A building contractor applied to add its steelwork subcontractor
as a co-defendant to the proceedings by the proprietor of a
shopping centre for breach of certain contractual warranties
concerning workmanship that resulted in damage to the building. The
contractor contended that the subcontractor, which had allegedly
caused the damage, was a concurrent wrongdoer under Part IVAA of
the Wrongs Act 1958 ('the
Act') with the result that the contractor could
apportion its liability.
The Court held that the subcontractor was not a concurrent
wrongdoer because it had no legal liability to the proprietor in
contract or tort. The joinder application was therefore
Bevendale Pty Limited ('the
proprietor') owned a shopping centre in Epping
('the shopping centre'). The
proprietor entered into a building contract with Equiset
Construction (Epping) Pty Limited ('the
contractor') to carry out construction works at
the shopping centre. The contractor subcontracted with GFC
Industries Pty Limited ('the
subcontractor') to supply and install structural
Some years later, a structural steel truss and four concrete
wall panels fell and caused damage to the shopping centre. The
proprietor sued the contractor for breach of contractual warranties
regarding quality of material, workmanship, and fitness for
purpose. The warranties covered acts and omissions of
The contractor alleged that the incident occurred because the
subcontractor had failed to take reasonable care in attaching the
structural steel truss to prefabricated concrete panels.
The contractor applied to join the subcontractor. In order to
succeed under the Act, it needed to be established that the
subcontractor was a concurrent wrongdoer, which required, in this
case, that the subcontractor owed a duty to the proprietor, to take
reasonable care and the breach of that duty had resulted in the
loss or damage.
It was common ground that there was no contractual relationship
between the subcontractor and the proprietor, and any apportionable
claim would be based on a duty of care owed to the proprietor. The
contractor argued that there was a duty of care because to hold
otherwise would leave the proprietor vulnerable to loss and damage
arising from defective workmanship by the subcontractor. The
proprietor argued otherwise.
The Court found that the subcontractor owed no duty to the
proprietor. There was no contractual relationship between them and
no grounds to require a duty of care. The proprietor was not
vulnerable in any way; it was fully protected by the contractual
warranties from the contractor. In arriving at this conclusion, the
Court relied on the reasoning of members of the High Court in
Woolcock Street Investments Pty Limited  216 CLR at 515 where
the majority held that an engineering company responsible for
designing the foundation of a warehouse and office complex did not
owe a duty of care to subsequent purchasers. It was said there that
the purchasers were not vulnerable because they could have
inspected the building for defects before purchase and protected
themselves by contractual and other means.
McHugh J made particular reference to outflanking of the
operation of the law of contract and the ability of a proprietor to
obtain warranties from the contractor if a duty of care were to
The Court said that to require a duty of care in the
circumstances would be, in effect, to impose on the subcontractor
the obligations of the contractor under the warranties. This would
dilute the effect of contractual warranties given by the contractor
and substantially change long established contractual relationships
in the building industry.
The Court therefore held that the contractor failed to show an
arguable proposition for an apportionable claim. The joinder
application was refused. Of course, the contractor may still be
able to sue the subcontractor for damages for breach of the
subcontract, its loss being comprised of the contractor's
liability to the proprietor and perhaps other expenses.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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