Jones Mining Innovation Pty Ltd v Mining Service Vehicles Australia Rental Division Pty Ltd - [2010] WADC 179

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: JONES MINING INNOVATION PTY LTD -v- MINING SERVICE VEHICLES AUSTRALIA RENTAL DIVISION PTY LTD [2010] WADC 179

CORAM: REGISTRAR KINGSLEY

HEARD: 4 NOVEMBER 2010

DELIVERED : 1 DECEMBER 2010

FILE NO/S: BUN CIV 18 of 2009

BETWEEN: JONES MINING INNOVATION PTY LTD (ACN 125 580 761)
Plaintiff
AND
MINING SERVICE VEHICLES AUSTRALIA RENTAL DIVISION PTY LTD (ACN 103 459 650)
Defendant

Catchwords:

Practice - Defendant's application pursuant to O 14 Rules of the Supreme Court 1971 against a third party

Legislation:

Nil

Result:

Application dismissed

Representation:

Counsel:

Plaintiff:     No appearance
Defendant:     Mr I Morison
Third Party                   :     Mr M Owens

Solicitors:

Plaintiff:     Slee Anderson & Pidgeon
Defendant:     Michael Rogers & Associates
Third Party                   :     Cullen Babington Hughes

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

Barclays Bank Ltd v Tom [1923] 1 KB 221
CE Health plc v Ceram Holding Co [1989] 1 All ER 203
Clayton v Stone James (Unreported, WASC, Library No 8136, 7 March 1990)

REGISTRAR KINGSLEY: The plaintiff, Jones Mining Innovation Pty Ltd (JMI) pleads in its statement of claim that Zane Jones and Luke Jones were directors of and acted on behalf of JMI and the defendant, Mining Service Vehicles Australia Rental Division Pty Ltd (MSV) had Carl Hanson and Peter Jones as directors acting on behalf of MSV. The plaintiff pleads that at a meeting between Peter Jones and Zane Jones held at Peter Jones' residence in or about 16 December 2007 it was orally agreed that JMI would provide to MSV maintenance and technical innovation works for a period of five years (the JMI contract).
In its defence, MSV pleads that Peter Jones did not have MSV's authority to enter into the JMI contract. The theme of the defence is that Peter Jones did not have the authority of MSV to act on MSV's behalf in relation to any contract with JMI.
Against that background MSV has issued a third party notice against Peter Jones. The essence of the third party claim is that Peter Jones acted without the authority of the defendant in entering into any agreement with JMI.
The defendant has brought an application for judgment pursuant to O 14 Rules of the Supreme Court 1971 (RSC) against the third party. I am dismissing the application for the following reasons.
The defendant's counsel has filed and served an outline of submissions dated 3 November 2010. These submissions are carefully thought through and seek to persuade me that the court has jurisdiction to entertain an application pursuant to O 14 RSC in the third party proceedings. However in the end I am not persuaded.
The third party procedure is a peculiar proceeding where inchoate claims as between the defendant and third party may be determined at the same time as the proceedings between plaintiff and defendant. The third party procedure also enables the question between the defendant and third party decided as soon as possible after the decision between plaintiff and defendant, with the attendant savings in costs and removing the possibility of inconsistent findings on the same facts (see Barclays Bank Ltd v Tom [1923] 1 KB 221, 224).
In CE Health plc v Ceram Holding Co [1989] 1 All ER 203 the issue of summary judgment in third party proceedings was carefully considered by Neill LJ. After a historical analysis of the third party procedure Neill LJ (210) concludes that the procedure under O 14 (English Rules) has never applied to a claim by a defendant against a third party.
Defendant's counsel at par 2 of his submissions dated 3 November 2010 states that a defendant's right to apply under O 14 for summary judgment against a third party was assumed in Clayton v Stone James (Unreported, WASC, Library No 8136, 7 March 1990) (Walsh J). However in that case the defendant had made payment to the plaintiff, the defendant amended its statement of claim against the third parties and the action appears to have continued as between the defendant as plaintiff and the third parties as defendant, thus allowing the O 14 RSC procedure to be involved.
Citing CE Health (210) the scope of third party proceedings has been determined at all times by the rules of the court. There is little room for argument that a court has wider powers than that conferred by the rules, or that a court has some residual or inherent jurisdiction to grant an order by way of summary judgment pursuant to O 14 RSC.
This is not to say there is no relief akin to that available pursuant to the principles upon which an O 14 application is determined. But that relief is upon the summons for directions pursuant to O 19 RSC being heard, and argument on the third party notice.
The defendant's counsel seeks to enlist O 19 r 4(3)(a) to support his submission that the court has jurisdiction to hear an O 14 application against the third party. Order 19 r 4(3)(a) provides:
(3)On an application for directions under this Rule the Court may -
(a)if the liability of the third party to the defendant who issued the third party notice is established on the hearing, order such judgment as the nature of the case may require to be entered against the third party in favour of the defendant …
The defendant's counsel submits that the summary judgment nature of O 19 r 4(3) is confirmed by the terms of O 19 r 4(4) RSC which provides that on an application for directions the court may give leave to defend the action. However that phrase in O 19 r 4(4) RSC is conditioned by the following words 'either alone or jointly with any defendant …'. Thus O 19 r 4(4) RSC empowers a court to make an order giving leave to the third party to defend, directly, the plaintiff's claim.
However, in my opinion, the hearing referred to in O 19 r 4(3)(a) is the hearing of the summons for directions issued pursuant to O 19 RSC and not a summons issued pursuant to O 14 RSC.
Defendant's counsel seeks to enlist O 19 r 7 where the court may at, or after trial of the action, or if the action is decided otherwise than by trial on an application by summons or motion, order such judgment as the nature of the case may require to be entered for the defendant against the third party or for the third party against the defendant. In my opinion O 19 r 7 is directed to the situation where the primary action between the plaintiff and defendant has been determined such that a liability has been found on the part of the defendant. It is that point that the defendant can crystallise its claim as against the third party.
In any event, on the merits, I am of the opinion that the application by the defendant must fail. Peter Jones, in an affidavit sworn 26 October 2010, deposes that he had a meeting in about December 2007 at the premises of MSV. Present at that meeting was Zane Jones on behalf of JMI and Mr Hanson and Peter Jones on behalf of MSV. Peter Jones deposes at that meeting Mr Hanson offered to the plaintiff a fixed contract sum which was broadly agreed by Zane Jones on behalf of JMI. However Zane Jones had to confirm the deal with the other directors of JMI. That is not the pleaded case of the plaintiff in that thee is no plea Hanson was at the meeting.
Carl Hanson, the director of MSV, deposes in his affidavit of 8 February 2010 that he did not ever agree to Peter Jones on behalf of MSV entering into a contract with Luke Jones and/or Zane Jones or any company of theirs on any terms. Hanson, in a subsequent affidavit sworn 12 March 2010, again states that Peter Jones did not have any authority to enter into the contracts, and that Peter Jones did not tell Hanson that he would, or had, entered into the contracts.
In my opinion, there is sufficient factual disparity to warrant that the third party proceedings be heard in the usual course with the primary action.
As I am of the opinion that the defendant did not have jurisdiction to bring this application and, in any event, the application has failed I am of the opinion that the costs of the application be the third party's in any event.