Hardi Australia Pty Ltd v Good; Greenshades Pastoral Co Pty Ltd v Hardi Australia Pty Ltd

[2019] NSWSC 730

Supreme Court

New South Wales

Medium Neutral Citation:	Hardi Australia Pty Ltd v Good; Greenshades Pastoral Co Pty Ltd v Hardi Australia Pty Ltd [2019] NSWSC 730
Hearing dates:	7 June 2019
Decision date:	19 June 2019
Jurisdiction:	Equity - Commercial List
Before:	Ball J
Decision:	(1)   In proceeding 2019/161439, the summons filed on 23 May 2019 be dismissed with costs; and  (2)   In proceeding 2019/101980, the notice of motion filed on 23 May 2019 be dismissed with costs.
Catchwords:	CIVIL PROCEDURE – Jurisdiction – Transfer of proceedings from District Court of NSW – whether case management alongside existing proceedings in Supreme Court of NSW is appropriate – time and costs – differences between proceedings – whether risk of inconsistent outcomes
Legislation Cited:	Australian Consumer Law Sale of Goods Act 1923 (NSW)
Category:	Procedural and other rulings
Parties:	Proceedings 2019/161439: Hardi Australia Pty Ltd (Plaintiff) Anthony Johnson Good (First Defendant) Kristine Mary Good (Second Defendant) Austona Pty Ltd t/as South West Tractors (Third Defendant) Tullshine Pty Ltd t/as South West Tractors (Fourth Defendant)   Proceedings 2019/101980: Greenshades Pastoral Co Pty Ltd (Plaintiff) Hardi Australia Pty Ltd (Defendant)
Representation:	Counsel: RCA Higgins SC with ZM Hillman (Plaintiff 2019/161439 | Defendant 2019/101980) Dr E Peden with A Hopkins (Plaintiff 2019/101980 | Defendants 2019/161439)   Solicitors: Minter Ellison (Plaintiff 2019/161439 | Defendant 2019/101980) RURAL LAW with Peter Long (Plaintiff 2019/101980) Hennessy & Co (Third and Fourth Defendants 2019/161439)
File Number(s):	2019/161439 and 2019/101980

Judgment

Introduction

1. The plaintiff in proceeding 2019/161439, Hardi Australia Pty Ltd, imports into Australia agricultural equipment from Europe, including the Hardi Presidio 2700 spray units (the Spray Units). It distributes the Spray Units through a number of dealers, including Austona Pty Limited and Tullshine Pty Limited trading as South West Tractors (SWT).

2. Hardi is the defendant in two substantive proceedings (together, the Substantive Proceedings) – one in the District Court (the DC Proceeding) and the other in this Court (the SC Proceeding). The plaintiffs in the DC Proceeding are Mr Anthony Good and Mrs Kristine Good. That proceeding is brought against Hardi as the third defendant and the two corporate entities that trade as SWT as the first and second defendants.

3. The SC Proceeding is a representative proceeding brought by Greenshades Pastoral Company Pty Limited on behalf of a closed class consisting of owners of Spray Units who:

1. Purchased a Spray Unit during the period between 1 April 2013 and 1 December 2018 for use in farming activities;

2. Incurred costs and expenses and suffered loss of the purchase price paid on the acquisition of, and loss of income arising out of, the subsequent attempted use and use of a Spray Unit; and

3. Have executed a retainer agreement with the law firm, RURAL LAW with Peter Long.

4. The same law firm represents Mr and Mrs Good in the DC Proceeding. It is not entirely clear whether Mr and Mrs Good are currently members of the group on behalf of whom the SC Proceeding is brought. They presumably have signed a retainer agreement with RURAL LAW with Peter Long, but not of a type contemplated by the definition of the group. In any event, Mr and Mrs Good accept that they must opt-out of the SC Proceeding if they are group members, if they are to continue their own action.

5. In proceeding 2019/161439, Hardi seeks an order that the DC Proceeding be transferred to this Court and, if that order is granted, an order that the two Substantive Proceedings be case managed together. Hardi has also filed a notice of motion dated 23 May 2019 in the SC Proceeding seeking an order that the two proceedings be case managed together.

6. The orders sought by Hardi are opposed by Mr and Mrs Good. They are neither consented to nor opposed by the other parties to the Substantive Proceedings.

The DC Proceeding

7. The DC Proceeding was commenced by way of statement of claim filed on 4 October 2018. A further amended statement of claim was filed on 18 December 2018. The pleading, as amended, is somewhat confused, but essentially Mr and Mrs Good plead two causes of action. First, they allege that (1) they made known to SWT the purpose for which they required the Spray Units (the application of agricultural chemicals to farmlands which included steep and wet terrain); (2) terms of fitness for purpose and merchantable quality were implied by the Sale of Goods Act 1923 (NSW) into the contract by which they purchased the Spray Units from SWT; and (3) those terms were breached because the Spray Units were not fit for purpose or of merchantable quality.

8. Second, Mr and Mrs Good allege that it was represented to them that the Hardi Presidio 2700 included the following features:

1. Its transmission was 4WD hydrostatic;

2. It had a Bosch Rexroth 4WD transmission; and

3. It had 4WD, 3-speed hydrostatic transmission.

Those representations were said to have been made in a brochure published by Hardi. It is also pleaded that similar representations, together with a representation that the Spray Unit acquired by Mr and Mrs Good was a new 2016 model, were made by SWT in material that it supplied to Mr and Mrs Good.

9. It is alleged that the representations were misleading and deceptive in contravention of s 18 of the Australian Consumer Law (ACL) because the Spray Unit did not have a 4WD hydrostatic drive and was a 2013 model. Mr and Mrs Good allege that they would not have purchased the Spray Unit if they had known the true facts. They claim as damages the purchase price of the Spray Unit together with consequential loss, which includes the loss of a crop.

The SC Proceeding

10. The SC Proceeding was commenced on 2 April 2019. The statement of claim filed in that proceeding is also somewhat confused. In substance, however, it pleads that Hardi made a number of representations in a brochure relating to the Spray Units and in a number of advertisements concerning the features of the Spray Units. The pleaded representations are substantially broader than those pleaded in the DC Proceeding. So, for example, it is pleaded that Hardi represented in the brochure that the Spray Units:

1. Were rugged and built for demanding conditions with optimised design strength;

2. Had class leading field performance and flotation;

3. Delivered climatically controlled air throughout the cabin;

4. Had a fluid system that was easy to use;

5. Had intelligent electronics, which prevents wheel slippage for superior tractive power; and

6. Had a rear axle which oscillates to maintain traction on all four driving wheels.

11. The pleaded representations also include the three representations pleaded in the DC Proceeding.

12. A case is also pleaded against Hardi in negligence which depends on allegations that Hardi owed a duty of care to group members:

1. To exercise reasonable care to ensure that the Spray Units operated in accordance with the representations in the brochure and advertisements;

2. To exercise reasonable care to ensure that the Spray Units operated in the manner for which they were designed; and

3. To warn the group members in relation to what are said to have been various deficiencies in the design or manufacture of the Spray Units.

13. Lengthy particulars are given for why Hardi breached its duty of care and the same particulars are relied on for why the pleaded representations are said to be misleading and deceptive in contravention of s 18 of the ACL. Greenshades claims damages at common law and for contraventions of s 18.

Hardi’s contentions

14. Hardi submits that it is in the interests of justice that the DC Proceeding be transferred and that the two cases be managed together. It advances two broad reasons in support of that submission. First, it submits that it will save time and costs, given the overlapping issues in the two proceedings. Second, it submits that the transfer will avoid the possibility of inconsistent judgments.

Consideration

15. In my opinion, this is not an appropriate case to order the transfer of the DC Proceeding.

16. I am not satisfied that there will be a substantial saving in time and costs if the proceedings are transferred.

17. There appears to be no particular advantage in case managing the two proceedings together. Apart from Hardi, they involve different parties and, to a large extent, different issues. That is particularly so given that one proceeding is a representative one which is likely to require directions which are unique to proceedings of that type.

18. The differences between the two proceedings also suggest that they will need to proceed according to different timetables. Hardi admits that it made the representations contained in the brochure. On the face of it, the evidence in relation to the falsity of the representations pleaded in the DC Proceeding appears to be relatively straightforward. On the other hand, it seems likely that additional time will be required to prepare evidence in relation to the representations pleaded in the SC Proceeding. Directions in the SC Proceeding will need to include directions appropriate for representative proceedings, including directions for the service of opt-out notices and the like. The DC Proceeding was commenced some time before the SC Proceeding and they have progressed further. If the orders sought by Hardi were granted, the likely result is that the DC Proceeding will be delayed substantially, causing Mr and Mrs Good prejudice.

19. It appears that what Hardi really seeks to achieve is to have the two proceedings heard together, with evidence in one being evidence in the other. If that were to occur, it is likely to save costs for Hardi, but it is not obvious that it will save costs overall.

20. Mr and Mrs Good’s primary claim in the DC Proceeding is against SWT. A claim against Hardi is limited to the three pleaded express representations in the brochure. As I have said, Hardi admits that each of those representations was made. Consequently, the only common question in the DC Proceeding and the SC Proceeding is whether those three representations were misleading or deceptive. Each of the proceedings raises a substantial number of issues that are not common. In the case of the DC Proceeding, those issues consist of the issues raised by the claim against SWT. In the case of the SC Proceeding, they consist of much broader allegations of misleading and deceptive conduct and a claim based on negligence. The likelihood is that the issues that are not common will occupy more of the Court’s time than the issues that are. Despite what Hardi submits, there is no obvious way of accommodating those differences in a trial; and there appears to be no point in case managing the two proceedings if they are to be heard separately. The result is that all parties other than Hardi are likely to incur substantial additional costs because they will be present during parts of the hearing that are not relevant to them. The likelihood is that Hardi will be able to use work done for one proceeding in the other. Taking those matters into account, I am not satisfied that, looked at from the perspective of the efficient and cost-effective management of the cases as a whole, the position would be improved if the orders sought by Hardi were granted.

21. Nor do I accept that the risk of inconsistent judgments provides a sufficiently compelling reason to justify the two cases being heard together. Strictly speaking, there is no risk of inconsistent judgments, since the parties in the two cases are different.

22. Hardi seeks to identify a number of common questions in the two cases in respect of which there might be inconsistent findings. Those questions are:

1. Whether at all material times the Spray Units were manufactured and/or imported into Australia and/or distributed within Australia to machinery dealers by Hardi;

2. Whether the Spray Units were sold for the purpose of applying agricultural chemicals to farmlands whilst traversing the same to control unwanted herbage and pests (the Purpose);

3. Whether the representations pleaded in the DC Proceeding were made;

4. Whether Hardi published its brochure with the intention that it would be used for the purpose of advertising the Spray Units;

5. Whether Hardi knew or ought to have known that the owners of the Spray Units would suffer loss if the units could not be used for the Purpose;

6. Whether the representations were misleading and deceptive;

7. Whether the Spray Units were fit for the Purpose in that they were not able to apply agricultural chemicals to farmland while traversing terrain when the units operated in 4WD mode;

8. Whether the Spray Units failed to comply with a representation that they were new; and

9. Whether the plaintiffs are entitled to damages that include the whole of the purchase price.

23. It is correct that in a broad sense each of those issues is raised by the statements of claim filed in the two proceedings. However, it is not correct to say that they could give rise to inconsistent findings.

24. As to (a), that allegation is largely admitted by Hardi. As to (b), the allegation is not raised against Hardi in the DC Proceeding. What is alleged is that “the Unit was sold and supplied by SWT for the purpose of applying agricultural chemicals” etc. That turns on the purpose for which SWT sold the particular Spray Units to Mr and Mrs Good. As to (c), Hardi admits that the representations were made in the brochure. As to (d), it is difficult to see how Hardi’s intention is relevant. The question is whether objectively certain representations were made. As to (e), again it is difficult to see what the relevance of the allegation is. What Hardi did or did not know about the likelihood of the purchasers of the Spray Units suffering loss if the Spray Units could not be used for the Purpose is irrelevant to the claims made against it in the DC Proceeding. As to (f), this appears to be the only real issue on which courts might reach different conclusions. However, that does not seem likely. The common issue is whether the Spray Units have certain objective features. That is unlikely to be an issue on which courts would reach different conclusions. And as I have said, they are conclusions between different parties. As to (g) and (h), neither of those issues is raised in the case between Hardi and Mr and Mrs Good. As to (i), that is not an issue that could be the subject of a common question in the SC Proceeding. The answer to it would depend on the particular circumstances of each individual plaintiff.

25. It follows that the risks of inconsistent findings are small. Moreover, they would not be truly inconsistent findings of the type that is likely to bring the administration of justice into disrepute, since they would arise between different parties on the basis of different evidence.

26. I should add that necessarily the conclusions I have reached are based on the cases as currently pleaded. If the cases were to be amended substantially so that they raise substantially the same allegations, the result may be different. If that were to happen, nothing I have said is intended to preclude a further application for transfer or to predetermine such an application if it were made.

Orders

27. The orders of the Court are:

1. In proceeding 2019/161439, the summons filed on 23 May 2019 be dismissed with costs; and

2. In proceeding 2019/101980, the notice of motion filed on 23 May 2019 be dismissed with costs.

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Decision last updated: 19 June 2019