Suttram Pty Limited v Michelin Australia Pty Limited

[2009] NSWDC 408

CITATION:	Suttram Pty Limited v Michelin Australia Pty Limited [2009] NSWDC 408
JUDGMENT DATE:	8 October 2009
JURISDICTION:	District Court of New South Wales
JUDGMENT OF:	Cogswell SC DCJ
DECISION:	The application is refused and the Notice of Motion is dismissed.
CATCHWORDS:	CIVIL LAW - reasons for judgment delivered but judgment not entered - Notice of Motion put on by defendant seeking leave to reopen its case and adduce further evidence - power of District Court to deal with application - considerations relevant to application
LEGISLATION CITED:	Uniform Civil Procedure Rules 2005 29.6 Civil Procedure Act 2005
CASES CITED:	Aon Risk Services Australia Limited v Australian National University (2009) 83 ALJR 951 ASIC v Rich [2006] NSWSC 826 DJL v The Central Authority (2000) 201 CLR 226 Kettemen v Hansel Properties Limited [1987] AC 189 Urban Trans Port Authority (NSW) v Nweiser (1992) 28 NSWLR 471
TEXTS CITED:	Ritchie's Uniform Civil Procedure
PARTIES:	Suttram Pty Limited Michelin Australia Pty Limited
FILE NUMBER(S):	4530/06
COUNSEL:	Mr Sharpe (for Suttram) Mr Parker S.C. (for Michelin Australia Pty Limited) Mr Vincent (for Michelin Australia Pty Limited)

JUDGMENT

1. Suttram Pty Limited sued Michelin Australia Pty Limited for damages for manufacturing a defective tyre which failed. Michelin denied that it was the manufacturer. Proceedings occupied about three weeks and canvassed many issues apart from that. After the evidence and submissions I reserved my decision.

2. I delivered my reasons for judgment on 21 May 2009 and found that Michelin was the manufacturer of the defective tyre. I did not enter a verdict or judgment for Suttram because Michelin needed to check a point which would affect the amount I would enter a judgment for. Suttram agreed to an adjournment for that purpose.

3. After some time Michelin put on a Notice of Motion which I have to resolve today. In that Notice of Motion Michelin asks that I grant “leave to reopen its case and adduce further evidence in the proceedings to prove that it was not the manufacturer of the tyre.” That Notice of Motion raises two issues. The first is whether or not I have power to reopen the proceedings. The second is, if I do have power, whether I should grant the application.

4. Mr Parker SC, who appears with Mr Vincent for Michelin on this motion, referred me to UCPR 29.6 as the source of my power to reopen the proceedings. In a sense that is not itself a source of power, it is a rule which regulates the order in which proceedings are conducted. However it is clear in my opinion that in order to succeed in its application Michelin requires leave for me to depart from the provisions of that order. I am reinforced to some extent in that view by the fact that the annotations to the Rule in Ritchie’s Uniform Civil Procedure New South Wales include references to cases concerning reopening.

5. Mr Sharpe, who appeared for Suttram and now appears for a plaintiff which has been substituted for Suttram, argued that I do not have the power to reopen the proceedings. He took me to DJL v The Central Authority (2000) 201 CLR 226, in particular to passages in the joint judgment of the Chief Justice and Gaudron, McHugh, Gummow and Hayne JJ. That case concerned the power of the Family Court of Australia to reopen proceedings. The High Court emphasised the fact that the question of power in a case such as that very much depends upon the construction of the statute constituting the court in question. I say in a case such as that because in that case the Family Court of Australia was regarded appropriately as a statutory court. But the District Court of New South Wales is also a statutory court. I do not find in DJL anything which indicates that I do not have the power to deal with an application such as the one made by Michelin.

6. Mr Sharpe secondly argued that I do not have the power because the proceedings had concluded and I had effectively found a verdict for the plaintiff. As he put it in his submissions, “the plaintiff wins”. An examination of my reasons and discussion between me and counsel after the delivery of those reasons leads me to reject that submission.

7. After [111] of the reasons for judgment there was a discussion between me and counsel. I indicated to counsel that I had reached “the conclusion of my reasons for judgment and I think, but I am subject to any submissions that you make, that I now enter a judgment and verdict for the plaintiff in an amount.” There were then discussions about the amount and a question about interest under the Civil Procedure Act 2005. Mr Vincent, who then appeared as counsel for Michelin, asked for an opportunity to elaborate his point in written submissions. Mr Sharpe, who also then appeared for Suttram, did not oppose that course. I responded by saying that it “sounds as though we need to fix a date for the verdict and judgment. I’ve given my reasons for judgment. The form of order needs to be the subject of submissions or agreement and ordered by me.”

8. It is clear in my opinion, from what I have just referred to, that I have not entered a verdict and judgment in favour of the plaintiff. To my mind the position is, as I said, that a date was to be fixed for the entry of that verdict and judgment and Michelin’s application is to be regarded as an application for leave to depart from the order of evidence and addresses provided for in UCPR 29.6.

9. That leads me to the second issue of whether or not I ought to grant that leave. Mr Parker submitted that the principles by reference to which I determine the application are those set out in the judgment of the Court of Appeal in Urban Trans Port Authority (NSW) v Nweiser (1992) 28 NSWLR 471. At 478D Clarke JA, with whom Mahoney JA, as his Honour then was, and Meagher JA agreed, said the following-

“ The principle which should guide the court in determining whether to grant an application for leave to reopen is whether the interests of justice are better served by allowing or rejecting the application as the case may be.”

10. I also gained some assistance from the decision of Austin J in ASIC v Rich [2006] NSWSC 826. That was a case where his Honour was considering a departure from the provisions of UCPR 29. The application in that case was made on behalf of the plaintiff to adduce further evidence after it had closed its case. At [18] his Honour said -

“ The defendants submitted a list of matters that they claimed to be relevant to the exercise of the court’s discretion to permit the plaintiff in a civil penalty proceeding to adduce further evidence after it has closed its case. I accept their list as a useful statement of relevant discretionary factors, applicable in such a case as the one before me.”

I make two observations about what his Honour said. First is that the nature of the case in ASIC v Rich was in a number of respects different to the matter before me. The second is that the list which his Honour adopted contains matters some of which I find of assistance in determining this application and I will take them into account.

11. I need now to turn to the evidence which Michelin relies upon in support of its application. There is an affidavit from the solicitor for Michelin, Simon Walter Johnson, sworn on 13 August 2009 with two exhibits to that affidavit. In that affidavit Mr Johnson said that his instructions from Michelin were that Michelin “had never manufactured Michelin tyres, or any tyres for that matter, and that it was not the manufacturer” of the tyre in question in this case.

12. I should perhaps at this point depart from a consideration of Mr Johnson’s affidavit to refer to the issue of the proof that Michelin was the manufacturer of the tyre. Mr Sharpe relied upon a number of exhibits which had been tendered in the proceedings. Included amongst those exhibits was exhibit C, a letter to Suttram’s solicitors from Michelin itself. For reasons which I set out in [55] to [58] inclusive of my judgment, I inferred from that letter that Michelin manufactured the tyre which was the subject of the proceedings.

13. I return now to Mr Johnson’s affidavit. Mr Johnson said that during the preparation of the matter for hearing “it was my view, following discussions with Mr Vincent of counsel (of over which privilege is not waived), that the plaintiff was unlikely to discharge its onus to prove” that Michelin was in fact the manufacturer of the tyre. Mr Johnson said that following the close of the evidence in the proceedings and at the stage that I reserved my judgment “it was my view that no evidence had been served or tendered which would support a finding” that Michelin was the manufacturer of the tyre.

14. Mr Johnson went on to explain that it was for that reason, that is, the views which he had referred to which he formed, that Michelin had not previously sought to rely on any evidence to prove that it was not the manufacturer of the tyre. I should add that what Mr Johnson said was in fact the case: that Michelin did not go into evidence on the question of whether or not it manufactured the tyre but its submission in the proceedings was that the evidence relied upon by Suttram was not sufficient to discharge the plaintiff’s burden of proving on the balance of probabilities that Michelin manufactured the tyre.

15. Mr Johnson went on to refer to the course of the proceedings which included written submissions on the part of Mr Sharpe to the effect that exhibit C could in fact be read as a concession by Michelin that it was the manufacturer of the tyre. That is ultimately the submission which I accepted. As Mr Johnson pointed out, in oral submissions before me Mr Vincent argued that there was nothing in that exhibit which constituted an admission or otherwise proved that Michelin was the manufacturer of the tyre.

16. There was exhibited to Mr Johnson’s affidavit a folder marked SWJ2 at the time of swearing his affidavit which contained a copy of an affidavit sworn by a man named Peter Heatley and documents exhibited to Mr Heatley which were in turn entitled PH1. Mr Heatley’s affidavit went into evidence before me as an exhibit to Mr Johnson’s affidavit. In Mr Heatley’s affidavit he described himself as the truck product marketing manager for Michelin. He had been formerly employed as an area manager for nearly ten years. Mr Heatley said in the exhibit comprising his affidavit that Michelin “has never manufactured Michelin tyres, or any tyres and it was not the manufacturer” of the tyre in question in this case. He asserted his awareness that “Michelin tyres are manufactured by separate international companies.”

17. Mr Heatley referred to evidence given in the proceedings by a Mr Carl Veen, an expert qualified on behalf of Suttram to express opinions about the manufacturing of tyres. Mr Heatley referred to observations made by Mr Veen concerning notations which were on the tyre in question in this case. One of the notations concerned a particular serial number and Mr Heatley said in his affidavit that the serial number recorded by Mr Veen as appearing on the tyre in question “represents the plant code where the tyre was manufactured.” He went on to say that information available indicates that the plant represented by the particular code “is the world wide code for the tyre manufacturer known as ‘Siam Tyre Industry Company Limited’, which manufactures tyres in a factory located in Nongkae, Saraburi, Thailand.” It is the case that exhibit C indicated that the tyre had been manufactured in Thailand. I should also observe at this point that Mr Veen, to my recollection, was not cross-examined on the code to which I have just referred and what it indicated.

18. Mr Heatley also said in the document which is his affidavit that the Siam Tyre Industry Company Limited is listed in the annual report of the Michelin Group as “a manufacturing company of the Michelin Group” and that the second defendant in these proceedings - which I am referring to consistently in this judgment as Michelin - is listed in another annual report as “a sales company of the Michelin Group and is not listed as a manufacturing company of the Michelin Group.” Mr Heatley then reasserted that Michelin does not manufacture tyres. The annual report referring to the Siam Company was the 2002 annual report and the one referred to by Mr Heatley about Michelin was the 2000 annual report.

19. There was another affidavit by Mr Johnson which was sworn on 1 October 2009. That affidavit concerned the procedural history, so to speak, from the delivery of my reasons for judgment and was, as Mr Parker submitted, relevant to the exercise of my discretion on the issue of whether there was any inappropriate delay or behaviour on the part of Michelin in raising the issue which I am asked to resolve today. I find that there was no inappropriate delay or inappropriate behaviour in Michelin raising the issue as it has done and when it has done.

20. Before turning to resolving this matter I make some observations about another authority, namely Aon Risk Services Australia Limited v Australian National University (2009) 83 ALJR 951. That was a judgment of the High Court of Australia delivered on 5 August 2009. I accept Mr Parker’s submission that the reasons for judgment in that case very much turned upon a construction of the relevant rules governing amendment of pleadings and the general history of rules and procedure concerning the amendment of pleadings. However there are some observations of a general nature made in the joint judgment of Gummow, Hayne, Crennan, Kiefel and Bell JJ which in my opinion are relevant to an application such as this. That observation is contained at 973 ([92]) of that judgment where their Honours said as follows -

“ It was recognised some time ago, by courts here and elsewhere in the common law world, that a different approach was required to tackle the problems of delay and cost in the litigation process.”

Their Honours said in the following paragraph that the “achievement of a just but timely and cost effective resolution of a dispute has an effect upon the court and upon other litigants.” At 975 ([100]) their Honours after referring to the views expressed in the speech of Lord Griffiths in the Ketteman v Hansel Properties Limited [1987] AC 189 at 220 that “justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants, are also know generally accepted.” At 977 ([113]) their Honours said as follows-

“ In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.”

21. It is clear that whether or not I grant this application for leave to depart from UCPR 29.6 is a matter for the exercise of my discretion. I have been considerably assisted by counsel, both for Michelin and for the successor to Suttram, Mr Parker SC and Mr Vincent on the one hand and Mr Sharpe on the other hand, in their written and oral submission. I have determined to reject the application and the matters which I take into account in rejecting the application are as follows.

22. The first is that the proceedings in this case had gone well beyond being part heard. This was not a case of a belated application during the course of proceedings or even after I had reserved. An example of a belated application during the course of submissions was in Nweiser’s case. This was not an application prompted by a reconsideration of the evidence or the submissions; it was an application prompted by the realisation that the considered forensic decision made by experienced lawyers was not vindicated in the result. It was an application prompted by the realisation that they had lost on a particular point run in a considered manner. A forensic risk was taken and the outcome was unfavourable.

23. I should make it clear here that I am not being critical of the Michelin lawyers in the nature of their decision and these remarks should not be so interpreted. Lawyers every day make considered decisions and not all of them turn out to be vindicated in the result. They are paid to draw on their experience and judgment to make such decisions. In this case the evidence is clear from Mr Johnson’s affidavit that they turned their mind to the question of the need for evidence on the question of manufacturer and formed the view in terms expressed by Mr Johnson that the plaintiff was “unlikely to discharge its onus”.

24. It seems that the decision made may have been the result of a failure to appreciate the significance of the evidence, as Mr Parker argued. As he pointed out, exhibit C was tendered in the proceedings on the very first day and it is important to look at also counsel’s view about the evidence at the close of the evidence. It may not have been obvious, as Mr Parker argued, that exhibit C would prove that Michelin was the manufacturer.

25. There is a question whether the decision might have amounted to a deliberate tactical decision. As Mr Parker points out, the Court of Appeal in Nweiser indicated that even if it was a deliberate tactical decision, then that would not be fatal to its application. All of the circumstances of the case must be examined. But the question whether or not it was a deliberate tactical decision would have been difficult to explore in this case because the relevant discussions on the point, referred to in Mr Johnson’s affidavit, which he had with counsel were made the subject of legal professional privilege.

26. Secondly, in my opinion the nature of the circumstances which have developed in this case are such that it should be considered in the Court of Appeal. The proceedings had reached a stage in this court where after a hearing of some three weeks, the findings went one way and not the other on a fundamental issue. In my opinion a plaintiff should be able to reap the benefit of that finding and proceedings should be brought to a close in this court. The proper forum in my opinion, as Mr Sharpe argued, to test whether the new evidence referred to by Mr Parker should be admitted and, if so, the plaintiff lose its judgment is the Court of Appeal.

27. Thirdly, although Mr Parker argued that no prejudice has been demonstrated by Suttram, there is in my opinion some prejudice in having a proper and legitimate expectation of a verdict snapped away and having to return to litigate the issue afresh. People and organisations operate upon such expectations. A litigant will take into account that there may be an appeal. But here the plaintiff had the benefit of a finding in its favour and because it reasonably acquiesced in a request for time to consider the interest question, it found itself back in litigation resisting the verdict. In other words the plaintiff would have had its verdict and judgment but for Michelin’s need to consider its position on an issue which it is common ground it later abandoned.

28. It is relevant in this regard to take into account the adoption by the High Court of the observations made in Ketteman that a judge is entitled to “weigh in the balance the strain the litigation imposes upon litigants”. I also take into account what the High Court said about it being recognised that the resolution of disputes serves the public as a whole and not merely the parties to the proceedings. There is in my opinion a public interest in the resolution of these proceedings given the stage which it had reached and given the legitimate expectation that one of the parties had to a verdict in its favour. As Mr Sharpe said, this is a case where the achievement of perfect justice between the parties needs to take second place to other considerations and I accept that submission.

29. One of the other arguments put forward by Mr Parker was that the further evidence on the question would be confined to a discrete issue. As he rhetorically asked by reference to the document which was Mr Heatley’s affidavit: what dispute could there be? But Mr Heatley was not able to be cross-examined on this application as Mr Sharpe indicated. The question of whether a company search may be required to confirm the information may be a matter which needs to be explored as well as the question whether or not Michelin might still be regarded as the manufacturer even though the tyre was manufactured outside of the country. It may be that these matters are straightforward as Mr Parker argues but I am not sure that they necessarily will be.

30. Finally, Mr Parker argued that there would need to be a reopening of the evidence in this case in any event. That brings me to a matter I referred to in passing earlier in these reasons. Yesterday there was filed by consent and relied upon by Mr Sharpe, a third amended statement of claim. The relevant amendments substituted MTI Limited as plaintiff in the proceedings and recited the circumstances in which the former plaintiff, Suttram Pty Limited, went into liquidation and assigned to MTI Limited its interest in these proceedings. There was tendered in these proceedings the deed of assignment dated 18 September 2009 which formed the basis for that circumstance which I have referred to.

31. I am not satisfied that there needs to be a reopening of the evidence in any event to accommodate the changes brought about by the third amended statement of claim. It was filed in court and relied upon by Mr Sharpe without objection. Mr Parker made it clear from a document which became MFI #1 that the assertions in the statement of claim will not be in issue. Michelin may or may not file a defence to the fresh allegations contained in the third amended statement of claim. If it fails to file any defence then UCPR 14.26 will mean that the fresh allegations stand admitted without any further step in the proceedings. The current plaintiff, MTI Limited, has become the beneficiary of a verdict as a result of a process of law and a deed in circumstances which are not controversial. I do not regard that as a factor which would persuade me to grant the application.

32. For the reasons which I have just given the application is refused and the Notice of Motion dismissed.

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