Hyundai v Dartbrook Coal
[2005] FCA 1901
•7 DECEMBER 2005
FEDERAL COURT OF AUSTRALIA
Hyundai v Dartbrook Coal [2005] FCA 1901
STATUTES
Trade Practices Act 1974 (Cth) ss 52, 82
HYUNDAI MERCHANT MARINE CO LTD v DARTBROOK COAL (SALES) PTY LTD
QUD 190 OF 2004KIEFEL J
BRISBANE
7 DECEMBER 2005
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION IN ADMIRALTY
Q190 OF 2004
BETWEEN:
HYUNDAI MERCHANT MARINE CO
(ABRN 102 471 723)
PLAINTIFFAND:
DARTBROOK COAL (SALES) PTY LTD
(ACN 050 139 841)
FIRST DEFENDANTMARUBENI THERMAL COAL PTY LTD
(ACN 061 468 620)
SECOND DEFENDANTANGLO COAL (DARTBROOK) PTY LTD
(ACN 000 012 813)
THIRD DEFENDANTSSANGYONG RESOURCES PTY LTD
(ACN 071 744 986)
FOURTH DEFENDANTMARUBENI THERMAL COAL PTY LTD
(ACN 061 468 620)
FIRST CROSS-CLAIMANTSSANGYONG RESOURCES PTY LTD
(ACN 071 744 986)
SECOND CROSS-CLAIMANTANGLO COAL (DARTBROOK) PTY LTD
(ACN 000 012 813)
FIRST CROSS-RESPONDENTDARTBROOK COAL (SALES) PTY LTD
(ACN 050 139 841)
SECOND CROSS-RESPONDENTJUDGE:
KIEFEL J
DATE OF ORDER:
7 DECEMBER 2005
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.Leave to amend the second and fourth defendants’ defence is granted.
2.Leave to amend their cross-claim is refused.
3.The second and fourth defendants pay each of the plaintiff and the first and third defendants’ costs of the application for leave to amend; and costs thrown away by the amendments to the defence.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION IN ADMIRALTY
Q190 OF 2004
BETWEEN:
HYUNDAI MERCHANT MARINE CO
(ABRN 102 471 723)
PLAINTIFFAND:
DARTBROOK COAL (SALES) PTY LTD
(ACN 050 139 841)
FIRST DEFENDANTMARUBENI THERMAL COAL PTY LTD
(ACN 061 468 620)
SECOND DEFENDANTANGLO COAL (DARTBROOK) PTY LTD
(ACN 000 012 813)
THIRD DEFENDANTSSANGYONG RESOURCES PTY LTD
(ACN 071 744 986)
FOURTH DEFENDANTMARUBENI THERMAL COAL PTY LTD
(ACN 061 468 620)
FIRST CROSS-CLAIMANTSSANGYONG RESOURCES PTY LTD
(ACN 071 744 986)
SECOND CROSS-CLAIMANTANGLO COAL (DARTBROOK) PTY LTD
(ACN 000 012 813)
FIRST CROSS-RESPONDENTDARTBROOK COAL (SALES) PTY LTD
(ACN 050 139 841)
SECOND CROSS-RESPONDENT
JUDGE:
KIEFEL J
DATE:
7 DECEMBER 2005
PLACE:
BRISBANE
RULING
On the first day allocated for trial, Marubeni Thermal Coal Pty Limited and Ssangyong Resources Pty Limited, whom I shall refer to as ‘the cross-claimants’, sought leave to amend their defence and cross-claim. Notice was given of the application to Dartbrook and Anglo Coal only the day before. The history of the matter is as follows:
The action was originally brought against Dartbrook as the charterer under a charterparty with the Plaintiff. It was allocated hearing dates on two occasions in the early part of 2005. The May trial date was vacated when it was suggested that the other defendants, for whom Dartbrook was said to have acted, should be joined. Leave was given on 21 April 2005 for that joinder. The cross-claimants filed a defence and a cross-claim on 31 May 2005. On 11 July the matter was listed for hearing commencing yesterday, 6 December.
The matter was listed for further directions on 28 October at the cross-claimants’ request and because of delays they had encountered with the preparation of expert reports. Directions given that day included leave to the plaintiff to amend its pleading and, as a flow - on effect, leave was given to amend the defendants’ pleadings and their cross-claims. The amended cross-claim of these cross-claimants was filed on 4 November 2005. Those amendments were reasonably substantial.
In the amended cross-claim filed on 4 November, indemnity and contribution was claimed against Anglo Coal on a number of bases in par 5. Not all of them were clearly connected to each other. It was alleged that it had duties as a joint venturer or pursuant to a marketing services agreement, which included responsibility for the transactions with the purchaser of the coal which was to be shipped, National Power Corporation, and the entry into the charterparty. It included the supervision of Dartbrook with respect to these transactions. Anglo Coal was alleged to have acted contrary to the best interests of the cross-claimants in breach of its obligations and to have caused loss and damage to them by failing to ensure the charterparty was not entered into prior to a binding contract coming into existence with National Power Corporation for the sale of the coal, and by failing to reject the vessel nominated by the plaintiff. Further, it was alleged that they had failed to properly supervise Dartbrook. It was also alleged that Anglo Coal’s failure to inform the cross-claimants of these matters amounted to a contravention of s 52 of the Trade Practices Act 1974 (Cth) (‘Trade Practices Act’). That allegation was not further particularised.
Paragraph 6 of the amended cross-claim contained a claim for indemnity or contribution against Dartbrook. It was alleged that Dartbrook acted outside the scope of its authority under its sales representative agreement with the joint venturers by entering into the charterparty without having a binding agreement with National Power Corporation and by not refusing the nomination of the vessel. Subparagraph (f) alleged that the entry into the charterparty amounted to a failure, on Dartbrook’s part, to perform its obligations under the sales representative agreement and that it was, therefore, not entitled to claim indemnity under that agreement from the joint venturers. Alternatively, it was alleged that Dartbrook should be denied that indemnity under the terms of the agreement which provided that the indemnity did not extend to wilful misconduct.
In the alternative to the claim for indemnity or contribution, paragraph 7 contained a claim for damages under s 82 of the Trade Practices Act or equitable compensation against either Anglo Coal or Dartbrook, it is not clear which since there is a reference, it would appear erroneously, to Ssangyong. In any event, this allegation was not further particularised.
The amendments proposed to the defence remove the allegation of Dartbrook’s want of authority as an agent. Those amendments are not opposed and leave will be granted. The amendments proposed with respect to the cross-claim and in particular pars 6 and 7, are however opposed.
The proposal is to largely replace the previous allegations in pars 6 and 7. It is sought only to make Dartbrook liable. Paragraph 6 would seek to claim either an indemnity or damages from it. These claims are based upon a breach of an implied term of the sales representative agreement that Dartbrook would exercise reasonable care, or upon a breach of its duty as an agent. The want of care in each case is the entry into the charterparty, absent a binding sales contract. Alternatively, reliance is placed upon an express term of the sales representative agreement that Dartbrook indemnify a joint venturer against claims arising from its breach or default under the agreement. Paragraph 6 also contains the claims, earlier made, that Dartbrook is not entitled to an indemnity from the joint venturers because it was guilty of wilful misconduct. Although not presently specified, it will be alleged that Ms Tan, acting for Dartbrook, was guilty of that conduct by entering into the charterparty in the circumstances mentioned.
In par 7 a further claim is now sought to be made against Dartbrook for contravention of s 52 of the Trade Practices Act. The relevant representation is said to be a continuing one, to the effect that Dartbrook was providing its services ‘in accordance with good commercial practice’ and with reasonable care and skill. It is said that its conduct was misleading because it did not disclose to the cross-claimants that it proposed to enter into the charterparty without a binding contract for sale.
Paragraph 7 is a curious claim, one that seems more theoretical than real. It would not appear to take claims for breach of contract or duty of care any further. Rather it may be seen as an aspect of them. The cross-claimants, however, say that its purpose is to defeat Dartbrook’s claim for indemnity under the agreement because the parties to that agreement could not contract out of s 52. That would not, however, appear to me to give substance to the claim.
In any event, for present purposes, both parties agree that par 7 will involve evidence for the first time of the dealings between the joint venturers to establish what is ‘good commercial practice’ amongst other things. It is not clear to me why that would be so, since it appears to be an objective test, but both parties are adamant that their business relationship will need to be gone into. The cross-claimants seem to suggest, in argument, that there was some departure from a norm in their business dealings and from what the parties would have expected to occur. If that is the case, it is not pleaded.
The discussion about this aspect of the claim highlighted the fact that it is not only a new claim, but that its factual basis is uncertain. I do not accept that it was in some way flagged in par 5 of the current cross-claim, in the claim against Anglo. It does not seem to me that leave could be given to amend to add the claim in par 7 in its present form, if leave were otherwise appropriate. At present Dartbrook could really have little idea about what evidence is either going to be put forward by the cross-claimants or what it would need to meet such a claim. It would require an adjournment for a period of time and further attempts to better plead this claim, if that is possible.
The cross-claimants submit that the amendments, in par 6 in particular, state with more clarity allegations already made. Consistent with that submission they say that if leave is denied they will proceed with the current cross-claim. In that regard, I note that their claim in paragraph 6 that Dartbrook acted outside the scope of its authority would not appear to be consistent with its proposed amendments to the defence. But I put that to one side.
The submission that the proposed claims are not new is simply incorrect. There has been no suggestion of a claim for breach of contract or one of breach of duty of care. The reference in par 6(f) of the current cross-claim to Dartbrook’s failure to perform its obligations under the sales representative agreements is relevant only to its disentitlement to an indemnity under the agreement.
The proposed amendments to the cross-claim are new and Dartbrook could not, in my view, have anticipated them. Its defences do not suggest that it did. The cross-claimants bring this application on the basis of proposed amendments which could not be taken to be in final form. They are unable to identify the additional evidence which will be necessary, although clearly there will be further evidence needed with respect to all of the new claims and that evidence is unlikely to be insubstantial.
The consequence, if leave were given, would be a substantial adjournment of the trial and the splitting off of the cross-claims from the plaintiff’s case might be necessary if the plaintiff is not to be prejudiced. Any such adjournment would be to facilitate the cross-claimants revisiting their case and preparing, in effect, a new one. It could hardly be said that this is either an efficient or cost-effective approach to the conduct of litigation.
The cross-claimants did not put forward any material to explain the delay in seeking these amendments. They could not be said to have arisen from the delay in the receipt of their expert reports. They are fundamentally legal questions which could have been pleaded from the outset. There is no recent evidence which has given rise to them. They frankly concede that it arose from new counsel being briefed very recently.
There does not seem to me to be any good reason to grant leave to amend. Five months have passed since the matter was listed for trial. The amendments proposed could have been pleaded at the outset. The cross-claimants have had a further opportunity to amend. The application is brought far too late and the other parties should not be subjected to a lengthy and costly adjournment in order to allow the cross-claimants in effect to set up and prepare, for the first time, a case they could have earlier pleaded.
The orders will be that leave to amend the defence in terms of the document which I have marked ‘A’ will be granted. Leave to amend the cross-claim therein is refused and I order the cross-claimants to pay each of the plaintiff and the first and third defendants’ costs of the application for leave to amend and any costs thrown away by the amendments to the defence.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. Associate:
Dated: 7 December 2005
Counsel for the Plaintiff: Mr JE Sexton SC Solicitor for the Plaintiff: Thynne & McCartney Counsel for the First and Third Defendants and First and Second Cross-Respondents: Mr K Fleming QC with Mr G Diehm Solicitor for the First and Third Defendants and First and Second Cross-Respondents: Blake Dawson Waldron Counsel for the Second and Fourth Defendants and First and Second Cross-Claimants: Mr M Speakman QC Solicitor for the Second and Fourth Defendants and First and Second Cross-Claimants: Dibbs Abbott Stillman Date of Hearing: 6 December 2005 Date of Ruling: 7 December 2005
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