Aqua Technics (WA) Pty Ltd v Summit Chemicals Pty Ltd - [2001] WASC 110

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: AQUA TECHNICS (WA) PTY LTD -v- SUMMIT CHEMICALS PTY LTD [2001] WASC 110

CORAM: MASTER SANDERSON

HEARD: 11 APRIL 2001

DELIVERED : 11 APRIL 2001

PUBLISHED : 3 MAY 2001

FILE NO/S: CIV 1348 of 1999

BETWEEN: AQUA TECHNICS (WA) PTY LTD (ACN 008 905 888)
Plaintiff
AND
SUMMIT CHEMICALS PTY LTD
Defendant
VETROTEX ESPANA SA
First Third Party
RF SERVICES PTY LTD
Second Third Party

Catchwords:

Practice and procedure - Joinder of parties - Turns on own facts

Legislation:

Trade Practices Act, s 82, s 87

Result:

Application granted

Representation:

Counsel:

Plaintiff:     Mr J R Ludlow
Defendant:     Mr G R Hancy
First Third Party           :     No appearance
Second Third Party       :     No appearance

Solicitors:

Plaintiff:     McAuliffe Williams & Partners
Defendant:     Banks-Smith & Associates
First Third Party           :     No appearance
Second Third Party       :     No appearance

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

Morgan v Banning (1999) 20 WAR 474
Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 51

Case(s) also cited:

Nil

MASTER SANDERSON: By way of application to the Case Management Registrar filed 18 December 2000, the plaintiff sought leave to amend its writ of summons and statement of claim in terms of minutes both dated 18 December 2000. Essentially the plaintiff sought to add Wayne Lloyd Spencer and Peter Kingsley Phillips as second and third defendants to the proceedings and to plead claims against both additional defendants. At the conclusion of the hearing I made orders adding these two individuals as defendants and allowing the plaintiff to amend its statement of claim in terms of the minute, subject to the defendant's right to apply to strike out the statement of claim. I indicated I would publish reasons at a later date. These are those reasons.
To understand the nature of the application it is necessary to say something about the nature of the plaintiff's claim. The plaintiff is the manufacturer of swimming pools. The first defendant is a supplier of raw materials used in the manufacture of swimming pools. Both the second and third defendants are directors of the first defendant and the third defendant acts as the managing director.
In the first four months of 1997 the plaintiff purchased from the first defendant four separate consignments of a product known as Vetrotex Anti‑Static Gun Rovings. The minute of proposed statement of claim (par 6) pleads that the expression "gun rovings" is "a trade description of continuous fibreglass rovings commonly used in the construction of swimming pools". The plaintiff says that it used the gun rovings in the construction of swimming pools which it sold to various clients. It is pleaded that each of the consignments of gun rovings was defective, leading to problems with certain of the swimming pools manufactured and sold by the plaintiff. The plaintiff claims against the first defendant on a number of different grounds, including for alleged breaches of the Trade Practices Act and the Fair Trading Act.
By its statement of claim the plaintiff pleads that the second and third defendants were knowingly concerned in the breach of the Trade Practices Act by the first defendant. It is pleaded that pursuant to s 82 of that Act the second and third defendants are thereby rendered liable directly to the plaintiff for any breaches of the Act by the first defendant. This is the extent of the claims made by the plaintiff against the second and third defendants. It is not contended that the second and third defendants are directly liable to the plaintiff for breach of contract or breaches of the Sale of Goods Act. Furthermore, it does not appear, as I read the pleading, that the plaintiff alleges that either the second or third defendant directly made representations which were misleading or deceptive, contrary to the Trade Practices Act or the Fair Trading Act. Rather, the liability is said to be derivative pursuant to s 82 of the Trade Practices Act.
In support of its application the plaintiff relied upon two affidavits of Jeremy Richard Ludlow sworn respectively 24 January 2001 and 2 April 2001. Annexed to each of these affidavits are various documents which have been discovered by the first defendant. It is said by the plaintiff that an examination of this documentation makes it clear that both the second and third defendants had knowledge of the defects in the gun rovings. Without undertaking a detailed analysis of this documentation I accept that it is arguable that the second and third defendants did have knowledge of the alleged defects in the gun rovings. In reaching that conclusion I am in no way seeking to determine the issues which will be resolved at trial. But I accept the plaintiff's submission that the documentation could give rise to a claim that the second and third defendants were knowingly involved in any contravention of the Trade Practices Act by the first defendant.
Having reached that conclusion it seemed to me appropriate that the second and third defendants should be joined as parties to the proceeding. The defendants objected to the orders being made on four separate but inter‑related grounds.
First it was said that discretionary considerations mitigated against the joinder. The action was commenced in 1999 and is close to being entered for trial. The defendant said that if further parties were added to the proceedings there was likely to be a delay in the action of up to two years and that was not in the public interest. Further, it was said that the ongoing litigation resulted in stress to the directors from the risk of loss to the business if the action was successful.
Order 18 r 4 clearly anticipates that all parties to a proceeding should be before the court. In my view, the public interest is best served by one set of proceedings only and this outweighs any delays which may be occasioned by the joinder of parties. As to the stress caused by litigation, that is unfortunate but simply unavoidable. It is difficult to imagine a circumstance where stress to a party could justify a refusal to join that party to proceedings properly issued and properly before the court.
Secondly, it was argued that the evidence adduced by the plaintiff was not sufficient to establish that the second and third defendants should be joined as parties to the proceedings. This submission was not directed so much at establishing that the second and third defendants did not have knowledge of the difficulties with the gun rovings. Rather it was said that there was no evidence to indicate that any defects in the gun rovings had led to the failure of the swimming pools manufactured by the plaintiff. Rather strangely the plaintiff did not produce any evidence, expert or otherwise, which established the causal link between the alleged defects in the gun rovings and the alleged failure of the swimming pools. Nonetheless, the causal connection is pleaded and whether or not the causal link is established is a matter for trial. As the pleadings stand at present, it is at least arguable that the defects in the gun rovings and the failure of the swimming pools are linked. In my view, that is sufficient for an application of this nature.
Thirdly, it was said that the pleading in the statement of claim was inadequate. This submission was not developed to any extent - counsel for the defendants reserved the right to apply to strike out the pleading in due course. Without in any way determining whether or not the minute of amended statement of claim is in a proper form, it is clearly not so defective as to disclose no cause of action against the second and third defendants. Any defects in the amended statement of claim, if they exist, can in all probability be remedied by further amendment. Insofar as the submission was pressed, I am not satisfied that any inadequacy in the pleading would justify refusing the orders sought by the plaintiff.
Finally, it was said that the limitation period of three years to be found in the Trade Practices Act had expired and the claim against the second and third defendants could not succeed. In Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 at 533, the High Court cautioned against determining limitation questions on an interlocutory application. In my view it would be entirely inappropriate to attempt to determine limitation questions on an application such as this or indeed to refuse leave on that basis. Of course, the granting of leave to amend cannot in any way affect the rights of the second and third defendant to rely upon any limitation period: See Morgan v Banning (1999) 20 WAR 474.
In all the circumstances then I was satisfied that leave to amend ought be granted. I made orders accordingly.