it should not have been dealt with perhaps on a strike‑out, but it was, and therefore that is where we are. We opposed it. Now, you will see from the submissions we submitted, Justice Rees accepted that – she thought it was available, but we also submitted that it was inappropriate to not allow the pleading to go forward – case to go forward, but there we are.

I have taken your Honours through 39. I should note 40, there is no contract dropping out. I will come back to these things. We have cut out a lot of the debate during the morning, I will be able to truncate things. Section 41 preserves all other rights and obligations – 41(1). Subsection (3), which is of some importance, is:

This Part is subject to the Civil Liability Act –

The only other provision I need take your Honours to is clause 5 of the schedule, which your Honours will find on page 184. That provided that there was, in effect, an extension retrospectively of the entitlement to claim damages under section 37 back in respect of any damage which had become apparent up to 10 years before the commencement of the Act. That may well, as we say, explain why this duty could be seen of a limited variety. It was a wholly new duty; it was extending retrospectively for 10 years – and there it is.

That is all I wanted to take your Honours through in that Act. Can I now go through the Civil Liability Act. Can we start – I will not take your Honours through the introductory provisions of this Act; your Honours are all familiar with them. Can I start, though, with section 3C. Your Honours will find that in the joint book of authorities, Part A, volume 1, page 27:

Any provision of this Act that excludes or limits the civil liability of a person for a tort also operates to exclude or limit the vicarious liability of another person for that tort.

In other words, this section seeks to equate the position of a person who is vicariously liable, so far as extent of liability is concerned, to that of the wrongdoer, for whom the person is vicariously liable. We will submit that if proportionate liability were available to the wrongdoer to limit its liability, it will also be available to the person vicariously liable for the wrongdoer’s failure to take reasonable care.

Can I then go to 5A. Will your Honours just note that this goes to the issue of whether 5Q – section 37 – creates a tort. I am going to be short with that, your Honour; I think it is sufficient to rely on our written submissions, if your Honours would note that. Then one can move over, I think, to 5Q. It says:

The extent of liability in tort of a person (the defendant) for breach of a non-delegable duty –

Then it says – it does not stop there – it is a non-delegable duty of a particular type:

to ensure that reasonable care is taken by a person in the carrying out of any work or task delegated or otherwise entrusted to the person by the defendant is to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work or task.

The formula after the words “non‑delegable duty” is what might be called the classic formula, which is developed by this Court, to frame the character of a non‑delegable duty. It was a form, which I think as your Honour Justice Edelman observed, developed to cater for independent contractors and the consequences of it. It came out of the report, which your Honours will find at joint book of authorities, Part E, volume 6, commencing at 1700 ‑ ‑ ‑

EDELMAN J: Which tab is that?

GORDON J: Tab 51 – it is 51, Mr Hutley.

MR HUTLEY: Thank you, your Honour.

BEECH-JONES J: This is the Ipp Report?

MR HUTLEY: Yes, what is called the Ipp Report. The relevant section dealing with non‑delegable duties and vicarious liabilities your Honours will find commencing at page 1878, and it goes over to 1882, where your Honours will find – I will not take your Honours through the detail of what are non‑delegable duties – to the recommendation, which is Recommendation 43 at 1882. That recommendation led to the introduction of 5Q. The reasons are shortly summarised in paragraphs 11.17 and 11.18. Can I commend the balance, but having regard to time, I am not going to take your Honours through the detail – it is, in effect, the broad analysis of the history of these matters.

The drafting of 5Q, as I have said, returning to it if I could, adopted words directed to the situation addressed in the numerous cases in this Court. We will submit it has, in effect, no sensible application to sections 37, 38 and 39 of the Building Act, but if it did, it would be limited to circumstances where the defendant remained under the 37 duty, i.e., that of carrying out the construction work even though it had chosen a person to perform its work whereby the defendant was still the person carrying out the work, to use the formula that has become “current employee” or “agent”, making allowances for the matters that I indicated.

Those are the two provisions. Can I then come to Part 4. Your Honours will find that at 79 in the joint book of authorities.

GORDON J: Could I just ask one question, which is just a practical question. In the Design Act, it says that Act is subject to the Civil Liability Act. If it is not 5Q or Part 4, what other parts of the Civil Liability Act apply to the Design Act?

MR HUTLEY: Damages parts.

GORDON J: I see. Thank you.

MR HUTLEY: And matters in contributory negligence, and matters of that variety, your Honour.

BEECH-JONES J: Also, the description of breach and causation and all that would apply, would it not?

MR HUTLEY: Various matters.

GORDON J: All of those apply.

MR HUTLEY: Those apply, as we understand.

GORDON J: Thank you.

MR HUTLEY: Turning to Part 4, if I might ‑ ‑ ‑

GAGELER CJ: If that is a natural break in your argument, we will take the morning adjournment.

AT 11.14 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.28 AM:

MR HUTLEY: Could I take your Honours to Part 4 of the Civil Liability Act. It is at page 79 of the relevant joint book of authorities. One starts with section 34. It applies to apportionable claims. I am going to concentrate on 34(1)(a):

a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury –

Now, the scope of that clause is not – there is a matter of some debate as to if the claim has to be formulated as one in negligence or the claim merely has to involve a finding of failure to exercise reasonable care. Your Honours are not concerned with that debate.

Just to tell your Honours the nature of that debate, it was the subject just last week of extensive discussion in the Court of Appeal in a case called Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232 – I will not take your Honours to it, it is just for your Honours’ information. Next, if your Honours note (1A):

For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action –

Et cetera. And then “concurrent wrongdoer”:

In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.

The essential idea is relatively clear, though difficulties can arise in its application. It would appear that the better view is that, in cases of what might be called pure vicarious liability, faultless legal responsibility for the wrong of another, the wrongdoer and the principal are not concurrent wrongdoers as between themselves. That has not been finally determined, and we have referred your Honours to various views at our submissions paragraph 47, but we do not think your Honours need to be concerned with that problem in this appeal.

Now, we submit that a person under a duty in section 37 of the Building Act can be a concurrent wrongdoer. We will submit that that is so whether or not section 5Q applies to the person. However, if our preferred view be correct, there can of course be another concurrent wrongdoer of the wrongdoer for whom a person is vicariously liable. As we have pointed out, section 3C operates that that would allow the defendant – namely, the person vicariously liable for the wrongdoer in another – to limit its liability as against that other concurrent wrongdoer in the same way as could the wrongdoer for whom the defendant is vicariously liable.

If that be correct, the same position should apply under 3C, where a person is under a non‑delegable duty within 5Q of the Civil Liability Act as that provision seeks to equate the position of the defendant under the non‑delegable duty to that of the person who is vicariously responsible for the wrongdoing of another. Can we just draw your Honours to section 34(3):

For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1).

If your Honours note (3A), the only point to make is it does not refer to the Building Act with which we are concerned.

STEWARD J: Do we know why (3A) was inserted?

MR HUTLEY: It was presumably considered that where the relevant home building warranty was in place, it should not be subject to proportionate liability. Your Honours note (4). Can I take your Honours to 34A. It says:

Nothing in this Part operates to limit the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer) in proceedings involving an apportionable claim if –

Three circumstances are applicable, none of with which we are concerned. The important point is (3):

The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Part.

GORDON J: What is the significance of that?

MR HUTLEY: The conclusion of the Court of Appeal was that persons under a non‑delegable duty cannot see to avail themselves of Part 4 of the Civil Liability Act because of an implication under the Act. That is directly inconsistent with section 34A(3). In other words, 34A(3) requires if you are not excluded – I will come to 39(a) in a moment – then you must apply the application if you are a concurrent wrongdoer. The Part must apply.

GLEESON J: Just going back to the definition of “concurrent wrongdoer”, it seems to be based on facts rather than any finding of liability or any wrong.

MR HUTLEY: Yes, that is concurrent wrongdoer.

GLEESON J: So, the concurrent ‑ ‑ ‑

MR HUTLEY: But the limitation lies in 34(1)(a) or (b).

GLEESON J: Does it also arise in 35 where you have to identify the extent of responsibility?

MR HUTLEY: Quite. You have to do that. But that is where you have got to an apportionable claim, then one in effect has to undertake an exercise and it may in certain circumstances be a difficult exercise. But that is the work – 35 through 37 is the working out of the applicability of the provisions.

GLEESON J: I might be being slow about this, but the apportionable claim that arises from a failure to take reasonable care, does that imply that everyone who is a concurrent wrongdoer must be the subject of a finding of failure to take reasonable care, or just the person who is seeking to invoke the proportionate liability provision?

MR HUTLEY: Your Honour, the way that the section operates, of course, there is a defendant, and it claims that it is a concurrent wrongdoer with other people.

GLEESON J: Yes.

MR HUTLEY: It then names those other people and the way in which they are said to be concurrent wrongdoers, and the claim against them falls within the proportional – sorry – the concurrent wrongdoers have contributed their wrongdoing to that loss you allege.

GLEESON J: Yes, but where does the allegation of wrongdoing come from? Does it come from the definition of “concurrent wrongdoer”?

MR HUTLEY: Where it says:

In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of two or more persons whose acts or omissions . . . caused, independently of each other or jointly, the damage –

It is the allegation of defence from the defendant that A, B and C are concurrent wrongdoers because their wrong – this is an apportionable claim; it is a claim for breach of duty, et cetera. We say these people whose acts and wrongdoings caused damage contributed to the damage. That is the way it works.

EDELMAN J: Yes, but what you are doing is you are inserting – I think Justice Gleeson’s point to you is that you are inserting the word “wrong” ‑ ‑ ‑

MR HUTLEY: I understand that, your Honour.

EDELMAN J: ‑ ‑ ‑ before the words “acts or omissions”.

MR HUTLEY: Quite. I do not want to go into the precise detail ‑ ‑ ‑

GLEESON J: But you have pleaded wrongful acts or omissions anyway. Is that it?

MR HUTLEY: Quite. I am not going into the extent to which they have to be in the nature of those wrongs. They are not before your Honours because we have pleaded neglect by these other people. But that is how it is structured.

GORDON J: Your short point is they do not need to be a match or a mirror between the concurrent wrongdoers ‑ ‑ ‑

MR HUTLEY: Yes.

GORDON J: ‑ ‑ ‑ in terms of the nature of the acts or of the claims that will be made against them.

MR HUTLEY: They do not have to be a mirror of acts, they have to be acts relevantly here involving negligence which, in effect, contributes to the apportionable claim for loss, et cetera – “damage or loss that is the subject of the claim”, which the apportionable claim, in effect. That is kind of how it works, as I understand it, in our respectful submission.

Now, just to tell you where we are then – as your Honours appreciate, 41(3) makes the Building Act subject to the Civil Liability Act. We say the effect of that, together with 34A, that as along as a section 37 claim could be – this is an apportionable claim is made against us; my clients – and we allege that other people who are under similar duties acted negligently and contributed in one way or another to the various parts of the loss, we say they are concurrent wrongdoers.

STEWARD J: Could I ask you, Mr Hutley, does your construction of section 37 – do you need that in order to demonstrate proportionate liability applies?

MR HUTLEY: No, your Honour, because – this gets to our issue 3 in a way, your Honour – if your Honours were, for example, to construe 37 and 39 to, in effect, instantiate – could I broadly call – the common law concept of non‑delegable duty such that 5Q was engaged, we would accept – having regard to, and I was going to come to this provision, particularly section 39(a) of the Act – that we would be liable for the proportion of the liability for which the person to whom we delegated the duty was liable.

In other words, we could not get apportionment against that individual, but if that individual could get apportionment against another person – proportionate liability – we could take advantage of that. Of course, if that other person was another person for whom we were responsible for a non‑delegable duty, they could apportion their liabilities, but we would be responsible for the full amount of each of their proportions. Your Honour sees the point.

EDELMAN J: So, how are you a concurrent wrongdoer on that basis?

MR HUTLEY: Our preferred view is we are not a concurrent wrongdoer, but the person for whom we are liable ‑ ‑ ‑

EDELMAN J: Because there is no act or admission.

MR HUTLEY: Precisely, your Honour. That is why we say that 3C says we can be in as good a position under this Act as the person for whom we are vicariously liable; see 5Q. Therefore, if the person to whom we delegated was negligent, he, she or it may be able to claim proportionate liability against another person. If so, we would be able to take advantage of that by operation of the combination of 3C ‑ ‑ ‑

EDELMAN J: If your primary position of a concurrent wrongdoer is right, what does 5Q do?

MR HUTLEY: At the most, put us in a position with respect to – to use the camp we are using – our employees and agents that we be treated as if we were vicariously liable for them such that we would be responsible for the act; we could not seek proportionate liability between us and them.

BEECH-JONES J: Mr Hutley, can I ask that with a, say, concrete example. Say you have a principal contractor, and say they engage one person to do a concrete pour ‑ ‑ ‑

MR HUTLEY: Under a subcontract?

BEECH-JONES J: Yes, and another person to do the plumbing. Your construction of the Design Act is to the effect that if that is all we do, we do not carry out the concrete pour and we do not carry out the plumbing. I think you have said, though, we accept that if the Act reflects the common law and we do have a non-delegable duty for the concrete pour and the plumbing ‑ ‑ ‑

MR HUTLEY: So, we are responsible for, in effect, to see that reasonable care is taken in the concrete pour ‑ ‑ ‑

BEECH-JONES J: And there is some defect that involves a combination of a bad concrete pour and bad plumbing, you cannot take advantage of Part 4, but each of the concreter and the plumber if they were sued, even though they own their own form of non‑delegable duty, could.

MR HUTLEY: Could.

BEECH-JONES J: Is that where we get to?

MR HUTLEY: Quite, and we would be 100 per cent liable for each of their performances.

EDELMAN J: Except there is an intermediate step. You say you are not a concurrent wrongdoer if the act or omission is the act or omission by the plumber or the pourer, which has nothing to do with your supervision.

MR HUTLEY: I accept that completely, that is where 3C and 39(a) come in.

EDELMAN J: Yes.

MR HUTLEY: I am able to be put in the same position as my plumber and my concreter would be put. Let it be seen there was a fourth person who was not a delegate of us and, to give a condensed example, the council.

BEECH‑JONES J: Then you would say we have an apportionable claim.

MR HUTLEY: The plumber has an apportionable claim, the concreter has got an apportionable claim, we – by the combination of 3C and 39(a) – can take advantage, where to be put, so far as extent or limit of liability is involved in the same position as they are. That is how we say it operates.

BEECH‑JONES J: But on the case against you there is no council equivalent in this case, is there?

MR HUTLEY: There is a council. That is the whole point. That is issue 3.

BEECH‑JONES J: I see.

MR HUTLEY: The court said – and we say this is wrong on any view of circumstances, and it is due to the implication, as we understand it – that a person subject to a non‑delegable duty cannot take advantage of Part 4 proportionate liability. That is why ‑ ‑ ‑

BEECH‑JONES J: That is even where the wrongdoer was not someone within the scope of their non‑delegable duty.

MR HUTLEY: Of the delegation, if I can use it.

BEECH‑JONES J: Yes.

MR HUTLEY: That, we say, was the council. We say it is also the certifier who, although we appoint, is under an independent statutory obligation to act in certifying free of our control, and also we say it is the manufacturer of the panels, which was an organisation with which we had nothing to do. We did not control their manufacturer in any way, and they are liable for ‑ ‑ ‑

GLEESON J: Are there agreed facts that the things – the acts or omissions of each of those three do not – could not constitute carrying out construction work by your clients?

MR HUTLEY: No, but what we are going to say, your Honour, is that was not the case determined. The case was determined as – and it really was a bit of a by‑blow in the Court of Appeal, as a matter of history – is no one ever suggested that the acts of the local council were our acts, unsurprisingly, and the certifier’s certification is, by statutory mandate, independent of us, and has to be.

GORDON J: Can I ask a question. Is that submission entirely predicated on them being jointly, rather than independently of each other, responsible for the damage? Concurrent wrongdoer has two aspects:

caused, independently of each other or jointly, the damage or loss –

MR HUTLEY: Yes, either one. We would say the council would be independently of us, we would say the maker of the panels would be independently of us, and we would say the certifier would be independently of us.

GORDON J: Why are you not all jointly responsible for the damage? This is a point I raised with you earlier because your acts are different but the acts collectively give rise to a loss or damage.

MR HUTLEY: On the assumption that we are all in breach and it has all contributed, I agree with your Honour, but that is when the proportionate liability applies. The court determines our proportion.

GORDON J: I understood you earlier, a moment ago, to say that you are not concurrent wrongdoer.

MR HUTLEY: If we are in the position of 5Q, we are equated, so far as limits of liability are concerned, to the position of a vicarious liability position. If there is true vicarious liability, it is probably the case there is not concurrent wrongdoing between the wrongdoer and the person for whom that wrongdoer is vicariously liable. Where it is what might be called the “classic” variety of vicarious liability, such as your Honour Justice Steward and your Honour Justice Edelman referred to in the case which has now escaped my mind ‑ ‑ ‑

STEWARD J: Schokman.

MR HUTLEY: Thank you, your Honour. In those circumstances, this comes about, your Honour, as the interreaction of 3C, 5Q, and 39(a).

GLEESON J: If 5Q does not apply, then you are a concurrent wrongdoer, and you say the provisions apply in its terms.

MR HUTLEY: Exactly.

GAGELER CJ: Mr Hutley, is there any case law on the application of the proportionate liability provisions to a classic common law non‑delegable duty?

MR HUTLEY: No. So far as I am aware, your Honour. There is a number referred to by the Court of Appeal, so unless it has happened since then. Mr Di Francesco is muttering. If I have said something wrong, I will let you know in a few moments, your Honour.

GAGELER CJ: On one view of your submission, you do not get through the concurrent wrongdoer definition. Another version is you somehow get to that, but 39(a) takes you out.

MR HUTLEY: We are looking at 37. We are the defendant, we are being sued for negligence, and that is what we are being sued for. The concurrent wrongdoer is a person whose acts or omissions cause, independently of each other, the damage or loss. We say if we are liable for causing these various types of losses, a number of other subcontractors, which I will come to, were; the council was, et cetera. I will come to and step your Honours through that in due course when I get to it.

Even if you are under a non‑delegable duty, you must be a person whose acts or omissions caused, independently of others, the damage – or jointly – because if we are under a classic duty, a duty to see that reasonable care is taken, we must have omitted to do an act – namely, to see that reasonable care is taken – and therefore must be a concurrent wrongdoer. That is how we put it, your Honour.

GORDON J: Although you answered to Justice Steward that your construction of 37 can be put to one side, arguably, and you still get home, as I understand your position, your position is that 37 in its terms does not give rise to the kind of non‑delegable duty being addressed in 5Q, and that in a sense, one falls back on the example or question just put to you by the Chief Justice, giving rise to the kinds of analysis we have been discussing in relation to (1A) giving rise to concurrent wrongdoers in 34(2) of the Civil Liability Act, and that is the simple route home as far as you are concerned.

MR HUTLEY: Precisely, your Honour.

GORDON J: Is anything to be made historically – and I do not know when (3A) of 34 came in – that Parliament has turned its mind to that there are express exclusions? You have 34(3A), and then you have 34A, which itself gives rise to a whole lot of express exclusions.

MR HUTLEY: Yes, and you may take 39(a) as being an exclusion if you take a view other than our view, that some of the cases do, that there can be a concurrent wrongdoing between a wrongdoer and the organisation for which it is strictly vicariously liable. They are the cases that I referred your Honours to where we do not think you need to determine that question. There are three views which we refer to in our written submissions as to how that might work out. We say it does not matter in this case.

GORDON J: Are you going to come to 39 in greater detail?

MR HUTLEY: I am on my way, your Honour.

GORDON J: Thank you.

MR HUTLEY: Now, I just referred back to 41(3) in the Building Act. Then one comes to 35 to 38. This, in effect, deals with the operation where one has an apportionable claim and one has a concurrent wrongdoer, and it says:

In any proceedings involving an apportionable claim—

(a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting –

the relevant proportion. I will not go through the detail of it, your Honours are, no doubt, familiar – and:

(b) the court may give judgment against the defendant for not more than that amount.

And then it deals with the situation which is referrable back to 34(1A), where you have both a proportional claim and a non‑proportional claim – I am not going to take your Honours through it. And then 35(3) deals with the means in which – it says:

In apportioning responsibility between defendants in the proceedings—

(a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent –

It deals with that, and:

(b) the court may have regard to the comparative responsibility –

Et cetera. Now, (4) makes clear it:

applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.

And then 35A deals with the obligation of the defendant to inform the plaintiff about concurrent wrongdoers, and that is really, in effect, a fair notice point, I do not need to go through the detail. Then 36, which is a provision of some significance to Justice Basten, is:

A defendant against whom judgment is given under this Part as a concurrent wrongdoer in relation to an apportionable claim—

(a) cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which the judgment is given against the defendant), and

(b) cannot be required to indemnify any such wrongdoer.

Now, I think his Honour thought that there was a difficult problem when you have multiple persons for whom one’s, as it were – who are wrongdoers and there are non‑delegable duties on you in respect of both, but we say that that is a false problem, which I will come to. Now, “Subsequent actions”, that deals with in 37. Then 38 says “Joining non‑party concurrent wrongdoer” – your Honours see what may have their Honours there – and then 39(a). Section 39(a) provides nothing:

prevents a person from being held vicariously liable for a proportion of any apportionable claim for which another person is liable –

That is really in effect saying this, as we understand it, is where there is vicariously liable, nothing in this section prevents the organisation vicariously liable for another to be responsible for that other’s proportion of any liability. So, it is in effect not saying that vicarious – the person who is vicariously liable can say, I can run a case that I am not liable for the whole of the person who I am vicariously liable for. There cannot, as it were, be a split and a sharing of burdens between the person for whom one is vicariously liable and yourself, as we read it.

BEECH-JONES J: Do you accept that in that simple case, say, an employer cannot – you would strike out a defence that sought to plead that?

MR HUTLEY: Yes, so that I should only be 50 per cent because my employee should be liable for 50 per cent, they of course both being able to be liable. That is as we see it, your Honour. Then there is a similar sort of provision with respect to partnership, your Honours will in (b).

GAGELER CJ: Do I understand you to accept that when that is read with section 5Q, it can be read also as meaning that nothing in this Part prevents a person owing a non‑delegable duty from following on?

MR HUTLEY: If I can take your Honours shortly back to 5Q to explain precisely how we put it, the extent of our liability in tort – our liability is to be determined as if the liability were vicarious liability. In other words, we are to be treated if we are under a 5Q liability, relevantly as if we were vicarious liable for the wrongdoing of the person to whom we delegated the duty. It is very important, having regard to issue 3, that this is only vicariously liable for the person to whom we delegated, not for any other person.

BEECH-JONES J: Not the council, in your example?

MR HUTLEY: Not the council.

EDELMAN J: I do not understand how that works for the non‑delegable duty. Are you saying it is only for that part of the non‑delegable duties for which there could be vicarious liability? Say you have an example outside the scope of the Building Act, an ordinary example of a mink coat that is bailed to a dry cleaner and then the coat is stolen, perhaps by an employee, are you saying that section 39(a) and 5Q apply only to prevent the dry cleaner from apportioning the claim based upon a theft where it is an employee who has stolen the mink coat, but not if it is a non‑employee? In both cases there would be a non‑delegable duty, but only in one instance would there also be vicarious liability?

MR HUTLEY: No, we say that this, in effect, takes the non‑vicarious case, non‑delegable duty, and says that your liability, the extent of your liability in the tort – person being sued, dry cleaner – is to be determined as if it was a liability for which you were vicariously liable.

GLEESON J: Or you could say as if the independent contractor was your employee.

MR HUTLEY: Another way of characterising it, your Honour, I accept.

EDELMAN J: Or the thief was your employee, and so on, yes.

MR HUTLEY: Exactly. That is what it seeks to do ‑ ‑ ‑

GORDON J: Sorry, I misunderstood that. I thought that by reference to 5Q it was limited to people who had work or tasks delegated to them, or was otherwise entrusted to them by the defendant.

MR HUTLEY: I am assuming in the example that Justice Edelman gave me, the employee was, in effect, given access to or entrusted with some dealing with the code. It might be different if the employee, for example, broke in at night, and then there would be a question of whether you are vicariously liable for them. I am assuming – for the employee, you do not need it. For the non‑employee example, you have to have an entrustment or the delegation of a task, and I am assuming that that is satisfied. If it is not satisfied, then 5Q does not speak. That is one of our points, as I have said. Section 5Q is very specific as to its scope of operation.

GORDON J: Sorry to harp on this. So, you have two complaints about 5Q. You have the disconnect, as you put it, between a duty to ensure that reasonable care is taken, read against the provisions in the Design and Building Practitioners Act, and the second is the idea that the scope of it, even if it is against you, is limited to those kinds of people. That means it is fact‑dependent.

MR HUTLEY: Yes. It is fact‑dependent because 5Q speaks in terms of:

to ensure that reasonable care is taken by a person in the carrying out of any work or task delegated or otherwise entrusted to the person –

You have to, in effect, identify a person who satisfies that predicate. If you do not have that, then 5Q simply does not speak to it. It simply does not operate. Can I now, after that – and I can be much shorter, since we have debated a lot of the principles, but I just want to go, if I can, relatively quickly through issue one.

GORDON J: Sorry, just one more question, I promise. Does that mean you have now dealt with 39(c), or does that just not arise ‑ ‑ ‑

MR HUTLEY: Section 39(a)?

GORDON J: No, 39(c).

MR HUTLEY: I am sorry, I thought your Honour said 39(a) to me. I do apologise.

GORDON J: Do they have no role to play in this?

MR HUTLEY: I do not think so, your Honour, or it has not been conceived that it does, because 41(3) of the other Act makes one subject to this Act, and this Act requires in 34A(3) that unless expressly dealt with, et cetera, you have to apply apportionable. We would say there is nothing in the other Act which precludes it.

Can I deal with issue 1, and to address the issue, it is necessary to analyse Part 4. As I said, it was made clear by Chief Justice Gleeson in New South Wales v Lepore, which is joint book of authorities Part C, volume 4, tab 28, page 858, at paragraphs 19 to 22, pages 874 to 876, and particularly at paragraph 22 that when considering issues of delegating duties of care:

the first step is to identify the extent of the obligation that arises out of a particular relationship –

That is done here by focusing on section 37 in the way we have sought and we will develop shortly – the relationship is limited in the manner which we have indicated and going to further develop in a minute. That is, the duty is upon the person who carries out the construction work, whatever it is. That, of course, brings into focus the scope of 39 in its operation.

In other words, following the analysis, we say, mandated by the Chief Justice, and say correctly, first you have to find the scope of the duty. The duty finds its place in 37. Then determining that the duty cannot be delegated, or it is of a non‑delegable character, that is done – and its extent takes as its point of departure the scope of the duty. It does not, in effect, create another duty. We say that Chief Justice Brennan in Northern Sandblasting Pty v Harris – that is joint book of authorities part C, volume 4, tab 29, page 976 at page 994 – also stressed the need to identify the content of the duty as an intellectual step prior to determining issues of delegations.

We say the fundamental error of the Court of Appeal – Justice Adamson and Justice Basten – is that neither of them did that. One sees that particularly if your Honours can take up the core appeal book at page 40, paragraph 11, and the core appeal book after that at page 51, paragraph 45. It is most clearly stated at that paragraph by Justice Basten, who said:

The nature of the duty under s 37(1) of the Design and Building Act requires no analysis for present purposes beyond noting that it is a duty imposed on a person who carries out construction work –

Et cetera. We say that was the steps that had to be taken, was not taken – and that had to be taken before one approached 5Q.

Going back to it, we have taken your Honours through the definition of “construction work” and with one possible exception, it refers to activities – the exception is subsection (d), which I have taken your Honours to, in the:

or otherwise having substantive control –

Et cetera. I will not take your Honours back to it. And as we submitted earlier, it may be accepted for the purpose of argument that subsection (d) extends beyond exercise of control to possession of power of control. That, of course, will be a question of fact as to whether that state existed and its extent at any point of time, and that will be potentially a complex factual inquiry.

As we said, to say that one has control over particular activities cannot be equated with undertaking those activities, and, therefore, one cannot equate an obligation to exercise reasonable care in respect of one’s position of control to an exercise of reasonable care in undertaking an activity over which another person has control.

GLEESON J: So, in what sense do you say that section 39 provides for delegation of duty? It must mean delegation of the performance of the duty by carrying out construction work, must it not?

MR HUTLEY: As long as it is the carrying out legally is by the same person, because the moment the person ceases to carry out the work, they are not under the duty and, therefore, any question of delegation must evaporate.

BEECH-JONES J: Mr Hutley, I think that is the argument you were putting earlier. Was that actually put to the Court of Appeal, this argument about the scope of the carrying out the performance of the work?

MR HUTLEY: I am not sure it was certainly put in those terms, your Honour. The difficulty is, of course, that the Court of Appeal and Justice Basten said that he does not have to consider these questions.

BEECH-JONES J: Well, maybe because no one had asked him to, but I am just curious, that is all. Take it on board.

MR HUTLEY: Your Honour, this, in my respectful submission, is a pure question of law, and no one has taken any point – our learned friends have taken no point in relation to it – and one simply has to address the true construction of this Act.

GORDON J: Mr Hutley, could you explain to me why it is that one adopts a different approach to substantive control from the other elements of construction work for this reason: back to where I started, I put to you earlier this morning ‑ ‑ ‑

MR HUTLEY: I understand your Honour’s difficulty. Can I take your Honour to it for a moment – to the relevant section. If your Honour goes to “construction work” and looks at (d), page 142, “supervising” – there is a particular decision of Justice Stevenson and other courts, it said, supervising means an activity; coordinating, that is an activity, project managing – and then it says:

or otherwise having substantive control –

GAGELER CJ: Is “project managing” an “activity” in the same sense?

MR HUTLEY: Yes, it involves activity.

GORDON J: Why is substantive control not an activity? In the sense that I can have substantial control over the building operations by standing there and ensuring that the work is done and contractually being bound to do it – why is that not an activity? Having control requires you to do things.

MR HUTLEY: Your Honour, there was an interlocutory judgment in this Court which our learned friends would have referred to where – in the Supreme Court, Justice Stevenson, I think, determined that there may be a distinction – or arguably, because it was an interlocutory case in this case, that having substantive control over the carrying could extend to a person who had the power to control but was not exercising it. So, in effect, it referred to a potential control as opposed to actively exercising. Now, we disputed that. That is an interlocutory decision. That will have to be determined on a final basis somewhere down the track. But for the purposes of this argument, we have not appealed against that. I am prepared to accept it is arguable that having substantive control goes beyond the Act.

We will submitting at the end of the day in an appeal someday in this case, if this case ever went to appeal, that having control had exactly what your Honour – having substantive control, if nothing else, ejusdem generis with the preceding words was referring to an activity having in the sense of activating or possessing control. But we accept that it is arguable, and we are prepared to argue the case on the basis that it has a more expansive meaning to having control, in effect, like a contractual power.

GAGELER CJ: Mr Hutley, can I ask you a really simple question which involves relating the definition of “construction work” to the pleadings here. Where do your clients, on the case pleaded against them, fit within that definition and where do the concurrent wrongdoers to whom you point fit within that definition?

MR HUTLEY: Your Honour, rather than, in effect, go through the pleading now – it is a rather long document – can I take that as a note to hand to your Honour ‑ ‑ ‑

GAGELER CJ: Please.

MR HUTLEY: ‑ ‑ ‑ after lunch, and those beside me will prepare that note, your Honour. To do it now is just going to waste your time and make me depressed.

GORDON J: I wish you could have seen the face.

MR HUTLEY: It would probably embarrass me in some way.

BEECH-JONES J: Mr Hutley, on your argument, I think, which you just made, is directed to effectively – a principal contractor effectively contracts the whole building out, and you have reserved the right to argue at trial that is not construction work.

MR HUTLEY: Well, we will say whether – we say if they are not carrying out the work that is done ‑ ‑ ‑

BEECH-JONES J: I understand that.

MR HUTLEY: If they are not carrying it out, there will be an issue: do they have control and the nature of that control. It may be different for different contracts.

BEECH-JONES J: But that presupposes that carrying out construction work is confined to them or their employees or some as yet to me unclear category of persons for whom they are legally responsible for other than 39. Is that right?

MR HUTLEY: When your Honour says other than ‑ ‑ ‑

BEECH-JONES J: Other than by virtue of section 39, you postulate that carries out construction work has to be by the principal contractor or their employees or category of agents for whom they are legally responsible.

MR HUTLEY: I do not contend to any absolute limit. All I say is, there will be a requirement in any given circumstance to ask, who is carrying out the construction work, whatever it is. If it is my client – for whatever factual matrix it is determined there doing it, whatever the construction work is, then we are liable, and we cannot delegate that.

BEECH-JONES J: All right. But there is a legal proposition underlying your construction of the words “carries out construction work”, as to not include independent contractors.

MR HUTLEY: Yes.

BEECH-JONES J: Yes.

MR HUTLEY: We would say, if you ask the construction, when there is an independent contractor, are you doing the plumbing – is Leightons carrying out the plumbing work. We say, of course, it is not. That is the ordinary meaning. We say, that is the sense of carrying out which is used elsewhere in the Act. If it was meant broader, it would have enormous significance as to the earlier Acts, because people who were not carrying out might be liable, and the earlier Act, when they used “carrying out”, has criminal consequences. So, that is our position, your Honour.

GORDON J: One way of looking at this definition of “construction work” is to look at it on a timeline. Although it is not in order, one would see the preparation of regulated designs and other designs, so that if you just took the concrete pour, that would include other aspects of the way in which it was designed, including scaffolding and engineering works and the like. Then one has the manufacturers of concrete, itself, under (c), and then one has the actual doing of the work under (a), and then (d) is an omnibus which covers all of those activities to the extent to which they can be established on the facts:

supervising, coordinating, project managing or otherwise having substantive control –

MR HUTLEY: Well, with respect to (d) – but if I am supervising, it does not mean that I am doing it. The person who is supervising the person who is hammering the nail in, is not hammering the nail in.

GORDON J: They are not hammering the nail in, but they are still doing construction work. They are still carrying out construction work.

MR HUTLEY: Your Honour, I accept that completely. Perhaps, I missed the import of your Honour’s question. We accept that completely.

GORDON J: It is reflected in the fact that it is carrying out of any work referred to in (a), (b) or (c).

MR HUTLEY: Quite.

GORDON J: So, we are left with a possible subgroup of non‑activity in (d) to which it might extend.

MR HUTLEY: Exactly. But, still, we say, even if it is, that is a matter fact and circumstance which depends upon the circumstances and one can exercise reasonable care with respect to the possession of a power – i.e., not activating it in circumstances where a reasonable organisation would activate it, such that the 37 duty could meaningfully be applied to a person who carries out construction work by having substantive control, et cetera, in the sense we are debating. In fact, often, as it were, what you might call – I will move on.

To put it in the terminology, 39 is addressing itself to a person who carries out construction work and precludes any act which could be characterised as delegating the 37 duty. We submit that that means that the duty – to use the terminology which is common in this case – is personal to the individual or entity who falls under it. No act of taking steps to seek to see that that individual or entity, itself, does not act carefully through its employees or agents, or others, will operate to immunise itself from its obligations, so long as it remains under that duty. Thus, the classic case, choosing competent staff to carry out, et cetera, your Honours can imagine, will avail them nothing. Subcontracting, of course, as we have put, leads to a different consequence.

GLEESON J: But section 39 has nothing to do with employees, does it?

MR HUTLEY: It has nothing – when you say it has nothing to do with employees, it is just merely saying you cannot delegate that duty, whatever that means. That is all it says. It does not change the duty. It does not say we create another duty, which our learned friends would have.

Now, once that analysis is undertaken, you then turn to 5Q. If we can then take up the observations of Acting Justice Basten at core appeal book page 47, paragraph 32, who observes – in our respectful submission, correctly, when one has regard to the passages of the Ipp Report to which I took your Honours – that 5Q is concerned with the issue of entrusting tasks to independent contractors to carry out. That is its source, and that is correct, when one goes back to the Ipp Report. That being so, we submit that 5Q cannot be enlivened with respect to section 37 because of the limitation of 37, which we have adverted to. It does not apply to an anterior person delegating or otherwise entrusting work to be carried out by independent contractors in a way that the work is not actually carried out by that entrusting person.

We submit Justice Adamson was, we say, implicitly to the same effect, and your Honours can see that at core appeal book 42, paragraph 15. We say that Acting Justice Basten was correct as to 5Q’s scope and intent, where his Honour referred to it as being concerned with the issue of entrusting tasks to independent contractors to carry out. This is also made clear by the reference to liability in tort for a non‑delegable duty and to the form in which the non‑delegable duty is expressed in 5Q itself, which is a form redolent or, really, taking its form from the jurisprudence in this Court. Again, that is consistent with what appeared in the Ipp Report.

Now, whether it was necessarily concerned with common law by reference to the words “liability in tort”, as Justice Rees found, need not delay one. We have dealt with that in writing in our submissions at paragraph 40, and I do not prepare to say anything more about the issue of whether a tort is involved or not. Section 5Q is not concerned with the situation of 37 operating together with 39, as 5Q is precise in the elements of the so‑called non‑delegable duty to ensure as specified in its terms.

We also dealt with this issue of liability in tort at our submissions at 64 to 65, and our reply submissions at 18. That is all I wish to say on issue one. Issue two: as we have pointed out, section 34A(3) of the Civil Liability Act maintains that:

The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Part.

That is qualified relevantly by 34(3), 34(3A), and 39(a) of the Act. As I have taken your Honours through, a concurrent wrongdoer is defined by 34(2) of the Act. Assuming a person is under a section 37 of the Building Act duty, there seems no reason why that person could not be a concurrent wrongdoer with another person or persons.

Saying of the first person, the duty owed is affected by 39, we say it takes the matter no further. In any event, it does not arise in the circumstances of this case, as it is not alleged that any of the concurrent wrongdoers which we have put forward was an employee or agent or other persons whose activities did not change the identity of the person who carried out the work in question. Your Honours can see that from core appeal book page 9 at paragraph 12. Even if there was a dispute about that, that would be a matter for trial, not for a matter of strike‑out.

In the Court of Appeal, Justice Basten relied on two pathways to conclude that the liability of the appellants would be treated as a form of vicarious liability, which was not subject to any limitation on their liability by apportionment as between the appellants and concurrent wrongdoers under Part 4 of the Act. Can I take your Honours to his Honour’s reasons. His Honour’s reasons commence at paragraph 42, core book page 50. First, in that process of analysis, does not have regard to 5Q. The central proposition is at paragraph 43 at core book page 51:

There is an alternative approach which turns on the uncontroversial principle of statutory interpretation that seeks to read harmoniously two statutes of the same legislature. The basic proposition is that for s 36 of the Civil Liability Act to be construed as preventing a defendant who is a concurrent wrongdoer being liable for damages for which another concurrent wrongdoer is liable, is to render the imposition of a non‑delegable duty on the former incoherent.

That conclusion, it may be accepted, requires an understanding of the concept of non‑delegable duty, but it does not require engagement with 5Q. His Honour then proceeds from 45 onwards to deal with the nature of the duty under 37(1) ‑ ‑ ‑

GORDON J: That is the one you criticised earlier for not taking the first step.

MR HUTLEY: Quite. His Honour then proceeds to consider the case law over a number of pages in various of the cases in this Court and other courts. I will not take your Honours through them.

Your Honours will see his Honour, throughout this analysis, never addresses section 34A(3). That is not addressed throughout this analysis. Now, and as I have taken you to, the central proposition was at paragraph 43. We submit it is fundamentally flawed. Section 41(3) of the Act – that is, the Building Act – specifies that Part 4 of the DBPA is subject to the Civil Liability Act. I am not going to take your Honours through the authorities. We have referred, at paragraph 19 and footnote 16 thereof, at page 5 of our reply submissions, to the authorities dealing with the significance of the expression of “subject to” when used in a statute. Her Honour Justice Rees did the same at core appeal book 12, paragraph 24.

A claim for breach of the duty of care under 37(1) of the Building Act is of a kind squarely within 34(1A) of the Civil Liability Act, if your Honours would go to that. Section 34A(3) of the Civil Liability Act provides that unless excluded:

liability . . . is to be determined in accordance with –

Part 4. Nothing in Part 4 of the Building Act or the Civil Liability Act excluded a duty, even one characterised as non‑delegable, from being a duty to which Part 4 of the Civil Liability Act can apply. Justice Basten’s analysis then proceeds through a consideration of non‑delegable duty, as I said, at common law – 45 to 50 – and I do not say any more about it. But can we take his Honour’s analysis up, at 51.

At paragraph 51, his Honour turns to the issue of “concurrent wrongdoer”. His Honour, with respect, fails to address that, even assuming there was under Part 4 of the Building Act a non‑delegable duty akin to the common law duty in play, the person subject to that duty could do an act or be involved in an omission which caused the loss, almost of necessity, as that individual would have failed to ensure that reasonable care was taken. At 52, his Honour refers to it being “awkward”, the process mandated under 35.

BEECH‑JONES J: Mr Hutley, just so I am clear, you are addressing this on the assumption against your earlier argument that the concurrent wrongdoer is a contractor for whom your client would be liable for a non‑delegable duty, is that right?

MR HUTLEY: I am addressing it – on either basis, the same applies.

BEECH‑JONES J: I see. The next analysis process is, with respect, at 52. His Honour refers to it being “awkward”, and in our respect, whether awkward or not, it can be done. At 53, his Honour refers to incoherence. No incoherence follows, that is just a consequence of Part 4 of the Civil Liability Act. Section 34A(3) mandates any incoherence, if your Honours were even of the view there was some.

At 54, his Honour, with respect, errs because liability for breach of a non‑delegable duty is not vicarious liability. That is why section 5Q is required, for if it did give rise to vicarious liability, 5Q would be otiose. Turning to paragraph 55, to take up the observation of your Honour Justice Beech‑Jones, that suffers from the limitation of the duty in 37(1) of the Building Act to carrying out construction work not being addressed by his Honour. The second route is the route through 5Q. We had addressed that and we say 5Q is simply inapplicable.

However, even were 5Q to be of relevance, in the first instance it is only concerned with vicarious liability of a defendant for the negligence of another person in connection with the performance of the work or task delegated or otherwise entrusted to that other person. If 5Q is enlivened, then the liability of a defendant – here the appellants – is to be determined as if the person, or persons, entrusted or delegated to work or task were ones for whom the appellant, or appellants, who entrusted or delegated the work or task were vicariously liable.

That position would certainly bring into the analysis section 39(a) of the Act, which I have taken your Honours through, and one can see that as between the appellants and those persons satisfying the requirements of 5Q, whatever they be, there would be no capacity for a proportionate liability between them, however persons who did not, there would.

Can I now turn to issue 3. That issue is dealt with in our submissions at the points indicated in our outline. Our learned friends, incorrectly at their submissions paragraphs 30 and 44, seek to advance the proposition the appellants in this case due to being alleged to have had substantive control over the construction work for the building are taken to have carried out the construction work of those other persons. That interpretation is based upon an incorrect appreciation of the duty in section 37 and the definition of construction work which previously is addressed.

We have said, as we say, their submissions seek to rewrite 37 in a way as if it was drafted like section 7(3) of the Building Act so that the defendant is taken to carry out construction work which another person carries out if the defendant had some control over the other person carrying out the construction work. And that, of course, is not the wording of Part 4.

In a claim under Part 4 of the Building Act, the defect may be caused or contributed by various concurrent wrongdoers. Not all, or even none of those concurrent wrongdoers may be persons to whom the defendant delegated or otherwise entrusted the carrying out of a task. In that case, 5Q would have no operation. And it is only 5Q which leads the operation of 39(a) together with 3C which has the result which we have deal with.

Now, I would like to turn, if I could, to various ones which we are dealing with where we say this has gone wrong. Can I deal with the private certifier and the council. The second appellant on the pleadings – but not the first appellant, the head builder – appointed an organisation, Anthony Protas Consulting, as the private certifying authority. If your Honours take out the further book of materials – and this is where I will have to shortly go to a few of the pleadings – the relevant technology and construction response commences at page 136 of the appellant’s book of further material.

Your Honours, paragraph 27 commences at page 152 – and that is the beginning of the pleading of proportionate liability. If your Honours go over to page 156, with a bit of luck, your Honours will see at about line 35, (d), they identify who are the alleged concurrent wrongdoers. They are:

DCP Enterprises –

and DCP Ceilings – I can tell your Honours they were the installers of the panels:

Chief Media Pty Ltd (“Chief”) –

They constructed the panels – and:

Anthony Protas, of Anthony Protas Consulting –

was the certifier, in respect of that work. Dealing with the certifier, can I just give your Honours a series of references where you will see what the allegations involve. Your Honours will find at 159 letter (v), at about line 48; then over at 167, at about line 55; then again at 169, at line 25; 172, at line 40; 174, at line 25; 177, at line 30; and 179, at line 25. Your Honours will see the character of what is being alleged involving the certifier.

The second appellant developer also lodged the development application – or alleged that it did – with the local council, which contains drawings that the local council allegedly approved, which admitted fire requirements which the respondent alleged should have been constructed. Your Honours will see that allegation at page 176, line 40.

Our short point is that neither of the appellants could have carried out supervised, project managed, coordinated or had substantive control over the carrying out of the statutory functions of the private certifier or local council. The developer, owner or builder is required by law to seek approvals from certifying bodies. The certifying authority is an independent body exercising statutory functions personal to the certifying authority.

The private certifier carried out a statutory role as a public official and independent regulator. Your Honours will see we have referred to that in our footnotes in our submissions at footnote 57, under section 6.4 and 6.5 of the Environmental Planning and Assessment Act and its predecessor sections, and your Honours will see those sections – I will not take your Honours to them – at joint book of authority volume B, pages 211 to 224. A private certifier is a principal certifying authority that can issue various certificates for building work, including construction certificates, occupation certificates and compliance certificates at various critical stages due to his or her inspection.

GAGELER CJ: Mr Hutley, just so I understand where all this is going, is the point that a private certifier is not engaged in construction work?

MR HUTLEY: No, what we are saying is, even if they are engaged in construction work and they owe a duty, it is not something that falls within 5Q and it is not something that we delegated to anybody. They have their independent statutory role.

So, the court has found we cannot be a concurrent wrongdoer with the certifier or the council because of the implication, which has been found – and I think that you cannot have proportionate liability where there is a non‑delegable duty, full stop, even if the wrongdoer in respect of the same loss you seek to have established proportionate liability in respect of can in no way be described as your delegate or somebody to whom you have within the meaning of 5Q or sensibly entrusted a task.

They have statutory tasks, even with the certifier, who we nominate. But once nominated, that certifier comes under obligations to act independently of us, therefore ‑ ‑ ‑

GLEESON J: But why do you not accept the Chief Justice’s point that what the certifier did could not fall within the scope of your clients carrying out construction work?

MR HUTLEY: I think the Chief Justice said it was a debate whether it could be construction work. Not my client’s construction work. Construction work.

GLEESON J: But it is only going to be relevant if it is your client’s construction work.

MR HUTLEY: That is what we would put, your Honour, but ‑ ‑ ‑

EDELMAN J: This is back to your first ground, then.

MR HUTLEY: Quite. But we say even if we lose on the first ground, it is not somebody to whom we delegated any task or function, and therefore 5Q cannot speak to it, and no implied – anyway, your Honour sees the point. I am dealing with people whom we have not subcontracted an activity to.

BEECH‑JONES J: Mr Hutley, if it applied to personal injury, is it a similar – an extreme point would be a contracted teacher who did not supervise a student who got hit by a car. You say on the Court of Appeal’s reasoning, the school could not be a concurrent wrongdoer with the car driver because it has a non‑delegable duty, and that is the end of it.

MR HUTLEY: Right. Setting aside the personal injury aspect, precisely.

BEECH‑JONES J: I think that is the extreme case, yes.

MR HUTLEY: That is what we wanted to say with respect to those two. With respect to the ACPs, we bought those from DCP Enterprises, and they were constructed by the organised Chief Media. Your Honours can see that, for example, at applicant’s further materials 156, at about letter 40, where it is dealing with the DCP and the ACPs. You can see it also, with respect, at 158, at letter 35 with respect to Chief, who manufactured it.

Our short point is we did not delegate to those persons the task, for example, Chief Media, of constructing the panels in any meaningful – and that is the short point with respect to the third issue, that if there is to be a limitation it has to be a limitation to people who one can meaningfully have said have had tasks delegated to them, and we say none of those are within that. Now, subject to fulfilling your Honours’ requirement of explaining it, unless your Honours have further questions, I have finished.

GAGELER CJ: Thank you. At this stage we will take the luncheon adjournment.

AT 12.48 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

MR HUTLEY: We have endeavoured to meet your Honours’ request in the document we have handed up.

GAGELER CJ: Thank you.

MR HUTLEY: Your Honours also asked whether there were any cases which have dealt with non‑delegable duties in relation to Part 4. We have referred to the two cases at paragraph 42 in our – the two cases, I can tell your Honours, are Woodhouse v Fitzgerald [2021] NSWCA 54; 104 NSWLR 475 and Prestage v Barrett [2021] TASSC 27, as dealt with by Justice Estcourt at
paragraphs 654 and 655. Neither of those cases involved the possibility of a third‑party wrongdoer and in Tasmania, of course, they do not have 5Q, so they really have not dealt in any particular depth with the questions your Honour was asking.

GAGELER CJ: Thank you very much, Mr Hutley. Mr Walker.

MR WALKER: May it please the Court. The approach we will take is to engage with the analysis and exposition of the two statutes in their operation with each other that has been the subject of our learned friends’ address. To that end, the sequence in our written outline will not exactly track what I am going to say – this is particularly responsive to the reading of the statutes that our friend has essayed.

Could we start, because it seems to be basal to the nature of the claims and counterclaims as a matter of argument, with the Design and Building Practitioners Act, Part 4 of which includes the critical section 37, which is headed “Extension of duty of care”. We know that this is something intended to be of public significance. That is, it overrides private agreement – section 40. We know that “extension”, depending upon your geometrical figures of speech, is to be understood as bearing a relation to what was already the position of potential benefit to a plaintiff – see section 41.

The concern there is with there being an addition to duties and other obligations imposed under other Acts or the common law; not limiting the duties, other obligations imposed under other Acts of the common law; and not to limit damages or other compensation that may be available under another Act or at common law because of a breach of a duty by a person who carries out construction work. Now, true it is, that is then followed by the bland 41(3):

subject to the Civil Liability Act –

To which of course I will come back. But when one looks at Part 4 of the Design Act, it is plain that the extension is intended to be a matter of substantive law reform with an evident purpose, first of all to overturn the effect of the holding in this Court at common law concerning the unavailability of a duty of care owed to future owners who, for example, may not even have been in existence at the time of the building work being done.

It is not to say, of course, that it is not evident from the Design Act Part 4 that there were other matters of evidently beneficial intention, and this is plainly beneficial legislation in the sense that is employed for the purpose of statutory interpretation. In particular, the nature of the duty of care, including the fact that it cannot be delegated – section 39 – has to be seen, obviously, as an extension of the protection formerly available under common law, as it was then previously modified, or affected by, for example, the Civil Liability Act. All of that is an extension.

Yet, the effect of the reading by the appellants is, if we may say so – in a case that they may urge as being the case that covers their position in these proceedings – one where a head contractor, to use a non‑statutory term for a moment, who has agreed to build a building to certain standards – and on whom, say, statutory law in any event imposes certain standards of achievement – can subcontract out everything to be done which produces the physical transformation of land so as to constitute the building which is the subject of the contract; subcontract out everything, but of course still maintaining, as a subcontract necessarily does, the control which is exerted by the head contractor to whom is owed promises, obligations created by those promises, on the part of the subcontractors.

The neat distillation of the matter urged against us so as to produce the desired effect on the part of the appellants, particularly the first appellant, is to say that the construction work carried out – and for emphasis our learned friends put the word “actually” in front of “carry out” – to mean, we think, action or conduct engaged in without any resort to subcontract, in particular.

The construction work actually carried out in such a case will be confined to that which in the various definitions to which I am about to come is described as what I am going to call supervision, et cetera, including the catch‑all notion of control. It is said that that supervisory, et cetera, activity is obviously not delegated, in fact, to the subcontractors being supervised, whereby in one blow you have an evasion, or a non‑application, of the Civil Liability Act notion of concurrent wrongdoer, to which, of course, I will have to come to in due course.

That, in our submission, is very odd, because under section 39 of the Design Act, that very duty of care which our friends are so astute as to narrowly apply only to the case I have given. By way of example, the supervisory conduct is a duty of care that cannot be delegated in the sense that I am going to explain in a moment. If that were the case, of course, it would mean that section 39 prohibiting – denying an entitlement to delegate has had no effect on preserving a plaintiff’s position against the person who has breached section 37 duty, albeit only in the sense that they have a supervisory role, and people supervised failed to exercise reasonable care.

That, in our submission, is not just counterintuitive as to the law reform proposal that is in project in, in particular, the Design Act, but also is completely at odds with what 39(a) of the Civil Liability Act proposes with respect to the position of vicarious liability.

EDELMAN J: Under section 41(2), at common law the position would be preserved whereby a usual situation that would fall within Brookfield where an owner enters into a contract with a builder for building work to be done, there is a direct relationship. That duty – that contractual duty – would be non‑delegable in the sense that if the owner got an independent contractor to do the work, the contracting owner would not be absolved of the contractual liability to ensure that the work – subject to the interpretation of the contract – is done carefully.

MR WALKER: Yes. And in 41(2), at common law, should of course be interpreted to include a contract. In a sense, that is unremarkable in that the general law – the common law – did not provide a defence of independent contractor to a claim in contract, but since the common law decided to impose what we call concurrent duties of care both under the contract – which in the contract would operate alongside stipulations for achieving certain standards, for example – and a duty of care imposed by reason of a relationship which happened to be created contractually but did not need to be, in a sense, then, there was the possibility – rarely practically important, but for cases of limitations just for operation – where there could be a defence of independent contractor to the claim in negligence as a matter of tort of the ground of independent contractor.

Of course, it highlights a very odd understanding of what might be called the policy of the law that such a radical difference would flow from whether the action was framed in contract or in tort, but that is not of present moment, except for the fact that under 41(2) it is fairly plain that there was a preservation in such a way as combining with 41(1), with 40 and, we say, with 39, to indicate that this is, indeed, an extension, in a number of different senses of the word “extension”. The ratchet is operating in one way: pro plaintiff.

EDELMAN J: But the effect of that, though, means that section 37(1) and following, it has not just expanded the common law beyond the Brookfield scenarios, it has actually substantially changed the content of the duty itself, particularly by the words “carries out”.

MR WALKER: Yes. I have to go to the definitions for that, and I will in just one moment, but one comment I wanted to insert at this point is this. Section 41(3), in subjecting this part to the Civil Liability Act, could – but only in a most unlikely and rebarbative reading of the provisions of both Acts – in effect, eliminate the plainly intended effect of Part 4 of the Design Act. But, holding the thought that it could, we accept that Parliament could commit the absurdity, as we would put it, of destroying with the same stroke of pen as they create.

In our submission, there is a much more pedestrian way in which to deal with the relations between the Acts. The first is to note, of course, the Civil Liability Act does have a number of provisions to do with negligence, to do with causation, to do with breach, et cetera, which can be – to use the jargon – picked up for the purposes of applying in cases governed by the Design Act. That is the first thing. The second thing is, a normal relation between two statutes, falling well within the notion of one being subject to the other, is to inquire whether one or other stand in relation to the other statute, as the special as opposed to the general – and, obviously, it is the Design Act, which is the special, compared to the general, which is the Civil Liability Act.

Being subject to the Civil Liability Act does not mean, of course, that you ignore the fact that the Design Act is a special Act with a focussed attention, and the general provisions in the Civil Liability Act are read accordingly.

GORDON J: Another way of putting it is that one cannot start with the Civil Liability Act when one does not know what it acts on.

MR WALKER: The Civil Liability Act is manifestly not a code for all actions framed in what might be called negligence, using that word not quite exactly – I will come back to that. But the Design Act most certainly creates a duty going beyond what the common law had imposed. It creates it by language which picks up, employs – terms which have a content informed by the antecedent common law. In particular, the notion of being not entitled to delegate.

Can I say this about that expression. A stranger to the common law and, in particular, the tort of negligence, might be puzzled at the idea that a statute which otherwise is ready enough to impose penalties for doing things you are not allowed to do would simply say, without any penalty attached or consequence spelt out, that somebody is not entitled to do something called – perhaps, to such a reader, strangely – delegate a duty. After all, if a duty is imposed on a person by Parliament, it is not an entirely natural proposition that the person can say, I know Parliament has imposed it on me, but I am going to pass it on to somebody else, in such a way as to affect my liability for a departure from its standards.

But we are not that kind of reader, and this is obviously – and this is common ground, I think, at the Bar table – a provision, section 39, that is to be read by reference to the doctrine of so‑called non‑delegable duty. The expression “non‑delegable” is not much more useful than “not entitled to delegate”, because in both cases they have effect. That is, they change what would otherwise be the outcome of an argument precisely because there has been something that can be called, in fact, a delegation. So, the employment of an independent contractor, or in the context of the later Act here, the use of a subcontractor.

Plainly enough, the consequence in law of a duty being non‑delegable is that the person on whom that duty is imposed – that is, the duty of care is imposed – it only arises, relevantly, with duties of care. It is still bound to take reasonable care, but the content of that duty, it being non‑delegable, extends to – that is, includes – ensuring that a person to whom the task has been delegated takes reasonable care themselves, so that – to quote from the passage in Lepore in Justices Gummow and Hayne, to which we have drawn attention in our written submission – if the person who actually does the work under, say, a subcontract does not perform to standard, then it is said that the person owning the non‑delegable duty is in breach of their non‑delegable duty.

It is for those reasons that the non‑delegable duty in our system of law at the moment at common law may have a problematic character as to whether it is fault‑based – but that is of academic interest only. The form of the action, the nature of the doctrine starts with imposing a duty of care, describing it as non‑delegable and discerning breach whenever a person to whom, in fact, the matter has been delegated falls below a reasonable standard of care themselves.

Against that background, you then come to how section 37 has inaugurated a duty called a “duty of care” – see the heading of Part 4 – in relation to an industry which we can call for present purposes the construction industry. It does so by, I am afraid, some nested definitions that require, in particular, attention to sections 4, 7 and 36. Because this is a case about Part 4, can I start with section 36, because “construction work” is the expression referred to in section 37.

It means any of the following – (a), (b), (c) and (d) – each of which either explicitly or by necessary implication centres on building work – express in (a), express in (b), express in (c) and, by necessary implication in (d) because of the reference to (a), (b) and (c). So, “construction work” means those aspects of building work. One sees for example that it includes the:

supply of a building product used for building work –

I am not going to go into spirals of the manufacture and supply of building work used for the manufacture and supply of building work, but it would literally include that, of course.

In (d) there is something important in relation to an industry where Parliament can be presumed not to have been innocent of commercial and social realities by which one would hope that many a head contractor has nothing to do with certain specialised work on the site – unlikely to have, for example, extremely specialised either plumbing or electronics people on the staff – you want them to subcontract. For those reasons, one includes naturally within construction work the interaction of people called in for the job – not just in‑house but also in‑house – by way of:

supervising, coordinating, project managing or otherwise –

So, outside of those categories:

having substantive control over the carrying out of any work –

And obviously you can have substantive control by any number of different methods – it is ultimately factual – but one obvious way, which is almost self‑demonstrating as to its existence, is requiring somebody to do something and to meet certain standards by having a contract with them for the performance of some of the work involved in the building which the head contractor has agreed to build.

EDELMAN J: But that does not make you a subject matter of the duty under 37(1).

MR WALKER: I am sorry, your Honour?

EDELMAN J: That does not make you the person who is the subject matter of a section 37(1) duty, because, even if you have substantive control, you still have to be the person who carries out that substantive control.

MR WALKER: I know. So, the next step is – I have started with the way “construction work” uses the reference to “building work”. Can I then go back to building work, which you will find at page 123 of the authorities in section 4:

For the purposes of this Act, building work means work involved in, or involved in coordinating or supervising work involved in, one or more of the following –

So, there is already a broad net cast. It starts with:

(a) the construction of a building –

And your Honours can take it that that applies in this case, and:

(b) the making of alterations or additions to a building . . .

(c) the repair, renovation or protective treatment of a building –

So, work which is familiarly described so as to fall within a lay understanding of the construction industry. That is what building work means when it is to be understood in its use in the definition of “construction work” in section 36(1).

While on those pages, if I can take you to pages 124 and 125, provisions to which my learned friend took you, the expression “building practitioner”, which does not find any use as such in Part 4 of the Act, is an expression used for all the regulatory provisions with penal consequences to which my learned friend drew your attention, some of which use expressions of carrying out. It means – that is, a “building practitioner” means:

a person who agrees under a contract or other arrangement to do building work –

And “building work”, obviously, is defined in section 4. Then, if there is more than one person agreeing to do it, it means a person who is the principal contractor. I stress “building practitioner” is not used as an expression in Part 4 and one can understand section 7(1) for the purposes of the regulatory requirements on ensuring that things are done to a certain standard. In subsection (2) again:

In this Act, principal contractor –

Can I draw this to attention as to the language used:

means a person who agrees to do building work under a contract or arrangement (the head contract) and for whom work is to be carried out –

There is “carried out”:

under one or more other contracts or arrangements as part of or incidental to the work carried out –

There is “carried out”:

under the head contract.

Now, obviously enough, it is carried out by the principal contractor by means of, inter alia, a number of persons under subcontracts. Then, in section 7(3), the notion of doing building work – and you will recall how much of our learned friends’ argument appears to have a non‑overlapping distinction between the word “do” and the expression “carry out” – in subsection (3):

a building practitioner is taken to do building work if the practitioner—

(a) agrees to do building work . . . or

(b) is the principal contractor –

So, that applies to everyone involved, being a principal contractor or a subcontractor, and so you are doing it, although as head contractor the actual physical transformation of the land is carried out, say, by a subcontractor.

So, that is what the notion of doing building work involves for what I am going to call the regulatory purposes which are probably the bulk of the provisions of this Act. Coming back then to Part 4, we know that in section 36 again the phrase “carries out” is used:

a reference to a person who carries out construction work includes –

as we have seen in any event:

manufactures, or is a supplier . . . of, a building product –

So, “carries out” includes the notion of a part contribution to the whole enterprise, it does not require that you have done the whole of the physical building, that is, the physical alteration of the land. Against all of that we then come to, in section 37 itself, in subsection (4), again “carried out” is used:

The duty of care is owed to an owner whether or not the construction work was carried out—

(a) under a contract or other arrangement entered into with the owner or another person –

A sufficiently broad description, of course, to embrace subcontracts. There is nothing in the supposed distinction between “do” and “carrying out”, if that be necessary to the argument against us.

So, that being the Design Act’s innovation, and because we know it is subject to, under 41(3), the Civil Liability Act, we accept that one asks – holding in mind the effect of section 39 of the Design Act – whether proportionate liability, which is part of the Civil Liability Act – also it just happens it is Part 4 – whether it has an effect upon the provisions of Part 4 of the Design Act so as to obey the mandate of subsection 41(3) of the Design Act. Picking it up at page 79 of the authorities, section 34 ‑ ‑ ‑

GAGELER CJ: Sorry, Mr Walker, are you going to say anything more about section 37 of the Building Act?

MR WALKER: I am going to come back to section 37 in pulling the threads together, yes, your Honour.

GAGELER CJ: Thank you.

MR WALKER: But if – certainly, coming back to section 37, in particular, just to flag it, in light of what I am going to say about proportionate liability to emphasise that its content is:

a duty to exercise reasonable care to avoid economic loss caused by defects –

And defects are the material outcome of substandard work. So, that and other aspects of 37 certainly are going to be where I return.

BEECH‑JONES J: So, it is where we get to at the moment that “carries out construction work” in light of the other provisions certainly includes “carries out construction work” by the use of the subcontractor?

MR WALKER: Yes, yes. This is a major departure between the parties, obviously.

BEECH‑JONES J: Yes.

MR WALKER: Now, even if one supposes that head contractors can get out of the intended extension of duties owed by them under Part 4 of the Design Act, even if you supposed that could be by them subcontracting everything and retaining only the obligations they are owed by the subcontractors under the head contract – to carry out the work that they have promised to carry out under the head contract, even if that were so, it is still – being a person who carries out the work even in that emaciated sense, there still a person who has a duty to exercise reasonable care to avoid economic loss caused by defects and ‑ ‑ ‑

BEECH‑JONES J: But that is about scope. Scope is about the defects, not limited to the nature of the ‑ ‑ ‑

MR WALKER: It is not seeing whether your paperwork and your diary is good enough for visiting the site. Whatever AICD may say about appropriate oversight, et cetera. It is a duty to avoid defects, and it is a duty to exercise reasonable care in that sense. We say that, in fact, “carries out” plainly includes having it carried out by others, not just your employees – that is, servants or agents in the old‑fashioned phrase – but also subcontractors or people who have managed to come on and do work, and will only be paid under a quantum merit. It does not matter.

GORDON J: Is that largely dictated by subsection (4)? Is that the way I understand your argument?

MR WALKER: Dictated? It certainly involves a use of section 4. It is also, in our submission ‑ ‑ ‑

GORDON J: That is, subsection (4) – 37(4).

MR WALKER: Sorry, I thought your Honour was asking about section 4, which coincidentally, is one I rely upon – the definition of building work.

GORDON J: Just so I am clear about it – at the moment I am a bit lost, I must say. We have “carries out construction work”, as I understand your argument, is a duty in order to exercise reasonable care to avoid loss caused by defects.

MR WALKER: Yes.

GORDON J: You say that duty extends to whether somebody does it themselves or employs a ‑ ‑ ‑

MR WALKER: Yes, that is right. Section 37(4) I have already referred to and rely upon in that regard. So does, in our submission, section 4, but I do not want to repeat what I have said about that.

EDELMAN J: If there is the parallel that you are drawing between, say, a section 7 building practitioner and principal contractor, and a section 37(1) person who carries out construction work, and if that parallel means that in both cases, the person who is carrying out or the principal contractor for whom work is to be carried out extends to work that is done by independent contractors, that would mean, would it not, then, that principal contractors can attract criminal liability for substandard work that is done by an independent contractor that is chosen by all due care and skill?

MR WALKER: No, Part 4 has nothing to do with criminal liability.

EDELMAN J: Not under Part 4, but under the provisions dealing with building practitioners. As I understood, your argument about section 7 is to draw the same parallel for independent contractors under section 7 with section 37(1).

MR WALKER: Your Honour, that will need a working‑through of all the many criminal provisions concerning taking reasonable steps, but, in our submission, yes, it would involve a person who is a head contractor being required to take reasonable steps, yes. But we are not talking about that being non‑delegable. That is why I mean this crime is not in Part 4. It is not affected by section 39.

EDELMAN J: Yes, but the competing interpretation which would draw the same parallel but would say that for a principal contractor, the words “for whom” mean the contractor becomes liable for agents of the contractor, but not for independent contractors where the principal contractor has done everything with due care and skill.

MR WALKER: Now, your Honour, this is a matter of trying to interpret the whole of the Act. I accept this case does not involve criminal questions, and I am not a prosecutor, but the “for whom” work is to be carried out under one or more other contracts, cannot, in our submission, be interpreted other than as to include subcontracts. You start with what is called the head contract, agrees to building work under a contract for whom – so, this is the person who has agreed to do the work; for them there is work carried out under one or more other contracts. That will not be for them if it is a contract with the owner; it is likely to be a contract with them or with one of their subcontractors – so, subcontractors, et cetera.

In our submission, yes, when it comes to all those regulatory provisions which are sanctioned by a criminal penalty, I think in every case, they do not render the liability of what I am calling the head contractor criminally simply a reflex of the wrong of someone down the track. It is always by reference to a failure to take reasonable steps – and that, by the way, is in accord with common patterns of legislation for industrial safety particularly in this country, not confined to that. So, no, there is nothing, in our submission, alarming about what your Honour Justice Edelman called the parallel I was drawing. The notion of carrying out building work by means of employing your direct labour from in‑house and your specialist labour as a subcontractor is ordinary English, and is also the common expectation in our community.

STEWARD J: Mr Walker, can I just ask you a question to test your construction. So, like Mr Hutley, the construction of 37 turns on who is the person carrying out the construction work. In a usual case of an owner who contracts with a builder, the builder is the person, on your view.

MR WALKER: Yes, I think on anyone’s view, in something that I am sure never happens – that is, that there is an owner who simply has a contract with a builder and there is nothing else to be known – then the person who has the section 37 duty there is that builder.

STEWARD J: If the owner engages an architect, an engineer and a builder all separately, they are all potential people?

MR WALKER: Yes.

STEWARD J: And if a developer engages a builder and then on‑sells the product, who is the person?

MR WALKER: So, a builder on‑sells the ‑ ‑ ‑

STEWARD J: No, the developer owns the land, engages a builder to build the development, and then the developer sells to consumers. Who is the person?

MR WALKER: The builder there is the person who carries out construction work.

STEWARD J: So, it will be the builder engaged by the developer?

MR WALKER: Yes.

STEWARD J: Okay. Right. And, again, contract law, with a prime way of identifying the right person?

MR WALKER: You would expect me to say yes, and I do.

STEWARD J: I hope so, yes. That is all right.

MR WALKER: Yes, because this legislation springs out of a setting over more than a century where contracts were the only way you could complain about a poor building. Gradually tort emerged in a somewhat modest concurrent sense.

STEWARD J: But does this mean that, really, the only practical difference between you and Mr Hutley is subcontractors?

MR WALKER: No. I think there are more differences than that.

STEWARD J: Because he includes employees and agents.

MR WALKER: Yes. That is common ground.

STEWARD J: So, that is common ground. Are there any other differences?

MR WALKER: There might be.

JAGOT J: But the councils and ‑ ‑ ‑

MR WALKER: I am about to say I have in mind that the council ‑ ‑ ‑

STEWARD J: Well, you say the council probably does not fit in 36.

MR WALKER: Can I come back to the council?

STEWARD J: Yes, of course, you can.

MR WALKER: I will not spend more than ‑ ‑ ‑

JAGOT J: The council and the certifier – if you could come back particularly to how that works with the definition – (a), (b), (c).

MR WALKER: Yes, I will not spend more than a few hours on each of those.

BEECH‑JONES J: Mr Walker, can I just finish off where you were on Part 4, I think in answer to Justice Gordon, where you referred to “carries out construction work” includes contractors – Mr Hutley says it does not. You had referred to section 4, section 37(4) – and, again, am I right in understanding that the first part of your submission was saying “and 39”?

MR WALKER: Yes.

BEECH‑JONES J: Because if it does not, 39 does not have any work to do.

MR WALKER: That is right. Exactly. That is exactly the point. Section 39 is not some rootless, amorphous, defensive gesture. It is designed to ensure that the duty of care, relevantly under section 37 – that is the one we are interested in – is one which cannot carry in the train of its breach by the person who owes the duty the consequences of delegation. That is a long‑winded way of trying to spell out the meaning of the terse expression:

not entitled to delegate that duty.

That has to be teased out because it is referring to the doctrine which can be understood in the jargon of young pleaders as being the defence of independent contractor does not apply.

GORDON J: To put it another way, you would say, as I understand it, by reference to the provisions we have just identified, that you cannot avoid liability by using a subcontractor.

MR WALKER: That is right. “Avoid or diminish”, I need to say.

GORDON J: Sorry. Thank you.

GLEESON J: Mr Walker, can I just ask two questions. In your pleading, as I understand it, you make allegations that the first and second appellants carry out different construction work: one is under (a) and one is under (d)?

MR WALKER: I think that is right, your Honour. Can I leave that as a not comprehensive and categorical answer for this reason. When one teases out the relationship, say, between (a) and (d), there are not necessarily completely different spheres and certainly not for section 37 purposes. Because, however you get to be a person who carries out construction work, your duty is the same and has to do with defects. Not surprisingly, Parliament was concerned about the fact that there was something wrong physically with the building. That is what led to the parliamentary project of reform.

GLEESON J: That leads to the question which maybe is for a little bit later. Is it not a question of fact whether or not the first and second appellants can be treated as concurrent wrongdoers in this context?

MR WALKER: May I say, ultimately – and I do not mean to trivialise the matter – it is a question of fact as to whether anybody that carries out construction work or can be treated as concurrent for the purposes ‑ ‑ ‑

GLEESON J: But that means you would not strike out paragraph 129A.

MR WALKER: I understand why your Honour asks the question. We say this: that the premise of the pleading back against us, which is a pleading back of proportionate liability, is a premise that asserts those identities.

GLEESON J: What identities?

MR WALKER: The characters, I should say. It asserts the character of being a concurrent tortfeasor.

GLEESON J: But on the basis of your allegation of who carried out what construction work.

MR WALKER: Yes, it is a pleading that says if that is true then we are that and, therefore, we get proportionate liability. They have not conceded the case, of course. It all then depends upon how the facts are determined. In terms of facts I need to draw to attention, your Honours will have, I think, seen the pleading by which the second appellant, notwithstanding being as it were the client, customer or owner, is nonetheless impleaded by us as somebody owing the duty to a subsequent owner because the controlling mind of the second appellant was appointed the superintendent, or supervisor, for the first appellant’s work, and there were organic similarities, if I may say so. So, that happens to be a quirk of the facts in this case.

There is nothing remarkable about it. The notion that a developer is related to a builder, it certainly would not be the only project in which that is true, and these provisions adapt to that. However paradoxically it may look at first, you can have somebody who is the owner for whom the work is being done also as somebody who owes a duty. Not to themselves, obviously, that could not be enforced, but to successive owners because that was the main change of substantive law by way of the reform by this Act, and that is a satisfying matter from the point of view of the policy of the law because it means that corporate organisation, by which there is a separation of developer and builder functions, will not defeat the evident purpose of Parliament to increase, not reduce, the number of people who can be made liable in a non‑delegable way for somebody’s failure to take reasonable care to avoid a defect.

GLEESON J: So, can I raise my second question, which was in relation to the having substantive control element of the construction work and you made the point that there would be certain – I am going to call them subcontractors, but certain service providers, perhaps, whom one would expect to exercise their particular expertise in carrying out construction work. Is it then going to be a question of fact whether the head contractor is also carrying out that construction work because of the contractual arrangements between them?

MR WALKER: It probably will not be a matter of fact if it is that there is a subcontract by which something that the head contractor has agreed to do is in fact carried out for the head contractor by a subcontractor. That will not yield any problems of fact.

GLEESON J: Because the delegation rule will apply.

MR WALKER: Yes, because – and this is even before we get to Part 4 of the Civil Liability Act obviously, but because under Part 4 of the Design Act and, in particular, because of section 39, applying to the section 37 duty which has the content of taking reasoning care to avoid defects. So, whatever your – I will call it – function or role that you are carrying out with respect to the defect produced by a subcontractor’s failure, whatever it is, you had a duty to exercise reasonable care to avoid a defect appearing. A defect has appeared, and because it is non‑delegable, section 39, you are taken in accordance with the imported doctrine through section 39 to be in breach of your duty to take reasonable care to avoid that.

That is the way we reason section 39 has as its evident intent that there cannot be among all the numerous people that Part 4 of the Design Act plainly contemplates will be in serried ranks as possible defendants, or if not defendants, concurrent wrongdoers – query, if we ever got to it – whoever might be blamed for the outcome under Part 4 of the Design Act you are not going to be able to escape liability by pointing to somebody else’s liability concurrent for whatever purposes or not. It may only be concurrent for contribution between tortfeasors, which will not trouble a plaintiff. One of our problems obviously is: could it be concurrent for the purpose of proportionate liability? We say it cannot be for reasons I have started, I hope, to try to explain.

If we come back then to Part 4 of the Civil Liability Act, the general description in paragraph 34(1)(a), namely “arising from a failure to take reasonable care”, is a way by which negligence actions are included but are not the whole of the subject matter of the description of apportionable claims. You see that from the parentheses:

(whether in contract, tort or otherwise) –

But however the claim is pressed – that is, the action is framed – it has to arise from a failure to take reasonable care. Apropos that – and there was an inquiry made about subsection (3)(a) of section 34 – we would respectfully suggest that that is there because pre‑existing case law had construed the breach of statutory warranty under the Home Building Act as not involving negligence. I do not mean, by that, the case law had said that a statutory warranty cannot be breached by conduct which is negligent. Obviously, it often can be, but it is a familiar distinction between the warranty and a duty of care imposed without a contract.

Therefore, it seems to be for clarity’s sake to point out that that law was not being affected by Part 4 of the Civil Liability Act. Like my friend, I will pass over paragraph 34(1)(b), because it does not cast any particular light on the issues before the Court today. Subsection (1A), like my friend, we point out that all that requires is that the claim be:

in respect of the same loss or damage.

It is not going to be dictated by the framing of the action. Then we come to one of the few provisions right at the heart of this case, section 34(2), a definition which will then be fitted into section 35:

is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly –

Those are fairly comprehensive phrases:

the damage or loss that is the subject of the claim.

And that is the same loss or damage between them. In our submission, plainly enough, that does involve – as our friends have pointed out – analysing in each case, on its own pleadings and facts, whether those components are made out.

Under section 34A, it is true that there are excluded cases, but we know, in any event, that certain cases are excluded generally from the Act, not just from Part 4 – see section 3B. So, 34A are exclusions simply for the purposes of this proportionate liability regime, and we accept the analysis of our learned friends as to 34A(3). Yes, this is a regime that stipulates that liability of anyone else who is a concurrent wrongdoer is to be determined – that is, must be determined – in accordance with the provisions of this Part. As my learned friend recognised, that of course will involve proper attention to section 39, which is a provision of this Part.

The premise of section 34(2) – indeed, of Part 4 as a whole – notwithstanding the absence from subsection (2) of references to “fault” or “liability” or “wrongdoing”, apart from the defined term “wrongdoer”, the premise is nonetheless liability – that is, fault or wrong – as you will see from every provision in which the defined term “concurrent wrongdoer” then performs work: 34A, the exclusions by reference to their liability; 34A(3) stipulates for the application of this regime to somebody’s liability; and section 35 is all about liability. So, there has to be wrongdoing in the sense of there being a liability. That is, a state of affairs conveniently and properly called a “wrong” for which the wrongdoer may be held liable by action in court.

Your Honours, we then see that under sections 35, 35A, 36, 37 and 38, there are elaborate provisions in this version of proportionate liability, of the variance around the country, by which there can be, if not once and for all litigation, at least once and for all understanding by a person who has invoked these provisions, that their position – vis‑à‑vis the plaintiff – will be, as once and for all, determined. But section 39 speaks comprehensively of everything that precedes it. Nothing in this Part prevents a person from being held – that means in an action – vicariously liable for a proportion of any apportionable claim for which another person is liable.

So, everything that precedes in section 34, including most obviously 34A(3), is affected by words which cannot be mistaken in their import and effect on the antecedent provisions of Part 4, “nothing in this Part prevents”. There can be no reliance upon any other part of Part 4 to prevent the outcome by which a person is going to be held vicariously liable for a proportion of an apportionable claim. Meaning, that even if there are concurrent wrongdoers located, if a concurrent wrongdoer who claims the benefit of proportioning who is vicariously liable in relation to the wrong of another concurrent wrongdoer, the first cannot have their liability reduced by reference to the second because they are vicariously liable for the second.

EDELMAN J: There is another way of reading 39(a), which would be to say that if you have, for example, an employment relationship where there is vicarious liability and the employee is liable for a portion of an apportionable claim, nothing in Part 4 prevents the employer being liable for the same proportion of the apportionable claim as the employee.

MR WALKER: That is right. So, you may go through two steps and it might have been done differently as a matter of drafting, but what it means is that you, the employer – being a concurrent wrongdoer – will not enjoy the benefit of proportionate liability from the, say, 80 per cent allocated as a matter of justice to your employee because you are vicariously liable for your employee.

GORDON J: Is that to say any more, though, that it works in this way, that one has the operation of the provisions leading up to 39 providing for concurrent wrongdoing and the application of apportionment provisions and then in effect it takes back and retracts back that extension of it where you have the vicarious liability operation?

MR WALKER: You could have done it by, in 34, having as a negative aspect of the definition of “concurrent wrongdoer”, but it does not include an employee vis-à-vis an employer. It has been done as it has been done. Its effect, in our submission, is obvious but unavoidable. That is, proportionate liability is not available to a person with respect to that proportion which, if you like, in the absence of this provision would have been allocated as a matter of a just determination to a person for whom the first person is vicariously liable. Again, a mouthful but, in our submission, the meaning is inescapable.

GORDON J: What impact, if any, does that have in relation to independent contractors?

MR WALKER: That is where 5Q comes in. So, as a matter of general law there is nothing, if I can use that expression, in 39(a) that applies it within the limits of 39(a) to cases of independent contractor. As a matter of general doctrine, you are not vicariously liable for the wrongs of your ‑ ‑ ‑

GORDON J: That is why I am asking.

MR WALKER: So, that is the role, if one needs to reach this point – that is, section 39 of Part 4 of the Design Act does not do what we say, concerning the general and the specific between the two statutes. Then we – in the same way that Justice Basten explains in his paragraph 54 on what happens also to be page 54 – we call in aid 5Q.

STEWARD J: Mr Walker, do you need 5Q if you are right on your interpretation of section 37?

MR WALKER: No, no, no.

STEWARD J: As I understood it, in your interpretation, the subcontractors do not owe any duty under section 37.

MR WALKER: Well, subcontractors may owe duties under section 37. I am sorry if I have ‑ ‑ ‑

STEWARD J: I thought the head contractor was the person ‑ ‑ ‑

MR WALKER: No, no. A head contractor will, but not to the exclusion of others. An architect will ‑ ‑ ‑

STEWARD J: But I thought your submission was that, in the case of a relationship between head contractors and subcontractors, the relevant person in section 37 was the head contractor.

MR WALKER: No.

BEECH‑JONES J: You say they are all ‑ ‑ ‑

MR WALKER: Yes, they are all. There is a whole bunch of them. It is extended in several different uses of the word “extension”, and section 39 is a real extension. Your Honours will recall the mischief to which this is directed. People’s whole fortunes – modest fortunes – tied up in apartments which were falling down, emerging so long after the event that statute of limitations had smashed any contract, but in any event privity, particularly when there were arrangements between projects and builders, had deprived anyone of any contractual claims.

BEECH‑JONES J: So, they all have a non‑delegable duty extending to the area of work for which they, or through their subcontractors, are engaged in.

MR WALKER: Yes.

BEECH‑JONES J: That means you do need 5Q, then, to work your way through to avoid Part 4, do you not?

MR WALKER: Well, it depends upon – we do say that section 39 of the Design Act and the relation between the Design Act and the Civil Liability Act – notwithstanding, I suppose I need to say, but I mean including in light of section 41(3) of the Design Act – is such that the general does not abolish the special, and the special is section 39 in the Design Act.

BEECH‑JONES J: I see.

MR WALKER: You cannot honour section 39 if you give general provisions of the Civil Liability Act the effect of meaning it never gets off the ground.

GAGELER CJ: Mr Walker, can I just step through a really simple scenario to make sure I understand the argument you are putting. If you have a head contractor who engages a subcontractor to lay concrete, and the concrete pour is defective, as I understand it, both the head contractor and the subcontractor answers the description of a person who carried out that construction work within the meaning of section 37.

MR WALKER: Yes, in that example, exactly.

GAGELER CJ: Both, then, are concurrent wrongdoers within the meaning of section 34(2) of the Civil Liability Act?

MR WALKER: If you get to that, given section 39 of the Design Act, yes.

GAGELER CJ: Well, that is what I am missing. Why would you not get to that, given section 39 of the Design Act?

MR WALKER: Because each of them owes a duty of care that they are not entitled to delegate. That is, they cannot point to the wrongs of anyone else to reduce their own liability for their breach.

GAGELER CJ: Yes, and how does that prevent you getting to the definition of “concurrent wrongdoer”?

MR WALKER: I am, I promise. I just cannot do all of it at once.

GAGELER CJ: I am sorry.

MR WALKER: No, not at all, your Honour.

EDELMAN J: This is Justice Basten’s point about incoherence.

MR WALKER: I am not going to use that word. I am simply saying that when you are reading these two Acts together, even with 41(3), you have to make it work, and you can make it work, including 41(3), by saying that a regime by which a person can reduce – perhaps almost completely – their liability to the plaintiff for their wrong will not apply in the face of section 39 for this subset of all the liabilities to which Part 4 of the Civil Liability Act speaks that is contained in Part 4 of the Design Act.

STEWARD J: But in the example given by the Chief Justice – let us just assume that the head contractor can reduce their liability by 80 per cent, the balance of the liability of them beyond the subcontractor and the plaintiff will recover their full loss in damage. It is just a question of allocation.

MR WALKER: No, it is not. It is a question of the risk of insolvency.

STEWARD J: That is always the case for building cases.

MR WALKER: And that is what, with respect, proportionate liability affects. Just as contribution between tortfeasors without bothering the plaintiff affects it. Common law solidary liability allocated the risk of insolvency among tortfeasors to the defendant.

STEWARD J: I have to confess, I currently do not see how you differ from Mr Hutley, say for the endgame about proportionate liability.

MR WALKER: That might be right, your Honour.

EDELMAN J: The one difference, I think, that I am struggling with at the moment is still the key words “carries out”. As I understand, for example, in the Chief Justice’s scenario that is put to you, the reason that the head contractor carries out work that has been delegated to an independent contractor can only be because the head contractor has undertaken or agreed to do that work.

MR WALKER: To do the work, yes.

EDELMAN J: So, “carries out” under your approach means agrees or undertakes to carry out.

MR WALKER: Yes, that is ordinary English, and is in accordance with the definition provisions to which I went earlier in my address. In our submission, it is to that ordinary situation that section 39 speaks when it talks about a duty being something that a person “is not entitled to delegate”. We are not talking about work, we are talking about a duty.

EDELMAN J: In that sense, if the duty arises from an undertaking to carry it out, it will always be a non‑delegable because ‑ ‑ ‑

MR WALKER: No, only in contract, your Honour.

EDELMAN J: Yes?

MR WALKER: Only in contract.

EDELMAN J: I mean, the Hedley Byrne v Heller‑type tortious duty is an undertaking to do something personally. It is not a delegable duty.

MR WALKER: No, that is going to depend upon facts. With expert advice, in particular, your Honour might be right, with respect – factually, nearly always. This is not Hedley Byrne v Heller. Concreting is very technical, I know, but it is not Hedley Byrne v Heller.

GORDON J: Can I ask one other question – just one final go at this. If you are right, and you have, on the Chief Justice’s example, a head contractor who carries out construction work and you have a subcontractor who carries out construction work which is different work ‑ ‑ ‑

MR WALKER: I would not say it is “different work”, it is still construction work.

GORDON J: Sorry, it is still construction work ‑ ‑ ‑

MR WALKER: Causing the same loss or damage.

GORDON J: ‑ ‑ ‑ causing the same loss or damage, but each of the work that they undertake is of a different nature.

MR WALKER: They are different actors.

GORDON J: Thank you. Then each of them is under a duty.

MR WALKER: And it is the same duty.

GORDON J: It is a separate duty, is it not? It is a duty of the head contractor to exercise reasonable care for the work it is doing.

MR WALKER: No, “to avoid economic loss caused by defects”. So, no one will be liable if their conduct did not fall short of a standard, thereby causing the same loss or damage arising – as it has to under Part 4 of the Design Act – from defects.

BEECH‑JONES J: Mr Walker, if the principal contractor retains a subbie to do the contracting and another subbie to do the plumbing – is this right – on your argument, the principal contractor is responsible for the non‑delegable duty for the plumbing and the contracting.

MR WALKER: Yes.

BEECH‑JONES J: The plumbers for the plumbing, and the concreter is for the concreting.

MR WALKER: That is right.

BEECH‑JONES J: Is that right?

MR WALKER: Yes.

BEECH‑JONES J: That is what the duties are?

MR WALKER: Yes, but the content of the duty is exactly the same for all of them and it focuses – and when we are going to come back to proportionate liability – as it happens, on the same loss or damage. But under the Design Act, the content is the same and it focuses on defects arising from the construction work. Section 37 is not interested in either a sequence or a gathering of people with respect to the same loss or damage, or the same defect, but the content of the duty is still the same.

GORDON J: I do not understand that, Mr Walker, I am sorry – and I know I am being very slow on this. You have one economic loss caused by the defects. You have two actors, each under a duty to exercise reasonable care to avoid that economic loss.

MR WALKER: Yes.

GORDON J: And the two actors do different construction work.

MR WALKER: That is right.

GORDON J: Each of them are not entitled to delegate their part of the duty.

MR WALKER: That is right – well, not their part of the duty, their duty.

GORDON J: Their duty.

MR WALKER: Their duty. So, your Honour has given an example which, with great respect, I will use for when I switch back to the proportionate liability provisions. What your Honour has posited is a way in which one may suppose Part 4 of the Design Act raises questions about proportionate liability.

GORDON J: No, I do not think it does. I think what it says is that I have an economic loss caused by defect. I have two actors who undertake construction work in relation to that defect ‑ ‑ ‑

MR WALKER: They are both liable.

GORDON J: ‑ ‑ ‑ and they are both liable because they have failed to ‑ ‑ ‑

MR WALKER: That is right.

GORDON J: ‑ ‑ ‑ exercise reasonable care to avoid my loss.

MR WALKER: Yes, that is assuming that in each – sorry, that is assuming that in each case facts are pleaded and proved ‑ ‑ ‑

GORDON J: I accept all of that. We are dealing with it in the hypothetical for the moment ‑ ‑ ‑

MR WALKER: Then the answer ‑ ‑ ‑

GORDON J: ‑ ‑ ‑ and neither of them can delegate that duty.

MR WALKER: That is right.

GORDON J: They are on the hook for it.

MR WALKER: Your Honour anticipates me. In the sense – cannot delegate in a sense that although of course you can delegate, it is not unlawful to get a concreter to do the concreting, you cannot thereby avoid or reduce your liability if you are, say, in the easy case, the head contractor.

GAGELER CJ: But if you are the subcontractor, you actually did the concrete pour, why can you not rely on the proportionate liability provisions? Section 39(a) does not speak to your position.

MR WALKER: I am not talking about 39(a), but I will come – I will answer your Honour’s question, but I was talking about section 39 of the Design Act, not 39(a) of the Civil Liability Act. But I promise I will answer your Honour’s question.

GAGELER CJ: Yes. Mr Walker, really, by simple scenario it seems to me – at the moment, I cannot see why the head contractor and the subcontractor are not both concurrent wrongdoers and I am struggling to see why, if only the subcontractor is sued, the subcontractor could not rely on the proportionate liability provisions.

MR WALKER: Pull in the head contractor.

GAGELER CJ: Yes.

BEECH‑JONES J: Well, what if they do not want to maybe pull in the plumber. So, it is the concreter and the plumber, only they were sued, you would accept they both owe a non‑delegable duty.

MR WALKER: Yes.

BEECH‑JONES J: The problem was something involving the concreting and the plumbing.

MR WALKER: Yes.

BEECH‑JONES J: Section 39(a) would never be engaged because at the same level. Why would that not engage the concurrent provisions?

MR WALKER: Can I combine my answer to try and answer the Chief Justice’s question ‑ ‑ ‑

JAGOT J: Sorry, can I just add to that. If you are right, your point is that you are 100 per cent liable and if you are the plaintiff, you could choose to sue one or more – if you sue both, what, you get judgment. Assume you do not know who is going to go insolvent, to avoid ‑ ‑ ‑

MR WALKER: That is the ordinary case, where solidary liability ‑ ‑ ‑

JAGOT J: You just get ‑ ‑ ‑

MR WALKER: There are the equities to prevent our over‑recovery, and more to the point there is the contribution after the ‑ ‑ ‑

JAGOT J: You can only recover from 100 per cent in total, however much you recover from ‑ ‑ ‑

MR WALKER: I can pick the richest and easiest defendant to execute against.

JAGOT J: Sure. Correct. And you say that is the point?

MR WALKER: Yes. That is the whole point. It is straightforward, easy position, cannot be delegated, you cannot reduce your liability by pointing to somebody else also being liable, and perhaps, being more responsible, to use the term of proportionate liability. That is what we say section 39 of the Design Act means when it says “not entitled to delegate”. It cannot mean what it says literally. What an appalling idea that you cannot get an expert concreter to do the concrete work. Everyone agrees that it has to do with excluding the consequences of a duty being non‑delegable.

What is the consequence that matters for a plaintiff? It is against whom you can levy execution. In our submission, once one gets to that position, that really is the end of it. If you have to go further – here I am trying to answer some of your Honours’ outstanding questions. Can I come back to the Civil Liability Act, please, and pick it up at the idea of a concurrent wrongdoer, for the reasons I have already, I hope, demonstrated. Everything from then on is affected by and capable of being neutered in actual application by section 39(a).

Parliament has turned its mind to the possibility of a situation of vicarious liability sitting oddly with the idea of proportionate liability – that a person who is vicariously liable for another’s wrong, it is a social policy choice Parliament made, and they said, well, nothing will prevent somebody being held vicariously liable for the proportion that an appeal to justice has held another person liable for, which means, obviously enough, that invoking the proportionate liability regime will not avail that person who is held vicariously liable. That is why we ‑ ‑ ‑

EDELMAN J: But it will avail them to the extent that the apportionment provisions assisted the person to whom the vicarious liability applied. For example, the employer and employee ‑ ‑ ‑

MR WALKER: It assists in the sense that there are more people on the hook for the whole lot. Yes.

EDELMAN J: Yes, so that an employee who is liable only 20 per cent under an apportionment legislation does not mean that the employer becomes liable for 100 per cent. It is only 100 per cent of the 20 per cent.

MR WALKER: It is a proportion of any apportionable claim for which another person is liable, yes. Your Honour is right.

GORDON J: So, the reason why that is important, I think, is because the way I put it to you before – the way the Civil Liability Act works is that it extends concurrent wrongdoers broadly in order to deal with those kinds of issues and then it carves out ‑ ‑ ‑

MR WALKER: That is right.

GORDON J: ‑ ‑ ‑ takes back out 39(a).

MR WALKER: Anything which is vicarious liability – I adopt that, with respect. Could I come back to authorities 34, section 5Q. We think it is common ground that the case posited – namely, liability in tort for breach of a non‑delegable duty to ensure that reasonable care is taken – is a capturing of one of the available paraphrases of common law doctrine concerning non‑delegable duty, as the heading might suggest, and it carries with it in its train the nature of the way in which that may be breached – that is, by the delegate, to use an expression, themselves being negligent, whereby the breach of the non‑delegable duty is made out.

My friend is right, 5Q has, as one of the elements that must be made out in order for its provisions to apply, to identify so as to restrict its application to a case where you can see that there has been the:

carrying‑out of any work or task delegated or otherwise entrusted to the person by the defendant –

So, the defendant is the person who, in the main, is the person invoking the proportionate liability regime to reduce their own liability. Section 5Q is, as its progenitors recognised, a remarkable act of jamming two opposites together to produce an effect. The whole point about vicarious liability is that you are not a wrongdoer, so that it would be normally quite impossible to suppose that a person whose duty was non‑delegable and will be liable only if they are a wrongdoer should therefore be given the status of somebody who is not a wrongdoer – that is, merely vicarious liable.

But, as explained in the Ipp Report, it is in order to ensure there is not a run‑around with respect to non‑delegable duty and, in practice, of course, the measure conveyed by the phrase introduced by the words “as if” serves that purpose admirably. So, the extent of the liability takes the, if you like, informal delegate who has done the work – notwithstanding the duty is non‑delegable – and imposes, as damages for the breach of the non‑delegable duty – the duty to ensure that that delegate took reasonable care – the same measure of damages as if you were, in fact, vicariously liable.

EDELMAN J: But you accept, then, that 5Q would not apply to the subcontractors?

MR WALKER: No, I do not accept that at all.

EDELMAN J: But they are not people whose work or task has been entrusted to them by the defendant.

MR WALKER: When the defendant is the head contractor – as the first appellant is – that is exactly what they are.

EDELMAN J: Yes.

MR WALKER: So, in the paradigm case the first appellant, a head contractor ‑ ‑ ‑

EDELMAN J: I suppose it would be a sub‑subcontractor, then.

MR WALKER: This case may raise that with respect to manufacture and supply, but we do not think in terms of actually doing of trade work. In our submission, delegated or otherwise entrusted will certainly include some – though this is not a case that requires that to be determined. There is no doubt that 5Q(1) embraces centrally the role of a subcontractor vis‑à‑vis the head contractor. The head contractor has delegated or otherwise entrusted to a subcontractor that work.

We are told by section 39 that the head contractor’s duties are non‑delegable, for what it is worth, so as the subcontractors – but that is not presently in question. By reason of that, we are told that the determination – the liabilities are to be determined as if vicariously liable. That then brings in section 39(a) of the proportionate liability provisions of the Civil Liability Act so that nothing prevents that vicarious liability for a proportion by which the shifting away from the defendant of it, say, 100 per cent to the extent, say, of 60 per cent for a subcontractor, does not work because they are vicariously liable for that 60 per cent.

GLEESON J: But the liability under 5Q is not a vicarious liability. It is a statement about the extent of the liability which is to be determined as if the liability were vicarious liability.

MR WALKER: True. But it is determined as if, and that means for all purposes.

GORDON J: Can I ask one other question – you may have answered this, Mr Walker, and I may have missed it. Do you make any point or have any answer to or make any submission about the difference in language between 5Q and the duty in 37?

MR WALKER: No, (a), I have thought about it; (b), there is no point of difference; and (c), it is close to impossible to posit that the reference to breach of a non‑delegable duty to ensure that reasonable care is taken by a person in the carrying out, et cetera, is not picked up by the terse words of section ‑ ‑ ‑

GORDON J: Section 37(1) read with 39?

MR WALKER: Yes, that is right – section 39 for the purpose of section 37, yes.

EDELMAN J: Can I just ask you once more about the head contractor under 5Q. If one reads the person – that is, the defendant – as the head contractor, how does one extend 5Q then to the subcontractors? Because if it is the extent of liability of the defendant being the head contractor, is based upon all of the following matters, work or task that is being entrusted to another person, the other person being the subcontractor, where does 5Q pick up the subcontractor’s so‑called “non‑delegable duty”?

MR WALKER: Well, in this case, where we do not want to sue all the people nominated as concurrent wrongdoers, the extent of liability of those people not joined but nominated under the proportionate liability regime is for the purpose only of sparing another their proportion of the loss. The only “other” here are the appellants and, relevantly, the first appellant, but the second appellant as well, for the reasons of the connection we have already referred to. So, 5Q will apply to a subcontractor, most obviously if there is a sub‑subcontractor – most obviously. But I do not think that arises in this case.

I accept what my friend puts, and I do not think there is any demur against this in the references to 5Q and the reasons of the Court of Appeal, though they did not go into it in this fashion. I accept that you have to find out – you have to satisfy the element of identifying the carrying out of any work or task delegated or otherwise entrusted to the person by the defendant. The defendant being, relevantly, a person against whom liability is alleged. That is why they call it a defendant. So, liability in tort of a person – the defendant.

It is easy to say where the defendant is the head contractor that a subcontractor fits within that, and the head contractor – their liability is to be determined as if the liability were vicarious for the subcontractor. In this case, there are some subcontractors, as you have seen in the pleading. Whatever else might be said about 5Q, there is an immediate textual attachment of the words to the cases of those particular persons.

There are also three others. There is the category of suppliers and manufacturers and, if and when it went to a trial, we would say obviously that a person to whom the head contractor and those like an architect advising the owner go for specialised goods, such as the panels in this case, plainly – when you consider the pivot of reliance which would be used in any tort action against a manufacturer or a supplier – are persons to whom the work or task of selecting and supplying panels to be used in construction has been entrusted by, relevantly, the defendant – in this case a head contractor, perhaps one of the subcontractors as well. That is the first point.

With respect to the certifier, it is true that the certifier has under the contract of appointment to carry out a job in which he or she cannot be directed as to the opinions formed or the conclusions reached because they are dictated by statute, but that is not remarkable. The same is true of lawyers retained to give their opinion or to provide advocacy services. Plainly enough, that does not mean that you have not been either delegated or, more likely, otherwise entrusted with a work or task. It is ordinary English and socially appropriate to describe a certifier as somebody to whom there has been entrusted by the contract – by the person giving the contract of appointment – with the job of carrying out the statutory certification without which you will not be able to make money out of your project.

GLEESON J: But much harder to think of the head contractor as someone who is carrying out the work that is performed by the certifier.

MR WALKER: Sorry, the last words I did not hear – carrying out the work ‑ ‑ ‑

GLEESON J: The purpose of section 37 – the head contractor who carries out construction work is not likely to be – the work performed by the certifier is not carried out by the head contractor.

MR WALKER: That is clearly right, but it does not have to be.

GLEESON J: You think it is a question of fact?

MR WALKER: No. The pleading against us asserts that they are concurrent wrongdoers. It is a question of fact of course, but they assert that for the purpose of proportionate liability. They say that, but for careless certification, we would not have still the defective building. That is the case posited by the pleading against us. So, it is not a matter of saying it is a matter of fact.

GLEESON J: But you are striking it out or seeking to have it struck out on the basis of section 37.

MR WALKER: Yes, because if it is as they say, then they have a section 37 duty. So does the head contractor.

GLEESON J: Because they carry out the construction work that is the work done by the certifier?

MR WALKER: Yes, but that does not mean it is – you can each be different actors and in your own different ways produce the same defect which causes the same loss or damage.

BEECH-JONES J: Mr Walker, you are assuming that certifying work is construction work?

MR WALKER: Yes, in terms of supervising or otherwise.

BEECH-JONES J: And we get into the council via this argument as well?

MR WALKER: I am just coming up to the council next.

BEECH-JONES J: All right.

GORDON J: Can I just ask, is your short point that the head contractor who is not carrying out the work or task of the certifier?

MR WALKER: Absolutely not.

GORDON J: So, you say – I think this is the question Justice Gleeson was asking – the certification cannot be said to be a task or work that would have otherwise been done by the head contractor who has delegated ‑ ‑ ‑

MR WALKER: No, I accept that.

EDELMAN J: I do not understand that. That is not consistent with the way you answered my question about section 37(1). If you had a contract between a head contractor and an owner by which the head contractor said, we will procure, arrange certification, then on your argument the certification has to be carried out by the head contractor.

MR WALKER: No, I did not answer your Honour’s question about certification. Obviously, a head contractor cannot certify it because they are not a certifier. They can promise to arrange for certification, but they cannot certify.

EDELMAN J: I had understood you to be effectively saying that the carrying out was the undertaking to carry out.

MR WALKER: That is for doing what I am going to call the building of – the alteration of the earth’s surface to produce the building. That is what you undertake to carry out, and building work includes all of that. It includes much besides; that is the extension of the duty that we find. Building work goes beyond just putting up a building.

EDELMAN J: Well, you undertake to have that work carried out, but you could equally undertake to have a certification carried out.

MR WALKER: Yes, but only in the sense that occurred in this case, that they contracted for a certifier. They engaged a certifier by contract. That is, in our submission, well within work involved in, or involved in the supervision of, the definition that I drew to attention in section 7. There is no difficulty about any of that, but it does not attribute to the head contractor, who appoints by contract a certifier, the certification at all.

When one then comes to a breach of the duty in section 37, the position of the certifier is that if the certifier produces the same loss, because that was one of the over‑determined ways in which the loss came about – the certifier was not there to catch everyone else’s delinquencies for which, they being non‑delegable, the head contractor is liable – then, in our submission, they join the band of people who are liable, but liable for breach of a non‑delegable duty. I do not want to repeat what I already said, but if you we have to use 5Q – I have completed what I wanted to say about the certifier, as somebody to whom there has been delegated or otherwise entrusted – it is more difficult with the council.

GLEESON J: I am sorry Mr Walker, just before you do go to the council, it seems – and it might be necessary to look at the pleading – that at the least, at the moment, there is an issue of fact between the parties as to whether or not the appellants carried out the work of the certifier within the meaning of section 37, and if that is the case, how can we strike out the proportionate liability?

MR WALKER: Can I say this, your Honour. On nobody’s address to this case does it involve identity of the certifier’s work with the work of the head contractor; not my friends’, and certainly not mine. They are different actors doing different things, but they are all doing construction work; they are carrying out construction work. If they are carrying out construction work – and it may be that your Honour’s inquiry is not so much about section 37 of the Design Act as about section 34 of the Civil Liability Act.

GLEESON J: I think that the point – perhaps, it is not clear to me – is that under section 39, the duty of care that you are not entitled to delegate is confined by the construction work that you have carried out.

MR WALKER: It is not really confined, only in the causation sense. It is:

a duty to exercise reasonable care to avoid economic loss caused by defects—

(a) in or related to a building for which the work is done –

That is not going to be a problem at all. Different actors are doing different work, but they are all for the same building, and:

(b) arising from the construction work.

Well, they are not going to be liable at all unless their work, their act, shows them in breach of a duty. So, no, it does not mean that the head contractor does the same thing as a certifier, it means everyone who carries out construction work in its different aspects.

GLEESON J: In the light of that, I do not understand why we are striking out the proportionate liability defence, because it seems to be redolent with factual disputes.

MR WALKER: I do repeat that it is the other side who has made allegations – that is why it is a pleading point – which we say convey a logic that the two Acts will not support. That is a claim for proportionate liability. You do not have to go into the question as to what they did, let alone whether or not they did it carelessly, because there will not be any of this until there has been a determination of those two facts, for a start. What there can be is upfront by saying, now, you say that they are all carrying out work in such a way as to become concurrent wrongdoers, and the Court looks at the pleading and says, well, the way you have pleaded it, this is all construction work and it is all said to have produced the same loss, that is why you are claiming proportionate liability relief.

It is they who, as it were, render unnecessary factual inquiry, which will have to be gone into if this case goes to trial on these issues, but they are the ones who were saying that this is construction work which constitutes the different actors that we have nominated – the nine of them – are concurrent wrongdoers for the purposes of proportionate liability.

BEECH-JONES J: Mr Walker, I think in your earlier answer to me, you agreed that a person who carries out construction work, on your construction, includes “carries out” by the use of subcontractors, but you are not saying that that includes “carries out construction work” including by retaining a certifier.

MR WALKER: No, because somebody that you contract to do something that you are required to do will apply to the usual subcontractor for trades, but you are not required to – indeed, you are not allowed to – certify. So, that is not a subcontract case, it is an otherwise entrusted case.

BEECH-JONES J: In terms of the certifier, I think an earlier argument – I am not asking to go over it, just so I am clear – is once you have a non‑delegable duty for which you are liable, it is implicit that that ousts any operation of Part 4. That would exclude the certifier on that argument, but we are here in the weeds, as it were, if that is wrong.

MR WALKER: That is right; in case I need it, 5Q does it. Now, with 5Q, the council is a more difficult case, but the way we put it is that the “otherwise entrusted” is redolent of the reliance that must be the nature of the case posited by the defendants, not by us, against the council. They must be saying that somebody has – to their loss, to their detriment – relied upon council approval, and that, we say, is the way in which you can satisfy “otherwise entrusted”. I can assure your Honours, there is no authority for that, but that is how we say it would work.

JAGOT J: But you say the council and the certifier, as well as the supplier or obviously the manufacturer, leave aside 5Q. They are all still covered by your 37 and 39 argument.

MR WALKER: Exactly.

JAGOT J: So, your difficulty that you refer to, that you are acknowledging about a council in particular ‑ ‑ ‑

MR WALKER: It is only for 5Q.

JAGOT J: It is a 5Q issue.

MR WALKER: It is because of “delegated or otherwise entrusted”.

JAGOT J: Exactly. Yes.

MR WALKER: If I may say so, though some developers might wish it were the case, you do not delegate council approval from a builder to the council. That is not the way we have it, but they posit liability of the council by having caused us loss. That is why I have said we have apportioned liability. They are nominating people who caused us the loss. The council caused us the loss because they approved, and it must be that there is a pivot of reliance, otherwise there is no case.

May it please the Court.

GAGELER CJ: Thank you. Mr Hutley.

MR HUTLEY: As we understand, the case is now put concentrating on the position of what might be called the head contractor. As we understand the submission that is now put, it is this, that once there is a contract to procure the construction to construct a structure, everything that is done which could be done by the head contractor itself – I will set aside the council, that is beyond my wit to explain that – is in fact done by the head contractor.

So, there is never a delegation because, as we understand how it is put under this contract – under section 37 – the person who is carrying sout each act of construction, each element of building work, each element of deregulated designs, each element of manufacture, each element of supervision, is and is always the head contractor.

EDELMAN J: Can a head contractor enter into a contract without, say, a building licence if the head contractor, for example, intends that the building will be done by a certified builder?

MR HUTLEY: Your Honour, I would like to tell you – and I am sure somebody on my left would know that – can I have that just checked because I do not know if there is a requirement. There probably is some form of requirement.

EDELMAN J: Because if so, then that would not be distinguishable, would it, from the certifier‑type case because, in both cases, the head contractor would not be able to lawfully perform the work themselves ‑ ‑ ‑

MR HUTLEY: There would be thousands of jobs you would not be able to perform. That, as we understand, is the construction put. So, in other words – and to make it concrete – if one goes to section 36 and take this contract, the head contractor – if I can use it – was doing all the building work, was at all times doing all the preparation of the regulated designs, was doing all the purpose of the manufacture of the plans, et cetera. No occasion, under my learned friends’ case, ever arises for delegation. Section 39 does nothing under my learned friends’ case because under my learned friends’ case ‑ ‑ ‑

BEECH-JONES J: No, he just says, you assume a duty when everybody does that. He does not say you do it.

MR HUTLEY: With respect, your Honour, he said that on numerous occasions.

BEECH-JONES J: He says, for the purposes of those words at the start of 37(1), you carry out construction work, via the contractors.

MR HUTLEY: Quite.

BEECH-JONES J: And the duty attaches to everything they do partly, otherwise, because 39 would never engage.

MR HUTLEY: But 37 has done that, according to my learned friend. Section 37 has done it. Section 39 has done nothing. Section 39 is irrelevant in my learned friends’ construction because everything is done by the head contractor, and this is done through the transmogrification of a number of sections.

I want to tell your Honour some of the strange things which would happen under this Act if this was true. Could your Honours go to 31 and 32. Section 32 sets out professional engineering work – what it is. Section 32 says:

A person must not carry out professional . . . unless—

(a) the person is –

Et cetera. If “carries out” in this means that the head contractor carries out all the work, then it would appear to be that the head contractor – who is unlikely to be registered – will be guilty of a criminal offence with a maximum penalty every time engineering work is done. The same will happen with respect to specialist work. There is a clear distinction drawn as to who is carrying out the work.

Your Honour, section 7(2) does not transmogrify everything that is done by a person other than the head contractor, whether it be a subcontractor or a sub‑subcontractor or down to the ultimate into the head contractor doing it. Firstly, this is a definition clause, it is not a substantive clause. My learned friend says it, in effect, seems to have the effect that because – I think it is the words:

for whom work is to be carried out under one or more other contracts –

means that carrying out thereafter under this Act when one jumps over to section 37, which has no concept of head contractor in it at all, and uses the ordinary English word of “carries out” somehow means that if I – there is a head contract and there are 30 or 40 subcontractors, somebody is doing the tiling at the bottom of the tenth down the line, that means because of 7(2), as we understand it – and I will come to 37(3) in a minute – the head contractor is “contraring” the work. We just say that is just not English. It is not advanced by the reference to subsection (4), which is a:

duty of care is owed . . . whether or not –

In other words, this is merely making clear that there could be a whole series of transactions and arrangements and a person who does the construction work – that is, the person who does it, irrespective of how they come to do it – owes the duty.

Now, my learned friend says – all this is what he submits is an extension of the duty of care. On any view of the construction of 37, it was a massive change to the law to extend duties of care. How far it went is a matter of construction. It is not answered by saying, we want it to go as far as we want it to go. That has to be based in text, and there is no text, with respect to my learned friend.

If it was right, it leads to utter absurdities under this Act. In effect, in answer to one of your Honour Justice Edelman’s questions, says carrying on work included agreeing to carry on work. It just does not. That is why of course we refer to the distinction where, under this legislation – under section 7 – with respect to doing building work, there the legislature directed its attention to this very problem. That is, you do work when you do it under a contract.

So, we say that is all flawed. It runs into a fundamental problem when it comes to 5Q because his duty under 7 is no longer a duty to ensure that reasonable care is taken. It is a duty which falls upon the head contractor, because of the head contract, to exercise reasonable care in respect of all the acts which are its acts because it is the one carrying out the work.

Therefore, structurally, the duty is even further from the application of 5Q than our construction would allow, even though our construction is
modest, because it refers to the fact that the delegation is merely having the effect which we advance. So my learned friends’ construction leads to utter absurdities under the Act, is utterly inconsistent with the operation of 5Q to it, renders 39 having no work to do at all, and, in our respectful submission, it is simply untenable.

Unless there are any further – with respect to the certifiers and the council, we are simply at issue.

GAGELER CJ: Thank you, Mr Hutley. The Court will consider its decision in this matter and will adjourn until 10.00 am tomorrow.

AT 4.03 PM THE MATTER WAS ADJOURNED