Manassen Foods v Seaway Logistics (No 3)

THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

ADMIRALTY LIST

S ECI 2018 00309

MANASSEN FOODS AUSTRALIA PTY LTD (ACN 001 356 449)	Plaintiff
v
SEAWAY LOGISTICS PTY LTD (ACN 094 204 609)	Defendant
and
INTELLIGENT SCM LLC	Third Party

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JUDGE:	Croft J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 May 2023
DATE OF JUDGMENT:	9 June 2023
CASE MAY BE CITED AS:	Manassen Foods v Seaway Logistics (No 3)
MEDIUM NEUTRAL CITATION:	[2023] VSC 316

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PRACTICE AND PROCEDURE — Appeal from an Associate Justice — Application for joinder of claimed concurrent wrongdoer and leave to amend to plead proportionate liability defence —Discretionary factors — Whether there has been a delay in bringing application — Joinder — Prejudice arising from delay — Risk of prejudice to plaintiff and defendant being time‑barred from suing concurrent wrongdoer — House v The King (1936) 55 CLR 499 —March v Stramere (1992) 171 CLR 506 —Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 — Fabfloor (Vic) Pty Ltd v BNY Trust Company of Australia Ltd [2016] VSC 99 — Wrongs Act 1958, Part IVAA, s 24AL — Supreme Court(General Civil Procedure) Rules 2015, rr 9.06, 77.06 — Civil Procedure Act 2010, ss 7, 8, 9 and 25.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	No appearance
For the Defendant	Mr CGK Madder	Colin Biggers & Paisley
For the Third Party	Mr MI Ravech	Weinberg Lawyers (as town agents for Carmody Lawyers)

HIS HONOUR:

Introduction

The plaintiff, Manassen Foods Australia Pty Ltd (“Manassen”), was the importer of salad dressing from the United States of America to Australia in 2017 by way of three cargo shipments in refrigerated containers. The critical allegation is that the refrigerated containers in which the salad dressing was shipped were set to the wrong temperature for storage, in that they were set to a temperature of minus 10 degrees Celsius, rather than a temperature of positive 10 degrees Celsius. The result was the spoiling of the salad dressing and Manassen suffering loss and damage as a result. As indicated by Digby J, in an earlier application for summary judgment, the kernel of the dispute is the determination of which of the parties is liable for the damage caused to the cargo as a result of the incorrect instruction as to the temperature setting for the refrigerated containers.[1]
[1]Manassen Foods v Seaway Logistics [2020] VSC 835 (“Summary Judgment Decision”), [21] (Digby J).

Manassen purchased the salad dressing from a United States company, Van Law Foods, on an ‘ex works’ terms basis. Title to the goods was, accordingly, transferred from Van Law Foods as seller to Manassen as buyer upon the product leaving the Van Law Foods premises in Fullerton, California. Manassen engaged the defendant (“Seaway”) to provide freight forwarding services under a Services Agreement entered into in May 2017. Seaway, in turn, engaged the Third Party to this proceeding, Intelligent SCM LLC (“AWA”), to provide freight forwarding services from the United States to Australia of the three cargos, initially via road truck from Fullerton to Long Beach, California, and then for transportation by sea from Long Beach to the ports of Sydney and Melbourne.

ANL Singapore Pte Ltd (“ANL Singapore”) was the ocean carrier for the three cargos, which were carried pursuant to three separate bills of lading:

(a) OCE 114573, dated 2 July 2017;

(b) OCE 0115413, dated 16 July 2017; and

(c) OCE 0114570, dated 9 July 2017.

AWA is stated to be the shipper on these bills of lading; that is, AWA, as shipper, was the contracting party[2] with ANL Singapore as the carrier. Each of the three bills of lading stated:
cargo is stored in a refrigerated container set at the shipper’s requested carrying temperature of -10° Celsius.

[2]See generally Martin Davies and Anthony Dickey, Shipping Law (Thomson Reuters, 4th ed, 2016), [11.20].

AWA appeals orders made in this proceeding by the Honourable Steffensen AsJ on 3 November 2022 and 21 November 2022 with respect to an application, by summons filed on 8 March 2022 (“Summons”), whereby AWA sought orders for:

(a) ANL Singapore to be joined as a defendant to the proceeding pursuant to s 24AL(1) of the Wrongs Act 1958 (“Wrongs Act”) and further or alternatively, r 9.06(b)(i) of the Supreme Court(General Civil Procedure) Rules 2015 (“Rules”); and

(b) leave to amend its defence (“Defence”)[3] to the Further Amended Third Party Claim (“FATPC”)[4] in substantially the form annexed to the affidavit of Mark Carmody on 8 March 2022, pursuant to r 36.01(1) of the Rules.

[3]AWA, ‘Defence to Further Amended Statement of Claim to Third Party Notice’ (18 February 2022).

[4]Seaway, ‘Further Amended Statement of Claim’ (20 December 2021).

On 3 November 2022 the Associate Justice delivered a ruling addressing the application made by the Summons (“Ruling”).[5]
[5]Manassen Foods v Seaway Logistics [No 2] [2022] VSC 659 (“Ruling”).

The Associate Justice said in that Ruling:[6]

This ruling addresses the application made by Summons filed on 8 March 2022 by the third party, Intelligent SCM LLC, known as ‘AWA’. AWA seeks orders to join a third party to the proceeding and amend its defence for the purpose of bringing a proportionate liability defence. By the proportionate liability defence, AWA seeks to have its liability (if any) reduced by reason of an asserted failure by the third party to comply with AWA’s instruction as to the correct temperature.
For the reasons that follow, whilst AWA’s proportionate liability defence is arguable, AWA’s Summons is dismissed on the grounds that the significant delay in bringing the application for joinder and associated proportionate liability defence has not been satisfactorily explained, and gives rise to prejudice to the other parties to the proceeding. Joinder of the third party at this late stage would not be in the interests of justice or consistent with the Court’s obligation to further the overarching purpose to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.

[6]Ibid, [4]–[5].

The parties to this appeal accept that the applicable principles of law are as set out in the submissions filed by AWA, which are stated in the following terms:[7]

AWA[8] appeals under r 77.06 of the Rules, from orders made in this proceeding by the Honourable Associate Justice Steffensen on 3 November 2022 and 21 November 2022 respectively, to a judge of the trial division. Such an appeal is in the nature of a rehearing, rather than a hearing de novo and ordinarily some legal, factual or discretionary error on the part of the Associate Judge must be demonstrated before appellate power may be exercised. Upon being satisfied that an error was made, the judge hearing the appeal is required to give the judgment which, in his or her opinion, ought to have been given at first instance.[9] If the orders from which the appeal is brought relate to a matter of practice and procedure as they do on this occasion the appellate court should exercise particular caution in reviewing the decision.[10]
On an appeal under r 77.06 of the Rules a judge has all the powers of the Court constituted by the Associate Judge[11] and has power to draw inferences of fact, and give any judgment and make any order which ought to have been given or made, and make any further or other order as the case may require.[12]
In determining an appeal in respect of a decision involving a discretionary judgment, such as the present appeal,[13] there is a strong presumption in favour of the correctness of the decision. The law governing when an appellate court will upset a discretionary decision is set out in House v The King[14] where it was held that:[15]
It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

[7]AWA, ‘Written Submissions for the Third Party’, (3 February 2023) (“Written Submissions for the Third Party”), [1]–[3]. See also Seaway, ‘Written Submissions for the Defendant’ (6 March 2023) (“Written Submissions for the Defendant”) [8].

[8]Words defined in the amended notice of appeal filed on behalf of AWA on 5 December 2022 retain their definitions for the purposes of these written submissions.

[9]Cargill Australia Ltd v Viterra Malt Pty Ltd [No 7] [2018] VSC 99, [4] (Macaulay J); Hou v Westpac Banking Corporation [2015] VSCA 57, [44] (Beach and Whelan JJA); Raptis v City of Melbourne [2017] VSC 448, [11] (Croft J).

[10]Oswal v Carson [2013] VSC 355, [11] (Ferguson J), in turn citing Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170, 177 (Gibbs CJ, Aickin, Wilson and Brennan JJ).

[11]See r 77.06.9(1) of the Rules.

[12]See r 77.06.9(2) of the Rules.

[13]The power to join a party, whether the Court acts under s 24AL of the Wrongs Act or r 9.06(b)(i) of the Rules, is discretionary as the Associate Judge concluded at [35] of the Ruling. The power to grant leave to amend a pleading under r 36.01 of the Rules is also discretionary.

[14](1936) 55 CLR 499 (“House v The King”).

[15]Ibid, 504–5 (Dixon, Evatt and McTiernan JJ).

Additionally, Seaway submits that, consistent with these principles, reference should be made to the statement by John Dixon J in Fabfloor (Vic) Pty Ltd v BNY Trust Company of Australia Ltd (“Fabfloor”)[16] where His Honour said:[17]

The conventional pleading test is not to be confused with the requirement that a party seeking to persuade the court to exercise a discretion is usually required to adduce evidence in order that the court has a proper basis to exercise its discretion judicially, particularly where the opposing party points to countervailing considerations relevant to that discretion.[18] Thus, where the party opposing an amendment and/or joinder of an additional party claims to be prejudiced, for example by reason of delay, the applicant should adduce evidence to satisfactorily explain its delay. There may be circumstances when the grounds of opposition advanced by the opposing party will require the moving party to provide some evidence about the merits of the amendment or joinder. Further, the dictates of modern case management procedures may develop particular practices, especially in specialist case lists, that require substantiation of a claim or response beyond proper basis certification.

[16][2016] VSC 99.

[17]Ibid, [48].

[18]His Honour cites Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (“Aon Risk Services”), 181–2 [4]–[6], 189 [24], 192 [30] (French CJ); 212–3 [94]–[98], 217–8 [111]–[114] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).

Contending that this statement in Fabfloor is applicable with respect to the Associate Justice’s reasons and exercise of discretion, Seaway contends that AWA has not discharged the presumption in favour of the correctness of the Associate Justice’s decision having regard to the statement of Dixon, Evatt and McTiernan JJ in House v The King as set out previously.[19] Moreover, it also contends that AWA has not demonstrated that Her Honour: acted upon a wrong principle; was guided by extraneous or irrelevant matters; mistook the facts; or failed to take into account a material consideration.
[19]See above, [7].

Grounds of appeal

The grounds of appeal (“Grounds of Appeal”)[20] are set out in the “Amended Notice of Appeal to Trial Division Constituted by a Judge of the Court” dated 5 December 2022. The Grounds of Appeal are:
[20]Amended pursuant to leave granted by the Honourable Connock J on 2 December 2022.

1.(a) Her Honour erred in law, and in fact, in concluding that there had been significant delay by the third party (AWA) in bringing the application.
(b)Her Honour ought to have concluded that:
(i)there was no significant delay by AWA because it filed the summons on 8 March 2022, which was within 1 month of the defendant (Seaway) having filed, on 18 February 2022, a further amended third party statement of claim against AWA (the FATPC) in which Seaway abandoned its previous claims founded upon an agency and a subcontract and, in lieu thereof, pleaded a claim based on a freight forwarding agreement that had not been raised before and a claim for contribution or indemnity under the Wrongs Act 1958 which was entirely new;
(ii)the new claim for contribution or indemnity under the Wrongs Act 1958 was substantial because it alleged, for the first time, that AWA had breached a duty of care owed to the plaintiff (Manassen) which had resulted in the loss of Manassen’s property, namely, the salad dressings. That new claim was significant because it exposed AWA, for the very first time, to a liability in negligence for the loss of property, as distinct from the liability for Seaway’s pure economic loss that had hitherto been the only subject of Seaway’s third party claim. Her Honour was in error in failing to recognise the significance of Seaway’s new claim under the Wrongs Act 1958 and why it was so substantial as to require AWA, in effect, to defend as from the beginning; and
(iii)AWA was entitled:
(A)pursuant to orders made by consent by Connock J on 21 December 2021, to file and serve its defence to the FATPC (the Defence) in which AWA raised a proportionate liability defence; and
(B)to obtain leave, under section 24AL(l) of the Wrongs Act 1958 and further or alternatively rule 9.06(b)(i) of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules), as it did in [1] of the summons, to join ANL as a defendant to the proceeding to enable AWA to run the proportionate liability defence; and
(C)to obtain leave, under rule 36.01(1) of the Rules, as it did at [2] of the Summons, to amend the Defence to extend AWA’s proportionate liability defence (as pleaded at [33] to [36] of the Defence) in relation to Seaway’s claim under the alleged freight forwarding agreement, to Seaway’s claim for indemnity or contribution under the Wrongs Act 1958 in which Seaway alleged that AWA had breached a duty of care owed to Manassen.

2.(a) Her Honour erred in law, and in fact, in concluding that the crux of the proceeding was the question of who is responsible for the instructions for the carriage temperature settings (see [98] of the Ruling).
(b)Her Honour ought to have concluded, on the pleadings, that:
(i)up until 18 February 2022, when the FATPC was filed, the issue in the third party proceeding was whether AWA was liable to Seaway, under the alleged agency or subcontract, for any pure economic loss sustained by Seaway as a consequence of Seaway being found liable to pay damages to Manassen; and
(ii)following the filing of the FAT[PC] on 18 February 2022, the issue in the third party proceeding was whether AWA was liable to Seaway:
(A)for the said pure economic loss, by reason of having breached the newly alleged freight forwarding agreement; and
(B)for indemnity or contribution, under the Wrongs Act 1958, in respect of the amount that Seaway had paid Manassen in settlement of Manassen’s claim against it in the principal proceeding for damages arising from the loss of Manassen’s property.

3.(a) Her Honour erred in law, and in fact, in concluding that the significant delay on AWA’s part in bringing the application would result in prejudice:
(i)to Seaway, because Seaway is now time barred under the Hague Visby Rules from making a claim against ANL for ANL’s proportionate share of the loss, since the 12 month limitation period prescribed thereunder for making such a claim has expired; and
(ii)to Manassen, because Manassen may be called upon by ANL, under ANL’s Terms, to indemnify ANL for any liability that ANL has to Seaway for ANL’s proportionate share of the loss.

(b)Her Honour ought to have concluded that, even if there was significant delay on AWA’s part (which is denied), then such delay would not result in prejudice:
(iii)to Seaway, because by the time AWA was joined as a party to the proceeding, Seaway was already time barred in any event, by operation of the limitation period prescribed under the Hague Visby Rules, from making a claim against ANL for ANL’s proportionate share of the loss. Thus, the significant delay on AWA’s part was not causative of Seaway being time barred under the Hague Visby Rules; and
(iv)to Manassen, because:
(A)if Seaway was time barred from bringing a claim against ANL for ANL’s proportionate share of the loss, then ANL could suffer no loss for Manassen to make good under the indemnity contained in ANL’s Terms. Thus, the prejudice to Manassen, said at [105] of the Ruling to arise from the potential of Manassen being called upon to indemnify ANL under the indemnity contained in ANL’s Terms, does not in fact exist; and
(B)further or alternatively, by reason of having settled its claim (save for the question of costs) against Seaway in the principal proceeding, Manassen no longer had a legal interest in the proceeding that was capable of being prejudiced by delay.

4.(a) Her Honour erred in law, and in fact, in concluding (at [105] of the Ruling) that AWA’s delay gave rise to prejudice to Manassen and Seaway because the prompt joinder of ANL may have affected the ultimate settlement agreement reached as between Manassen and Seaway.
(b)It was not open to her Honour to reach that conclusion because there was no evidence to support it and it was speculative.

5.(a) Her Honour erred in law, and in fact, in concluding that AWA had not provided a satisfactory explanation for why it did not raise a proportionate liability defence until it filed the Defence to the FATPC in February 2022.
(b)Her Honour ought to have concluded, as counsel for AWA submitted (see [79] of the Ruling), that AWA was entitled to refrain from raising a proportionate liability defence until it apprehended a potential liability to apportion, and saw fit, in its Defence to the newly formulated claim contained in the FATPC, to invoke that defence for the purpose of limiting its liability to Seaway (if any) to its proportionate share of Seaway’s loss and damage.

6.(a) Her Honour erred in law, and in fact, in the exercise of her discretion by dismissing the summons on the ground that there had been significant delay on the part of AWA in bringing the application.
(b)By reason of the matters referred to at [1(b)] of these grounds of appeal, and having concluded (at [75] of the Ruling) that Manassen and Seaway had not established that AWA’s proportionate liability defence had no real prospects of success, her Honour should, in the exercise of her discretion, have granted AWA’s application to join ANL as a defendant to the third party proceeding and allowed AWA to file and serve the proposed amended defence to the FATPC, on the ground that there had been no significant delay on the part of AWA in bringing the application.

Appeal ground 2 is no longer pressed by AWA. On that basis, I turn to the parties’ submissions in respect of the remaining Grounds.

Submissions
AWA
Grounds 1, 5 and 6: The conclusion that there had been significant delay by AWA in bringing the application is in error

AWA submits that the Associate Justice erred in the exercise of her discretion by dismissing the Summons on the grounds that there had been significant delay on the part of AWA in bringing its application to join ANL Singapore as a defendant to the proceeding so that AWA could run its already pleaded proportionate liability defence against Seaway (“the First Application”), and in relation to the bringing of its application to amend its current Defence for the purpose of extending its existing defence of proportionate liability, as amended in relation to Seaway’s claim under the alleged freight forwarding agreement, to Seaway’s claim for indemnity or contribution under the Wrongs Act which alleges that AWA breached a duty of care owed to Manassen (“the Second Application”).

In so doing, AWA contends that the Associate Justice allowed herself to be guided by an irrelevant consideration, namely, the fact that AWA could have pleaded a proportionate liability defence and applied to join ANL Singapore as a defendant to the third party proceeding in March 2020, when AWA was joined as a third party, rather than wait until February 2022, when AWA considered it was at risk of an adverse judgment, to do so.[21]
[21]Ruling, [97]–[103].

AWA further contends that it was not to the point that it could have acted sooner to raise a proportionate liability defence and apply to join ANL Singapore as a defendant. This is because, it says, the material consideration, which it is submitted that the Associate Justice failed to take into account, was that AWA was entitled to plead to the FATPC in its Defence and to make consequential amendments to it,[22] such as raising a proportionate liability defence to Seaway’s, said to be, new claims under the freight forwarding agreement that had not been pleaded before and under the Wrongs Act that had not been raised previously.
[22]The entitlement arises, AWA submits, where a pleading is amended, whether under r 36.06(1) of the Rules or, as it was in this case, pursuant to leave granted by the Court. The entitlement can be implied from r 36.06 of the Rules. Further, it has been held that leave to amend a pleading involves, without mention, leave to the opposite party to make consequential amendments to its own pleading: Bowes v Chaleyer (1923) 32 CLR 159; Squire v Squire [1972] 2 WLR 363, 370.

Indeed, AWA contends that it is noteworthy that Seaway’s new claims were pleaded in lieu of its previous claims, founded upon an agency and a subcontract, which were abandoned once Seaway filed the FATPC. The agency and subcontract claims had previously been the subject of an application for summary judgment by AWA heard before Digby J in October 2020, in which AWA submitted that neither claim had real prospects of success on the basis that the bills of lading did not constitute or evidence either a contract of agency or a subcontract between Seaway as principal and AWA as agent or subcontractor.[23] Although the application for summary judgment was dismissed,[24] Seaway’s claims against AWA remained based in agency and subcontract until the filing of the FATPC on 18 February 2022.
[23]Summary Judgment Decision, [26]. The application was heard concurrently with a similar application for summary judgment by Seaway against Manassen.
[24]Summary Judgment Decision, [118].

It is also observed that, in accordance with the orders of Digby J made on 18 December 2020, Seaway filed an Amended Third Party Notice (“ATPC”) on 11 February 2021.[25] Seaway’s claims under the ATPC were at that time still based solely in agency and subcontract. AWA then filed its defence to the ATPC on 19 May 2021, which further denied that the bills of lading constituted contracts of agency or were subcontracts.[26]
[25]Ruling, [17].
[26]Ibid, [18].

For completeness, it is observed that, on 2 August 2021, in accordance with orders made by Connock J, AWA filed its Amended Defence to the ATPC, which included a new claim of contributory negligence against Seaway, being that Seaway failed to inform AWA of the correct carriage temperature for the cargo.[27] Seaway filed its Reply to the Amended Defence on 9 August 2021, also in accordance with the orders made by Connock J, denying the allegation of contributory negligence on the basis that it did not know, and could not know, the correct carriage temperature. AWA has continued to assert its claim of contributory negligence against Seaway since its original Amended Defence, and is included in its most recent Defence to the FATPC.
[27]Ibid, [20].

Further to this, AWA contends that it was not a relevant consideration that, in the exercise of the Associate Justice’s discretion on the question of delay, Digby J had concluded, in October 2020 for the purpose of deciding the two summary judgment applications which were before him at the time, that the core issue in the proceeding was the determination of the party responsible for the damage caused to the cargo as a result of the incorrect temperature setting instruction. This is given that, as set out above, the responsibility of AWA was only claimed at the time to arise in the context of its status of agent or subcontractor of Seaway, which it denied, and under which formulation AWA did not perceive a risk of being held liable.[28] This is, in essence, AWA’s explanation as to why it did not raise the proportionate liability defence earlier.
[28]Ibid, [79].

Further, it is contended by AWA that the Associate Justice wrongly allowed herself to be influenced by Digby J’s conclusion, which is said to have been irrelevant to the task then before her,[29] and failed to take account of the material consideration which should have guided her, as it is said, namely that AWA was entitled, as of right, to raise a proportionate liability defence in its pleading to the new claims made in the FATPC.
[29]Ibid, [3], [98].

On the basis of the claimed entitlement of AWA to raise a proportionate liability defence, as indicated, it submits that the Associate Justice ought to have concluded that there was no significant delay on the part of AWA in bringing either the First Application or the Second Application, since it filed the Summons on 8 March 2022 which was within three weeks of having filed, on 18 February 2022, the Defence to the FATPC; and AWA’s explanation, for why it waited until February 2022 to bring a proportionate liability defence, rather than raising it sooner, was satisfactory. It is submitted that the Associate Justice’s conclusion to the contrary is in error. Moreover, on the basis that there was no significant delay, AWA contends that the provisions of the Civil Procedure Act 2010 (“Civil Procedure Act”) as identified by the Associate Justice[30] which deal with that question are not engaged.
[30]Ibid, [101].

Concluding on these grounds, AWA submits that by reason of the matters referred to above and the Associate Justice having concluded that Manassen and Seaway had not established that AWA’s proportionate liability defence had no real prospect of success,[31] her discretion should have been exercised in favour of allowing the First Application and Second Application on the ground that there had been no significant delay on the part of AWA in bringing either of those applications.

Grounds 3 and 4: The conclusion that the significant delay by AWA in issuing the Summons gives rise to prejudice to Seaway and Manassen is in error

[31]Ibid, [75].

AWA submits that if the Court finds that there was significant delay on the part of AWA on its part in bringing the First Application and, or alternatively, the Second Application, then the Associate Justice was in error in concluding that such significant delay, on AWA’s part, would result in prejudice to Seaway.[32] This is said to be by reason of the position that Seaway is now time-barred under the Hague Rules from making a claim against ANL Singapore for ANL Singapore’s proportionate share of the loss, since the 12 month limitation period prescribed under those Rules for making such a claim has expired.[33]
[32]Written Submissions for the Third Party, [12], referring to ibid, [106]–[107].
[33]Although the submissions of the parties and the Ruling (see, for example, [83]) refer to the Hague‑Visby Rules, it was clarified in oral submissions that the applicable rules are in fact the US Hague Rules, but that the provisions relevant for this proceeding (being the time-bar provisions) appear in both. As it is not necessary for present purposes to determine which Rules in fact apply, the general term ‘Hague Rules’ will be used herein.

Moreover, it is contended that the Associate Justice ought to have concluded that, even if there had been significant delay on the part of AWA, which it does not accept, then such delay did not give rise to any prejudice to Seaway.[34] This is said to be because any delay on AWA’s part to seek to join ANL Singapore was unconnected to any prejudice to Seaway arising from the 12 month limitation period under the Hague Rules, because that limitation period had already expired by the time AWA became a party to the proceeding.[35] It is also contended that AWA was under no duty to disclose to Seaway in 2017 that it sought to attribute blame to ANL Singapore for the damage to the cargo.[36] AWA further submits that the Associate Justice was in error in concluding that the significant delay by AWA in issuing the Summons gave rise to prejudice to Manassen on the basis that it might be called upon by ANL Singapore, under ANL Singapore’s Terms, to indemnify ANL Singapore for any liability that ANL Singapore has to Seaway for ANL Singapore’s proportionate share of Seaway’s loss.[37]
[34]Written Submissions for the Third Party, [13].
[35]Ibid, referring to Ruling, [106].
[36]Written Submissions for the Third Party, [13], referring to Ruling, [107].
[37]Written Submissions for the Third Party, [14], referring to Ruling, [105].

Rather, it is submitted that the Associate Justice ought to have concluded that even if there was significant delay on AWA’s part, which it does not accept, then such delay did not give rise to any prejudice to Manassen because, having found that Seaway was time‑barred under the Hague Rules from bringing a claim against ANL Singapore for ANL Singapore’s proportionate share of the loss,[38] it followed that ANL Singapore could suffer no loss for Manassen to make good under the indemnity contained in ANL Singapore’s Terms.[39] Consequently, it is said that the prejudice to Manassen, which was said by the Associate Justice to flow from the potential of Manassen being called upon to indemnify ANL Singapore under the indemnity contained in ANL Singapore’s Terms, was illusory; and further, or alternatively, having settled its claim apart from the question of costs against Seaway in the principal proceeding, Manassen no longer had a legal interest in the proceeding that was capable of being prejudiced by delay.
[38]Ruling, [106].
[39]Written Submissions for the Third Party, [15].

It is also submitted that the Associate Justice was in error in concluding that AWA’s significant delay gave rise to prejudice to Manassen and Seaway because the prompt joinder of ANL Singapore might have affected the ultimate settlement agreement between them.[40] Moreover, it is contended that it was not open to the Associate Justice to reach that conclusion because there was no evidence to support it and it was merely speculative.[41] It is also contended that what is described as the more probable conclusion is that the prompt joinder of ANL Singapore as a defendant to the third party proceeding would have had no bearing whatsoever on the ultimate settlement agreement between Manassen and Seaway because Manassen was not a party to the third party proceeding and therefore had no interest in its outcome.
[40]Ibid, [16], referring to Ruling, [105].
[41]Written Submissions for the Third Party, [15], citing Masters Home Improvement Pty Ltd v North East Solutions Pty Ltd [2017] VSCA 88, [101] (Santamaria, Ferguson and Kaye JJA).

In this respect, AWA adds that where a conclusion is drawn in favour of the party which bears the burden of proof, being Seaway in this instance, the conclusion must be “the more probable inference” from those facts.[42] In other words, it is said, the inference drawn by the Associate Justice must be reasonably considered to have a greater degree of likelihood than any competing inference.[43]

Seaway
Grounds 1, 5 and 6: The conclusion that there had been significant delay by AWA in bringing the application is in error

[42]Ibid.

[43]Ibid.

Seaway’s position is that its claims against AWA have always been “apportionable claims”, and that it has never (including by filing the FATPC) abandoned such claims. It submits that when it originally joined AWA to the proceeding as a third party by the Third Party Notice dated 25 March 2020, it alleged in its Statement of Claim (“TPSOC”) that insofar as AWA was Seaway’s agent, it was a term of the contract of agency and, or alternatively, it was AWA’s duty as agent to Seaway to exercise reasonable care and skill so as not to cause financial loss to Seaway.[44] Additionally, further or alternatively, it was a term of a subcontract between Seaway and AWA that AWA would exercise reasonable care and skill so as not to cause financial loss to Seaway.[45] Thus, Seaway contends that, by the TPSOC, it brought an action for damages against AWA by way of a claim for economic loss arising from an alleged failure to take reasonable care by AWA. This is said to be an apportionable claim within the meaning of s 24AF of the Wrongs Act.[46] Consequently, it is said that if AWA considered that ANL Singapore caused the loss or damage the subject of Seaway’s claim as alleged in the TPSOC, it could have raised a proportionate liability defence having regard to ss 24AI and 24AJ of the Wrongs Act at that time.[47]
[44]Written Submissions for the Defendant, [12], citing TPSOC, [19]–[20].
[45]Written Submissions for the Defendant, [12], citing TPSOC, [24].
[46]Written Submissions for the Defendant, [13].
[47]Ibid, [14].

Moreover, Seaway contends that it is incorrect to say, as AWA submits, that the Associate Justice wrongly allowed herself to be influenced by Digby J’s conclusion that the core issue in the proceeding was the determination of the party responsible for the damage caused to the cargo as a result of the incorrect carriage temperature instruction.[48] Digby J was, Seaway submits, doing no more than stating the real issues in dispute.
[48]Ibid, [15], citing the Summary Judgment Decision, [21]:
This proceeding principally concerns which of the above respondent parties [Seaway or AWA] 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.

Further, Seaway submits that, for the purpose of s 24AH of the Wrongs Act, a concurrent wrongdoer is someone whose acts or omissions caused loss and damage. Damage may, it is said, be reduced having regard to a defendant’s responsibility for such loss and damage. Thus causation, when referring to Part IVAA of the Wrongs Act, requires not only factual causation, but also the establishment of legal responsibility on the part of a concurrent wrongdoer to a plaintiff.[49] On this basis it is contended that, as Seaway brought the claim against AWA as a third party, Seaway is the party against whom AWA could raise a proportionate liability defence. It is said that, in this context, the Associate Justice’s reasons are unexceptional.[50] Seaway contends that there is no reason at law why AWA could not have raised a proportionate liability defence against Seaway alleging that ANL Singapore caused and was legally responsible for the incorrect carriage temperature setting when responding to Seaway’s TPSOC. It is said that, unquestionably, a defence that some party other than AWA was responsible for the setting of the carriage temperature at ‑10°C goes to the heart of causation and legal responsibility in this case.[51]
[49]Written Submissions for the Defendant, [17], referring to March v Stramere (1991) 171 CLR 506, and S Sali & Sons Pty Ltd v Metzke [2009] VSC 48, [282] (Whelan J).
[50]Written Submissions for the Defendant, [18], referring to Ruling, [98].
[51]Written Submissions for the Defendant, [18], referring to Ruling, [100].

Seaway says that AWA in its submissions suggests that there were “new claims” made in the FATPC, such that “it was entitled as of right to raise a proportionate liability defence in pleading to the new claims”, and that AWA now asserts that the Associate Justice erred in failing to take account of this as a material consideration.[52] Seaway contends that this is a misconception for the following reasons.[53]
[52]Written Submissions for the Third Party, [4]–[7].
[53]Written Submissions for the Defendant, [19]–[24].

In the FATPC,[54] Seaway alleges that it settled Manassen’s claim by accepting an offer of compromise on 18 October 2021. Thus, it is said, having settled Manassen’s claim, Seaway’s damages in respect to its ongoing claim against AWA have crystalised. Further, it is said that, rather than articulating the claim against AWA on the basis that AWA provided services to Seaway pursuant to a contract of agency or subcontract (as was the case under the TPSOC), Seaway in the FATPC[55] has finessed the case against AWA with reference to a pleaded “Freight Forwarding Agreement”.[56] Thus the basis upon which Seaway in the FATPC says that it alleges that AWA is liable to it is that “AWA failed to perform the services to be provided … with due care and skill”.[57] That is, Seaway contends, its claim against AWA upon which liability is sought is apportionable, just as it was apportionable under the TPSOC in March 2020. Further, it is said that the only “new” basis upon which relief is sought against AWA is pursuant to Part IV of the Wrongs Act. That is, seeking damages, which were always claimed, Seaway has now brought a claim for contribution and, or alternatively, indemnity relying on ss 23B and 24 of the Wrongs Act.
[54]FATPC, [22]–[25].
[55]Ibid, [27]-[29].
[56]Ibid, [3], [4] and [27].
[57]Ibid, [27].

On this basis, Seaway submits that the Associate Justice correctly considered that causation regarding the setting of the carriage temperature at ‑10°C is a kernel of the dispute,[58] and that AWA could have applied to join ANL Singapore as a concurrent wrongdoer upon the service of Seaway’s TPSOC. It follows, it is said, that the relevant period regarding ‘delay’ is at least from 25 March 2020 when the TPSOC was issued, until 8 March 2022, when AWA applied to join ANL Singapore to the proceeding as a concurrent wrongdoer.

Grounds 3 and 4: The conclusion that the significant delay by AWA in issuing the Summons gives rise to prejudice to Seaway and Manassen is in error

[58]Written Submissions for the Defendant, [24], citing Ruling, [3].

Seaway submits that the Associate Justice had regard to various developments in the litigation between February 2020 and March 2022 with reference to the general prejudice suffered by any party as a result of a late amendment.[59] This is, it is said, consistent with the modern approach to case management as set out in Aon Risk Services.[60] It is also submitted that the Associate Justice’s reasons are entirely consistent with the overarching purpose of the Civil Procedure Act as articulated in s 7.[61]
[59]Written Submissions for the Defendant, [25], citing Ruling, [103].
[60](2009) 239 CLR 175. Written Submissions for the Defendant, [25] also cites McHugh J’s discussion of the passage of time and general prejudice in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 551–2, Fabfloor, [48]).
[61]Written Submissions for the Defendant, [25], citing Ruling, [104].

Seaway made reference to the following statement of the High Court in Aon Risk Services:[62]

It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. [emphasis added]

Moreover, Seaway submits that the Associate Justice’s reasons in respect to general prejudice and principles of case management were sufficient to dispose of AWA’s application to join ANL Singapore.[63] Seaway observes that AWA has not challenged on this basis.

[62]Written Submissions for the Defendant, [26], citing Aon Risk Services (2009) 239 CLR 175, 214–5 [102] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).

[63]Written Submissions for the Defendant, [27], citing Ruling, [103]–[104].

More particularly, with regard to specific prejudice and also to the terms of settlement between Seaway and Manassen, AWA, it is said, misconstrues the nature of the discretion with respect to an amendment of pleading by referring to the drawing of inferences based on admissible evidence for the purposes of the burden of proof.[64] Neither Seaway nor Manassen, it is said, bear an evidentiary burden of proof regarding the fact, by way of example, that a different result would have occurred regarding the settlement had AWA joined ANL Singapore as a defendant under the proportionate liability regime prior to the settlement. Rather, it is contended that it is sufficient that AWA’s joinder of ANL Singapore may have affected the ultimate settlement agreement. Further, Seaway submits that one possibility is obvious: namely, that had AWA applied to join ANL Singapore prior to the settlement between Manassen and Seaway, Seaway may have given consideration to whether it, too, had a proper basis to join ANL Singapore as a concurrent wrongdoer.
[64]Written Submissions for the Defendant, [28]–[29] citing Written Submissions for the Third Party, [16].

The settlement between Manassen and Seaway is, as observed, but one of the matters to which the Associate Justice refers.[65] It is clearly an important matter, as it is said, because it forms the basis upon which Seaway now claims by way of a crystallisation of its damages against AWA. Nonetheless, it is the position that this is not the sole matter referred to by the Associate Justice. It is submitted that Her Honour had regard to a combination of matters, entirely consistent with the approaches of the Courts in Aon Risk Services and Fabfloor.[66]
[65]Written Submissions for the Defendant, [30].
[66]Ibid, citing Ruling, [103]–[107].

Accordingly, Seaway submits, AWA has not discharged the heavy burden, set out in House v The King, that the Associate Justice acted upon a wrong principle; was guided by extraneous or irrelevant matters; mistook the facts or failed to take into account a material consideration.[67]
[67]Written Submissions for the Defendant, [31].

Analysis

As set out above,[68] the parties are in agreement that the relevant test to be applied in respect of the current appeal is that set out in House v The King. In essence, it is AWA’s submission that the appeal against the Associate Justice’s decision should be granted on the basis that:
[68]See above, [7].

(a) the Associate Justice mistook the facts and took into account irrelevant considerations in finding that there had been a delay in AWA issuing the Summons;

(b) in the alternative and in any event, the Associate Justice mistook the facts and took into account irrelevant considerations (including by incorrectly taking an inference) in finding that there would be prejudice to Seaway and Manassen as a result of AWA issuing the Summons; and

(c) in the alternative and in any event, the Associate Justice failed to take into account a material consideration, being AWA’s entitlement to raise a proportionate liability defence in its pleading to the new claims made in the FATPC.

It is common ground among the parties that the Associate Justice acted upon the correct principle in determining whether to grant AWA leave to issue the Summons, namely that the power to grant leave under s 24AL(1) of the Wrongs Act (or under r 9.06(b)(i) of the Rules) to join a concurrent wrongdoer is a discretion afforded to the Court which may be exercised if it is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon.[69]
[69]Ruling, [35].

Accordingly, I will now address each of AWA’s submissions in turn.

Delay in issuing the Summons

AWA was joined to the proceeding on 25 March 2020, when Seaway issued the TPSOC.[70] AWA’s application to join ANL Singapore as a defendant was filed on 8 March 2022.[71] The Associate Justice identified that AWA did not raise its proportionate liability defence until February 2022.[72] Her Honour held that AWA’s proportionate liability defence is “a matter that goes to the heart of the issue of responsibility for setting the carriage temperature”.[73]
[70]Written Submissions for the Defendant, [24].
[71]Ibid. See also Seaway, ‘Chronology for Appeal’, [3] (“Chronology for Appeal”).
[72]Ruling, [98].
[73]Ibid, [100].

It is my view that the Associate Justice was not mistaken in fact, or guided by “extraneous or irrelevant matters”,[74] in determining that there was “significant delay by AWA” in issuing the Summons.[75] I agree with Her Honour’s conclusion that the documents upon which AWA relied for its proportionate liability defence are obtained “from its own records” and do not reveal “new information” necessitating a “new defence”.[76]
[74]House v The King (1936) 55 CLR 499, 505.
[75]Ruling, [97].
[76]Ibid, [99].

I accept Seaway’s submission that its economic loss claim against AWA in the TPSOC was an apportionable claim and that AWA could have raised its proportionate liability defence implicating ANL Singapore at that time.[77] As I discuss in more detail below, I also reject AWA’s assertion that the Associate Justice failed to take into account the material consideration that Seaway made “new claims” in the FATPC to which AWA was entitled to plead.[78] Seaway’s damages in relation to its claim against AWA crystallised following Seaway’s settlement of Manassen’s claim in October 2021.[79] I agree that the FATPC “finessed” Seaway’s claim against AWA by referencing a Freight Forwarding Agreement instead of relying upon a contract of agency or subcontract.[80] The basis of Seaway’s claims is that “AWA failed to perform the services to be provided … with due care and skill”.[81] No new bases were introduced other than the relief sought under ss 23B and 24 of the Wrongs Act.[82] In addition, I do not find any error in the Associate Justice’s assessment of AWA’s “tactical” conduct, Digby J’s dismissal of AWA’s summary judgment application in December 2020, and AWA’s obligations under the Civil Procedure Act.[83] Therefore, I consider that the Her Honour did not err in finding that AWA’s proportionate liability defence “could and should have been pleaded by AWA from the outset”, and that there was delay.[84]
[77]Written Submissions for the Defendant, [12]–[14].
[78]Written Submissions for the Third Party, [6].
[79]Written Submissions for the Defendant, [20]; FATPC, [22]–[25].
[80]Written Submissions for the Defendant, [21].
[81]Ibid, [22], citing FATPC, [27].
[82]Written Submissions for the Defendant, [23]. See also FATPC, [30].
[83]Ruling, [101].
[84]Ibid, [100].

Notwithstanding my findings with respect to delay, it is convenient at this stage to take note of a number of matters relating to the history of the proceedings which set the context of AWA’s actions. In particular:

(a) proceedings were commenced by writ filed by Manassen on 12 July 2018 against Seaway and ANL Singapore, but not against AWA at that stage.[85] The statement of claim was filed one year later on 19 July 2019, and (notwithstanding that AWA was not yet a party to the proceedings) included allegations regarding AWA’s conduct;[86]
[85]Ibid, [7].
[86]Ibid, [8].

(b) Seaway’s defence filed on 23 August 2019 stated that the proper defendant to Manassen’s claim was AWA.[87] On 7 February 2020, Manassen was granted leave to discontinue its proceedings against ANL Singapore.[88] Orders were also made allowing Seaway to make a joinder application by 23 March 2020. On 25 March 2020, more than 20 months after the filing of the initial writ by Manassen, Seaway filed its Third Party Notice against AWA,[89] the claims under which, as stated above,[90] were based on AWA being the agent or subcontractor of Seaway;
[87]Ibid, [9].
[88]Ibid, [12].
[89]Ibid, [13].
[90]See above, [15].

(c) summary judgment applications were then filed by AWA as against Seaway, and by Seaway against Manassen.[91] Those summary judgment applications were dismissed by Digby J on 18 December 2020;[92]
[91]Ruling, [15].
[92]Summary Judgment Decision, [99].

(d) the matter then proceeded through 2021, with Connock J making pre‑trial directions for the exchange of lay and expert evidence, chronology, opening submissions and authorities at a directions hearing on 29 July 2021;[93]

(e) in October 2021, Manassen and Seaway entered into a settlement with respect to the primary proceedings, subject to an outstanding issue as to costs;[94] and

(f) on 21 December 2021, Connock J made orders by consent giving Seaway leave to file and serve the FATPC against AWA. Connock J ordered that Seaway was to pay AWA’s costs thrown away by reason of the amendment.[95] It was following this that AWA sought to issue the Summons, leading to the present proceedings.

[93]Ruling, [19].

[94]Ibid, [22].

[95]Ibid, [23].

It is clear from the events set out above that there is a significant history in the proceedings. However, in considering the nature and impact of AWA’s delay in issuing the Summons, I take it as particularly noteworthy that:

(a) AWA was not joined as a party to these proceedings until almost two years after their commencement (in 2020). Manassen and Seaway have, by contrast, each been a party to these proceedings since their inception (in 2018);

(b) shortly after being joined as a party, AWA brought an application for summary judgment (which was dismissed only in December 2020); and

(c) in December 2021, Seaway issued the FATPC, which significantly amended the previous formulation of its claims against AWA. Both Seaway and AWA had also obtained leave to amend the Third Party Claim and Defence (respectively) on a number of occasions through 2021.

Although acknowledging that AWA could have raised its proportionate liability defence earlier, the timing of AWA’s joinder and the other matters noted above are significant to assessing AWA’s conduct in these proceedings. In particular, I note that the Associate Justice stated that “AWA … did not seek to attribute blame to ANL at any time in the period from August 2017 when the damage was discovered until it filed its Defence to the FATPC on 18 February 2022”.[96] However, AWA had only been joined as a party to the proceedings in March 2020, and its actions prior to being so joined should not be considered ‘delay’ in the same way as its actions afterwards.
[96]Ibid, [107].

The application for summary judgment in 2020 is also significant. It would plainly not be reasonable to expect AWA to bring further defences in respect of claims that were, at the time, the subject of an application for summary judgment.

Accordingly, while I do agree with the Associate Justice’s finding that there was delay in AWA bringing the application to issue the Summons, I am of the view that the relevant context to consider AWA’s actions is the period since it was joined as a party in March 2020, and particularly following the decision of Digby J dismissing AWA’s application for summary judgment in December 2020. It is AWA’s delay in that period that should be weighed against the other considerations in AWA’s application, including the prejudice to Manassen and Seaway, to which I will now turn.

Prejudice to Manassen

I will first turn to whether there was any prejudice occasioned to Manassen as a result of the Summons. Although Manassen did not appear in these proceedings, it did appear in the proceedings before the Associate Justice.

The argument raised by Manassen before the Associate Justice was that it “could suffer prejudice in the event that ANL [Singapore] is joined to the proceeding, as ANL [Singapore] may seek an indemnity or contribution from Manassen in respect of loss suffered by reason of its joinder”.[97] This argument was accepted by Her Honour.[98] As set out above,[99] AWA submits in response that Manassen could have suffered no prejudice, as any claims against ANL Singapore are now time‑barred under the Hague Rules, meaning that there can be no claims now brought against ANL Singapore that could be required to be indemnified by Manassen. As discussed further below, the prejudice claimed by Seaway is also contingent on the fact that it can no longer bring a claim against ANL Singapore by virtue of the time‑bar.
[97]Ibid, [89].
[98]See, in particular, ibid, [105], where the Associate Justice stated “I also accept that Manassen may suffer prejudice should ANL [Singapore] seek to enforce the indemnity provided for in ANL [Singapore]’s Terms.”
[99]See above, [24].

Given that the Associate Justice found that any claims against ANL Singapore now brought by Manassen or Seaway would “likely be time barred”,[100] there do not now appear to be any grounds upon which Manassen could be required to indemnify ANL Singapore. Accordingly, I accept the submissions of AWA that the Associate Justice erred in finding that the Summons would result in prejudice to Manassen, and therefore took into account an “extraneous or irrelevant matter” in reaching her decision.[101]

Prejudice to Seaway

[100]Ruling, [82].

[101]House v The King (1936) 55 CLR 499, 505.

Turning now to the question of prejudice against Seaway. Although it was originally contended by Seaway and Manassen that they had suffered some prejudice by being “denied the opportunity to investigate and bring any claims they may have against ANL [Singapore] in a timely manner”,[102] this was ultimately dismissed by the Associate Justice on the basis that the time limitation under the Hague Rules expired well before AWA was joined as a party to the proceedings.[103] I have no reason to disagree with the finding of Her Honour on this point.
[102]Ruling, [82].
[103]Ibid, [106].

The prejudice to Seaway that was found by the Associate Justice was that “prompt joinder of ANL [Singapore] may have affected the ultimate settlement agreement reached as between Manassen and Seaway.”[104] Her Honour went on to say that “[i]t is common sense that the introduction of a new party who is allegedly responsible to some extent for the damage suffered, would affect the terms on which parties might agree to resolve proceedings.”[105] AWA contends that this inference, namely that the negotiation of the settlement between Manassen and Seaway would have been affected by the issue of the Summons, was not open to be drawn by the Associate Justice on the basis that it was not the “more probable inference” available on the facts (the more probable inference being that there would have been no effect on the settlement).
[104]Ibid, [105].
[105]Ibid.

The crux of the prejudice claimed by Seaway stems from the fact that, having crystallised its loss by entering into the settlement with Manassen, it will likely be unable to recover any portion of that loss that is attributed to ANL Singapore under s 24AI of the Wrongs Act as a result of the time‑bar under the Hague Rules. This is said to operate as some prejudice to it on the basis that, had it known that ANL Singapore would be added as a party to the proceedings, it may not have settled with Manassen on the same terms as it did (including in respect of the quantum of the settlement sum paid).[106]
[106]Ibid, [81].

Given that it is common ground that any claims against or liability attributed to ANL Singapore would now be time‑barred, Seaway is, in effect, simply stating that it had not anticipated that AWA would put on a defence that would significantly reduce (or completely extinguish) its liability to Seaway. Although I accept that the precise nature of the argument now sought to be raised by AWA had not been raised in its Defence previously, AWA had raised a number of other potential arguments in its Defence that would (if found at trial) extinguish its liability and deprive Seaway of the opportunity to recover the loss it had crystallised through the settlement with Manassen. There is no meaningful distinction (at least for present purposes) between those defences (such as the denial that there was a Freight Forwarding Agreement between AWA and Seaway, or that Seaway had been contributorily negligent in causing the loss to Manassen) and the proportionate liability defence which AWA now seeks to bring in conjunction with the Summons, in that they will all similarly deprive Seaway of its ability to recover its loss against AWA, and will leave it bearing some portion (or all) of the cost of its settlement with Manassen.

In negotiating its settlement with Manassen, Seaway must therefore have considered (or would at least have had the opportunity to consider) the possibility that one or more of the defences raised by AWA would be accepted by the Court, and that it would not be able to recover some part (or all) of the amount of its loss to be crystallised by the settlement. This would have been the case whether AWA’s defence was based in proportionate liability or on any other basis or bases. The fact that Seaway did not have the benefit of seeing the exact nature of AWA’s response to its FATPC before negotiating the settlement, and instead could only generally anticipate that a defence of some kind might be put on, cannot be said to amount to prejudice in any real sense. In any event, it was Seaway’s decision to negotiate the terms of the settlement without first being able to see and assess the merits of AWA’s case against it.

Accordingly, I am not satisfied that an inference can be drawn that Seaway would have acted differently in the negotiation of its settlement with Manassen, and that in any event the Associate Justice should not have found that any delay in issuing the Summons resulted in prejudice to Seaway had these material considerations been taken into account.[107]
[107]See House v The King (1936) 55 CLR 499; Fabfloor [2016] VSC 99, [8] and [9].

I also consider it relevant and a material consideration that should have been taken into account that ANL Singapore had already been a party to the proceedings at an earlier stage with Seaway (and before AWA was joined as a party).[108] To the extent that, as Seaway claims, AWA should have considered issuing the Summons at an earlier stage given that the nature of the factual issues in the proceedings was clear, it could also be said that Seaway should have been alive to the possibility that ANL Singapore could be found to have some responsibility for setting the temperature of the cargo, especially given that ANL Singapore had previously been a party to the proceedings as a co-defendant with Seaway.
[108]Chronology for Appeal, [10] and [11], and Ruling, [12]. As noted above, the proceedings against ANL Singapore had been discontinued by Manassen before AWA had been joined as a Third Party by Seaway.

I therefore cannot accept that the inference that an earlier issuing of the Summons would have affected the terms of the settlement between Manassen and Seaway was the “more probable” inference available to the Associate Justice to draw, or that the timing of the Summons amounts to unfair prejudice to Seaway. I consider the more probable inference to be that Seaway had already considered the possibility that AWA would successfully raise a defence that would reduce or extinguish its liability and had negotiated its settlement with Manassen accordingly, and that therefore the terms of its settlement with Manassen would have been unaffected by an earlier issuing of the Summons. Accordingly, I am satisfied that the Associate Justice took into account an “extraneous or irrelevant matter” in reaching her decision.[109]

AWA’s entitlement to raise a proportionate liability defence

[109]House v The King (1936) 55 CLR 499, 505.

Notwithstanding my findings regarding the specific prejudice complained of by Manassen and Seaway, the Associate Justice pointed out (appropriately in my view) that delay in court proceedings causes a number of negative effects on the justice system more broadly.[110] Indeed, the High Court in Aon Risk Services identified a number of justifications for the principles of case management that it discussed, including that “delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants.”[111] This was also emphasised by French CJ, who stated that:[112]

Undue delay can undermine confidence in the rule of law. … Another factor which relates to the interests of the parties but transcends them is the waste of public resources and the inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials either because of non‑compliance with court timetables or, as in this case, because of a late and deliberate tactical change by one party in the direction of its conduct of the litigation.

[110]Ruling, [103].

[111]Aon Risk Services (2009) 239 CLR 175, 217 [114] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).

[112]Ibid, 189 [24] (French CJ).

In its Grounds of Appeal and its submissions, AWA referred to its “entitlement” to plead to the FATPC in its Defence.[113] However, such a view of the “entitlement” of a party is not consistent with the modern approach to case management taken by the courts. As described by the majority in Aon Risk Services:[114]

An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend.
…
A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate. [emphasis added]

[113]Written Submissions for the Third Party, [6].

[114]Aon Risk Services (2009) 239 CLR 175, 217 [111]–[112] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).

Rather than treating AWA as having an entitlement to issue the Summons, the correct approach, as taken by the Associate Justice, is to weigh the interests of AWA against the interests of the other parties, as well as the interests of other interested parties and of the justice system as a whole.[115] As set out in the judgment of J Forrest J in Ultra Thoroughbred Racing Pty Ltd v Those Certain Underwriters at Lloyd’s, London, the factors identified by the High Court in Aon Risk Services can be articulated as follows:[116]
[115]See, generally, Ruling, [108]–[109].
[116][2011] VSC 370, [8]–[9]. This formulation was endorsed by Kyrou and McLeish JJA in Northern Health v Kuipers [2015] VSCA 172, [28].

(a)whether there will be a substantial delay caused by the amendment;
(b)the extent of any wasted costs;
(c)whether there is an irreparable element of unfair prejudice caused by the amendment;
(d)concerns of case management arising from the stage in the proceeding when the amendment is sought;
(e)whether the grant of the amendment will lessen public confidence in the judicial system; and
(f)whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.

It is, however, to be remembered that the primary question still remains: what do the interests of justice dictate? Aon [Risk Services] reminds us that the prism through which these interests are viewed is wider than just that of the moving party.

It is, however, worth noting that the majority in Aon Risk Services also stated that:[117]

The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill‑effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court’s discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment.
…
Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court’s attention, so that they may be weighed against the effects of any delay and the objectives of the Rules.

[117]Aon Risk Services (2009) 239 CLR 175, 214–5 [102]–[103] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).

In the case of Aon Risk Services, the plaintiff (ANU), on the third day of a four week trial of an action against its insurers and its insurance broker (Aon), had settled with its insurers and had then applied for an adjournment of the trial to make substantial amendments to its statement of claim against Aon, essentially alleging, under a different contract for services, that Aon had been obliged to ascertain and declare correct values of certain buildings and contents to insurers and provide certain advices to ANU regarding insurance.[118] Central to this new claim was that Aon knew or ought to have known that the true replacement value of both building and contents were material to the insurers’ consideration of indemnity, including the decision to reinsure.[119] Notwithstanding the reasons provided by ANU, it was found that there had been no satisfactory explanation provided for the delay, particularly given that the insurers’ defences had identified the issue central to ANU’s new claim more than 12 months earlier.[120]
[118]Ibid, 196-9 [41]-[54] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[119]Ibid, 198 [48] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[120]Ibid, 215 [106] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).

The actions taken by the plaintiff in Aon Risk Services were an extreme situation. Indeed, the majority noted that the application brought by ANU:[121]

[S]ought to introduce new and substantial claims; they were so substantial as to require Aon, in effect, to defend again, as from the beginning; the application was brought during the time set for the trial of the action and would result in the abandonment of the trial if granted; and there was a question whether costs, even indemnity costs, would overcome the prejudicial effects on Aon if the litigation to this point was not productive of an outcome.

[121]Ibid, 215 [104] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).

It is also significant that Aon Risk Services, although relied upon by Seaway, was the case of a plaintiff seeking to leave to amend its statement of claim, whereas the instant case is one of, effectively, a defendant seeking leave to amend its defence (or, more exactly, seeking leave to issue a summons to join an additional party to the proceedings) so that it may effectively raise a legal defence. As found by the Associate Justice, “AWA will be prejudiced if leave is not granted, as s 24AI of the Wrongs Act will prevent AWA from seeking reduction in any liability it has for the damaged cargos by reference to ANL [Singapore]’s comparative responsibility for the damage.”[122] This prejudice is significant, as it would deny a defendant the ability to properly defend itself from the claims made against it.
[122]Ruling, [108].

Although the Associate Justice did find that there would be “further delay and expense” occasioned as a result of the “additional pleadings, discovery and lay evidence” in the event that ANL Singapore were to be joined as a party,[123] I am not satisfied that these considerations alone (having dismissed the claims of prejudice raised by Manassen and Seaway) justify denying leave for AWA to issue the Summons and amend its Defence. I also note that ANL Singapore was previously a party to these proceedings, that material relating to ANL Singapore’s alleged wrongdoing has already been produced in these proceedings, and that it is common ground among the parties that ANL Singapore can suffer no loss (in the event that it was found to be a concurrent wrongdoer at trial) by virtue of the time‑bar under the Hague Rules. Accordingly, it may be that the delay and expense resulting from the joining of ANL Singapore will be less significant in these proceedings than in a case where such factors were not present.
[123]Ibid, [103].

Even in the event that it can be said that AWA did delay in bringing the Summons, I am not satisfied that this is a case where there can be no explanation for its actions such as in Aon Risk Services. It must be significant that the nature of the claims made in the ATPC (being based in agency and subcontract) were entirely abandoned by Seaway in its FATPC. In doing so, Seaway essentially conceded that AWA’s response to the ATPC was entirely effective, and that at trial AWA would have had no case to answer (by virtue of it not being Seaway’s agent or subcontractor). This is AWA’s explanation for its conduct.

If it is to be found that AWA’s approach is unreasonable, then the Court would essentially be requiring that AWA should have joined ANL Singapore even when doing so was not required in order for it to successfully defend the case against it brought by Seaway. Parties must answer the case put to them. Requiring defendants to expend every expense by joining any party who may conceivably be relevant under any potential formulation of a plaintiff’s case is hardly in the interests of bringing just, efficient, timely, and cost‑effective resolution of disputes. The additional burden on the justice system, as well as on parties who may otherwise be spared from the expense of litigation, is a significant consideration.

In Aon Risk Services, when discussing the reasons for ANU’s delay in bringing its application, the majority referred to the judgment of Bowen LJ in Cropper v Smith, where His Lordship stated that:[124]

[T]he object of the Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. … I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace.

[124](1884) 26 Ch D 700, 710.

Although not finding any such “mistake of judgement” in the facts of Aon Risk Services, and therefore granting Aon’s appeal to dismiss ANU’s application, the majority referred to such a mistake which “might be weighed against the effects of the delay”.[125] In this case, if it is to be said that AWA should have issued the Summons to ANL Singapore earlier, I do not consider that AWA should be punished by denying it the ability to raise its proportionate liability defence. This would be both “unreasonable and plainly unjust” in the present case,[126] and could not possibly be the position mandated by ss 6 and 7 of the Civil Procedure Act.
[125]Aon Risk Services (2009) 239 CLR 175, 216 [109] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[126]House v The King (1936) 55 CLR 499, 505.

Notices of Contention

Given my findings above, it is now necessary to address the matters raised in the Notices of Contention issued by Seaway and Manassen.

Seaway Notice of Contention

In its Notice of Contention dated 5 December 2022, Seaway contends that:[127]
[127]Seaway, ‘Notice of Contention’ (5 December 2022).

1. Her Honour erred in law in concluding that:
(a) the Third Party (AWA) had pleaded an arguable proportionate liability defence ([75]); and
(b) the Plaintiff (Manassen) and the Defendant (Seaway) had not established that AWA’s proportionate liability defence had no real prospects of success ([75]).

2. Her Honour ought to have found that AWA’s pleaded proportionate liability defence had no real prospect of success because:
(a) AWA in its proportionate liability defence relied on the respective bills of lading evidencing contracts of carriage between AWA and ANL Singapore Pte Ltd (ANLS) for the purpose of establishing a duty of care owed by ANLS to Seaway in respect to the carriage by sea of the First, Second, and Third Cargos;
(b) AWA in its proportionate liability defence did not plead that ANLS owed a duty of care to Seaway on any basis other than in relying on and with reference to the respective bills of lading evidencing the contracts of carriage by sea of the First, Second, and Third Cargos;
(c) It was a term of the respective contracts of carriage by sea between AWA and ANLS that ANLS was to carry the First, Second, and Third Containers at minus 10°C;
(d) ANLS complied with its contractual obligations evidenced by the respective bills of lading, in that it carried the First, Second, and Third Containers at minus 10°C;
(e) The scope of ANLS’s duty of care to Seaway as alleged by AWA was defined solely with reference to the contracts of carriage by sea evidenced by the respective bills of lading. Assuming such duty of care to Seaway were proved by AWA’s pleaded case, ANLS complied with such duty in that it carried the First, Second, and Third Containers at minus 10°C.

3. Having found that AWA’s pleading was deficient (at [74]), her Honour ought to have dismissed AWA’s application to join ANLS on that basis alone.

Manassen Notice of Contention

Although it did not appear before the current proceedings, Manassen also issued a Notice of Contention dated 5 December 2022, wherein it contends that:[128]

1.The Court erred in law by holding at [58] that the third party’s proposed amended defence cannot be said to have no real prospects of success in circumstances where the proposed amended defence refers to:
(a)in relation to the first and third cargos, an email sent at 10:00am on 19 May 2017, which email does not refer to the shipments the subject of the first and third cargos; and
(b)in relation to the second cargo, AWA’s shipping instructions document with reference No. OCE0115413, which is undated and it is not alleged to have been provided to ANLS prior to shipment of the second cargo or otherwise relied upon by ANLS.
[128]Manassen, ‘Notice of Contention’ (5 December 2022).

Analysis

Both Notices of Contention essentially seek to identify deficiencies in the evidence that AWA proposes to use in support of its proportionate liability defence, and that, by virtue of those deficiencies, the application for leave to issue the Summons should be denied.

Fabfloor also concerned an application to join additional defendants as concurrent wrongdoers under s 24AL of the Wrongs Act. In that case, the plaintiffs contended that the defendants had failed to discharge their onus to identify, by evidence, an “arguable basis” for joining the new parties as co-defendants, and that “mere assertions” were insufficient.[129] John Dixon J, however, stated that:[130]

Whether the court acts under s 24AL or r 9.06(b)(i), the application is approached in the same way. Assuming that the parties opposing the application raised no considerations that might persuade a court in its discretion to refuse the application such as prejudice, the relevant questions for the primary court were, first, whether the plaintiffs’ claims against DTM were apportionable claims, which is assessed by analysis of the plaintiffs’ statement of claim, and, second, whether the allegations to be introduced by the amendment, if proved at trial, could establish that each of the proposed defendants was a concurrent wrongdoer in relation to those claims. For the reasons I will presently explain, both questions are assessed by reference to the traditional pleading test. [emphasis added]
…
Where, as here, a party seeks both a pleading amendment and joinder of the relevant concurrent wrongdoers as parties, once the court is satisfied that the amendments plead a defence that has a real prospect of success, joinder of the additional parties should follow as a matter of course.

[129]Fabfloor [2016] VSC 99, [24].

[130]Ibid, [39]–[41].

John Dixon J then went on to conclude that:[131]

For these reasons the primary judge fell into error in concluding that an amendment to a defence alleging proportionate liability against additional concurrent wrongdoers who are to be joined as defendants to the proceeding requires some evidence demonstrating that there is substance to the claims proposed to be raised and that such claims are not hopeless.
…
It is sufficient for a defendant to establish that the proposed pleadings contain facts or allegations which, if established at trial, could arguably found one or more of the causes of action alleged and that if the Court is satisfied such an arguable case has been put forward, joinder should be allowed.

[131]Ibid, [53], [75].

The Associate Justice identified these passages from Fabfloor,[132] and thereafter undertook a detailed analysis of the evidence presented by the parties in these proceedings, following which she stated that:[133]

Having regard to the pleading and the evidence adduced, AWA has identified the facts on which it may establish (if proved) that it provided the correct temperature instructions to ANL for the first and third cargos. In my view, subject to the pleading deficiency raised by Seaway and addressed below, AWA’s case is arguable and cannot be said to have no real prospects of success. The pleaded facts are supported by contemporaneous documents adduced in support of this application. The events that occurred subsequently, including with respect to ANL’s booking confirmations and the bills of lading, and the parties’ respective responsibility for these documents and their influence on the carriage temperature, are matters which ought to be addressed on their merits at trial.

[132]Ruling, [45].

[133]Ibid, [58].

In respect of the second cargo, having found one of AWA’s proposed claims to have “no real prospects of success”,[134] Her Honour then stated that:[135]

However, AWA’s alternative plea with respect to the undated shipping instructions appear on their face to provide instructions for the correct carriage temperature for the second cargo. AWA does not plead how or when they were provided to ANL [Singapore], but based upon the material facts pleaded, AWA’s contentions as to the instructions are not fanciful. … Subject to the pleading deficiency raised by Seaway and addressed below, AWA has pleaded an arguable claim. The impact (if any) of the bills of lading and the 14 July 2017 email confirming the incorrect carriage temperature are matters which ought to be determined on their merits at trial.

[134]Ibid, [67].

[135]Ibid, [68].

Turning to Manassen’s argument that the proportionate liability defence was “time barred by reason of Article 3, rule 6 of the Hague Visby Rules”,[136] and therefore had no reasonable prospects of success, Her Honour accepted AWA’s submissions and highlighted that:[137]

Article 3, rule 6 only operates to discharge ANL from liability for claims that may be brought by ‘suit’, and does not affect the ability to bring a proportionate liability defence. By raising this defence, AWA does not seek any judgment or other relief against ANL, and accordingly, Article 3, rule 6 does not apply.

[136]Ibid, [69]. See above, n 33.

[137] Ruling, [70].

In response to Seaway’s argument that AWA’s pleading was deficient “insofar as it fails to plead why the carriage contract between AWA and ANL [Singapore] does not reflect AWA’s instructions”, Her Honour then stated that “[i]f I were minded to grant AWA’s application for joinder, I would give it leave to address this deficiency”.[138] She then concluded that:[139]

In my view, subject to addressing the pleading deficiency referred to … above, I am satisfied that AWA has pleaded an arguable proportionate liability defence. Manassen and Seaway have not established that AWA’s proportionate liability defence has no real prospects of success.

[138]Ibid, [74].

[139]Ibid, [75].

Having reviewed Her Honour’s consideration of the evidence, I find no reason to disrupt the Associate Justice’s finding that AWA has satisfied the approach set out by John Dixon J in Fabfloor, namely that AWA’s pleadings “contain facts or allegations which, if established at trial, could arguably found one or more of the causes of action alleged”, and that therefore “joinder should be allowed”.[140] The Associate Justice correctly concluded that the proportionate liability defence pleaded by AWA (once amended by AWA in the manner proposed) is arguable and that the matters raised in the Defence should be determined on their merits at trial. I am accordingly not satisfied that Manassen or Seaway have demonstrated that the Associate Justice acted upon wrong principle; was guided by extraneous or irrelevant matters; mistook the facts or failed to take into account a material consideration in relation to the matters raised in their notices of contention.
[140]Fabfloor [2016] VSC 99, [75].

Conclusion

For the preceding reasons the appeal is allowed with respect to Grounds 3 and 4. Otherwise the decision of the Associate Justice is affirmed.

The parties are to bring in orders to give effect to these reasons. I reserve the question of costs and will hear the parties on this issue accordingly.

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[2023] VSC 316

9 June 2023