Aqua Technics (WA) Pty Ltd v Summit Chemicals Pty Ltd

[2003] WASC 242

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   AQUA TECHNICS (WA) PTY LTD -v- SUMMIT CHEMICALS PTY LTD & ORS [2003] WASC 242

CORAM:   MCKECHNIE J

HEARD:   10 SEPTEMBER & 28 OCTOBER 2003

DELIVERED          :   4 DECEMBER 2003

PUBLISHED           :  19 NOVEMBER 2003

FILE NO/S:   CIV 1348 of 1999

BETWEEN:   AQUA TECHNICS (WA) PTY LTD (ACN 008 905 888)

Plaintiff

AND

SUMMIT CHEMICALS PTY LTD
First Defendant

WAYNE LLOYD SPENCER
Second Defendant

PETER KINGSLEY PHILLIPS
Third Defendant

VETROTEX ESPANA SA
First Third Party

SAINT-GOBAIN RF PTY LTD
Second Third Party

LAURENCE ALAN BESTON
Third Third Party

QBE HOLDINGS (AUSTRALIA) PTY LTD formerly known as QBE INSURANCE LTD (ACN 000 157 899)
Fourth Third Party

JARDINE LLOYD THOMPSON PTY LTD formerly known as JARDINE INSURANCE BROKERS PTY LTD (ACN 009 098 964)
Fifth Third Party

Catchwords:

Orders for separate trial from third party proceedings - No new principles

Legislation:

Nil

Result:

Summons dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     Mr M J McCusker QC & Mr M S Van Brakel

First Defendant             :     Mr G R Hancy

Second Defendant         :     Mr G R Hancy

Third Defendant           :     Mr G R Hancy

First Third Party           :     Mr R L Le Miere QC & Dr S E Ivey

Second Third Party       :     Mr R J L McCormack

Third Third Party          :     Mr R J L McCormack

Fourth Third Party        :     Mr K J Martin QC, Mr P E Jarman & Ms E C McLennan

Fifth Third Party           :     Ms J A Thornton

Solicitors:

Plaintiff:     Clayton Utz

First Defendant             :     Phillips Fox

Second Defendant         :     Phillips Fox

Third Defendant           :     Phillips Fox

First Third Party           :     Blake Dawson Waldron

Second Third Party       :     Srdarov Richards Burton

Third Third Party          :     Srdarov Richards Burton

Fourth Third Party        :     Jarman McKenna

Fifth Third Party           :     Allens Arthur Robinson

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334

Gallagher v CSR Ltd & Anor, unreported; SCt of WA (Ipp J); Library No 8706; 31 January 1991

Pillinger v Ropework Services, unreported; SCt of WA (Staples M); Library No 7976; 5 December 1989

Vernem & Anor v Glanville & Ors, unreported; SCt of WA (White M); Library No 7984; 13 December 1989

1. MCKECHNIE J:  In this long causes action the plaintiff has applied to recall and rescind case management orders in relation to third party proceedings and seeks in their place an order that the proceedings between the plaintiff and the defendants be tried separately from proceedings between the defendants and the third parties.

The orders

1. The orders which the plaintiff seeks to have recalled are:

   1.Orders made by Registrar Rimmer in the course of case management on 10 September 1999:

   •The third parties be at liberty to appear at the trial of the action, and take such part as the Judge shall direct, and be bound by the result of the trial.  [Order 5]

   •The question of liability of the third parties to indemnify and/or pay damages to the defendant be tried at or immediately after the trial of this action as the Judge shall direct.  [Order 6]

   2.Orders of 18 September 2002 made by me in relation to the fourth and fifth third party proceedings in identical form to those made by Registrar Rimmer.

2. The plaintiff is a manufacturer of swimming pools and the action relates to approximately 150 defective pools which were installed in 1997 and 1998.  The action centres upon the condition of fibreglass gun rovings used in the manufacture of swimming pools.

3. It is unproductive and unnecessary to set out a detailed chronology, although I have had regard to it.  Proceedings were commenced on 1 April 1999 against the first defendant and on 11 April 2001 the second and third defendants were joined.  Since 29 June 1999 the defendants have joined five third parties.  The first third party is allegedly the supplier of gun rovings.  The second and third third parties are allegedly the agents of the first third party.  The fourth and fifth third party are the insurer and the insurance broker for the first defendant.

4. The plaintiff's chief ground is the delay in the progress of the third party proceedings and the continuing complexity of those proceedings.  This has consequent potential to delay and expand the hearing of the plaintiff's claim.  So it is said there is particular prejudice to the plaintiff.

5. It is asserted that the longer the action progresses without resolution, the greater the level of dissatisfaction by the plaintiff's customers and the greater the damage to the plaintiff's commercial reputation.

The legal principles

1. The third party directions made are in common form and generally follow the provisions of O 19 r 4.  The power to rescind is undoubted: O 19 r 5.

2. It is not in contention that ordinarily there should be a concurrent trial in order to bring about a contemporaneous determination of all the issues and disputes between the parties.  The binding nature of a determination on all parties is particularly relevant in this case.

3. Nor is it in contention that the power to order separate trials of a plaintiff's claim against a defendant and a defendants' claim against a third party is exceptional.

4. The exercise of the discretion enlivened by the application must recognise that any decision whether to continue the joinder or to sever the trial will inevitably cause prejudice to some parties.

5. I am conscious that the plaintiff has received many complaints in respect of apparently defective swimming pools.  It is repairing the pools at its cost.  The complaints are likely to continue.  Consequently an early resolution is an issue manifestly in its favour.

6. In one sense, the plaintiff's case against the defendants is relatively simple, whereas there are issues of factual and legal complexity in the third party proceeding that will go beyond anything about which the plaintiff has an interest.

7. The question of delay is not decisive.  If the plaintiff is successful in its claims against the defendants, there may be a considerable delay before the defendant can determine whether it is entitled to an indemnity from any of the third parties.  Against this, if the pools are defective, at the moment the plaintiff is carrying the burden alone.

8. Resolution of the plaintiff's case will answer the question whether the gun rovings are defective.  This issue is a necessary preliminary determination in the third party proceedings.  If I grant the plaintiff's application, the third parties cannot be bound by any finding of defect.  The defendants would have to prove defect in subsequent proceedings.

9. Having regard to the legal principles I have sketched and the need for resolution of the common issue of defect, I do not propose to grant the plaintiff's application.  Shortly put, the contentions of the plaintiff do not persuade me to take the exceptional step of severing the trials.

10. That is not the end of the matter however.  The plaintiff has persuaded me that it is continuing to suffer prejudice by delays in the third party proceedings over which it has no control.

11. These reasons are made available to all the parties in advance of formal orders with the intent that they shall confer and return with a realistic timetable leading to the entry for trial of this action in the first half of next year.  I will then make binding case management orders to ensure that a timetable, either agreed or imposed, is maintained.