Associated Kiln Driers Pty Ltd v VTX Investments Pty Ltd and Ors (Ruling)
[2013] VCC 593
•22 March 2013 (Revised)
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION LIST
GENERAL DIVISION
Case No. CI-11-03283
| ASSOCIATED KILN DRIERS PTY LTD (ACN 004 341 048) | Plaintiff |
| v | |
| VTX INVESTMENTS PTY LTD (formerly WILSON ENGINEERING PTY LTD) | First Defendant |
| ICSYS LIMITED | Second Defendant |
| INTEGRATED ELECTRICAL LTD | Third Defendant |
| MAHILD DRYING TECHNOLOGIES PTY LTD (ACN 102 744 454) | Fourth Defendant |
| MAHILD DRYING TECHNOLOGIES GMBH | Fifth Defendant |
| - AND BETWEEN - | |
| VTX INVESTMENTS (ACN 007 026 495) | Plaintiff by Counterclaim |
| v | |
| ASSOCIATED KILN DRIERS PTY LTD (ACN 004 341 048) | First Defendant by Counterclaim |
| ICSYS LIMITED | Second Defendant by Counterclaim |
| INTEGRATED ELECTRICAL LTD | Third Defendant by Counterclaim |
| MAHILD DRYING TECHNOLOGIES PTY LTD (ACN 102 744 454) | Fourth Defendant by Counterclaim |
| MAHILD DRYING TECHNOLOGIES GMBH | Fifth Defendant by Counterclaim |
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JUDGE: | HIS HONOUR JUDGE MISSO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 8 March 2013 | |
DATE OF RULING: | 22 March 2013 (Revised) | |
CASE MAY BE CITED AS: | Associated Kiln Driers Pty Ltd v VTX Investments Pty Ltd & Ors (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2013] VCC 593 | |
RULING
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Subject: COSTS
Catchwords: First defendant put to expense of joining additional parties – advised plaintiff that it should join the additional parties – plaintiff took no step to join the additional parties – first defendant joined the additional parties – subsequently the plaintiff joined the additional parties as defendants – first defendant applied for the costs of the joinder as constituting the plaintiff’s costs.
Legislation Cited: Wrongs Act 1958, PART IVAA
Cases Cited: Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd & Others (2008) 21 VR 84
Ruling: The first defendant's application to costs of the joinder of the additional parties is reserved for the consideration of the trial judge.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T Horan | Wotton & Kearney |
| For the First Defendant | Mr M Roberts | Moray & Agnew |
HIS HONOUR:
Introduction
1 On 7 March 2013, I conducted a directions hearing for the purpose of determining what further orders were necessary to enable the parties to be ready for the forthcoming trial of this proceeding.
2 At the end of the directions hearing, Mr Roberts Senior Counsel, who appeared for the first defendant, informed me that he intended to make an application that the plaintiff pay the first defendant’s costs incurred by it in joining a number of additional parties to the proceeding. Mr Horan of Counsel, who appeared for the plaintiff, informed me that the application was resisted.
The Basis of the Application
3 Mr Roberts referred me to the affidavit of Mr Sampath Neil Soysa, solicitor for the first defendant, which set out the basis upon which the application was made.
4 Essentially, Mr Soysa said the following:
· In addition to the three original parties to the proceeding, there were three additional parties who should be defendants to the proceeding because they were concurrent wrongdoers.
· He made clear to the solicitors for the plaintiff (Moray & Agnew, Lawyers) the complexity of the contractual relationship between those three original parties to the proceeding, and the three additional parties, by correspondence from as early as 30 September 2011.
· He referred to the volume of correspondence which is annexed to his earlier affidavit sworn 3 May 2012.
· He then referred to a directions hearing before me on 10 May 2012 when the issue of the joinder of those three additional parties was ventilated, and the party who should join those three additional parties.
5 I have looked at the orders which were made on 10 May 2012. I made orders on that day that the first defendant be given leave to join Mahild Drying Technologies GMBH, Mahild Drying Technologies Pty Ltd and Integrated Systems Design Ltd. Each of these parties were the three additional parties referred to by Mr Soysa.
6 Mr Soysa then set out the steps taken to join those three additional parties and the cost of doing so which he says amounts to some $50,032.50 Australian plus a further sum of $2,663.37 New Zealand. The first defendant now seeks an order that the first defendant pay those costs for reasons which I will identify next.
7 Mr Roberts submitted that, given the matters deposed to by Mr Soysa in his two affidavits, the plaintiff must have been acutely aware of the fact that it was necessary for the plaintiff to join the additional three parties.
8 Mr Horan anticipated that an application for costs would be made. He provided me with an outline of submissions and a folder of authorities. Essentially, he submitted that the first defendant joined the additional three parties in order to derive a benefit under Part IVAA of the Wrongs Act 1958 (“the Act”).
9 Section 24AI(1) provides that the liability of a defendant who was a concurrent wrongdoer is limited to an amount reflecting the proportion of the loss and damage which the Court considers just, having regard to the extent of that defendant’s responsibility for the loss or damage. Subsection (2) provides that judgment must not be given against that defendant for more than that amount in relation to that claim. Furthermore, subsection (3) provides that the Court must not have regard to the comparative responsibility of any person who was not a party to the proceeding
10 Mr Horan submitted that the purpose served by Part IVAA is to benefit a defendant by joining additional parties on the basis that they are concurrent wrongdoers by pleading the same in its defence and by joining the concurrent wrongdoers to the proceeding.
11 Mr Horan submitted that it was not in the interests of the plaintiff to join those additional parties as concurrent wrongdoers because, and it would appear from a tactical standpoint, it would permit the first defendant to limit its liability. However, if the plaintiff wishes to raise contingent claims against the concurrent wrongdoers, it must apply for them to become defendants to the plaintiff’s claim otherwise the plaintiff will only be able to recover that proportion of its damages which is attributable to the proportionate liability of the defendant to its proceeding.[1]
[1]Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd & Others (2008) 21 VR 84
12 Mr Roberts, in reply, referred me to paragraph 19 of the affidavit of Mr Soysa in which Mr Soysa set out a synthesis of the material provided to the plaintiff which, it was argued, made it abundantly clear that the additional three parties should be joined to the proceeding. Mr Roberts submitted that it was a complete answer to the submissions made by Mr Horan.
Disposition
13 What is not controversial is that the three additional parties are necessary parties to the proceeding. No party represented at the directions hearing sought to argue to the contrary.
14 What I must weigh up is the tactical advantage exercised by the plaintiff in bringing a claim against the first defendant, and waiting to see whether it would rely upon the relevant provisions in Part IVAA, and if it did, then to take the necessary steps to join the three additional defendants as defendants. Against that, Mr Roberts submitted that in reality what the plaintiff did was to avoid paying the cost of joining the three additional defendants, which it would inevitably have joined any way, by forcing the first defendant to do that following which it then join those additional three defendants. It was done to suit the purpose of the plaintiff, and the submissions made by Mr Horan are unsustainable.
15 It is common enough to see a plaintiff bring a proceeding against parties, but not against all the parties who might ultimately be responsible for the damage suffered by the plaintiff. Tactically, the plaintiff may wait to see what steps the parties to its proceeding may take to join third parties, which then gives the plaintiff confidence that serious allegations are made against third parties, and that there is a sound basis upon which joinder of those third parties can be undertaken.
16 I do not see the tactical approach taken by the plaintiff in this proceeding to be necessarily unreasonable even in the setting of the matters deposed to by Mr Soysa in his affidavits. However, and at the same time, I think there is something in the submissions made by Mr Roberts that the plaintiff was likely to take steps to join the three additional defendants, but did not want to incur the expense of doing so.
17 I can see the benefit to both the plaintiff in taking the tactical approach, but I can see the benefit to the first defendant in successfully persuading the plaintiff to join the three additional defendants and have it incur the expense of doing so that the first defendant could plead its case for proportionate liability pursuant to Part IVAA.
18 I am not prepared to make the order sought by Mr Roberts at this stage, and I say at this stage, because it may be that at the trial of the proceeding the trial Judge will have the advantage of evaluating the evidence of the plaintiff and the defendants relevant to their responsibility, if any, to the plaintiff, or to each other. It may arise that the trial Judge is in a position to then reconsider the submissions of Mr Roberts and perhaps to conclude that there is greater merit in the submissions made by Mr Roberts that I am prepared to accept at present.
19 Therefore, I am not persuaded that I should make such an order; however, I will reserve the question, permitting the first defendant to raise this issue again at trial.
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