NT Power Generation Pty Ltd v Power and Water Authority - [1999] FCA 1548

FEDERAL COURT OF AUSTRALIA
NT Power Generation Pty Ltd v Power & Water Authority [1999] FCA 1548
NT POWER GENERATION PTY LIMITED (ACN 061 314 921) v POWER AND WATER AUTHORITY and GASCO PTY LIMITED (ACN 009 627 801)
D5 OF 1999
MANSFIELD J
2 NOVEMBER 1999
DARWIN

IN THE FEDERAL COURT OF AUSTRALIA

NORTHERN TERRITORY DISTRICT REGISTRY

D 5 OF 1999

BETWEEN:

NT POWER GENERATION PTY LTD
(ACN 061 314 921)
Applicant

AND:

POWER AND WATER AUTHORITY
First Respondent

GASCO PTY LTD
(ACN 009 627 801)
Second Respondent

GASCO PTY LTD
(ACN 009 627 801)
Cross Claimant

NT POWER GENERATION PTY LTD
Cross Respondent

JUDGE:

MANSFIELD J

DATE:

2 NOVEMBER 1999

PLACE:

DARWIN

REASONS FOR DECISION

I have heard this morning an application to join NT Power Transmission Pty Limited (“Transmission”) as a second applicant in these proceedings. It proposes to claim damages from the respondents in circumstances which are substantially allied to the circumstances in which the present applicant’s claim is founded.
The proposed joinder arises from an issue which, at least from the applicant’s point of view, emerged during the cross-examination of Mr Hutchison, Chief Executive Officer of the applicant. The claim of the applicant is for an order giving it access to the infrastructure of the first respondent to enable it to sell electricity generated at the Mt Todd Power Station into the Darwin-Katherine area. It is also a claim for damages for the loss suffered whilst it wrongfully (as it alleges) has been prevented from having that access. One issue which apparently emerged to the applicant in the course of Mr Hutchison’s cross-examination was whether its claim for damages should be reduced by the amount which it may have to pay to Transmission as operator of the 132 KV power line from Hudson Creek to Katherine. Transmission is a subsidiary of NT Power Group Pty Ltd, although not all its shares are held by NT Power Group Pty Ltd and that company is in turn a wholly owned subsidiary of Power Facilities Pty Ltd. Power Facilities Pty Ltd is also the parent company of the applicant.
The applicant’s case is that, in the light of that relationship, it would have been given access to the 132 KV line without having to pay any fee for that access. The proposition has been challenged by the respondents. The proposed addition of Transmission as an applicant is to cover the contingency that the Court, if it otherwise decides the proceedings in favour of the applicant, may determine that the applicant’s claim for damages should be reduced by an appropriate amount payable to Transmission for access to the 132 KV line.
Transmission in its application seeks in that event to claim damages to cover the period until the access to the first respondent’s infrastructure which the applicant generally claims is provided, as a direct loss suffered by Transmission. That appears clearly from pars 30D and 47A of the proposed amended statement of claim.
The respondents oppose the application. They contend that it is not appropriate to join Transmission in these proceedings under O 6 r 2 of the Federal Court Rules (“the Rules”). It is contended firstly that there is no power in the Court to do so under that rule because the circumstances to which subrule 2(a) apply do not arise on the facts before the Court and, secondly, as a matter of discretion, the general power which subrule 2(b) provides should not be exercised.
It is clear, in my view, that the power to join Transmission as an applicant in these proceedings is a discretionary one. I am able to deal with the application on that basis as, in my view, the discretion arises whether the power is proposed to be exercised under subrule (a) or subrule (b) of O 6 r 2 of the Rules. I do not therefore need to address the contentions of counsel for the respondents that the proposed claim of Transmission does not, as a matter of law, fall within either of the alternatives encompassed within subrule 2(a) of O 6 of the Rules.
Counsel for the respondents contended that the claim for damages proposed to be bought by Transmission is not as simple or straight-forward as it is set out to be. I was referred, in submissions, to a detailed history of interlocking agreements regarding the circumstances in which the 132 KV line came to be constructed and financed. Part of that arrangement involved Transmission, and a company called Darnor Pty Limited, which is a shareholder in Transmission and as I understand it, a nominee company of the first respondent. The first respondent is entitled to nominate a director to the board of Transmission.
Although Transmission constructed the 132 KV line, its financing and maintenance was, I was told, substantially procured through the series interlocking agreements including guarantees provided by the first respondent and by the Northern Territory Government. Consequently, it is contended - and I am sure I am not doing justice to the subtlety of the submissions by putting it as simply as this – that even if Transmission were to succeed in a claim for damages against the first respondent by reason of the primary conduct of the respondents which the applicant alleges, the damages would not be reflected simply in the amount of the fee which would be payable by the applicant to Transmission.
It is also contended that those interlocking agreements, and the circumstances in which they came into existence, may give rise to other considerations as to whether Transmission would be entitled to recover damages against the first respondent because, it was said, arising out of those interlocking agreements there may be some form of joint venture, or fiduciary obligations between the first respondent and Transmission.
The point of those submissions ultimately, so far as it is relevant to the exercise of the discretion, is that counsel for the respondents asserted that if the proposed joinder is permitted, the respondents will need some time to consider properly the implications of the joinder. They will need to consider in what way the defence to the allegations in the proposed pars 30A to 30D and 47A and 47B would be expressed. They will need to investigate the implications of the detailed interaction of the agreements, the discussions concerning them, and subsequent dealings between the parties.
I accept what senior counsel for the respondents told me as to the respondents’ position. He said that the respondents were simply unable at present, given the course of these proceedings, to devote sufficient resources to consideration of those issues in the immediate short term. It seems to me, therefore, that if the application is granted, the consequence will be that the Court would have to entertain sympathetically an application by the respondents for the matter to be adjourned whilst they attend to those matters, whilst they file a defence, and whilst they prepare their case in relation to those issues.
At present the proceedings have been running for some time. This is the twenty-eighth day of hearing. The present application was foreshadowed only a few days ago. There are, including today, eight further days set aside for the taking of evidence, during which it is anticipated that the applicant’s case will shortly be closed, and the respondent’s case substantially advanced. It is then proposed that the hearing will be adjourned until 1 February 2000 to complete the evidence and for submissions.
It seems to me that the consequence of allowing the proposed application would be that the course of evidence contemplated for the next eight days would be aborted. I think it would be inappropriate to proceed to hear further evidence in the light of the concerns which were expressed by counsel for the respondents. It would be unfair for the applicant to be in a position of having to close its case before the respondents’ defence to those issues was expressed by the filing of a defence.
Counsel for the applicant pointed out that, if the application is allowed, the respondents will in a practical sense, have until 1 February 2000 to prepare the matter further. I accept that in the general course that period of time would be sufficient for the respondents to be able to address the issues to which the proposed amendment may give rise and to be in a position to respond to them. However, the consequence is not that they will have that time, and the matter can then proceed, but that a further eight days of hearing, in what is already now a prolonged and broken trial, will be lost. Somehow the additional anticipated eight days of evidence will have to be fitted into the available time to the Court. At present only one week from 1 February 2000 has been set aside. I am by no means confident that the Court will have sufficient time to hear that eight days of evidence and to proceed to resolve the matter in a timely fashion in the first few months of 2000. I already have commitments for all of March and April and part of May of next year.
I have sought to balance the disadvantage to the parties, and in particular to Transmission, by declining the present application. Transmission could still bring the claim, if it is advised to do so, in the terms in which it is presently expressed, or in some other terms. It can institute those proceedings immediately. The disadvantage to it, as counsel for the applicant candidly acknowledged, is simply one of costs, and possibly of delay. If Transmission brings separate proceedings, there is the separate and additional disadvantage that the applicant will not have the benefit of any finding which the Court makes in favour of the applicant in these proceedings. Such findings will not give rise to issues estoppel or give rise to a res judicata as Transmission will not have been a party to these proceedings. The converse is also the case. The applicant may have the advantage, depending upon the outcome of these proceedings, of not being bound by any findings which the Court makes on the present application. I accept that it is in the interest of all parties, and I suspect including Transmission, that there be only one trial of the primary issues arising under s 46 of the Trade Practices Act. I do not however consider that the desirability of that occurring outweighs the other considerations which I have mentioned.
Accordingly, I propose to refuse the application. I decline to make the order sought.

I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.
Associate:
Dated: 9 November 1999

Counsel for the Applicant: Mr I M Barker QC,
Mr A J Bannon SC
and Mr A A Henskens

Solicitors for the Applicant: Colin Biggers & Paisley

Counsel for the Respondents: Mr B Oslington QC,
Mr L Foster SC,
Mr J Nicholas
and Mr A I Tonking

Solicitors for the Respondents: James Noonan

Date of Hearing: 2 November 1999

Date of Decision: 2 November 1999

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	D 5 OF 1999

JUDGE:	MANSFIELD J
DATE:	2 NOVEMBER 1999
PLACE:	DARWIN

Counsel for the Applicant:	Mr I M Barker QC, Mr A J Bannon SC and Mr A A Henskens
Solicitors for the Applicant:	Colin Biggers & Paisley
Counsel for the Respondents:	Mr B Oslington QC, Mr L Foster SC, Mr J Nicholas and Mr A I Tonking
Solicitors for the Respondents:	James Noonan
Date of Hearing:	2 November 1999
Date of Decision:	2 November 1999