Apportionment Under the Wrongs Act: Unresolved Questions on the Scope of the “Concurrent Wrongdoer” Definition

In BlueCross Community Care Services Group Pty Ltd v Buxton Constructions (Vic) Pty Ltd & Anor [2026] VSC 581, Associate Justice Goulden of the Supreme Court of Victoria refused to strike out a proportionate liability defence raised under Part IVAA of the Wrongs Act 1958 (Vic) (Wrongs Act).

The application was brought by BlueCross (Owner), who contended that the defence did not disclose a viable cause of action for the purposes of r 23.02(a) of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) (SC Rules). At the heart of the dispute was whether a defendant can rely on proportionate liability defence where the person it identifies as a “concurrent wrongdoer” under s 24AH of the Wrongs Act is the subject only of contractual claims and not claims alleging a failure to take reasonable care.

Her Honour found the defence to be at least arguable and held that the contested questions of statutory interpretation ought to be determined at trial rather than resolved summarily.

The proceeding concerned the construction of an aged care facility in Box Hill. BlueCross, as owner, brought claims against two defendants: Buxton Constructions (Builder), the builder, and Billard Leece Partnership (Architect), the architect.

Critically, the claims against the Builder sounded exclusively in contract. The Owner alleged breaches of contractual warranties and indemnities but did not allege that the Builder had failed to exercise reasonable care. The claims against the Architect, by contrast, were advanced in both contract and negligence.

The Architect’s defence included an apportionment plea under Part IVAA of the Wrongs Act. It alleged that the Builder was a “concurrent wrongdoer” within the meaning of s.24AH, on the basis the Builder’s acts or omissions had caused the same loss and damage for which Owner attributed to the Architect. On that basis, the Architect sought to limit its liability to the proportion the Court considered just, having regard to the Builder’s comparative responsibility.

The Owner applied to strike out the Architect’s apportionment defence. It argued that, because its claims against the Builder did not arise from any failure to take reasonable care, the Builder was not capable of being a concurrent wrongdoer under the Wrongs Act, and therefore the Architect’s defence in relation to its apportionment claim was untenable as a matter of law. It was noted on the application that the Builder had recently entered liquidation, which may have informed the timing of the application.

Part IVAA of the Wrongs Act governs the apportionment of liability for “apportionable claims”. Under s.24AF(1)(a), an apportionable claim is a claim for economic loss or damage to property in an action for damages arising from a failure to take reasonable care.

Section 24AH(1) provides that a “concurrent wrongdoer” is a person who is one of two or more persons whose acts or omissions caused, independently of each other or jointly, the loss or damage that is the subject of the claim. Where the regime applies, s.24AI(2)(b) limits the defendant’s liability to an amount reflecting its proportionate share of the loss.

The Owner maintained that, on a proper reading of s.24AH, a person can only qualify as a concurrent wrongdoer if the claim made against that person is itself an apportionable claim; that is, one arising from a failure to take reasonable care. Given all of the Owner’s claims against the Builder were alleged on the basis of contractual warranties rather than negligence, it followed (on the Owner’s application) that the Builder was incapable of being a concurrent wrongdoer and the entire apportionment regime was inapplicable.

In support, the Owner pointed to the Victorian Court of Appeal’s reasoning in Tanah Merah Vic Pty Ltd v Owners Corporation No 1 of PS613436 (2021) 75 VR 1, where the Court held that the terms in which a claim is framed are “an essential determinant” of whether it arises from a failure to take reasonable care. The Owner also relied on Ball J’s analysis in LM Investment Management Limited (in liq) v BMT & Assoc Pty Ltd [2015] NSWSC 1902, where his Honour concluded that a concurrent wrongdoer must be a person against whom a claim is based on a failure to take reasonable care, or such a claim could be brought.

The Architect took issue with that construction. It submitted that s.24AH(1) directs attention to a factual question, being whether the putative concurrent wrongdoer’s acts or omissions caused the same loss or damage, rather than a legal inquiry into the nature of the claim pleaded against that person. The Architect relied principally on the High Court’s observations in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613, where the majority stated that there is “no express limitation on the nature of the claim which might have been brought by the plaintiff against a concurrent wrongdoer”, save for the requirement that the wrongdoer’s conduct caused the relevant damage. In that case, liability was apportioned against parties who had engaged in fraud, a cause of action which does not itself rest on a failure to take reasonable care.

Her Honour declined to strike out BLP’s defence and dismissed the Owner’s application.

Goulden AsJ identified two significant areas of uncertainty in the existing case law. The first was whether s.24AH requires that each putative concurrent wrongdoer be the subject of an apportionable claim. Her Honour observed that while Ball J’s reasoning in LM Investment offered the strongest support for the Owner’s position, his Honour had himself acknowledged that the legislation was “not entirely clear”. The Court noted, in another Supreme Court of Victoria decision, Forbes J in Trani & Anor v Trani [No 2] (2019) 59 VR 362, it had applied apportionment against parties who had committed fraud alongside a negligent defendant, without requiring the claims against the fraudsters themselves qualify as apportionable claims. Her Honour concluded that, in the absence of clear and binding authority, the Architect’s reading of s.24AH was reasonably open.

The second area of uncertainty concerned the role of the pleadings. The Owner argued that the availability of proportionate liability is to be assessed by reference to the claims as pleaded, and that because it had deliberately confined its claims against the Builder to contract, the apportionment regime was excluded. Her Honour acknowledged the significance of Tanah Merah, in which the Court of Appeal described the pleadings as “an essential determinant”. However, her Honour noted that this formulation had attracted criticism. In Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) [No 2] [2024] NSWCA 232, Basten AJA had described the expression as “ambiguous” and identified potential anomalous consequences flowing from it. Earlier authorities, including Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450 and Godfrey-Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd (2008) 21 VR 84, had taken the view that proportionate liability is ultimately a matter to be resolved in light of factual findings at trial, not solely by the form of the pleading.

Against that backdrop, her Honour was satisfied that the Architect’s defence was at least arguable and could not be dismissed as fanciful. Her Honour emphasised that where an application to strike out raises debatable questions of statutory interpretation, it is ordinarily inappropriate to resolve those questions summarily. The proper occasion for their determination is at trial.

The decision raises a number of points of practical significance for parties involved in multi-party construction proceedings.

First, the question of whether each concurrent wrongdoer must itself be the subject of an apportionable claim remains open in Victoria. The decision provides comfort to defendants wishing to raise apportionment defences that their position is not untenable, even in circumstances where the co-defendant they identify is sued only in contract.

Secondly, plaintiffs who deliberately frame their claims against one defendant in contract alone, in an effort to insulate the other defendant from the effects of apportionment, should not assume that strategy will succeed at an interlocutory stage. The Court identified that contested questions of statutory construction may not be resolved on a strike-out application.

Thirdly, Courts may not strike out a pleading under r 23.02(a) where a debatable point of law is raised and may assume the pleading party can establish its allegations at trial. Defendants should therefore ensure that their pleadings are defensible both in form and substance. Until an appellate court provides definitive guidance, parties should expect that apportionment questions will frequently require determination at trial.

Finally, the decision is a useful reminder that there is a high threshold for striking out a defence under r.23.02(a) of the SC Rules. A defence may only be struck out where it is clearly futile. Where there is genuine debate about the availability of the defence, the Court may permit it to proceed to trial.

BlueCross Community Care Services Group v Buxton Constructions illustrates the ongoing uncertainty in the Victorian proportionate liability regime regarding who qualifies as a concurrent wrongdoer and the extent to which the pleadings determine the availability of apportionment. The decision does not resolve these questions, but it confirms that they may be sufficiently contestable to survive an interlocutory challenge.

The case reinforces the need for careful analysis of the apportionment regime at the outset, and a recognition that the boundaries of that regime remain unsettled.

This article was co-authored with contributions from Anthony Deligiannoudis, Lawyer.