Manassen Foods v Seaway Logistics
[2020] VSC 835
•18 December 2020
| IN THE SUPREME COURT OF VICTORIA AT MELBOURNE COMMERCIAL COURT ADMIRALTY LIST | Not Restricted |
S ECI 2018 0309
| MANASSEN FOODS AUSTRALIA PTY LTD (ACN 001 356 449) | Plaintiff |
| - and - | |
| SEAWAY LOGISTICS PTY LTD (ACN 094 204 609) | Defendant |
| - and - | |
| INTELLIGENT SCM LLC | Third Party |
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JUDGE: | Digby J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 1 October 2020 |
DATE OF JUDGMENT: | 18 December 2020 |
CASE MAY BE CITED AS: | Manassen Foods v Seaway Logistics |
MEDIUM NEUTRAL CITATION: | [2020] VSC 835 |
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PRACTICE AND PROCEDURE – Applications for summary judgment – Supreme Court (General Civil Procedure) Rules 2015, rr 22.16 and 22.24(2), Civil Procedure Act 2010 (Vic), ss 62 and 63 - Asserted liability of freight forwarder to owner of Cargo and asserted liability of freight service provider to freight forwarder – Viability of claims of agency or subcontract -Whether Cargo owner or freight forwarder’s claims have any real prospect of success.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Harvey SC with Mr N Wallwork | Cusack & Co Lawyers (as town agents for SRB Legal) |
| For the Defendant | Mr C Madder | Colin Biggers & Paisley |
| For the Third Party | Mr M Ravech | Weinberg Lawyers (as town agents for Carmody Lawyers) |
HIS HONOUR:
Summary of applications
By:
(a) Summons dated 24 July 2020 Intelligent SCM LLC (the third party) being principal of American Worldwide Agencies seeks summary judgment against Seaway Logistics Pty Ltd (the defendant) in this proceeding pursuant to r 22.24(2) of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) on the basis that the claim made against it by the defendant has no real prospect of success; and
(b) Summons dated 7 August 2020 the defendant seeks summary judgment against Manassen Foods Australia Pty Ltd (the plaintiff) pursuant to ss 62 and/or 63 of the Civil Procedure Act 2010 (Vic) (the CPA) and/or alternatively r 22.16 of the of the Rules, on the basis that the claims made against it by the plaintiff have no real prospect of success.
Both the applications of the third party and the defendant for summary judgment are similarly based upon the assertions of the third party and the defendant that:
(a) the defendant’s case that the third party is liable for breach of contract or negligence as the defendant’s agent or subcontractor has no prospect of success;
(b) the plaintiff’s case against the defendant, which relies upon the allegation that the third party was the defendant’s agent, or alternatively was the defendant’s subcontractor, has no prospect of success.
Background
The parties and other relevant matters
The parties:
(a) the plaintiff, Manassen Foods Australia Pty Ltd, is an importer of various food stuffs and the purchaser of the subject Cargo of food stuffs (the Cargo);
(b) the defendant, Seaway Logistics Pty Ltd, is a transport and logistics provider and freight forwarder based in Australia;
(c) the defendant was engaged to effect the import to Australia of the Cargo from the premises of Van Law Foods in California, United States of America;
(d) the third party, Intelligent SCM LLC, is the principal of American Worldwide Agencies (AWA). AWA is a freight forwarder based in the United States of America. The plaintiff alleges that AWA was at all material times the agent and/or subcontractor of the defendant and provided freight forwarding services.
Other relevant matters:
(e) ANL Singapore Pte Ltd is an ocean carrier (the ocean carrier);
(f) Newman’s Own is an entity involved in the sale of food products. Van Law and LiDestri Foods are companies associated with Newman’s Own;
(g) the Cargo is comprised of cartons of food stuff in the nature of salad dressing.
The plaintiff’s claim
The plaintiff claims damages for breach of contract, against the defendant in respect of the carriage of goods by sea, and in particular the Cargo which was transported from the City of Fullerton in California, via the Port of Long Beach in California, in the United States of America, to both the Port of Sydney in New South Wales and the Port of Melbourne in Victoria, Australia and was damaged in transit.
The plaintiff engaged the defendant pursuant to a Services Agreement entered into in about May 2017, to provide freight forwarding services.
Pursuant to the Services Agreement there were three relevant shipments of the damaged Cargo between about May 2017 and June 2017 under Ocean Bills of Lading Nos. OCE0114570, OCE0115413 and OCE0115413 (the Bills of Lading).
The defendant engaged AWA[1] (the third party) to provide freight forwarding services for the three Cargos initially via truck from Fullerton to Long Beach, California. After arrival at Long Beach, California the Cargo was transported by sea from Long Beach, California to the Ports of Sydney and Melbourne.
[1]CB22-23, [6(c)].
The plaintiff alleges that the third party booked the former second defendant, ANL Singapore Pte Ltd, as ocean carrier for the Cargos.
The plaintiff also alleges in relation to the three Containers used to transport the Cargo, that the defendant instructed the third party that each of those Containers should be set at minus 10 degrees Celsius, alternatively the third party instructed or arranged those temperature settings.[2]
[2]CB171, [3]; CB10-12, Statement of Claim, 18 July 2019, [8], [9], [13], [14], [18] and [19].
As a consequence of the temperature settings in relation to the above Containers the plaintiff alleges that the defendant by its conduct, or the conduct of its agent or subcontractor, the third party, caused two of the Containers containing the Cargo which arrived in an Australian Port, to be wholly damaged and the Cargo in a third container to be partly damaged.
The plaintiff alleges that as a result of the above it has suffered loss and damage.
The defendant’s defence
The defendant asserts by way of its Defence,[3] inter alia, that:
[3]CB22-23, Defence, 23 August 2019, [6], [11] and [16].
(a) it was at no time instructed to carry the Cargos for the plaintiff, but only to provide services limited to those in the First Schedule Services of the Services Agreement dated 1 May 2017 between the plaintiff and the defendant, which included international freight forwarding services and the management of third party Full Container Load transport providers as required;
(b) pursuant to the provision of the First Schedule Services it arranged for AWA Lines LLC, trading as AWA, to provide freight forwarding services;
(c) on dates in July 2017 AWA’s principal, the third party, issued Bills of Lading No. S00081200, S00082174 and S00081197 evidencing a contract of carriage of the First Cargo between it and the shipper Van Law Foods, which named the plaintiff as the consignee; and
(d) in the premises, the proper defendant to the plaintiff’s claim in respect of each Cargo is AWA and/or the third party, as carrier under the relevant Bills of Lading, and not the defendant.
The defendant’s Defence does not admit that, as alleged by the plaintiff, the third party instructed or arranged for any of the Containers to be set at minus 10 degrees Celsius and denies that it instructed that the Containers be set at minus 10 degrees Celsius.[4]
[4]CB23-26, [9], [14] and [19].
The defendant’s third party notice
The defendant’s Third Party Notice dated 25 March 2020, in summary, sets out the plaintiff’s claims against the defendant summarised above, the defendant’s Defence to the plaintiff’s claims, and the defendant’s claims against the third party.
The defendant’s Third Party Notice claims that if the defendant, as alleged by the plaintiff in the proceeding, was liable to the plaintiff that liability is contingent on the acts or omissions of the defendant’s agents, alternatively its subcontractors, causing loss to the plaintiff.
The defendant alleges that if it is liable to the plaintiff (which it denies) that liability arises because the third party was the defendant’s agent, and if so, the defendant alleges, it was a term of the contract of agency that the third party would exercise reasonable care and skill not to cause financial loss to the defendant.
The defendant also alleges that the third party owed a duty to the defendant, to exercise reasonable care not to cause financial loss to the defendant, and the defendant alleges that if it is liable to the plaintiff, such liability arose by reason of a breach of the third party’s contract of agency with the defendant and/or a breach of the duty owed by the third party to the defendant.
The defendant’s Third Party Notice makes similar allegations against the third party as subcontractor and alleges that if the defendant is liable to the plaintiff, and thereby suffers loss and damage, that loss and damage resulted from the third party’s breach of its obligations to the defendant.
The third party’s defence to the third party notice
The third party’s Defence to the defendant’s allegations admits the existence of the allegations made by the plaintiff against the defendant and denies the defendant’s allegations that the third party was the defendant’s agent and asserts that those allegations (and a number of other allegations made by the defendant against the third party) should be struck out as having no basis.
Similarly, the third party denies that it was the defendant’s subcontractor and also seeks to have that allegation struck out as having no basis.
The kernel of the dispute for present purposes
This proceeding principally concerns which of the above respondent parties is liable for damage caused to the Cargo as a result of the alleged incorrect instruction as to the temperature setting for the refrigerated Containers in which the Cargo was transported.
Third party’s application against the defendant for summary judgment
Third party’s submissions dated 27 July 2020 and reply submissions dated 13 August 2020
The third party submits in support of its application for summary judgment against the defendant pursuant to r 22.24(2) of the Rules that the defendant’s third party claim against it for damages for breach of contract or negligence, either as the defendant’s agent (the Agency Claim) or subcontractor (the Subcontractor Claim), relies upon the plaintiff instructing the defendant to carry the relevant goods from Van Law Foods’ premises in California to the plaintiff’s premises in New South Wales, and in that carriage damaged the Cargos by carrying them at minus 10 degrees Celsius, rather than 10 degrees Celsius.
The third party submits that, accepting the facts alleged in the plaintiff’s Statement of Claim (as the third party submits the Court should do for present purposes), taken at their highest the defendant’s claim against the third party should nevertheless fail because the Bills of Lading relied on by the plaintiff at CB396, establish neither agency nor the third party’s role as subcontractor.[5]
[5]T7.1-24.
The third party asserts that in support of the Agency Claim and the Subcontractor Claim the plaintiff relies upon the Bills of Lading pertaining to the three Cargos, each in the same form and in the name Van Law Foods as shipper/exporter, and each with the plaintiff as consignee and the third party as carrier of the goods.
The third party submits that the Bills of Lading relied on by the plaintiff, rather than constituting or evidencing either a contract of agency or a subcontract between the defendant as principal and the third party as agent or subcontractor, represent contracts between Van Law Foods as shipper/exporter and the third party’s carrier, pursuant to which the third party agreed to transport the goods to Sydney.
The third party submits that the Bills of Lading relied upon by the defendant do not establish either the Agency Claim or the Subcontractor Claim and are the only documents asserted (via the plaintiff’s pleading) to support the alleged Agency Claim or the Subcontractor Claim, and that in those circumstances the defendant has ‘no real prospect of success’ in relation to its claims against the third party.[6]
[6]T8.19-31.
The third party however also submits that:
Nonetheless, the facts, matters and circumstances giving rise to this legal conclusion that it is assumed Manassen intends to argue are ultimately a matter for trial.
Defendant’s submissions dated 31 July 2020 in response to third party application for summary judgment
The defendant submits that the materials discovered to date in this proceeding, the ‘Booking Forms’ and correspondence between the third party and the ocean carrier concerning each of the three consignments of the Cargo evinces that it was the third party which advised the ocean carrier, that the containers should be set at minus 10 degrees Celsius. The defendant submits that prima facie on this basis it was the third party’s acts or omissions which have caused the relevant damage.
The defendant also submits that there is no material available to establish that the defendant instructed that the Containers should be set at minus 10 degrees Celsius.
Accordingly, the defendant submits that it cannot be said to be liable to the plaintiff for the third party’s conduct, particularly when the defendant:
(a) is not a party to the carriage contracts evinced by the Bills of Lading; and
(b) was not involved, as the defendant will seek to establish at trial, in relation to the third party instructing the ocean carrier that the relevant Containers should be set at minus 10 degrees Celsius or itself providing an instruction as to that temperature setting for the Containers or Cargo.
The defendant also acknowledges that the plaintiff advances an alternative case which relies upon cl 10.4 of the Services Agreement, which in summary provides that the defendant shall be liable to the plaintiff in respect of ‘negligence according to the standards of the trade’, and further provides that the defendant agrees ‘as Principal and/or Carrier and assumes liability for its subcontractors and for itself’.
The defendant’s submission concedes that if the plaintiff proves that the defendant subcontracted with the third party, or that the third party was the defendant’s agent, then cl 10.4 of the Services Agreement may entitle the plaintiff to claim directly against the defendant as principal.[7]
[7]CB228, [17].
The defendant submits that on the basis of the plaintiff’s allegations in its Statement of Claim, in particular paragraph [22], [23], [24] and [25], and the plaintiff’s Further and Better Particulars filed 26 November 2019, in particular at [7], the plaintiff appears to advance a case that the defendant is vicariously liable under the Services Agreement, or has assumed liability under the Services Agreement, for any negligent conduct of its subcontractors.
The defendant contends that insofar as the plaintiff advances the case referred to in the last preceding paragraph at this point in the proceeding, the only material which has been discovered by any party, relevant to these matters is that related to the negligent conduct of the third party alone in advising the ocean carrier that the Containers should be set at minus 10 degrees Celsius, rather than at 10 degrees Celsius as should have occurred.[8]
[8]Affidavit of Andrew Tulloch, 31 July 2020, Exhibit ‘ADT-5’; CB214; T13.1-T14.7.
The defendant relies on documents which appear to establish that the third party was responsible for the incorrect temperature setting in the Containers.[9]
[9]A case that the defendant is vicariously liable under the Services Agreement, or has assumed liability under that Agreement, for any negligent conduct of its subcontractors.
The defendant also submits that as a result of what it submits is AWA’s sole responsibility for the relevant damage, the plaintiff’s claim against the defendant is entirely determinative.[10]
[10]T14.10-16.
The defendant also denies that it was in any relevant contractual relationship with the third party or that the third party was its agent or subcontractor.
The defendant however submits that notwithstanding its denials referred to in the last preceding paragraph, the facts, matters and circumstances asserted by the plaintiff as giving rise to the plaintiff’s intended case, alleging that the third party was the defendant’s agent or subcontractor in respect of part of the carriage of the Cargo, are ultimately matters for trial.[11]
[11]CB229, Defendant’s Submissions, 31 July 2020, [20].
Further, the defendant observes that it has joined the third party because if the plaintiff proves its asserted relationship of agency or subcontractor as between the defendant and the third party, the defendant may have a good arguable claim for indemnity against the third party in connection with loss caused by the defendant in relation to which it is liable to the plaintiff.
The defendant also explains that it has joined the third party because it is the party which on the defendant’s case has caused the loss and the party which instructed AWA as to the temperature settings for the Containers.[12]
[12]T21.23-29.
The defendant also argues that it is appropriate that the third party be joined to the principal proceeding rather than there being separate proceedings and the risk of inconsistent findings.
Further the defendant also points out that to the extent that it remains unclear upon what facts, matters and circumstances the plaintiff relies in respect of its alleged legal relationships between the defendant and the third party, the defendant has sought further and better particulars.
Third party submissions dated 13 August 2020 in reply to the defendant’s opposition to the third party summary judgment application
The third party submits that the defendant’s case in opposition to the third party’s application for summary judgment lacks an arguable factual foundation for the allegations which underpin it in relation to potential liability based on the plaintiff’s allegations that the third party was the agent or the subcontractor of the defendant.
The third party also raised certain CPA related matters which were ultimately not pressed on its application.[13]
Defendant’s submissions dated 7 August 2020 in support of its summary judgment application against the plaintiff
[13]T12.4-26.
In addition to the defendant’s submissions of 31 July 2020 (in response to the third party’s application for summary judgment) the defendant, by submissions dated 7 August 2020, submits that if the Court accepts the third party’s submission that there was no evidence of the relationships of subcontractor or agency between the defendant and the third party, then it follows that the plaintiff’s claim against the defendant, insofar as it relies upon cl 10.4 of the Services Agreement, should be struck out.
In support of the propositions referred to in the last preceding paragraph, the defendant refers to an email dated 31 March 2017 from the plaintiff to Newman’s Own (trading as Van Law Foods) in which the plaintiff states that it has changed the Freight Forwarder for its shipments from the United States of America to the third party. The defendant submits that by this communication of 31 March 2017, the plaintiff acknowledges, contemporaneously with the carriage of the relevant goods, that its Freight Forwarder is the third party.
Further, the defendant emphasises that because there is no evidence that the defendant had any part in the process of advising the ocean carrier (or any other relevant person) that the consignments of the goods should be carried at minus 10 degrees Celsius, the defendant should have summary judgment against the plaintiff because the plaintiff’s claim has no real prospect of success against the defendant.
In the Affidavit of Andrew Tulloch sworn 7 August 2020 the defendant in Exhibit ‘ADT-10’ being the ‘Carrier to Carrier Agreement’[14] and in Exhibits ‘ADT-9’ and ‘ADT-12’ exhibits a number of discovered documents passing between the defendant and the third party and between the defendant and the plaintiff.[15]
[14]CB184-198.
[15]CB244-321 and CB53-53, [3] and CB55-169.
Plaintiff’s submissions in response to defendant’s application
Plaintiff’s submissions dated 21 August 2020
The plaintiff submits that the documents discovered in this proceeding show that in the performance of the Services Agreement between the plaintiff and the defendant, the defendant arranged for the third party to provide freight forwarding services and that in the performance of those services the third party arranged ocean carriage of the Cargo with the ocean carrier and the third party instructed the ocean carrier to set the temperature of the three relevant refrigerated Containers at minus 10 degrees Celsius, instead of 10 degrees Celsius, resulting in the Cargo being frozen and damaged.
The plaintiff highlights the existence of the following facts and documentary materials, which it argues result in its pleaded case having, at least, a real prospect of success against the defendant.
Summary of facts relied upon by the plaintiff
The plaintiff relies on the following summary of facts:
(a)On 10 February 2017, the defendant sent an email to the ocean carrier advising that the defendant had an opportunity to tender for a services contract with Bright Food Group.[16]
[16]CB74.
(b)On 31 March 2017, the plaintiff sent an email to Newman’s Own advising that it had changed its freight forwarder from Geodis Wilson to the third party.[17]
[17]CB88.
(c)On 31 March 2017, Newman’s Own sent an email to LiDestri Foods to enquire whether the shipping of certain orders for the plaintiff had been arranged by Geodis Wilson and advised that, if shipping had not been arranged with Geodis Wilson, those orders would be forwarded to the third party.[18]
[18]CB85.
(d)On 13 April 2017, the third party forwarded the email from Newman’s Own to the defendant and enquired as to what it concerned.[19] Email correspondence between the defendant and the third party then followed. That correspondence concerned the nature of the commercial relationship between the defendant and the third party, and concluded with the third party sending to the defendant a ‘carrier to carrier’ agreement for execution.[20]
[19]CB81.
[20]CB80 and CB90-93.
(e)On 13 April 2017, the defendant sent an email to the ocean carrier requesting that the plaintiff’s orders be put ‘under ANL’s AWA contract number’.[21]
[21]CB66.
(f)On 18 April 2017, the defendant executed the ‘carrier to carrier’ agreement with the third party.[22]
[22]CB92-93.
(g)On 1 May 2017, the Services Agreement between the plaintiff and the defendant was executed.[23]
[23]CB94-106.
(h)On 3 May 2017, the plaintiff sent an email to Newman’s Own attaching the purchase order for the Third Cargo. That email was copied to the defendant.[24]
[24]CB107-110.
(i)On 10 May 2017, the plaintiff sent an email to Newman’s Own attaching the purchase order for the First Cargo. That email was copied to the defendant.[25]
(j)On 23 May 2017, the third party forwarded the booking confirmation for the First Cargo to the defendant.[26]
(k)On 31 May 2017, the plaintiff sent an email to Newman’s Own attaching the purchase order for the Second Cargo. That email was copied to the defendant.[27]
(l)On 6 June 2017, the defendant sent an email to the third party advising that the Second Cargo is urgent and cannot be delayed.[28]
(m)On 19 June 2017, the defendant sent an email to the plaintiff advising the defendant’s ‘agent’ has notified them that the Second Cargo was incorrectly loaded into a container. The email chain arguably tends to establish that the ‘agent’ was the third party.[29]
(n)On 23 June 2017, the third party forwarded an updated booking confirmation for the Second Cargo to the defendant. The defendant responded that the booking needs to be made earlier as the Second Cargo is urgent.[30]
(o)Between 2 July and 16 July 2017, the ocean carrier issued Bills of Lading in respect of the First, Second and Third Cargos.[31]
(p)Between 2 July and 16 July 2017, the third party issued Bills of Lading in respect of the First, Second and Third Cargos.[32]
(q)On 22 August 2017, the defendant sent an email to the third party enquiring whether it had specified a temperature setting for refrigeration at the time of booking.[33]
[25]CB111-116.
[26]CB117.
[27]CB119-128.
[28]CB134.
[29]CB137.
[30]CB133.
[31]CB139-143.
[32]CB144-146.
[33]CB147.
In essence, the plaintiff submits that both on its pleaded case relying on cl 10.4 of the Services Agreement, and the defendant’s breaches of the Services Agreement, and further in light of the documents discovered to date in the proceeding, the defendant should not succeed in its application for summary judgment against the plaintiff because the Court should not be satisfied that the plaintiff’s case has no real prospect of success against the defendant.
The plaintiff submits that neither the defendant’s application seeking summary judgment against the plaintiff nor the third party’s application seeking summary judgment against the defendant should have been issued given the plaintiff’s pleaded case and the import of discovery outlined below.
The plaintiff submits that both such applications should be dismissed, with costs following those events.
The plaintiff submits that it should not be denied the opportunity to put its case at trial which, in summary, is that:
(a)by the Services Agreement dated 1 May 2017 the plaintiff engaged the defendant to provide freight forwarding services;
(b)pursuant to cl 10.4 of the Services Agreement[34] the defendant contracted with the plaintiff, as principal and is liable for the acts and omissions of any subcontractor to the defendant;
[34]CB49; Emails dated 3 May 2017 (CB107-110), 10 May 2017 (CB111-116), and 31 May 2017 (CB119-128).
(c)having contracted as principal, the defendant was entitled to arrange for a third party to provide required services;
(d)the defendant entered into a ‘carrier to carrier’ contract with the third party in pursuance of fulfilling its obligations under the Services Agreement;
(e)the defendant ‘arranged’ for the third party, as the defendant’s agent, to undertake aspects of the services;
(f)after the defendant had arranged for the third party to undertake some of the required services, the defendant remained involved in the process and ultimately invoiced the plaintiff for the transport booked by the third party;
(g)while performing the services at the defendant’s request, the third party gave the incorrect instructions as to container temperature settings to the ocean carrier, causing loss and damage;
(h)the defendant corresponded with the third party advising the third party that it held the third party responsible for the loss and damage as the defendant’s agent; and
(i)in the result, the defendant is liable to the plaintiff for the loss and damage because:
(i)it caused the loss and damage, or
(ii)it is vicariously liable for the acts or omissions of its agent the third party, or
(iii)it is liable under cl 10.4 of the Services Agreement for the acts or omissions of its subcontractor the third party.
Further, the plaintiff submits that it has at least an arguable case that the defendant contravened cl 10.4 of the Services Agreement by refusing to indemnify the plaintiff in respect of the loss and damage occasioned by the critical instructions as to container temperature settings, given by the defendant or its subcontractor, the third party.
Alternatively the plaintiff submits that the Court may also find that the defendant is vicariously liable for acts and omissions of its ‘agent’, the third party.
Ultimately the plaintiff submits that the fundamental question is:
… does Manassen have no real prospect of success in establishing that Seaway engaged Intelligent, or AWA, either as a subcontractor or an agent to arrange the carriage of free cargos from California to Sydney and Melbourne? That’s what it's all about. Is there no real prospect of Manassen establishing that there was some relationship between the two of them, either as subcontractor or as agent?[35]
[35]T22.30-T23.7.
The plaintiff also submits that summary dismissal of the plaintiff’s claim would be contrary to s 63 of the CPA, and inconsistent with that Act.
Considerations
Applicable legal principles
Both the third party’s application for summary judgment against the defendant and the defendant’s application for summary judgment against the plaintiff are to be determined by the principles applicable to applications for summary judgment pursuant to r 22 of the Rules and in accordance with the provisions of ss 62 and 63 of the CPA.
It is accepted by the parties that the test to be applied as to whether there should be summary judgment for the third party in relation to the defendant’s third party claims, or summary judgment for the defendant in relation to the plaintiff’s claims, is whether those claims have ‘no real prospect of success’.[36]
[36]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27.
In Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[37] the Court also observed that:
The power of summary dismissal is to be exercised with caution unless it is clear that there is no question to be tried regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (which cannot be cured by amendment) or on the basis that the action is frivolous, vexatious or an abuse of process or where the application is supported by evidence.
[37](2013) 42 VR 27.
The CPA provides in ss 62 and 63:
62Defendant may apply for summary judgment in proceeding
A defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff's claim or part of that claim has no real prospect of success.
63Summary judgment if no real prospect of success
(1)Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
(2)A court may give summary judgment in any civil proceeding under subsection (1)—
(a)on the application of a plaintiff in a civil proceeding;
(b)on the application of a defendant in a civil proceeding;
(c)on the court's own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.
Rule 22.16 of the Rules provides for an application by a defendant for summary judgment under s 62 of the CPA in accordance with Part 3 of r 22 of the Rules and r 22.24(2) provides that a third or subsequent party may also apply for summary judgment.
Further, it is to be observed that s 64 of the CPA provides:
Court may allow a matter to proceed to trial
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—(a)it is not in the interests of justice to do so; or
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate.
The Court’s approach to the exercise of discretion under s 62 and s 63 of the CPA and r 22 of the Rules, imports caution in relation to granting summary relief unless it is sufficiently clear that there was no question to be tried.
Furthermore, the exercise of judicial discretion in relation to such powers includes taking into account, in appropriate circumstances, whether in cases where a pleading fails to disclose a reasonable cause of action or a real prospect of success for other reasons, that pleading is capable of being cured by amendment, and also whether in all the circumstances it may be more appropriate in the interests of justice to allow the claim or defence which is sought to be foreclosed, to proceed to a full hearing on the merits.
The two summary judgment applications
In this matter there are two closely interrelated summary judgment applications. Indeed the defendant’s application for summary judgment against the plaintiff is predicated on summary judgment being granted to the third party against the defendant,[38] and the third party’s application against the defendant was issued first in time and was also dealt with first in argument.
[38]CB345, [3].
Because of the nature of the defendant’s third party claim, which it predicated upon the plaintiff’s case against the defendant and mirrors and relies upon the possible success of the plaintiff’s claim, it is the viability of the plaintiff’s claim which is in substance in focus in both summary judgment applications. For this, and for the reasons which follow, the defendant’s application focusing on the plaintiff’s case is addressed first in these reasons.
In my view the above approach is more sensible, convenient and appropriate in that it facilitates an holistic view of the closely interrelated claims and defences and common evidentiary materials. This approach in my view also affords a more realistic and less technical consideration of whether the cases of the two parties responding to these applications, have no real prospect of success.
I also consider that the above approach facilitates an evaluation of whether, in all the relevant circumstances, I should conclude that it is not in the interests of justice for claims in issue to be summarily disposed of, including because the disputes involved are of such a nature that it is just and appropriate that they proceed to trial where they can be the subject of a full hearing on the merits.
Further, I consider it to be particularly appropriate to proceed with caution in relation to the two applications in issue because, as the plaintiff has extensively canvassed, there is a considerable and significant body of relevant evidence which:
(a) is likely at trial to inform (together with viva voce evidence addressing that evidence) key issues, including the true relationship between the defendant and the third party (and perhaps other entities associated with the material transactions) and the origin of and responsibility for instructions or advice as to the Container temperature settings in question;
(b) informs, or is likely to inform, the circumstances of the transactions giving rise to the plaintiff’s case against the defendant and the defendant’s case against the third party and predictable trial questions, including as to inferences which may ultimately be available to be drawn.
In this matter I am not satisfied for the reasons which I outline below, that the third party’s application for summary judgment against the defendant or the defendant’s application for summary judgment against the plaintiff are made out.
Furthermore, I am satisfied that in relation to both these applications for summary judgment, as outlined below, there are substantive complex interrelated factual and legal questions which should not be foreclosed at this interlocutory stage of this proceeding and which should be addressed at trial.
Defendant’s application for summary judgment against the plaintiff
The defendant relies heavily on it not being a party to the carriage contracts reflected in the Bills of Lading identified in the plaintiff’s Statement of Claim, nor involved, on the defendant’s assertion, in relation to the third party instructing or advising the ocean carrier as to the temperature settings in the Containers or itself so instructing or advising.
However, I am persuaded that the plaintiff has identified, and cogently relies upon, numerous contemporaneous documents including documents passing between the defendant and the third party which are capable of establishing breaches by the defendant of its obligations under the Services Agreement, including cl 10.4 of that Agreement.[39]
[39]Refer: documents referred to in these Reasons for Judgment at [79] to [89].
The contemporaneous documents relied on by the plaintiff and referred to in the last preceding paragraph are also arguably capable of giving rise to vicarious liability on the part of the defendant for negligence by the third party as the defendant’s agent, or for breach by the third party as the defendant’s subcontractor, giving rise to an arguable right of indemnification in the plaintiff against the defendant pursuant to the Services Agreement or recovery at law.
The plaintiff has also sufficiently identified an asserted inferential case which is cogent and arguable on its presently pleaded case, as particularised, and which is also arguably supported by the contemporaneous documentation which the plaintiff has rehearsed in these applications.[40]
[40]Statement of Claim, [7], [8], [12] and [17]; Plaintiff’s Further and Better Particulars, 26 November 2019, [1] to [6].
Plaintiff’s reliance on contemporaneous documents
Plaintiff’s asserted facts and the arguable inferences which can be drawn from a number of key discovered documents
In my view the following materials arguably and for present purposes sufficiently support the plaintiff’s pleaded case that the plaintiff has a real prospect of success in establishing that the defendant engaged the third party or AWA, either as a subcontractor or as an agent to arrange the carriage of the Cargo from California to the Ports of Sydney and Melbourne, and that within the scope of the performance of such agency or subcontract, the third party instructed or advised incorrect temperature settings in relation to the Containers. In this regard it is also to be noted that the plaintiff relies upon cl 10.4 of the Services Agreement to support the plaintiff’s case that the defendant is contractually liable to the plaintiff as principal or vicariously for the defendant’s agent’s default and for the defaults of those with which the defendant subcontracted to provide the required services to the plaintiff.
The defendant’s pleadings made it clear that the defendant admits that it entered into an arrangement with AWA to carry or arrange carriage in the nature of freight forwarding services, although the defendant adds that such an arrangement was permitted pursuant to the First Schedule Services.[41]
[41]CB23, Defence, 23 August 2019, [7].
The plaintiff identifies a Services Agreement between the defendant, the plaintiff and Sunbeam Foods Pty Ltd which includes provisions of that agreement in cl 8.2 expressly permitting the defendant to enter into other agreements of a similar nature with other parties for the provision of services under the Services Agreement or services of a substantially similar nature.[42]
[42]CB94-106.
The plaintiff emphasises that cl 10.4 of the Services Agreement provides that the defendant shall be liable to the plaintiff if negligent according to the standards of the trade and also expressly provides that the defendant contracts with the plaintiff as principal and/or carrier and assumes liability for its subcontractors as for itself.
The plaintiff identifies and relies upon a Carrier to Carrier Agreement entered into on 18 April 2017[43] between the defendant and the third party. The Carrier to Carrier Agreement relied on is in the nature of a co-operative, non-exclusive working agreement between two non-vessel operating common carriers. However, although the plaintiff’s submissions in these applications placed significant reliance on the Carrier to Carrier Agreement dated 18 April 2017 between the defendant and third party, the Carrier to Carrier Agreement is not relied upon in the plaintiff’s Statement of Claim nor in the plaintiff’s Further and Better Particulars filed by the plaintiff on 26 November 2019. It was not until the defendant’s solicitors again pressed for the bases on which the plaintiff alleged a contract of agency and/or subcontract that the plaintiff’s solicitors on 6 August 2020 referred to the Carrier to Carrier Agreement on which the plaintiff now places significant reliance in argument.[44]
[43]CB90-93.
[44]Affidavit of Andrew Tulloch, 7 August 2020, [5]-[6].
The plaintiff submits that the Carrier to Carrier Agreement between the defendant and the third party, AWA, is the type of subcontract agreement contemplated and permitted by cl 8.2 of the Services Agreement and in respect of which the defendant has assumed liability to the plaintiff under cl 10.4 of the Services Agreement.
The plaintiff refers to and relies upon a number of documents which prima facie appear to establish the relationship between the defendant and AWA as parties working co-operatively together to forward freight as non-vessel operated carrier.[45]
[45]CB67-68; CB81-82 (as examples); T25.20-T44; Reasons for Judgment, [79] to [89].
The plaintiff identifies and relies upon documents in the nature of communications between the defendant and AWA concerning the forwarding of the Cargo.[46]
[46]T25.20-T44.
I consider that these and other documents referred to by the plaintiff in its Statement of Claim and Further and Better Particulars filed 26 November 2019 and oral argument, prima facie establish a cogent arguable basis for the plaintiff’s claim that AWA was acting as the defendant’s agent or subcontractor in relation to aspects of the transport of the Cargo.[47]
[47]CB67-68; CB81-82 (as examples); CB90-93; CB134; CB137; T25.20-T44.
Amongst these documents are contemporaneous documents which the plaintiff also relies upon and which appear to implicate the third party in instructing or advising the ocean carrier as to the temperature to be set in relation to the Containers containing the Cargo which record temperature setting requirements as ‘temperature of -10 degrees Celsius’.[48]
[48]CB139-140, House Bills of Lading; Plaintiff’s Further and Better Particulars, 26 November 2019, [2B], [4B], [4C], [6B], [6C] and [6D] .
In my view, the plaintiff has in argument sufficiently highlighted contemporaneous documentation which for present purposes arguably demonstrates its case that the third party AWA was either a subcontractor or an agent to the defendant in respect of the forwarding of the relevant Cargo and that AWA was arguably implicated in the erroneous temperature settings for the Containers in which the Cargo was transported.
Conclusion – defendant’s application for summary judgment
Accordingly, for the above reasons I am not satisfied that the defendant has demonstrated that the plaintiff’s case has no real prospect of success against the defendant.
Furthermore, the evaluation of whether the plaintiff’s case against the defendant (and similarly the defendant’s case against the third party) are devoid of any real prospect of success should in these closely interrelated applications, in which factual context and potential documentary evidence is relied upon, not just be a matter of analysis of the plaintiff’s pleading but rather a consideration of both the pleaded case together with other potentially relevant facts, matters and circumstances. These potentially relevant facts, matters and circumstances here include those which at trial may establish directly and/or by inference the relationship of agent or subcontractor, as between the defendant and the third party, and establish directly and/or by inference which party instructed or advised the Containers’ temperature settings.[49]
[49]Manderson M & F Consulting (A Firm) v Incitec Pivot Ltd (2011) 35 VR 98, including at [32].
Summary judgment should also not ordinarily be granted where it is sufficiently clear that inadequacy in the respondent’s pleading at the time of the application can be remediated.[50] On these applications both the plaintiff, by reliance in its submissions on the Carrier to Carrier Agreement between the defendant and the third party together with many other presently unpleaded documents relied upon by the plaintiff, and the defendant by foreshadowing its proposed amendment to its Third Party Notice, in effect recognised certain inadequacies in their pleaded cases and also their intention to remediate those inadequacies.
[50]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, including at [35].
It is also material that here the defendant, to a significant degree, accepts that there is an arguable case advanced against it by the plaintiff, by submitting that the third party has not demonstrated that the defendant’s case against it is fanciful.[51]
[51]Defendant Submissions, 31 July 2020, [26].
Furthermore, because of the nature of this matter and the relationships between the parties and the existence of potential documentary evidence which may at trial establish the plaintiff’s case, particularly when clarified by the evidence of witnesses, the issues in this proceeding are of such a nature that there should be no summary determination at this juncture and the nature of those issues and the evidence which appears to inform them support the conclusion that it would be in the interests of justice for there to be a full hearing on the merits in due course.
I am also unpersuaded, given the plaintiff’s pleaded case and its identification of the documentary foundation to support that case, which will be the subject of further particularisation by the plaintiff, that there is no utility in allowing the plaintiff’s case, and the defendant’s third party claim based on it, to go forward.[52]
[52]T10.23-T11.3.
Further, the defendant accepts that if the plaintiff was to prove that the defendant wrongly instructed the third party, or an intermediary, in relation to the temperature to be maintained in the relevant Containers, the defendant may be liable to the plaintiff in this proceeding.
The defendant also concedes that the plaintiff’s case that the defendant contracted with the third party, or that the third party was the agent or subcontractor of the defendant, draws on facts, matters and circumstances and associated asserted legal conclusions, which are ultimately matters for trial.[53]
[53]Defendant Submissions, 31 July 2020, [20]-[21].
On these applications, for the above reasons, the defendant has not established that the plaintiff’s case against it has no real prospect of success.
Accordingly, I am of the view that the disputes in relation to the plaintiff’s claims and the defendant’s third party claims are, for the reasons I have outlined, also of such a nature that it is likely that they will only be safely and justly determined upon a hearing at trial on their merits.
In my view it would therefore also be unsafe and contrary to the interests of justice not to allow the plaintiff’s claims to go to trial so that the body of potential evidence identified on these applications can be considered and determined.
For these reasons, in addition to not being satisfied that the plaintiff’s claims against the defendant or the defendant has no real prospect of success, I am also satisfied that it is not in the interests of justice to summarily dispose of the plaintiff’s case against the defendant.
Further and Better Particulars
The defendant has complained that the plaintiff has failed to adequately particularise the bases upon which it alleges that the third party was at material times the agent or subcontractor of the defendant.
I do not consider this assertion by the defendant to be established given the plaintiff’s pleas including in paragraphs [4], [5(h)], [7], [12], [18] and [22] to [25] of its Statement of Claim as particularised in paragraphs [1] to [7] of the plaintiff’s Further and Better Particulars filed 26 November 2019. I consider that the plaintiff’s Statement of Claim, supplemented by the said particulars, viably and cogently pleads the plaintiff’s arguable claims against the defendant under the Services Agreement, including based on the acts of the defendant’s subcontractors, and negligent agents for which the defendant is arguably vicariously liable.[54]
[54]Statement of Claim, [5(h)]; Services Agreement, cl 10.4.
The Statement of Claim, at paragraphs [7] and [8], supplemented by the plaintiff’s Further and Better Particulars filed 26 November 2019, in relation to the First Cargo (and the congruous allegations concerning the Second and Third Cargos) alleges the instruction or engagement by the defendant of the third party, AWA, and AWA or the defendant’s instruction as to the temperature setting of the Containers in which the Cargo was to be transported. The plaintiff also pleads and particularises an inferred case arising from certain specified documents and facts. Further or alternatively, the plaintiff pleads that the defendant is in breach of the Services Agreement by not indemnifying the plaintiff for loss to the Cargos due to negligence by the defendant, or its agent AWA.[55]
[55]Statement of Claim, [22] to [25].
What in all the circumstances on the evidence adduced at trial is to be inferred, as alleged by the particulars to paragraphs [7] and [8] of the plaintiff’s Statement of Claim, the plaintiff’s Further and Better Particulars filed 26 November 2019, in relation to the Cargo, should in my view not be foreclosed on the present summary judgment applications.
Furthermore, even absent the plaintiff by its submissions highlighting the arguable support that many discovered contemporaneous documents now available provide for the plaintiff’s case based on agency and subcontract between the defendant and AWA, I consider for the above reasons that the plaintiff’s pleaded case, as presently particularised, is not without real prospects of success.
Third party’s application against the defendant
The third party submits that it has no relevant contractual relations with the defendant and submits further that the Bills of Lading relied on by the plaintiff are clear evidence of the relevant contract of carriage between Van Law Foods as shipper/exporter and AWA, as carrier. It is substantially on this basis the third party seeks summary judgment against the defendant.
In response, adopting the case put by the plaintiff, the defendant asserts that if the plaintiff is ultimately able, as pleaded, to establish at trial that the third party was the defendant’s agent or subcontractor in respect of its actions in relation to the carriage of the Cargo, in particular in relation to the setting of the temperature of the Containers in which the Cargo was transported, then the defendant’s third party claim has real prospects of success. Further, that case also thereby relegates the third party’s argument relying upon the Bills of Lading as unequivocally defining the relevant contractual relations.
I also consider that the inferential case pleaded by the plaintiff which is adopted for the purpose of the Third Party Notice by the defendant, as now further particularised in the defendant’s proposed Amended Third Party Notice, relies on a number of documents, including documents apparently recording the third party’s instructions to the ocean carrier as to Container temperature settings.[56]
[56]Affidavit of Andrew Tulloch, 31 July 2020, [15]; Plaintiff’s Further and Better Particulars, 26 November 2019, [2], [4] and [6].
I consider that the facts, matters and circumstances potentially established by the body of evidence referred to in this application by the plaintiff,[57] also found a cogent and viable case, as here adopted by the defendant against the third party, and therefore results in the third party failing in its application to establish that the defendant’s third party claims had no real prospect of success in this proceeding.
[57]Plaintiff’s Further and Better Particulars, 26 November 2019, [2], [4] and [6]; Affidavit of Andrew Tulloch, 7 August 2020, [15] and T25.20-T44.
The defendant, amongst other things, argues that the booking forms and correspondence between the third party and the ocean carrier in respect of each relevant consignment of goods, evince, or are capable of evincing, that the third party advised the ocean carrier to set container temperatures at minus 10 degrees Celsius and accordingly prima facie on the present evidence the third party’s acts and omissions have caused the damage sought to be recovered by the plaintiff.[58]
[58]Affidavit of Andrew Tulloch, 31 July 2020, [15]; Plaintiff’s Further and Better Particulars, 26 November 2019, [1] to [6].
The third party’s submissions include that the defendant’s reliance on the Bills of Lading (derived from the plaintiff’s case) supports the third party’s case that it has no relevant contractual relationship with the defendant.
Conclusion – third party’s application for summary judgment
The above submissions by the third party fail however to negate the plaintiff’s, and in turn the defendant’s, express reliance upon an arguable inferential case that the third party was engaged as the defendant’s agent or subcontractor, and in these roles and in breach of its responsibilities, instructed or advised as to incorrect temperature settings in the Containers.[59]
[59]Statement of Claim, [7], [8], [12] and [17]; Plaintiff’s Further and Better Particulars, 26 November 2019, [2B and C], [4B and C] and [6B, C and D].
For these reasons, I am not satisfied that the third party has established that the defendant’s claim against the third party has no real prospect of success.
Furthermore, the third party concedes that its potential entitlement to summary judgment in this matter is contingent upon the defendant satisfying the Court that the plaintiff has no real prospect of success against the third party.
In relation to this acknowledgement by the third party I note that, for reasons I have separately outlined, the defendant has not satisfied me that the plaintiff’s case has no real prospect of success and accordingly the defendant is not entitled to summary judgment in this proceeding. Concomitantly, the third party has not satisfied me that the defendant’s case against it has no real prospect of success.
Furthermore, for the same reasons I have outlined above as to why in the circumstances of this matter it would be unsafe to determine the plaintiff’s claim summarily and it is in the interests of justice to permit the case to go to trial, I also consider that the defendant’s third party claims cannot be safely summarily determined and it is in the interests of justice and appropriate to also permit those third party claims to proceed to trial.
For the above reasons the third party is also not entitled to summary judgment.
Further Interlocutory Orders
In argument on these applications the plaintiff has detailed by reference to a number of documents and materials the basis upon which it submits that the third party was arguably the defendant’s agent or subcontractor in connection with the carriage of the Cargo and also arguably responsible for setting the temperature of the Containers used to transport the Cargo. The facts and circumstances now relied upon by the plaintiff in support of its case and in defence of the defendant’s application for summary judgment against it, should be particularised in the relevant parts of the plaintiff’s pleading to the extent the plaintiff intends to rely upon those matters at trial. A cardinal example is the plaintiff’s present omission to plead or particularise the Carrier to Carrier Agreement between the defendant and the third party dated 18 April 2017.[60]
[60]CB90-93.
Accordingly I shall direct that the plaintiff provide further and better particulars identifying the documents and other materials, facts, matters or circumstances upon which it intends to rely in response to paragraph [5] of the letter of Colin Biggers & Paisley dated 16 July 2020.[61]
[61]Affidavit of Andrew Tulloch, 31 July 2020, Exhibit ‘ADT-7’.
I have ordered the plaintiff to provide the further and better particulars referred to above to the defendant for the reasons identified above. The requirement now imposed on the plaintiff to provide further and better particulars does not qualify the defendant or the third party’s failure on their summary judgment applications. Similarly, the requirement that the plaintiff provide further and better particulars, including specific reference to the documents it has relied upon in arguing these applications does not qualify my view that the plaintiff’s Statement of Claim as particularised, is not without real prospects of success.
I shall also grant leave to the defendant to file and serve its proposed Amended Third Party Notice.[62]
[62]Affidavit of Andrew Tulloch, 31 July 2020, [15].
Costs
In relation to costs:
(a) the third party by its application for summary judgment seeks an order that the defendant pay the third party’s costs of and incidental to the application and the proceeding;
(b) the defendant by its application for summary judgment seeks an order that the plaintiff pay the defendant’s costs of and incidental to the application and the proceeding;
(c) the plaintiff submits that the defendant’s application against it should be dismissed (and that so also should the third party’s application against the defendant) with costs following the event.
The costs of the defendant’s application for summary judgment against the plaintiff and the third party’s application for summary judgment against the defendant should in my view each follow the event of those applications being unsuccessful. The third party and the defendant have failed on their respective applications for summary judgment and the defendant and the plaintiff have succeeded in defeating those applications. These circumstances are sufficient to justify the third party paying the defendant, and the defendant paying the plaintiff, the costs of those applications, on a standard basis.
Further, in my view, as explained above, it is here not to the point on costs that there will be orders that the plaintiff provide further and better particulars of certain of its pleaded allegations as a result of the way it argued the defendant’s application against it. Nor in my view is it here material to where costs should lie that the defendant is granted leave to amend its Third Party Notice in the ways it has foreshadowed.
Orders
Accordingly I order that:
(a) By 4:00pm on 29 January 2021, the plaintiff file and serve further and better particulars identifying the documents and other materials, facts, matters or circumstances upon which it intends to rely in response to paragraph [5] of the letter of Colin Biggers & Paisley dated 16 July 2020..
(b) The defendant has leave to file and serve an Amended Third Party Notice by 4:00pm on 12 February 2021.
(c) The third party’s application for summary judgment against the defendant by Summons dated 24 July 2020 is dismissed.
(d) The third party pay the defendant’s costs of and associated with its Summons dated 24 July 2020 on a standard basis.
(e) The defendant’s application for summary judgment against the plaintiff by Summons dated 7 August 2020 is dismissed.
(f) The defendant pay the plaintiff’s costs of and associated with its Summons dated 7 August 2020 on a standard basis.
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