Kellogg Brown & Root Pty Ltd v Douglas Partners Pty Ltd

[2007] WASC 275

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   KELLOGG BROWN & ROOT PTY LTD -v- DOUGLAS PARTNERS PTY LTD [2007] WASC 275

CORAM:   MARTIN CJ

HEARD:   4 OCTOBER 2007

DELIVERED          :   4 OCTOBER 2007

PUBLISHED           :  20 NOVEMBER 2007

FILE NO/S:   CIV 2039 of 2005

BETWEEN:   KELLOGG BROWN & ROOT PTY LTD (ACN 007 660 317)

Plaintiff

AND

DOUGLAS PARTNERS PTY LTD (ACN 053 980 117)
Defendant

Catchwords:

Practice and procedure - Joiner of parties - Turns on own facts

Legislation:

Nil

Result:

Applications granted

Category:    B

Representation:

Counsel:

Plaintiff:     Mr M P Cornes

Defendant:     Mr S F Popperwell

Solicitors:

Plaintiff:     Minter Ellison

Defendant:     Pynt & Partners

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

Nil

MARTIN CJ: 

(This judgment was delivered extemporaneously on 4 October 2007 and has been edited from the transcript)

1. There are two applications before the court, each in the same form.  Both applications have been brought by the defendant, Douglas Partners Pty Ltd (Douglas Partners) who seeks leave to join a third party to the proceedings.

2. The history of the proceedings is set out in the affidavit of Justin Lee Edwards, filed on behalf of the plaintiff, Kellogg Brown & Root Pty Ltd (Kellogg Brown & Root), which opposes the applications.

3. The proceedings were commenced by a writ issued on 29 August 2005.  In April 2006 Kellogg Brown & Root filed and served an amended writ of summons and amended statement of claim.  Douglas Partners filed and served a defence in July 2006.  Both parties then provided discovery and each party inspected the other's documents.

4. In January 2007 the court ordered that the parties exchange experts' reports and in June 2007, the solicitors for Douglas Partners advised that they had received a report from Mr Emery, Douglas Partners' expert.  In relation to Kellogg Brown & Root, it had served Douglas Partners with an expert report prior to the commencement of proceedings in the latter part of 2004 followed by a brief supplementary expert report on Douglas Partners on 27 July 2007.  On 28 August 2007 Douglas Partners served a copy of Mr Emery's expert report on Kellogg Brown & Root.

5. The applications are supported in each case by an affidavit from the solicitor for Douglas Partners.  He deposes that it was the delivery and consideration of the Emery report that provided the basis for the joinder of the third parties.

6. Kellogg Brown & Root opposes the applications on the basis that the grant of leave at this late stage in the proceedings, it otherwise being ready for trial, is likely to delay the trial.  Kellogg Brown & Root further points out that the prospect of a cause of action arising against each of the third parties, which Douglas Partners now wishes to join, should have been apparent from the terms of its expert report, provided in the latter part of 2004.

7. When application is made to join third parties at a belated stage of the proceedings such as this, it is essential for the court to scrutinise the application with care.  There is an onus upon defendants who seek to join third parties to do so promptly, lest their belated joinder delay the trial of the primary proceedings.

8. Applying that approach to this case, there seems to be a basis for Douglas Partners having waited until receipt of the Emery report prior to moving to join the additional third parties because, until confirmation of the causes of action was received, it might have been imprudent - and indeed, arguably improper - for an application to have been made for their joinder.  That, however, does not excuse the delay in obtaining and delivering the Emery report, and that is a delay that counts against Douglas Partners in its application to now join those third parties.

9. In these circumstances, I am required to balance the possible prejudice to Kellogg Brown & Root as a result of joinder of the third parties at this late stage in the proceedings against the possible prejudice to Douglas Partners and with regard to the public interest if third parties are not now joined.  That prejudice arises because, unless the third parties are now joined, there is no prospect that they could be bound by the determinations made by the court in the primary proceedings between Kellogg Brown & Root and Douglas Partners.  Consequently, there is the significant prospect that those issues might have to be relitigated.

10. In relation to the prejudice to Kellogg Brown & Root, Douglas Partners submits, and I accept, that that prejudice will only materialise if and when the primary proceedings are substantively delayed by reason; for example, of an order that the third party proceedings be jointly tried with the substantive proceedings.

11. It is perhaps too early now to know whether such an order would be appropriate.  Much will turn upon the position adopted by the third parties and their attitude to the time that it will take them to get ready to be able to participate in any such trial.

12. There are other alternatives available, such as making directions to the effect that the third parties have limited participation in any such proceedings and be bound only in relation to some issues determined in the course of the primary proceedings.  But those are matters for a future date.

13. I do, however, accept that any order for joinder at this stage will cause some prejudice to Kellogg Brown & Root.  This is because, of necessity, if an order for joinder is made, it will be impossible to make further directions in relation to this matter unless and until the third parties have in fact been joined and entered appearances.

14. It seems to me that in this particular case, the balancing of those competing considerations, from a case management point of view, points to the conclusion that I should allow the applications to join the third parties.  After the third parties have entered appearances, I can ascertain the appropriate course that will balance the competing considerations, to which I have referred, doing whatever I can to mitigate the prejudice to Kellogg Brown & Root in the form of delay as a result of the belated application for joinder of the third parties.  At the same time, I can protect the interests of Douglas Partners and the third parties and the public interest in avoiding multiplicity of proceedings.