Pena Jetboat Rides Pty Ltd (Trustee) v Jonathon Kemp and Associates Pty Ltd
[2011] FCA 910
•10 August 2011
FEDERAL COURT OF AUSTRALIA
Pena Jetboat Rides Pty Ltd (Trustee) v Jonathon Kemp & Associates Pty Ltd
[2011] FCA 910
Citation: Pena Jetboat Rides Pty Ltd (Trustee) v Jonathon Kemp & Associates Pty Ltd [2011] FCA 910 Parties: PENA JETBOAT RIDES PTY LTD (ACN 125 662 179) AS TRUSTEE FOR THE PENA JETBOAT TRUST TRADING AS HEL-A-VA JET BOATS TWEED HEADS/COOLANGATTA and CJ PENA NOMINEES PTY LTD (ACN 074 031 244) AS TRUSTEE OF THE CHRIS PENA FAMILY TRUST v JONATHON KEMP & ASSOCIATES PTY LTD (ACN 062 485 670) TRADING AS OCEANTECH DESIGN, CALIBRE MARINE PTY LTD (ACN 108 021 414) TRADING AS CALIBRE BOATS) and JONATHON CRAIG KEMP File number: SAD 54 of 2010 Judge: BESANKO J Date of judgment: 10 August 2011 Dates of hearing: 1, 4 August 2011 Catchwords: PRACTICE AND PROCEDURE — application by respondents shortly before trial to amend defences to allege contributory negligence, proportionate liability in relation to alleged negligence of third party and alleged negligence of other respondents — where amendments said to arise out of expert’s report — where applicants did not say proposed amendments unarguable as matter of law — where there was no direct evidence that applicants could not be ready for trial — where applicants may need to consider whether to join third party — whether amendments were too late
HELD: Leave was given to the respondents to amend their defences.
Legislation: Federal Court Rules 2011 r 1.04 Cases cited: Aon Risk Services Australia v Australian National University (2009) 239 CLR 175, cited Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 23 Counsel for the Applicants: Mr M Frayne SC Solicitor for the Applicants: Cowell Clarke Counsel for the First, Second and Third Respondents: Mr N Swan Solicitor for the First Respondent: Wallmans Solicitor for the Second and Third Respondents: Coates Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 54 OF 2010
BETWEEN: PENA JETBOAT RIDES PTY LTD (ACN 125 662 179) AS TRUSTEE FOR THE PENA JETBOAT TRUST TRADING AS HEL-A-VA JET BOATS TWEED HEADS/COOLANGATTA
First ApplicantCJ PENA NOMINEES PTY LTD (ACN 074 031 244) AS TRUSTEE OF THE CHRIS PENA FAMILY TRUST
Second ApplicantAND: JONATHON KEMP & ASSOCIATES PTY LTD (ACN 062 485 670) TRADING AS OCEANTECH DESIGN
First RespondentCALIBRE MARINE PTY LTD (ACN 108 021 414) TRADING AS CALIBRE BOATS)
Second RespondentJONATHON CRAIG KEMP
Third Respondent
JUDGE:
BESANKO J
DATE OF ORDER:
8 AUGUST 2011
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.The first respondent have leave to amend its defence in terms of the amended defence which is Exhibit ILM-2 to the affidavit of Ian Lewis Maitland sworn on 28 July 2011.
2.The second and third respondents have leave to amend their defence in terms of the amended defence which is Exhibit MRC-1 to the affidavit of Michael Richard Coates sworn on 28 July 2011.
Note:Entry of orders is dealt with in Rule 39.32 of the of the Federal Court Rules 2011
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 54 OF 2010
BETWEEN: PENA JETBOAT RIDES PTY LTD (ACN 125 662 179) AS TRUSTEE FOR THE PENA JETBOAT TRUST TRADING AS HEL-A-VA JET BOATS TWEED HEADS/COOLANGATTA
First ApplicantCJ PENA NOMINEES PTY LTD (ACN 074 031 244) AS TRUSTEE OF THE CHRIS PENA FAMILY TRUST
Second ApplicantAND: JONATHON KEMP & ASSOCIATES PTY LTD (ACN 062 485 670) TRADING AS OCEANTECH DESIGN
First RespondentCALIBRE MARINE PTY LTD (ACN 108 021 414) TRADING AS CALIBRE BOATS)
Second RespondentJONATHON CRAIG KEMP
Third Respondent
JUDGE:
BESANKO J
DATE:
10 AUGUST 2011
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
The three respondents to this proceeding applied to amend their defences. The first respondent on the one hand and the second and third respondents together on the other are separately represented. However, on these applications they all appeared by the same counsel and the amendments which they sought to make to their respective defences were essentially the same. The same considerations apply to both applications and it is sufficient for me to refer in these reasons to the first respondent’s application.
I granted leave to amend to each respondent and said that I would deliver my reasons for doing so. These are my reasons.
By its application, the first respondent sought to allege against the applicants contributory negligence, proportionate liability in relation to the alleged negligence of a third party, Marine Mechanical Solutions (‘MMS’), and proportionate liability in relation to the alleged negligence of the second and third respondents.
In broad terms the proposed plea of contributory negligence involves an allegation that the applicants operated the vessel which is the subject of this proceeding in a way which placed excessive loads on the engine mounts and two factual allegations going to a more general allegation that the applicants failed to maintain the vessel properly. The basis of the claim of proportionate liability involving MMS is that MMS failed at a 50-hour service of the vessel’s engines and again at a 70-hour service to detect a fault which the first respondent alleges it ought to have detected. The basis of the claim of proportionate liability involving the second and third respondents is the factual allegations already made against them by the applicants.
The applicants did not contend that the proposed amendments were unarguable as a matter of law. They did contend that the proposed amendments were not adequately particularised. There seemed to be force in some of the applicants’ complaints but it did not seem to me that the complaints were such as to suggest that leave to amend ought not be granted. The applicants can pursue their complaints if necessary by an application for particulars.
The principal basis of the applicants’ opposition to the first respondent’s application to amend was that it was too late. The trial is due to commence on 19 September 2011 and the applicants contended that it was too late for the respondents to amend. Although the applicants did not put forward any direct evidence, they asked me to infer that if the amendments were allowed they would be required to undertake substantial work at a late stage. Furthermore, they would also have to consider their position against MMS. They did not know how long it would take to do those things and they suggested that the trial date may be put in jeopardy.
The first respondent’s notice of motion was issued before the Federal Court Rules 2011 came into operation. However, by the time I heard submissions those Rules had come into operation. There was some debate before me as to whether the hearing and determination of the application was a ‘step’ in the proceeding within r 1.04(2) of the Federal Court Rules 2011. That said, neither party suggested that in the case of this application different principles from those which applied under the previous Rules applied in the case of the Federal Court Rules 2011. Those principles are the various discretionary factors identified in the authorities and most recently in Aon Risk Services Australia v Australian National University (2009) 239 CLR 175. In the circumstances and because the first respondent’s notice of motion was issued at the time the previous Rules were in force I will proceed to hear and determine the application as if the previous Rules still apply.
I start with the explanation for the respondents’ delay in bringing forward the proposed pleas. It appears that the proposed pleas arise out of an expert’s report obtained by the first respondent in late March 2011. The report is a report of Mr Geoffrey Alan Glanville dated 28 March 2011 (‘March report’). Mr Glanville has a number of qualifications but for present purposes it is sufficient to say that he holds a Bachelor of Engineering (Naval Architecture). In a number of places in his March report Mr Glanville refers to an excessive load being placed on the vessel during operation by the owner and irresponsible operation of the vessel. In support of his opinion he refers to video footage which he has seen of the vessel in operation.
In early May 2011 the first respondent gave the applicants notice of a proposal to amend its defence to allege contributory negligence by the applicants and a claim of proportionate liability involving the second and third respondents. At that stage no particulars of the various pleas were provided. There was then some delay by the first respondent in bringing its application to amend. That delay is at least partly explained by a request for particulars by the applicants and an agreement by the parties that they would put the issue ‘on hold’ (to use the words of the first respondent’s solicitor) until after a mediation was undertaken by the parties.
Mr Glanville prepared an amended report which is dated 25 July 2011 (‘July report’). He has deleted any references to the video footage and he has referred to photographs of the vessel which were taken within days of the damage to the motor being ascertained by the applicants. The reason for the deletion of references to the video footage is that it was discovered by Mr Glanville that in fact the footage was of another vessel and not the applicants’ vessel. An affidavit of the third respondent sworn on 22 July 2011 states that the photographs were provided to him on 7 June 2011 and that they were taken by an employee of MMS on the day of the failure of the motor.
The first respondent argued that the proposed amendments arise out of Mr Glanville’s March report and that this was the explanation for the delay in bringing the pleas forward.
On the face of it, the proposed amendments alleging contributory negligence and the claim of proportionate liability involving MMS did seem to arise out of Mr Glanville’s March report.
The applicants submitted that the basis of Mr Glanville’s opinions has changed between his March report and his July report. It is not for me at this stage to examine in detail Mr Glanville’s reports or to make any findings. All I can do is draw some provisional conclusions from reading his reports. It seemed to me he formed certain opinions in his March report based on a number of matters including, but not limited to, the video footage he saw. In his July report he no longer relies on the video footage.
The photographs are new in the sense that they are not referred to by Mr Glanville in his March report. They are discussed in detail in his July report. I accept that the applicants will have to address the photographs, but it seemed to me that it would be quite unrealistic and contrary to the interests of justice to hear and determine this matter without reference to the photographs. Of course, I am not making any finding at this stage about how significant the photographs will ultimately be.
I accept that Mr Glanville’s March report is the explanation for the first respondent’s delay in bringing forward the proposed amendment of contributory negligence and the proposed amendment of proportionate liability involving MMS. It might be said that there has been some delay by the first respondent in bringing forward its amendments after receiving Mr Glanville’s March report and in providing particulars of those amendments. However, in general terms I was satisfied that there was an adequate explanation for the delay.
The prejudice to the first respondent if the application were refused is that it would be unable to pursue arguable claims of fact and law.
I turn now to the question of prejudice to the applicants should the first respondent be given leave to amend. I will deal with each of the three categories of proposed amendments separately.
As far as the proposed plea of contributory negligence is concerned, the first respondent gave notice to the applicants of a claim of contributory negligence based on the inappropriate operation of the vessel and a failure to maintain the engine of the vessel in early May 2011.
For the reasons I have given, I do not accept that there has been a fundamental change in the basis of Mr Glanville’s opinion. To the extent there has been a change by deletion of reference to the video footage that is something the applicants would say was appropriate. It is true the applicants will have to address the photographs but, as I have said, it would be quite unrealistic and contrary to the interests of justice to preclude reference to the photographs.
It is true the applicants will be required to undertake further work at a late stage. There was no direct evidence before me that the applicants cannot be ready for trial. I did not think that I could make an assumption either way. Had it been clear the trial date would have had to be vacated if the amendments were allowed then that might have been an important consideration, although, I stress, not necessarily decisive. Weighing the relevant factors I considered that leave to make the proposed amendments should be granted.
As far as the plea of proportionate liability involving MMS is concerned, the fault which it is alleged would have been visible on the 70-hour service is referred to in Mr Glanville’s March report, as is the assertion of inadequate maintenance.
The question whether I should grant leave in relation to this category of proposed amendments was evenly balanced. On the face of it, the applicants would have to consider their position in relation to MMS. On the other hand, I had no evidence on the application as to whether or not they have done so previously. Nor did I have any evidence relevant to the relationship between the applicants and MMS which might throw light on whether they would or would not bring a claim against MMS. Weighing all the relevant factors I was satisfied that the respondents should be given the opportunity to agitate the role of MMS and I granted leave in relation to this category of proposed amendments.
As far as the plea of proportionate liability involving the second and third respondents is concerned, notice of these amendments was given to the applicants by the respondents in early May 2011. The second and third respondents are already parties to the proceeding and the proposed amendments do not raise any new factual allegations because they rely on factual allegations already made by the applicants against the second and third respondents. I was satisfied that leave to amend in relation to this category of proposed amendments should be granted.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate:
Dated: 10 August 2011
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