IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMERCIAL DIVISION	Revised
Not Restricted
Suitable for Publication	

Case No. CI-22-01142

Owners Corporation 1 PS721535N
	Plaintiff	
v		
		
Team Building (Vic) Pty Ltd	First defendant	

and		

Hercules Carparking Systems 2004 Pty Ltd (ACN 007 434 452) (in Liquidation)	
Second defendant	

and		

Armsby Nominees Pty Ltd (ACN 110 707 572)	Third party	

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JUDGE:	HER HONOUR JUDGE KIRTON	
WHERE HELD:	Melbourne	
DATE OF HEARING:	Directions Hearing on 16 February 2024, followed by a determination on the papers based on written submissions from the plaintiff dated 25 April 2024 and 24 May 2024 and from the defendant dated 9 May 2024	
DATE OF JUDGMENT:	22 October 2024	
CASE MAY BE CITED AS:	Owners Corporation 1 PS721535N v Team Building (Vic) Pty Ltd & Ors	
MEDIUM NEUTRAL CITATION:	[2024] VCC 1633 		

REASONS FOR RULING
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Subject:	BUILDING CASE - PROPORTIONATE LIABILITY - Domestic Building Contracts Act 1995 - Part IVAA Wrongs Act 1958 (Vic) and/or Part VIA Competition and Consumer Act 2010 (Cth)				
Catchwords: 	Plaintiffs’ claim originally pleaded that the defendant breached the warranties implied by sections 8(a) and (d) of the Domestic Building Contracts Act 1995 to carry out work in a proper and workmanlike manner and with reasonable care and skill – and that the defendant breached a duty of care at common law to carry out its work with reasonable care and skill – defendant’s original defence pleaded these were apportionable claims under Part IVAA Wrongs Act 1958 (Vic) and/or Part VIA Competition and Consumer Act 2010 (Cth) – defendant sought to apportion responsibility with concurrent wrongdoers – plaintiffs amended claim to remove apportionable claims – defendant applied for leave to amend defence to maintain and add further apportionment defences – whether defendant’s proposed amended defence futile with no real prospects of success and should not be allowed – whether an apportionable claim is determined by the plaintiff’s pleading only or is in part an issue of fact to be determined after hearing the evidence at trial – meaning of ‘essential determinant’ – competing authorities – may be reconcilable – recent further authorities of New South Wales Court of Appeal and High Court – whether appropriate to determine on interlocutory application.
Legislation Cited:	Domestic Building Contracts Act 1995 (Vic); Wrongs Act 1958 (Vic); Competition and Consumer Act 2010 (Cth); Supreme Court (General Civil Procedure) Rules 2005; Civil Procedure Act 2010 (Vic);
Cases Cited:	Aon Risk Services Australia v Australian National University (2009) 239 CLR 175; Namberry Craft Pty Ltd v Watson [2011] VSC 136; ABL Nominees Pty Ltd v MacKenzie (No. 2) [2014] VSC 529; Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSCA 98; Matthews v SPI Electricity Pty Ltd; SPI Electricity Pty Ltd v Utility Services Corporation Limited (Ruling No 6) [2012] VSC 70; Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27; Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd (2011) 35 VR 1; APN Funds Management Ltd v Australian Property Investments Strategic Pty Ltd [2011] VSC 555; Uniting Church in Australia Property Trust (Vic) v Ian Hartley Architects Pty Ltd & Ors [2022] VSC 233; Tanah Merah Vic Pty Ltd v Owners Corporation No 1 of PS613436 [2021] VSCA 72; Peck v Eade [2023] VCAT 80; Bellini v Meldan (Vic) Pty Ltd [2021] VCAT 833; Upton v Hartman Construction & Development Pty Ltd [2022] VCAT 224; Owners Corporation PS623721 v Shangri-La Construction Pty Ltd [2022] VCAT 1499; Kettyle v E. Cheong Garden Pty Ltd & Ors [2012] VCAT 1097; LU Simon Builders Pty Ltd v Allianz Australia Insurance Ltd & Ors [2013] VCAT 468; Owners Corporation No 1 of BS613436T v LU Simon Builders Pty Ltd [2019] VCAT 286; Jinalea Pty Ltd v Mace [2019] VCAT 1732; Mazzeo v Camilleri [2021] VCAT 150; Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216; Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187; Godfrey-Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd [2008] VSCA 208; Hunt & Hunt (2013) 247 CLR 613; Perpetual Trustee Company Limited v CTC Group Pty Ltd [No 2] [2013] NSWCA 58; Owners Corporation 1 Plan No. PS 640567Y v Shangri-La Construction Pty Ltd [2020] VCAT 1157; Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232; Pafburn Pty Limited (ACN 003 485 505) & Anor v The Owners - Strata Plan No 84674; Solak v Bank of Western Australia [2009] VSC 82; Tesseract International Pty Ltd v Pascale Construction Pty Ltd [2024] HCA 24; Main Road Property Group Pty & Ors v Pelligra & Sons Pty Ltd & Ors [2010] VSC 5; 

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff	R Rozenberg	Minter Ellison	
			
For the Defendant	F Brimfield	Nicholas Albon Law	

HER HONOUR:

Background

1	This proceeding involves the failure of a car stacker in an apartment building in Cremorne. The Plaintiff Owners Corporation (the OC) sued the first defendant (Team Building) for alleged breaches of the statutory warranties in the Domestic Building Contracts Act 1995 (DBC Act). Team Building previously joined, for the purposes of an apportionment defence and contribution claim, the Second Defendant (Hercules), who manufactured, supplied and installed the car stacker. Team Building further joined, for the purposes of an apportionment defence only, the design architect being the Third party (Armsby).
2	The mediation of this matter was held on 7 February 2024. Shortly prior to that mediation, Hercules went into liquidation. 
3	Following the unsuccessful mediation, Team Building resolved to:
(a)	approach Hercules’ former experts to see whether they would accept an engagement on behalf of Team Building;
(b)	amend its defence to plead a further apportionment defence based on misleading and deceptive conduct in respect of Hercules; and
(c)	make a direct claim for contribution against Armsby.
4	Team Building’s intention to do the above was communicated to the other parties prior to the mediation, and was made clear to the Court at the directions hearing on 18 February 2024.
5	Additionally, Team Building has made it clear to the other parties in correspondence that it intended to engage a further architectural expert, to respond to the report filed on behalf of Armsby, and also to support its direct claim against Armsby.
6	On 2 April 2024 Team Building issued a summons applying for orders including the following:
(a)	Leave to file and serve a further amended defence, in substantially the same form as that which is annexed to the affidavit of its solicitor Nicholas Albon dated 2 April 2024.
7	Team Building has filed the following material in support of its application:
(a)	Affidavit of Nicholas Albon, dated 2 April 2024;
(b)	Proposed further amended defence (PFAD), annexed to the affidavit of Nicholas Albon dated 2 April 2024; and
(c)	Submissions on Pleading Amendments dated 9 May 2024. 
8	The OC has filed the following material in opposition to the application:
(a)	Affidavit of Courtenay Wood, affirmed 25 April 2024; 
(b)	Submissions dated 25 April 2024; and
(c)	Submissions in Reply dated 24 May 2024.
9	The summons was originally listed for hearing on 26 April 2024 but was adjourned to 31 May 2024 to allow Team Building to consider and respond to the OC’s objections. On 30 May 2024 the parties agreed that Team Building’s application may be determined on the papers and the hearing on 31 May 2024 was vacated. 
10	For the reasons that follow, I will grant Team Building leave to file and serve its proposed further amended defence. 
The current pleadings 
11	Until February 2024 the OC’s claims alleged, inter alia, that:
(a)	Team Building had provided the OC with the warranties contained in the first limb of s 8(a) of the DBC Act, and in s 8(d), being the warranties that work would be carried out in a proper and workmanlike manner, and with reasonable care and skill; and/or
(b)	Team Building owed the OC a duty of care at common law to carry out its work with reasonable care and skill.
12	It was not disputed that these claims may be ‘apportionable’ claims within the meaning of Part IVAA of the Wrongs Act 1958 (Vic) (Wrongs Act), nor that Team Building may be entitled to put forward defences apportioning responsibility to concurrent wrongdoers. 
13	Team Building had pleaded an apportionment defence in its Amended Defence dated 2 June 2023, and prior to 23 February 2024, Team Building had put the OC on notice that it intended to plead further apportionment defences naming Hercules and Armsby.
14	On 23 February 2024, the OC filed its Further Amended Statement of Claim (the FASOC) in which it:
(a)	deleted reliance on the warranties contained in the first limb of 8(a) and all of section 8(d) of the DBC Act; 
(b)	deleted reliance on the pleading that Team Building owed the OC a duty of care; and
(c)	relies now only on the warranties contained in the second limb of s  8(a), and the warranties in sections 8(b), (c) and (e) of the DBC Act.
15	The OC’s amendments to remove the ‘apportionable’ claims were made without notice. It was not disputed that the OC made the decision to remove the ‘apportionable’ aspects of its claim after:
(a)	Hercules entered liquidation on 16 January 2024; and
(b)	the OC settled with Armsby on 22 April 2024.
16	It is apparent that that the OC amended its claim in an attempt to move the risk of non-recovery from the other defendants from itself to Team Building. If the OC’s claims are not apportionable claims, then Team Building cannot apportion its responsibility (if any) amongst any concurrent wrongdoers who have caused the OC’s same loss and damage. Instead, Team Building will be liable to the OC and it is a matter for Team Building to try to recover from others. 
The proposed PFAD 
17	Team Building’s proposed amendments in the PFAD are largely confined to:
(a)	pleading matters that were raised by Hercules in its pleading, which were previously incorporated by reference but not specifically pleaded in Team Building’s Amended Defence dated 2 June 2023;
(b)	pleading an additional apportionment defence in respect of Hercules’ alleged misleading and deceptive conduct under the Competition and Consumer Act 2010 (Cth) (CCA); and
(c)	expanding its apportionment defence in respect of Armsby, to incorporate the further matters pleaded in Team Building’s Proposed Statement of Claim against Armsby.
18	There are other minor amendments to the pleading which are a consequence of the changes made to the OC’s Further Amended Statement of Claim that was filed on 23 February 2024.
The principles relating to leave to amend a pleading
19	The principles relating to leave to amend a pleading are well established. In the present matter, the factor relied on by the plaintiff is that of the merits or otherwise of the proposed amendment. 
20	Absent extraordinary circumstances, and unless the court is satisfied that the amendment is futile and has no real prospects of success, the amendment should be allowed.
21	As the Court of Appeal in Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd said: 
In an application for leave to amend a pleading, the court proceeds on the basis that the application will be granted (subject to other issues), provided that the amended pleading would not be one which would be liable to be struck out on a summary application. Thus, the court ordinarily allows an amendment, unless it is plainly demurrable.
22	Derham AsJ in ABL Nominees Pty Ltd v MacKenzie (No. 2) set out and discussed the relevant principles, including referring to r 36.01(1) of the Supreme Court (General Civil Procedure) Rules 2005, s 63 of the Civil Procedure Act 2010 (Vic), and to earlier authorities. His Honour concluded : 
… pleadings are not an end in themselves. They are a means of ensuring that real issues of controversy are raised for determination in a way that is procedurally fair, both to a plaintiff and a defendant. This allows claims and defences to be clearly articulated, granting parties an opportunity to present their case properly prepared, on clear notice of allegations and defences raised in the proceedings. On this basis, the authorities clearly establish that, absent extraordinary circumstances, leave to amend will be granted.
23	Derham AsJ also summarized the following principles :
(a)	An amendment which is futile because it is bad in law will not be allowed.
(b)	If a proposed amendment would be liable to be struck out if it were in an original pleading, either because it was bad in law or defective as a pleading, then leave to file it will not be given. 
(c)	The Court does not, at this stage, engage in an examination of the merits of the case in the part of the pleading which is objected to, but where that amendment introduces a patently hopeless issue for determination then its inclusion will be futile and that will be a significant, and probably decisive, matter in the exercise of the Court’s discretion.
(d)	The test is best expressed in the words of s 63 of the Civil Procedure Act 2010 (CP Act): if the amendment has no real prospect of success at trial, that would be a highly relevant and probably decisive factor in the exercise of the discretion.
24	The test under s 63 of the CP Act is whether the defendant’s defence has a ‘real’ as opposed to a ‘fanciful’ chance of success. It is not sufficient for a party to merely have an arguable case, it must have a real prospect of succeeding.
25	The Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd has observed that the test whether a claim ‘has no real prospect of success’:
…should be construed as one of whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success; that the ‘real chance of success’ test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test; and that, as the law is at present understood, the real chance of success test permits of the possibility that there may be cases, yet to be identified, in which it appears that, although the respondent’s case is not ‘hopeless’ or ‘bound to fail’, it does not have a real prospect of succeeding. 
26	In Uniting Church in Australia Property Trust (Vic) v Ian Hartley Architects Pty Ltd & Ors, his Honour Delany J emphasised the need to consider whether a plea, including as to a legal argument, has a proper basis and is properly arguable in accordance with s 18 of the CP Act.
27	The policy behind Part 4.4 of the CP Act (in which s 63 and associated provisions are housed) is to enable disposition of unmeritorious claims and defences so as to save the costs, time and resources of the courts.
The plaintiff’s submissions
28	The OC opposes the grant of leave in respect of paragraphs [22] - [47] of the PFAD. In summary, it submits that as it has abandoned those claims in its FASOC which were arguably apportionable, the OC’s claim is not an ‘apportionable claim’ within the meaning of either the Wrongs Act or the CCA. Accordingly, the above paragraphs of the PFAD are futile with no real prospects of success, and should not be allowed.
Section 8 DBC Act claims are not apportionable
29	In the present matter, the OC’s claim relies on the second limb of s 8(a), as well as sections 8(b), 8(c) and 8(e), of the DBC Act.
30	The decision of the Court of Appeal in Tanah Merah Vic Pty Ltd v Owners Corporation No 1 of PS613436, (Tanah Merah) makes it clear that the warranties at sections 8(b), (c) and (e) of the DBC Act do not give rise to apportionable claims under the Wrongs Act. The Court emphasised that the plain meaning of s 24AF(1)(a) of the Wrongs Act requires a claim arising from a failure to take reasonable care, and this does not extend to a claim ‘involving circumstances arising out of a failure to take reasonable care’.
31	Further, whilst there are some competing authorities as to whether the warranty implied by s 8(a) gives rise to an apportionable claim under the Wrongs Act, it is only in respect of the limb of s 8(a) which requires work to be carried out ‘in a proper and workmanlike manner’ that it has been suggested that a claim may be apportionable. 
32	In the present matter the FASOC does not rely on that limb of s 8(a) which may arguably be apportionable. The OC’s plea is limited to a breach of the other limb of s 8(a) which requires work to be carried out ‘in accordance with the plans and specifications’. There is no realistic prospect of Team Building establishing that reliance on this limb of s 8(a) in the FASOC is a claim that arises from a failure to take reasonable care.
33	The OC submits that by abandoning its apportionable claims, it has sought to narrow the scope of the issues in dispute, in accordance with its overarching obligations under the CP Act. 
34	The OC also contends that by contrast, if allowed, paragraphs [22] - [47] of the PFAD, would have the effect of substantially enlarging the issues in dispute. For example, significant argument, evidence and trial time (and associated costs) would need to be devoted to the matters raised in relation to the alleged misleading and deceptive conduct by Hercules, including in respect of the counterfactual that is sought to be pleaded at [26K] of the PFAD.
35	Accordingly, the OC says that it is particularly important not to leave these issues undetermined until trial. Rather, in accordance with the principles set out above, the Court should only allow those proposed amendments in respect of which it is satisfied that Team Building has real prospects of success. 
CCA claims are not apportionable
36	The OC says that a claim for breach of those s 8 warranties it now pleads does not fall within the scope of s 87CB(1) of the CCA. Accordingly, Team Building’s apportionment defences based on s 87CD of the CCA have no realistic prospect of success.
The defendant’s submissions
The section 8 DBC Act claims 
37	Team Building acknowledges the correctness of the OC’s summary of Tanah Merah, at least insofar as the finding that the warranties at ss 8(b), (c) and 8(e) of the DBC Act are not apportionable. Team Building also acknowledges the distinction within the two limbs of the s 8(a) warranty, and the lack of binding authority surrounding that subsection. It also concedes that the OC has pleaded only the so called ‘non-apportionable’ warranties, namely, the second limb of s 8(a), and s 8(b), (c) and (e). 
38	However, Team Building contends this is not the complete answer to their application. It says that what the Court of Appeal did not do in Tanah Merah was reject as incorrect all of the previous jurisprudence which came before it which was to the effect that a party’s pleaded claims are not the be-all and end-all of determining whether or not the claims are apportionable.
39	A number of authorities, which are still good law, suggest that the question whether a claim is an apportionable claim, and therefore whether an apportionment defence is available to Team Building, is not limited by the OC’s pleading. Instead, that is in part an issue of fact to be determined after hearing the evidence at trial. 
40	In their written submissions, Counsel for Team Building set out the authorities and discussed them in some detail. Because there has been a lack of considered determination of these issues and there are still unresolved questions in this area of law, I have reproduced Team Building ’s submissions at length in the following paragraphs, including the emphases stressed by Counsel. 
41	In Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd, (Dartberg) Middleton J remarked on the operation of the Victorian Wrongs Act: 
In my view, Pt IVAA could apply in the circumstances of this proceeding according to its own terms. Where a claim brought by an applicant does not have as one of its necessary elements any allegation of failing to take reasonable care, an additional enquiry into the failure to take reasonable care may become relevant in the course of a trial to determine the application of Pt IVAA. Even though the claims in this proceeding themselves do not rely upon any plea of negligence or a “failure to take reasonable care” in a strict sense, a failure to take reasonable care may form part of the allegations or the evidence that is tendered in the proceedings. At the end of the trial, after hearing all the evidence, it may be found that Pt IVAA applies.
…
The court, after hearing all the evidence, will then need to determine, as a matter of fact, whether the relevant claim brought by the applicant is a claim arising from a failure to take reasonable care. 
42	His Honour’s comments in Dartberg were obiter in that he ultimately decided that the Victorian Wrongs Act did not apply to the claim before him, but were cited with approval by Barrett J in Reinhold v New South Wales Lotteries Corporation (No 2) (Reinhold). 
43	In Reinhold, Barrett J remarked of the proportionate liability provisions in the Civil Liability Act 2002 (NSW):
There was some debate before me about the construction of Part 4 of the Civil Liability Act and the fact that its provisions are, in terms, concerned with “claims”, not liability as such. But I am of the opinion that the several references to “claims” are references to determined or decided claims that have been established as sources of liability…
It seems to me clear that a person will be a “concurrent wrongdoer” only if the court makes findings about the existence of “loss or damage” and about which acts or omissions “caused” the loss or damage. It is only when those findings are made that it is possible to identify, as contemplated by s 34(2), each person whose acts or omissions, as found, “caused” the “loss or damage”, as found. At that point, and not before, a person can be seen to be a “concurrent wrongdoer”.
The relevant “claim” – that is, the claim in relation to which the identified person is a “concurrent wrongdoer” - can only be the claim in respect of which the findings concerning loss or damage and causation are made. That claim is, of necessity, a claim already litigated, not a pending or foreshadowed claim. Its nature and content (and, therefore, its status under s 34(1)) will be discoverable by looking at the findings that cause it to be determined as it is determined. If, on those findings, it is seen that the loss or damage (as established in “an action for damages”) arose from a failure to take reasonable care and did not arise out of personal injury, the case will be within s 34(1)(a); and if it is seen that there was a contravention of s 42 of the Fair Trading Act, the case will be within s 34(1)(b). In either such case, the already litigated “claim” will be an “apportionable claim” because of s 34(1) and, if, on the findings made, the acts or omissions of several persons “caused” the “damage or loss” as found, the persons will be “concurrent wrongdoers”.
The need to know the outcome of the claim in order to apply Part 4 is emphasised by s 34A. The operation of that section – and, therefore, the ambit of Part 4 as a whole – depends on the ability to know, among other things, whether a person “intended to cause” or “fraudulently caused” the “loss or damage that is the subject of the claim”. These things can be judged only after the loss or damage and its causes have been identified through a process of fact finding and analysis. Viewed in prospect and in its pending state, a claim might allege an intentional or fraudulent act or omission, but it is impossible to say, at that point, whether any loss or damage was caused and, if it was, what caused it – in particular, whether it was intentionally caused or fraudulently caused.
On this basis, the nature of a “claim”, for the purposes of Part 4, will be determined by what the court has decided in the case, not by what might be prayed or pleaded in an initiating process or points of claim. In short, “claim” refers to a claim as proved and established, not a claim as made or advanced. 
44	Barrett J’s reasoning was them approved by the Court of Appeal (comprised of Nettle, Ashley and Neave JJA) in Godfrey-Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd (Godfrey-Spowers). Ashley JA wrote the leading judgment, saying of the importance of fact finding at the trial as follows:
First, if pleadings rather than judgment could ever render a matter an ‘apportionable claim’, and a defendant a ‘concurrent wrongdoer’ they did not do so in this instance…
The second reason why I do not agree with the proposition that the liability of Spowers was, as it were, immediately confined by operation of the pleadings to proportionate liability under Part IVAA is that, in my opinion, the operation of Part IVAA is dependent upon judgment by a plaintiff against a defendant. I consider, contrary to the submission of counsel for the engineer, that it is not simply the quantum of the limitation on liability which depends upon judgment.
The definition of ‘apportionable claim’ by s 24AE, and the description in s 24AF of circumstances in which Part IVAA applies do not mean that, once something that looks like an apportionable claim is pleaded, a defendant forthwith becomes a ‘concurrent wrongdoer’. Section 24AH(1) emphasises that whether a wrongdoer is of that character depends upon the person having been one of two or more persons whose acts or omissions caused the plaintiff’s loss and damage. At least absent highly unusual pleadings, determination of the critical circumstances will depend upon findings having been made. Section 24AI(1) is consistent with such an analysis. It limits the liability of a concurrent wrongdoer to an amount reflecting the proportion of the plaintiff’s loss or damage claimed which the Court considers just in all the circumstances, the Court being obliged to take into account the responsibility of other concurrent wrongdoers who are parties to the proceeding, but ordinarily not others. The importance of the Court’s adjudication is emphasised by this provision, as it is by s 24AJ, which naturally flows from it. The same may be said of s 24AK(1), which takes as its standing point judgment against a concurrent wrongdoer.
Such an analysis of similar provisions was made, as counsel for Spowers submitted, by Barrett J in Reinhold v NSW Lottery Corporation (No2). It is true, as counsel for the surveyors submitted, that Reinhold was a case conducted within the confines of the NSW equivalent of Part IVAA. But in my opinion it gives the lie to the idea that, without judgment, a defendant who might turn out to be a concurrent wrongdoer in an apportionable claim attains that status, and is fixed with liability under Part IVAA – judgment merely fixing the quantum of the liability.
45	Ashley JA then went to quote the relevant parts of Barrett J’s decision in Reinhold (which are quoted above), before stating: 
Those observations emphasised the importance of trial to the determination of the application of the relevant legislation. As will be apparent, I respectfully agree with his Honour’s analysis.
46	Team Building then turned their attention to the OC’s contention that the Court of Appeal in Tanah Merah overturned the above authorities. Counsel submitted that such a conclusion is not borne out on a careful reading of the judgment. Counsel’s submissions set out the following relevant parts of the Tanah Merah judgment:
Thomas Nicolas and Elenberg Fraser relied upon Reinhold and Dartberg to support arguments that the Owners’ claims against LU Simon were apportionable.  In our view, however, the plain meaning of the statutory provision requires a claim arising from a failure to take reasonable care.  The claim in Hunt & Hunt exemplifies such a claim. 
It is not disputed that Mitchell Morgan’s claim against Hunt & Hunt is an ‘apportionable claim’ within the meaning of s 34(1)(a). The claim was based upon Hunt & Hunt’s breach of an implied term of its retainer that it exercise proper skill, diligence and care. Section 34(1A) provides that 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, whether of the same or a different kind. There is no express limitation on the nature of the claim which might have been brought by the plaintiff against a concurrent wrongdoer, except the requirement of s 34(2) that the acts or omissions of all concurrent wrongdoers have caused the damage in question. 
The definition does not extend to a claim ‘involving circumstances arising out of a failure to take reasonable care’.  The claim itself must arise from a failure to take reasonable care.  Such a construction is consistent with the purpose identified at [16] of Hunt & Hunt.
Moreover, despite the breadth of the observations of Barrett J in Reinhold, in Perpetual Trustee Company Limited v CTC Group Pty Ltd [No 2], his Honour speaking as a member of the NSW Court of Appeal subsequently said:
It cannot be suggested (nor do I think it has been suggested in any decided case) that the nature or quality of a ‘claim’ is, for relevant purposes, to be determined solely by looking at the court's decision in relation to it.  Nor is the nature or quality of a ‘claim’ to be determined solely by looking at the terms in which it is framed.  Rather, it is a combination of the terms in which the claim is framed (or pleaded) and relevant findings of the court in relation to it that must be assessed in order to decide whether it is a claim ‘in an action for damages . . . arising from a failure to take reasonable care’ and has the other attributes of an ‘apportionable claim’ under s 34(1)(a).
In our view, this passage makes it clear that the terms in which the claim is framed are the starting point for deciding whether the claim is of the kind referred to in s 24AF(1)(a) of the Wrongs Act. 
…
Notwithstanding what Barrett J said in Reinhold, it seems to us that his Honour’s view (as expressed in Perpetual Trustee) is now that the terms in which the claim is framed are an essential determinant of whether a claim can be said to arise from a failure to take reasonable care.  In our opinion, that is the correct approach.
47	Team Building then submitted that there is at first blush a tension between what the Court of Appeal said in Godfrey-Spowers and its later reasoning in Tanah Merah. On the one hand, Godfrey-Spowers (and Reinhold and Dartberg) are saying that the findings made at trial are of critical importance. On the other hand, Tanah Merah is saying that the terms in which the claims are framed are an essential determinant.
48	Team Building contended that the better view is that the Court in Tanah Merah simply emphasised that the parties’ pleadings are an essential consideration in determining whether a claim is apportionable but that the Court’s actual findings following a trial are still relevant. 
49	Such an interpretation is consistent with what Barrett J later said in Perpetual Trustee Company Limited v CTC Group Pty Ltd [No 2] (Perpetual Trustee), that it is a combination of the findings made following a trial together with the pleadings that determine whether claims are apportionable or not. It would also allow the Court of Appeal’s two decisions in Tanah Merah and Godfrey-Spowers to be read together and to happily coexist. In other words, a plaintiff’s pleaded claims must be considered in determining whether the claims are ultimately apportionable, but that determination will also depend upon the ultimate findings of fact following the evidence.
50	Team Building suggested that if the Court finds for the OC on responsibility, then there is a real (as opposed to fanciful) prospect the Court might find that Team’s responsibility arises from a failure to take reasonable care, notwithstanding the pleadings. Team provided detailed examples of how this might arise on the current FASOC, in respect of each of the ‘non-apportionable’ statutory warranties implied by s 8(b), (c), (e), and the first part of (a). I will not set out the examples in detail, but summarise them as follows: 
(a)	The warranty that the works would be carried out in accordance with the plans and specifications (partial s 8(a) warranty):
Team Building acknowledges that it constructed the car stacker pits slightly smaller than what was shown on the latest version of the construction issue plans. Hercules’ and Armsby’s discovered documents reveal they were aware of the discrepancy and that Team had used an earlier set of plans. There is expert evidence already filed, and more foreshadowed, about what a competent architect should have done being confronted with the discrepancy. It is possible that the Court might find that the construction of the pit size smaller than what was specified in the plans occurred because Team did not use the latest set of plans, which arises from a failure to take reasonable care. 
(b)	The warranty that the materials would be good and suitable for the purpose for which they are used (s 8(b) warranty):
A finding that something is not fit for purpose is not mutually exclusive with a failure to take reasonable care. As with the previous example, there is expert evidence linking the size of the pits and the car parking bays to errors in the use of the stacker. It is open to the Court to find that the car stacker is not fit for purpose, but it was rendered so by some want of care by Team Building.
(c)	Warranty that the work will be carried out in accordance with and will comply with all laws and legal requirements (s 8(c) warranty):
The FASOC does not particularise which laws and legal requirements are said not to have been met. Assuming the OC means provisions of the Yarra Planning Scheme (which it had previously pleaded and provided expert opinion about, which Team Building refers to in its Defence), it is open for the Court to find that Team Building bore all the risk and responsibility of ensuring compliance with the planning scheme and the planning permit, and what led to the non-compliance with the scheme/permit was a want of care by Team Building in adequately supervising the various consultants, and checking all conditions on the discretionary planning permit were met before certifying completion of its works.
(d)	The warranty that the work and any material used in carrying out the work will be reasonably fit for that purpose or would be of such a nature and quality that they might reasonably be expected to achieve that result (s 8(e) warranty):
This is a similar situation to the warranty at s 8(b), discussed above.
51	Team Building concluded its submissions by saying that all the Court has to be satisfied of is that the apportionment defences are not futile. They say that to so find at this interlocutory stage would mean the Court would have to find that the superior court and intermediate-appellate decisions of Dartberg, Reinhold, Godfrey-Spowers and Perpetual Trustee were wrong. They repeat that this is something that the Court of Appeal did not expressly do in Tanah Merah.
The CCA apportionment defence
52	In its PFAD, Team Building had proposed an apportionment defence alleging that Hercules misled and deceived Team Building and Armsby, which ultimately caused the OC’s loss and damage. 
53	Team Building now concedes the OC’s argument that there was no prospect that the OC’s claims were an “apportionable claim” under the CCA, because section 87CB(1) limits apportionable claims to claims for damages under section 236 of the ACL, which the OC has not pleaded in its FASOC. 
54	However, Team Building has applied to further amend its defence to remove those apportionment defences which relied on the apportionment provisions of the CCA, and to rely instead on the Wrongs Act 1958 (Vic) and the ACL (Victoria). 
55	The apportionment regime under the Wrongs Act is broader than that under the CCA. The CCA is limited to claims for damages under the ACL, whereas the regime under the Wrongs Act applies to any “claim for economic loss or damage to property in an action for damages (whether in tort, in contract, under statute or otherwise) arising from a failure to take reasonable care” 
56	Team Building submitted that it is open and arguable that the OCs claims may well turn out to be apportionable claims within the meaning of the Wrongs Act. The relevant question will then become whether the apportionable defence concerns the same loss and damage.
57	Team Building has pleaded that the misleading and deceptive conduct does concern the same loss and damage, because had Hercules not misled and deceived Team Building and Armsby, Armsby would not have recommended the particular car stacker model to the developer and a more robust and reliable system would have been installed, and Team would not ultimately have contracted with Hercules to supply that particular model of car stacker.
58	Team Building submits that this defence is open, arguable, and not futile. It should be permitted to go to trial.
The plaintiff’s reply submissions
59	In reply, the OC disputed Team Building’s contentions. They submitted that Team Building’s arguments were rejected in the VCAT decision of Deputy President Aird in Owners Corporation 1 Plan No. PS 640567Y v Shangri-La Construction Pty Ltd (Shangri-La Construction). In that decision, Deputy President Aird considered the authorities and passages relied on by Team Building in this matter. She concluded by rejecting the builder’s application to introduce apportionment defences, and emphasised that in ‘civil litigation the onus is on an applicant to prove its case, and it must be within the control of the applicant as to which cause of action it seeks to rely on when bringing its claim’. 
60	The OC also relied upon and repeated paragraphs 117, 121, 122 and 124 of Tanah Merah.
Discussion and analysis
61	I accept Team Building’s submission that there is an unresolved tension between the decisions in Dartberg, Reinhold, Perpetual Trustee and Godfrey‑Spowers on the one hand, and Shangri-La Construction and Tanah Merah on the other hand. 
62	In the latter case, the Court of Appeal referred to its earlier decision of Godfrey‑Spowers, and acknowledged the breadth of the dicta. The Court then stated that the decision ‘is not authority for the proposition that a claim which does not itself arise from a failure to take reasonable care, can be transformed into an apportionable claim by a defendant establishing that the circumstances upon which the plaintiff relies arose out of a failure to take reasonable care’. 
63	At first blush, that statement may appear to be rejecting the proposition that findings of fact, as well as the plaintiff’s pleaded claim, may be taken into account when ascertaining if a claim is apportionable. However, I agree with Team Building, that it is significant that the Court did not actually reject as incorrect all of the previous jurisprudence which came before it. Its statement quoted in the preceding paragraph (from paragraph 124 of the decision) does not expressly deny a place for the findings of fact made by the trial court in determining if a claim is apportionable. 
64	A recent decision of the New South Wales Court of Appeal highlights the tension referred to by Team Building. Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) (Gerrard Toltz) was handed down after the parties filed their submissions in the present matter. The NSW Court of Appeal criticised the Victorian Court of Appeal's decision in Tanah Merah. The NSW Court held: 
In March 2021, the Victorian Court of Appeal addressed the apportionment provisions of the Victorian Wrongs Act in Tanah Merah Vic Pty Ltd v Owners’ Corporation No 1 of PS631436T. In the Court’s assessment, it was no longer appropriate to follow the reasoning of Middleton J in Dartberg, nor that of Barrett J in Reinhold, in part because Barrett JA in CTC Group appeared to have qualified his position so as to clarify that “the terms in which the claim is framed are the starting point for deciding whether the claim is of the kind referred to in [the equivalent of s 34(1)(a) of the Civil Liability Act]”: at [115]. Then, having referred to Macfarlan JA in CTC Group, the Court opined that:
Notwithstanding what Barrett J said in Reinhold, it seems to us that his Honour’s view (as expressed in Perpetual Trustee) is now that the terms in which the claim is framed are an essential determinant of whether a claim can be said to arise from a failure to take reasonable care. In our opinion, that is the correct approach.
The phrase, “an essential determinant” is ambiguous; in the following paragraph the Court took issue with the view that “the nature of the claim itself is irrelevant to the question whether the claim is one ‘arising from a failure to take reasonable care’” and has a number of anomalous consequences. With respect, there would appear to be an alternative reading (that adopted by Barrett JA in CTC Group) which permits both the pleading of the claim and the findings made by the trial court, to be given weight in determining the issue.
65	Gerrard Toltz appears to support Team Building’s contentions, and the decisions in Dartberg, Reinhold, Perpetual Trustee and Godfrey‑Spowers, that both the pleading of the claim and the findings made by the trial court may be relevant to determining the question of whether a claim can be said to arise from a failure to take reasonable care. 
66	Tellingly, that this is a live issue was noted in the appellants’ submissions made to the High Court recently in Pafburn Pty Limited (ACN 003 485 505) & Anor v The Owners - Strata Plan No 84674, in the context of the Civil Liability Act 2002 (NSW). The issue is not directly before the High Court in that case (which is yet to be determined), but Counsel for the appellants stated as follows:
Now, the scope of that clause [s 34(1)] 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.  
67	In Shangri-La Construction (which pre dates Tanah Merah), the VCAT Deputy President referred to and discussed the earlier decisions. She also referred to the decision of Solak v Bank of Western Australia (Solak), where Pagone J said:
However, the apportionability of claims under the State legislation all depend fundamentally upon whether the claim is one “arising from a failure to take reasonable care”. Bank West’s claim against the third parties is not pleaded as such but the factual pre‑condition to the operation of the relevant statutory regimes does not depend upon how a claim is pleaded but whether the statutory precondition exists, namely whether the claim arises from a failure to take reasonable care. In Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd Middleton J said that the words “arising from a failure to take reasonable care” should be interpreted broadly. In my view the State regimes providing for apportionment of liability between concurrent wrongdoers requires a broad interpretation of the condition upon which apportionment provision depends to enable courts to determine how the claim should be apportioned between those found responsible for the damage. The policy in the legislation is to ensure that those in fact who caused the actionable loss are required to bear the portion of the loss referable to their cause. That task ought not to be frustrated by arid disputes about pleadings. Support for that conclusion may be found by the circumstance that a “failure to take reasonable care” can arise as much from an obligation in tort as in contract. In this case Bank West’s claim for indemnity based upon a failure to sight original documents (that is, a breach of contract) may aptly be described as a failure to take reasonable care for the purposes of the apportionment provisions. 
68	I note that the parties in the present matter have not referred to Solak. The comments of Pagone J set out above seem to indicate he falls in the camp that pleadings are not the sole determiner, although he does look at whether the action itself can be regarded, in fact, as a claim in an action arising from a failure to take reasonable care.
69	A distinguishing factor between Shangri-La Construction and the present matter, is that Shangri-La Construction involved an application by a respondent to join further parties to a proceeding in circumstances where the applicant had made no claim against them. DP Aird’s conclusion must be read in that context:
I am not persuaded that any of the authorities relied on by the Builder stand for the proposition that there must be total disregard for the claim as put by an applicant. It is one thing for a respondent to rely on and plead out the cause of action an applicant has against an alleged concurrent wrongdoer, it is quite another to rely on and plead out a cause of action an applicant has against a respondent but has chosen not to pursue. In civil litigation the onus is on an applicant to prove its case, and it must be within the control of the applicant as to which cause of action it seeks to rely on when bringing its claim. Whilst allowing a respondent to join alleged concurrent wrongdoers in an attempt to reduce its responsibility to an applicant, where a court or tribunal is satisfied those joined are concurrent wrongdoers, its task is to apportion responsibility; not liability.
70	On the other hand, in the present matter the OC had ‘chosen to pursue’ apportionable causes of action. The OC has already joined the other defendants and has already brought apportionable claims against them. It later withdrew those claims, after Team Building had filed a defence relying on them being concurrent wrongdoers, had made forensic decisions, and had run its case for more than two years on that basis. It is therefore arguable that the comments set out above can be distinguished from the present fact scenario. These are matters that are not appropriate to determine on an interlocutory basis.
71	A further matter bearing on my decision is the High Court decision of Tesseract International Pty Ltd v Pascale Construction Pty Ltd (Tesseract), which was handed down after the parties filed their submissions in the present matter and before Gerrard Toltz. Five separate judgments of the High Court justices have considered matters including Part VIA of the CCA which Team Building had originally proposed to rely on in its PFAD (especially sections 87CB and 87CD). In its subsequent written submissions, filed prior to Tesseract, Team Builders conceded the CCA may not assist it and proposed redrafting those paragraphs of its PFAD. In my view, in light of the High Court decision, Team Builders should be given the opportunity to consider the competing judgments in Tesseract before re-pleading and before this question is determined adversely to it.
72	In my view, there is enough uncertainty in the authorities, and lack of a binding ratio decidendi, that the question of whether only the pleadings may define if a claim is apportionable, or whether that is a question to be determined after hearing all the evidence, is open and arguable. It is a matter to be determined at trial. It is not appropriate to finally determine this question on an interlocutory application. 
73	I rely on the comments of Croft J in Main Road Property Group Pty & Ors v Pelligra & Sons Pty Ltd & Ors where he said:
As was emphasised by Middleton J in Dartberg the assessment of the application or otherwise of Part IVAA of the Wrongs Act at a preliminary stage of the proceedings does not pre-empt the further consideration and final determination of the issue in the course of the trial, in light of a full hearing of the evidence and submissions. This process at trial will involve the determination whether or not a claim is an “apportionable claim” under Part IVAA and, if so, the consequences in the particular circumstances with respect to the apportionment of liability among each of the defendants subject to such a claim. In my view the final determination of the issue at an earlier stage of proceedings carries a significant risk of injustice when the result is to preclude the reduction of proportionate liability of a defendant or defendants as a result. 
Conclusion 
74	In light of the unresolved questions, the seemingly competing authorities, and the lack of a considered determination of these issues, in my view it is not appropriate to determine these questions on an interlocutory application. That is a matter for the final hearing, after the parties have had the opportunity to provide detailed submissions.
75	Accordingly I will order that Team Building is given leave to file and serve a further amended defence, in substantially the same form as that which is annexed to the affidavit of its solicitor Nicholas Albon dated 2 April 2024.
76	The parties have each provided draft timetabling orders. I invite them to provide a new version (by consent or otherwise) of the orders they seek following this determination.

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Certificate
I certify that these 23 pages are a true copy of the ruling of her Honour Judge Kirton delivered on 22 October 2024.
 
Dated: 22 October 2024
Jessica Meaney
Associate to Her Honour Judge Kirton