Camellia Properties Pty Ltd and Ors v Golder Associates Pty Ltd Golder Associates Pty Ltd v Duracell Australia Pty Ltd

[1996] FCA 1000

CATCHWORDS

PRACTICE AND PROCEDURE - motion to vacate hearing date and join third party - whether hearing should proceed on date fixed notwithstanding absence of third party - whether third party should reasonably have been joined earlier - desirability of having all relevant parties joined in one piece of litigation.

Law Reform (Miscellaneous Provisions) Act 1946 (NSW) - s 5

Standen v G.H. Varley Pty Limited (1956) 56 SR(NSW) 346

CAMELLIA PROPERTIES PTY LIMITED, SANDRA ANNE MATTHEWS and   DAVID FERDYNAND LIBLING v GOLDER ASSOCIATES PTY LIMITED

No. NG 357 of 1994

GOLDER ASSOCIATES PTY LIMITED v DURACELL AUSTRALIA PTY LIMITED

No. NG 826 of 1996

CORAM:    FOSTER J
DATE:     21 OCTOBER 1996
PLACE:    SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No. NG 357 of 1994
  )
GENERAL DIVISION                 )

BETWEEN:CAMELLIA PROPERTIES PTY LIMITED

First Applicant

SANDRA ANNE MATTHEWS and   DAVID FERDYNAND LIBLING

Second Applicants

AND:GOLDER ASSOCIATES PTY LIMITED

Respondent

IN THE FEDERAL COURT OF AUSTRALIA  )
  )
NEW SOUTH WALES DISTRICT REGISTRY  )    No. NG 826 of 1996
  )
GENERAL DIVISION                  )

BETWEEN:GOLDER ASSOCIATES PTY LIMITED

Applicant

AND:DURACELL AUSTRALIA PTY LIMITED

Respondent

CORAM:     FOSTER J

DATE:     21 OCTOBER 1996

PLACE:     SYDNEY

REASONS FOR JUDGMENT
  (Extempore)

HIS HONOUR:    As duty judge I heard applications in relation
to these proceedings on 10 and 18 October 1996.  In the substantive proceedings, NG 357 of 1994, the applicants sue the respondent for damages allegedly arising from faulty professional advice, given in 1991, as to the possible contamination of a property it was purchasing from the activities of battery-making conducted on that property by a tenant, Duracell Australia Pty Limited ("Duracell").  All relevant breaches are denied.

The proceedings were case managed in the usual way by judges of the Court, with the result that up until 14 December 1995 each side had served upon the other a number of affidavits directed to issues arising on the pleadings.  These included affidavits of experts as to the alleged contamination and as to the proper professional standards to be employed in investigating and reporting on it. 

One such affidavit filed by the applicants consisted only of an outline of evidence expected to be given by a Dr W.R. Ryall, a scientist who had not directly advised in relation to the litigation, but who had played an important role in relation to the cleaning up of the property by Duracell when it was ceasing its operations in 1993.  This outline of evidence was accompanied by a very large number of documents allegedly bearing upon the content of his expected evidence.  It appears that Dr Ryall, although expected to be an important witness, was not prepared to confer with either side. 

On 14 December 1995, the Court directed the applicants to file and serve by 16 February 1996 their expert evidence, which had previously existed only in outline, and evidence in reply to the respondent's evidence.  It appears that in respect of Dr Ryall's evidence, this direction could not be complied with, as it remains in outline.  The respondent was also given leave to file and serve a cross-claim against Duracell. 

The proceedings were listed for callover on 12 March 1996.  The respondent's solicitor considered the question of the cross-claim against Duracell on the basis of the evidence filed, and decided, according to his affidavit, not to take this action.  On 11 March 1996 he was served with further affidavits by the applicants, including one of a Dr Brent Davey, a geo-technical engineer.  At the callover on 12 March the solicitor expressed some concern about the affidavits served only the day before, but did not oppose the listing of the matter for hearing for five days, commencing on 21 October 1996.  This period for the hearing was obviously based upon the state of the evidence as it then was.  No suggestion was made that any further evidence would be served, and no leave was sought in this respect.  The Court no doubt listed the matter for hearing in the usual way on the basis that the parties had completed their affidavit evidence at that time.

Some correspondence ensued between the solicitors for the respondent and the solicitors for the applicants as to the affidavits served on 11 March.  Dr Davey had expressed a view contrary to that of another expert, Dr Swane, whose affidavit had been filed on behalf of the respondent.  Dr Swane had expressed the view that the contamination identified in Dr Ryall's outline of evidence, there being no clear indication of how it had occurred, could have occurred during 1992, after the respondent had examined and reported.  Dr Davey expressed the view, however, based on that material, that the contamination had not occurred in that period but over a period of years, rendering it probable that it existed at the time of the respondent's report. 

It appears that in this context the respondent's solicitor raised the question of joining Duracell. He sought further particularisation of Dr Davey's report, apparently to assist on this question. This was refused by the applicants' solicitor, who asserted that the respondent was adopting an inconsistent position: if Duracell had contaminated the site by its activities prior to the respondent's investigation then it must have been contaminated at the time of that investigation. This was contrary to the respondent's case as put. The respondent's solicitor replied that Dr Davey gave no evidence as to how the property had become contaminated. This was referred to in argument before me as the "lay down mechanism." He raised the question whether Duracell may have mislead the respondent in its response to questions put to it as to its activities by the respondent leading to a cause of action against it on this basis. He also referred to a possible cause of action for indemnity or contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). He asserted that the late service of Dr Davey's report had reopened the issue of whether it was necessary to join Duracell. He stated it would be contended at the hearing that Dr Davey's report in the circumstances was objectionable and a ruling sought that it was inadmissible. This could hardly be said to be a satisfactory situation in which the matter was left, but it must be remembered that it apparently occurred in the context of neither side seeking to adduce or having available direct evidence of any blameworthy activities on the part of Duracell leading to the contamination of the site.

During August and September 1966, however, the applicant served further affidavits.  These included the affidavit of one Collins, an employee of Duracell at the relevant times before the respondent's investigation.  This affidavit contained factual allegations as to the lay down mechanism which could implicate Duracell in relevantly unsafe practices in relation to contaminants present in the manufacturing process.  This evidence, of course, also went to establish the applicants' contention that contamination must have been present at the time of the respondent's investigation.  It provided, in effect, a substratum for Dr Davey's conclusion which had been largely based on inference.  It is asserted in the affidavit that one of the respondent's staff had in fact interviewed Collins in relation to the respondent's investigation and had been given information contrary to that in his affidavit, namely, that no improper practices on the part of Duracell could have produced the contamination.  The result of that information had been that the investigation had been diverted from what might have been important areas of the premises. 

Other affidavits filed on behalf of the applicant in this period also made significant changes to the basis and calculation of the applicants' damages, resulting in a significant escalation of the amount claimed.  It is clear to me that the new bases would require investigation by the respondent's legal advisers. 

In this broad context, application was made by the respondent by notice of motion to vacate the trial date and join Duracell in the proceedings.  This application was opposed on grounds to which I shall make reference later. 

When the application came before me on 10 October 1996 the situation was further complicated by the fact that the designated trial judge had, through illness, become unavailable.  Although it might have been possible for another judge to take his place, the further complication existed that the trial itself now appeared to be likely to take longer than the allotted time.  This would cause significant difficulty should there be a substitution of judges.  In these circumstances it became plain that the dates should be
vacated.  However, it was possible for me to hear the matter commencing on 5 December. 

In those circumstances, and in the hope that an overall satisfactory solution might eventuate, I vacated the trial date and adjourned the application for joinder of Duracell to 18 October.  I gave leave to the respondent to commence separate proceedings against Duracell in the meantime.  Duracell was required to appear on 18 October.  This was done in the hope that Duracell could be in the position to be involved as a party in a hearing to commence on 5 December. 

Duracell duly appeared by solicitor and counsel on 18 October.  I am satisfied from what was then put to me that it would not be reasonable to require that they participate in the hearing starting on 5 December.  However, I am satisfied that they should be ready to do so, if appropriate directions are given, by early February 1997. 

Both Duracell and the applicants resisted the respondent's notice of motion which had been taken out returnable on 18 October, that the proceedings which had been commenced against Duracell by the respondent be consolidated with and heard with the present proceedings.  It was the applicants' contention that there should be no such joinder and that the original proceedings should be heard on 5 December, with the respondents, in the event of their being unsuccessful, being put in the position of prosecuting their separate proceedings thereafter against Duracell.  This submission was supported on two bases: (a) that because the respondents had had ample material before them in March to justify the joining of Duracell and had decided not to, they should not now be allowed to delay the applicants' claim by joining Duracell; and (b) that there would be significant prejudice to the applicants if the case did not proceed on 5 December.

As to the first submission I was taken to the outline of Dr Ryall's evidence.  It was asserted with some cogency that there was material contained therein that could be construed as implicating Duracell, and which reasonably raised the desirability of joining it in the proceedings at that earlier point of time.  It was also submitted that Dr Davey's report of 11 March 1996, even though it did not postulate a lay down mechanism, should nevertheless have pointed towards the desirability of joining Duracell.

I have carefully considered these matters.  One has to be careful not to allow hindsight to intrude into deliberations on this aspect.  I have had regard to what the respondent asserts in relation to the information provided by Duracell at the time of its investigations as to the lack of dangerous practices in its processes.  In particular I have had regard to the alleged failure of the witness, Collins, to reveal the practices referred to in his affidavit filed in the applicants' case when he was interviewed during those investigations.  I consider, on balance, that the failure to join Duracell at an earlier stage was not so unreasonable in itself to result in the proceedings being heard without the respondent having the benefit of the presence of Duracell as a party.  Additionally, the well known principle as to the overriding desirability of having all relevant parties joined in one piece of litigation as a matter both of convenience and justice, so that the rights and liabilities of all may be determined by the one tribunal at the one time points strongly in the same direction: see Owens J in Standen v G.H. Varley Pty Limited (1956) 56 SR(NSW) 346 at 346-7. I am accordingly not persuaded by the first submission of the applicant.

The second submission was based on the evidence of Mr Libling that serious financial difficulty might be occasioned to him if the proceedings were not heard promptly.  In the submission this was put no higher than that the delay would increase the risk of these difficulties eventuating.  I have considered these matters sympathetically but I am not persuaded that they mandate a hearing on 5 December 1996.  I am, however, of the view that every effort should be made to achieve a hearing early in February 1997 before myself.  I am of the view that Duracell should be in a position to participate in such a hearing by then. 

Accordingly, I make the order sought by the respondent that the proceedings commenced against it be consolidated with the present proceedings.  I direct that the consolidated proceedings do not commence as foreshadowed on 5 December.  I further direct that the proceedings be listed before me at 9.30 on Friday 1 November for further directions with a hearing commencing preferably in the second week of February 1997.  On that occasion the respondent should bring in short minutes of the orders made today.  At this stage I reserve the question of costs.

I certify that this and the preceding nine (9) pages are a true copy of the reasons for judgment herein of the Honourable Justice M. L. Foster.

Associate:

Date:   21 OCTOBER 1996

A P P E A R A N C E S

Matter No. NG 357 OF 1994

COUNSEL FOR THE APPLICANTS:       R. MACFARLAN QC
   with    P. DURACK

INSTRUCTED BY:                 CLAYTON UTZ

COUNSEL FOR THE RESPONDENT:       R. BURBIDGE QC
   with    F. CORSARO

INSTRUCTED BY:                 TRESS COCKS MADDOX

Matter No. NG 826 OF 1996

COUNSEL FOR THE APPLICANT:       R. BURBIDGE QC
  with     F. CORSARO

INSTRUCTED BY:                 TRESS COCKS MADDOX

COUNSEL FOR THE RESPONDENT:       F. KUNC

INSTRUCTED BY:                 DEACONS GRAHAM & JAMES

DATE OF HEARING:               18 OCTOBER 1996

DATE OF JUDGMENT:               21 OCTOBER 1996