Fonterra Co-operative Group Limited v Waikato Coldstorage Limited HC Hamilton CIV-2010-419-855
[2010] NZHC 2327
•22 December 2010
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2010-419-855
BETWEEN FONTERRA CO-OPERATIVE GROUP LIMITED
First Plaintiff
ANDFONTERRA LIMITED Second Plaintiff
ANDFONTERRA (NEW ZEALAND) LIMITED
Third Plaintiff
ANDWAIKATO COLDSTORAGE LIMITED First Defendant
ANDMOBILE REFRIGERATION SPECIALISTS LIMITED Second Defendant
CIV-2009-419-614
AND BETWEEN THE TATUA COOPERATIVE DAIRY COMPANY LIMITED
Plaintiff
ANDWAIKATO COLDSTORAGE LIMITED (FORMERLY ICEPAK COOLSTORES LIMITED)
Defendant
ANDMOBILE REFRIGERATION SPECIALISTS LIMITED First Third Party
ANDWARREN ROLAND COOK Second Third Party
FONTERRA CO-OPERATIVE GROUP LIMITED AND ORS V WAIKATO COLDSTORAGE LIMITED AND ANOR HC HAM CIV-2010-419-855 22 December 2010
AND BRIAN DESMOND LIDDELL Third Third Party
ANDHAZARDOUS SUBSTANCES BOP LIMITED
Fourth Third Party
ANDJOHN CLARE ELECTRICAL LIMITED Fifth Third Party
CIV-2009-419-000615
AND BETWEEN OPEN COUNTRY CHEESE COMPANY LIMITED
Plaintiff
ANDWAIKATO COLDSTORAGE LIMITED (FORMERLY ICEPAK COOLSTORES LIMITED)
Defendant
ANDMOBILE REFRIGERATION SPECIALISTS LIMITED First Third Party
ANDWARREN ROLAND COOK Second Third Party
AND BRIAN DESMOND LIDDELL Third Third Party
ANDHAZARDOUS SUBSTANCES BOP LIMITED
Fourth Third Party
ANDJOHN CLARE ELECTRICAL LIMITED Fifth Third Party
Hearing: 14 December 2010
Counsel: MA Flynn and AP Colgan for Plaintiffs CIV- 2009-419-614 and CIV-
2009-419-000615
JGH Hannan and JM Hayes for Plaintiff in CIV-2010-419-855
MD Branch and SJ Rawcliffe for First Defendant in CIV-2010-419-
855 and Defendant in CIV- 2009-419-614 and CIV-2009-419-000615
Judgment: 22 December 2010 at 9.30 a.m.
2
JUDGMENT OF RODNEY HANSEN J
This judgment was delivered by me on 22 December 2010 at 9.30 a.m., pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date: ………………………….
Solicitors: McElroys, P O Box 835, Auckland 1140 for Plaintiff in CIV-2009-419-614 and
CIV-2009-419-000615
DLA Phillips Fox, P O Box 160, Auckland 1140 for Plaintiff in CIV-2010-419-885Harkness Henry, Private Bag 3077, Hamilton 3240 for Defendants
Introduction
[1] The plaintiffs each had dairy produce stored in a coolstore at Tamahere when, on 5 April 2008, it was destroyed by fire. In these proceedings they sue the lessee of the coolstore, Waikato Coldstorage Limited, formerly Icepak Coolstores Limited, (Coolstores). The plaintiffs (Fonterra) in CIV-2010-419-855 also sue Mobile Refrigeration Specialists (MRS) which carried out refrigeration work at the coolstore.
[2] The plaintiffs apply to join the owner and lessor of the coolstore, Icepak Group Limited (Group) as an additional defendant. Group was represented at the hearing by virtue of its status as plaintiff in an associated proceeding which is to be heard at the same time. The application is opposed by Coolstores and Group.
Issues
[3] The application is brought under r 4.56 of the High Court Rules which provides:
Striking out and adding parties
(1) A Judge may, at any stage of a proceeding, order that—
(a)the name of a party be struck out as a plaintiff or defendant because the party was improperly or mistakenly joined; or
(b)the name of a person be added as a plaintiff or defendant because—
(i) the person ought to have been joined; or
(ii) the person's presence before the court may be necessary to adjudicate on and settle all questions involved in the proceeding.
(2)An order does not require an application and may be made on terms the court considers just.
(3)Despite subclause (1)(b), no person may be added as a plaintiff without that person's consent.
[4] The Court’s power to order joinder under the rule is discretionary. Often considerations of jurisdiction and discretion overlap and are not separately considered. In this case, opposition to joinder was put squarely on the basis that there is no jurisdiction to order joinder and, if there is, the Court in its discretion should decline to make the order. Accordingly, the two issues will be considered separately.
Jurisdiction
[5] The fire at the coolstore followed an explosion believed to have been caused by the ignition of flammable gases used as a refrigerant. The plaintiffs’ case is that the explosion resulted from the unlawful and unsafe operation of the coolstore. They allege that there were defects in the plant installed and systems introduced when the coolstore was modified to introduce the refrigerant which caused the explosion.
[6] The plaintiffs have proceeded on the basis that Icepak Coolstores was responsible for the installation of the plant and the operation of the coolstore. As a result of documents which did not become available to them until earlier this year, they learned that Group, the parent company of Coolstores, was more involved in the installation of the plant and the development of associated systems than previously thought. They now consider they have a cause of action against Group as owner of the site and plant including refrigeration equipment.
[7] The plaintiffs contend that there is jurisdiction to order joinder of Group under either limb of r 4.56(1)(b). Mr Branch, for Coolstores and Group, disputed that. He submitted that Group is not a person who ought to have been joined or whose presence before the Court is necessary to adjudicate on and settle all questions involved in the proceeding.
[8] Argument in relation to the first limb of r 4.56(1)(b) uncovered divergent streams of authority on what is meant by “ought”. The plaintiffs’ position is that a proposed defendant who could have been joined at the outset under the Rules will generally be someone who ought to have been joined. That is, as provided by r 4.3(1), a person:
... against whom it is alleged there is a right to relief in respect of, or arising out of, the same transaction, matter, event, instrument, document, series of documents, enactment, or bylaw.
[9] Mr Branch, in arguing for a more restrictive interpretation, relied on the following passage from McGechan on Procedure:[1]
[1] McGechan on Procedure (looseleafed, Brookers) at HR4.56.07.
“Ought to have been joined”
Rule 4.56(1) allows the addition of a further party where the proposed party “ought to have been joined”. This situation presents few problems. The word “ought” means “ought to do justice”; Edwards v Lowther (1876) 45
LJCP 417; 24 WR 434; Mere Roihi v Assets Co (1902) 21 NZLR 673 (CA), at p 688. See also Tetlow v Orela [1920] 2 Ch 24, at 27. The tendency has
been to regard persons as parties who “ought to have been joined” if the presence of such parties before the Court is necessary to enable the Court to adjudicate upon the precise issues raised in the proceeding. In that light, it
is potentially a rather more limited ground than the alternative which follows.
(Emphasis added.)
[10] Mr Branch also relied on a passage from the judgment of Barker J in Paccar
Inc v Four Ways Trucking Inc:[2]
[2] Paccar Inc v Four Ways Trucking Inc [1995] 2 NZLR 492 at 495.
I agree with the submissions of Mr Brown that the first part of the rule that these proposed defendants “ought to be joined” does not apply. I agree with the statement of Master Kennedy-Grant in Kupe Group Ltd v Seamar Holdings Ltd (High Court, Auckland, CP 2826/88, 2 June 1993) where he stated at pp 4-5 that the first limb of the rule:
“... covers those cases in which the person sought to be joined ‘should’ have been joined because it is impossible to do justice between the existing parties without the joinder (eg where the party sought to be joined is jointly interested with either the plaintiff or the defendant in the subject-matter of the dispute).”
In this case it does not seem to me impossible to do justice between the existing parties without the joinder; therefore I do not consider the application under that limb of the rule is soundly based.
[11] These passages were invoked in support of the proposition that the first limb of r 4.56 is restricted to cases where joinder is necessary to dispose of the precise issues arising between the parties. In my respectful view, that interpretation of the rule is not consistent with the purpose of the rule or the way in which it has generally been applied.
[12] As noted in the passage in McGechan quoted at [9] above, the English Court of Appeal, when considering a rule in pari materia to r 4.59, took the view that “ought” means “ought to do justice”. Lord Coleridge CJ said:[3]
[3] Edwards v Lowther (1876) 45 LJCP 417, at 419.
Then the 13th rule says, “that the name or names of any party or parties, whether plaintiffs or defendants, who ought to have been joined,” may be added. I think that this means that a person may be added as a defendant who ought to have been such defendant for the purpose of general convenience, and of doing justice in the subject-matter of the suit. Now, as Mr Green, whom it is proposed to add as defendant, is clearly a person against whom if the plaintiff’s case is right, relief may be sought, and who might have been made a defendant in the first instance, so I think he is one who may now be properly ordered to be joined as defendant on such terms as the Court may think just. It is clear, that as a matter of discretion, there may be cases in which such an application as the present may be refused because justice cannot be done if it be granted. But here we can grant it in terms by which justice may be done; ...
Lindley J added:[4]
The case turns on the meaning of the word “ought,” in the 13th rule. I think it should be construed as meaning “ought for the purpose of doing justice,” and I see no difficulty in granting this application.
[4] At 419.
[13] This approach to the application of the rule is consistent with its historical development. As discussed in McGechan,[5] the underlying object of the rule is pragmatic. Its purpose is to avoid a multiplicity of hearings:[6]
Where there is one subject-matter out of which several disputes arise, all parties may be brought before the Court, and all those disputes may be determined at the same time without delay and expense of several actions and trials.
[5] At HR4.56.03.
[6] Montgomery v Foy Morgan & Co [1895] 2 QB 321 at 324.
[14] To similar effect, the Court of Appeal said in Auckland Regional Services
Trust v Lark:[7]
[7] Auckland Regional Services Trust v Lark [1994] 2 ERNZ 135 at 138.
The purpose of joinder rules is to secure the determination of all disputes relating to the same subject-matter without the delay and expense of separate proceedings. The general test is whether the proposed party will be directly affected by any order which may be made in the proceedings and the general rule is that it is for the plaintiff to decide who he or she will sue and for any
person named as defendant to take striking-out proceedings if it is considered by them that there is no arguable cause of action.
[15] The suggestion that the rule should be confined to the joinder of persons whose presence is necessary to adjudicate on a precise issue before the Court in the existing proceedings may owe something to cases such as Raleigh v Goschen[8] in which leave was refused the plaintiff to introduce new parties so that he could use the existing proceedings for the purpose of establishing an entirely new cause of action. In Westfield Freezing Co Limited v Sayer & Co (New Zealand) Limited[9] the Court of Appeal distinguished Raleigh v Goschen and made it clear that r 90 (a predecessor to r 4.59) should be given a liberal interpretation. North P said:[10]
[8] Raleigh v Goschen [1898] 1 Ch 73.
[9] Westfield Freezing Co Limited v Sayer & Co (New Zealand) Limited [1972] NZLR 137.
[10] At 143.
Once the real dispute is before the Court, then it is in the interests of the parties, and indeed in the public interest, that that dispute should be resolved as soon as possible. Accordingly, the failure by a plaintiff to select the right parties should not stand in the way of the court bringing the dispute to a conclusion by joining additional persons either as plaintiffs or defendants “who ought to have been joined” in the first instance, or “whose presence before the court may be necessary to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the action.
Turner J said:[11]
I agree with the President that in general, in the absence of special considerations, in a case like the present all necessary parties should be joined who can be joined without actual injustice, to the end that the litigation may be concluded as speedily as possible. Costs will generally adequately compensate the defendant originally joined for inconvenience and expense resulting from the non-joinder of the proper parties in the first place.
[11] At 147.
[16] There is, then, powerful support for the view that r 4.56 should be read with r 4.3 to permit the joinder as a defendant of any person who could have been joined in the first place, provided that joinder serves the interests of justice. It would be contrary to the object of the rule and, subject to considerations bearing on the exercise of the discretion, the interests of justice, to prevent a plaintiff joining as a defendant a person whom it could have sued in the first instance as of right. Joinder, in such circumstances, will avoid the need for further proceedings and ensure that all
issues arising out of the subject matter of the litigation are disposed of. That is the view which appealed to Master Hansen (as he then was) in Cassels v Kells.[12] He concluded:[13]
[12] Cassels v Kells (1990) 4 PRNZ 65.
[13] At 68.
Given Mr Walshaw’s concession that the intended second defendant could have been properly joined originally under r 74(1), I find it difficult to understand how it can now be argued that the first jurisdiction, or leg, of r 97 is not satisfied. I am quite satisfied that if an intended defendant could have been joined originally under r 74, then the “ought to be joined” criterion of r
97 is satisfied. This is consistent with the decisions just referred [to].
Those decisions included Westfield Freezing v Sayer.
[17] The second limb of r 4.56(b) permits joinder in the circumstances helpfully summarised in McGechan.[14] It may enable parties to be joined as defendants who would not come within the first limb. They may be directly or indirectly affected by an order in the proceeding but not be a person against whom the plaintiff could have claimed a right to relief under r 4.3; they would not be parties whom it could be said “ought” to have been joined.
[14] At HR4.56.08.
[18] It is unnecessary for the purpose of this judgment to consider further the application of the second limb of the rule as it is clear that Group is a party that ought to have been joined in the sense I have discussed. It is a person against whom the plaintiffs allege a right to relief arising out of the same matter or event as the claims against the existing parties. Subject to discretionary considerations, it is clearly in the interests of justice that the plaintiffs’ claim against Group is disposed of at the same time as other claims arising out of the coolstore fire.
Discretion
[19] Once jurisdiction is established, a plaintiff’s application to join defendants will normally be granted. Plaintiffs seeking joinder of additional defendants are in a more favoured position than defendants seeking joinder of additional parties.[15] It is for the plaintiff to decide whom he or she will sue.[16]
[15] McGechan HR4.56.11.
[16] Auckland Regional Services Trust v Lark above n 7.
[20] Mr Branch submitted that the following discretionary considerations militate against the grant of leave:
a) the strength of the claims;
b) delay and its consequence; and
c) Fonterra’s conduct in relation to a cancelled mediation.
Strength of claim
[21] Mr Branch submitted that I should give consideration to the merits of the proposed claim against Group. He contended that the claims are untenable even if the factual basis upon which they are brought is accepted.
[22] The proposed cause of action against Group is pleaded by Fonterra in its draft amended statement of claim as follows:
48The third defendant owed the plaintiffs a duty to exercise a reasonable standard of skill and care normally exercised by the competent cold storage facility owner and lessor (third defendant’s duty of care).
49 The third defendant breached its duty of care by failing to –
49.1 Ensure that the land, buildings and refrigeration and electrical plant and equipment were capable of complying
with and did comply at all times with all applicable legislation, regulations, standards, codes and rules.
49.2Exercise reasonable skill and care to ensure that the land, buildings, refrigeration and electrical plant and equipment were safe and appropriate for use in the provision of cold storage services to the plaintiffs.
49.3Take reasonable steps to ensure that the product was maintained in an undamaged condition whilst stored in the facility.
The draft pleading of the other plaintiffs is not materially different.
[23] The plaintiffs also foreshadow a likely claim under the Occupiers Liability
Act 1962.
[24] Mr Branch submitted that the claim in negligence is unsustainable. Even if, in terms of the two-step enquiry necessary to establish a duty of care[17] there was a sufficient degree of proximity between the plaintiffs and Group, he said policy considerations weighed decisively against the imposition of a duty of care. He argued that the the contractual arrangements between the plaintiffs and Coolstore provide a sufficient sanction against want of care in the storage of the plaintiffs’ goods. He pointed to an exclusion clause in the contracts with the Tatua Cooperative Dairy Company Limited and Open Country Cheese Company Limited which, on the
[17] See South Pacific Manufacturing Co Ltd v New Zealand Security Consultants and Investigations Ltd [1992] 2 NZLR 282, Carter Holt Harvey Ltd v Rolls Royce New Zealand Ltd [2005] 1 NZLR 324.
face of it, defeats those parties’ claims, and to a clause which limits Coolstores’ liability to Fonterra to $10m. Mr Branch also referred to the lease between Group and Coolstores which excludes any warranty as to the suitability of the premises or compliance with regulations. In summary, Mr Branch relies on a clear contractual chain, with each of the parties having agreed how they will allocate their respective
risks. In such circumstances a duty of care is said to be excluded as:[18]
[18] South Pacific Manufacturing Co Ltd at 309.
... the plaintiffs seek relief in tort for what are essentially contract based losses in circumstances where there are no discernible public interest considerations warranting departure from the allocation of risks as agreed contractually. And is not as if the case involves a choice between letting the loss remain with the injured party and transferring it to another through a tort action. Where those are the stark alternatives it may be reasonable to focus
particularly on the respective moral claims of one as against the other. But a plaintiff who has had the opportunity under her or his primary contract to obtain full contractual protection against that kind of loss cannot expect society to provide further protection through tort law.
[25] The plaintiffs contend that South Pacific Manufacturing is distinguishable on its facts as the network of contractual relationships was quite different. But the key circumstance on which I understand them to rely is the building owner’s role in creating a dangerous situation analogous, they say, to the circumstances in McCarthy v Wellington City[19] where it was held that a person storing dangerous explosives on his premises owed a duty of care to keep them secure to all persons foreseeably likely to be injured as a result of a breach of that duty.
[19] McCarthy v Wellington City [1966] NZLR 481.
[26] McCarthy is of limited assistance here as a duty of care was conceded and there were no contractual relationships which might have negated the imposition of a duty. The weight of authority appears to be against the imposition of a duty in this case, even if the evidence establishes that Group either had or shared responsibility for the dangerous situation which arose.
[27] The proposed claim under the Occupiers Liability Act would also break new ground. The plaintiffs rely on Wheat v E Lacon & Co Ltd[20] which held that, although liability for dangerous premises is generally based on occupancy or control, rather than on ownership, a person may be an occupier even though he or she does not have complete control over the premises. Control may be shared.
[20] Wheat v E Lacon & Co Ltd [1966] AC 552.
[28] Arguably of more direct application is s 8 of the Occupiers Liability Act which relevantly provides:
8 Landlord's liability in virtue of obligations to repair
(1)Where premises are occupied by any person under a tenancy which puts on the landlord an obligation to that person for the maintenance or repair of the premises, the landlord shall owe to all persons who or whose goods may from time to time be lawfully on the premises the same duty, in respect of dangers arising from any default by him in carrying out that obligation, as if he were an occupier of the premises and those persons or their goods were there by his invitation or permission but without any contract.
...
(4)For the purposes of this section, a landlord shall not be deemed to have made default in carrying out any obligation to the occupier of the premises unless his default is such as to be actionable at the suit of the occupier or, in the case of a superior landlord whose actual obligation is to an inferior landlord, his default in carrying out that obligation is actionable at the suit of the inferior landlord.
...
[29] The plaintiffs contend that the lease of the premises imposes on Group a liability to maintain and repair and that the loss in this case arose from Group’s default in carrying out that obligation. Mr Branch did not accept that the lease imposes an obligation on Group to maintain or repair and, to the extent that any such obligation arises, that there was no relevant default.
[30] It is clear that both proposed causes of action pose challenges for the plaintiffs, but they are not challenges which I could confidently conclude at this stage are insurmountable. The opposing arguments could not be fully developed in the context of the hearing. They could only be fairly addressed after the plaintiffs have pleaded and a properly constituted strike out application made. That is the remedy which Group should invoke if it considers the plaintiffs have no arguable
cause of action.[21]
Delay and its consequences
[21] Auckland Regional Authority v Lark above n 7 at 138.
[31] The new information which prompted the plaintiffs to apply to join Group is contained in a record of an interview of Mr Wayne Gratton by a health and safety inspector employed by the Department of Labour. Mr Gratton was the Managing Director of Group and a director of Coolstores. He was authorised to speak on behalf of both companies. The interview took place on 15 August 2008. Although included in Coolstores’ list of documents served in October 2009, it was not made available for inspection until after the prosecution of Coolstores by the Department of Labour had been completed. In the event, the interview was not made available to the plaintiffs until March 2010.
[32] The Department of Labour documentation was extensive and the plaintiffs say it was not until some months later that they learned from the record of interview that Group had commissioned and paid for equipment and plant alleged to have been in breach of legislation, regulations, standards and other codes applicable to the operation of the coolstore. It was not, however, until 17 November that the application for joinder was made without prior notice to the defendants.
[33] Mr Branch is right to say that the delay has not been fully or satisfactorily explained. Even making due allowance for the large number of documents which needed to be reviewed, it should not have taken the plaintiffs from March until November to extract the new information and make the decision to apply for joinder. However, it is not the delay per se but the consequences which are of direct relevance.
[34] The proceedings are set down for an eight-week hearing commencing on
2 May 2011. They are to be heard concurrently with a fourth proceeding issued in the name of Group, Coolstores and an associated company by their insurer in respect of buildings and plant destroyed. Mr Branch submitted that, unless time is abridged, it would be impossible for Group to complete interlocutory procedures and be ready for trial by 2 May. Among other things, Group anticipates that it would apply to strike out the proceeding at some stage.
[35] There is a further possible development which Mr Branch foreshadowed as one which could be fatal to the fixture. He said that Group’s position is that Coolstores was responsible for the decision to convert the refrigeration plant and to switch to the highly inflammable refrigerant which caused the initial explosion. On that basis, if joined, Group would seek an indemnity from Coolstores and would also have claims against the third parties already joined by Coolstores.
[36] It is then theorised that a claim by Group against Coolstores would elicit a counterclaim on the basis that, if the plaintiffs are correct, there was a breach of a duty to provide safe premises. The counterclaim would not only be for an indemnity but also for other losses associated with the fire. A counterclaim by Coolstores would in turn lead to a claim by Group for indemnity from MRS and other third
parties. Such claims would, it is submitted, significantly expand the scope of the current proceeding. It would require, for example, Coolstores to quantify its loss of profits claim.
[37] Mr Branch said that a consequence of cross-claims between Coolstores and Group would be that the solicitors who have hitherto acted for both could not act for either. Both would have to be separately represented. This has obvious costs implications and would further delay the determination of the proceedings.
[38] I accept that the May fixture may be at risk if Group is joined, although I consider there is time to deal with foreseeable interlocutory steps (including an application to strike out) in the time available. I accept, however, that if cross-claims are made with the consequences foreseen by Mr Branch, joinder would necessitate an adjournment of the trial. I am satisfied, nevertheless, that is not a sufficient reason to decline joinder.
[39] Adjournment of the trial is a consequence the plaintiffs are prepared to accept as the price of joinder, and they have the greater interest in an early hearing. I attach most weight, though, to the importance of determining at the same time all issues between the parties arising out of the fire. Mr Branch argued that issues involving the plaintiffs’ claim against Group could readily be dealt with as part of a separate hearing heard at a later time. He submitted that little more evidence would be required as Group would be bound by factual findings in the present proceeding through its involvement as plaintiff in the claim for property damage. He said it would simply be a matter of applying the alleged legal duties owed by Group to the factual findings made in the present proceedings.
[40] I do not share Mr Branch’s confidence that a separate proceeding would be so confined. I do not think it can be assumed that factual findings in the present proceeding will be readily applicable in proceedings which are still to be issued and pleaded, the likely course of which is a matter of conjecture at this stage. The
conditions necessary to found issue estoppel are strict and not easily met.[22] I foresee
a likelihood of duplication of evidence and a risk of inconsistent findings if there are separate proceedings. In my view, practical considerations and the interests of justice weigh heavily in favour of all legal and factual issues arising from the fire being disposed of at the same time.
[22] See generally The Laws of New Zealand, Estoppel [12]-[20]; Spencer Bower and Handley,
Res Judicata, (4th ed, LexisNexus Butterworths, London, 2009) Ch 8, Issue Estoppel.
[41] If Group and Coolstores decide that cross-claims are appropriate, it seems likely that an adjournment will be the price of joinder, but even that is not inevitable. Mr Branch acknowledged that the parties to the cross-claim could consider having the issues arising out of their claims determined separately, although as part of the same proceeding.
The cancelled mediation
[42] There was a mediation arranged for 29 November 2010. Group agreed to attend with a view to settling the claims now being advanced by the plaintiffs. However, Fonterra advised that it would not attend the mediation unless Group disclosed its financial position. That condition was not acceptable to Group. Coolstores, on the other hand, had disclosed its financial position to Fonterra.
[43] Although the mediation has been rescheduled for 3 February 2001, neither Coolstores nor Group will attend unless Fonterra alters its position. Mr Branch submitted that Fonterra’s demands were unreasonable and inappropriate in circumstances where Group was not contending a lack of funds to effect settlement. It is submitted that the additional costs Group has incurred as a result of the cancellation or postponement of the mediation, is a factor that should be taken into account.
[44] While it is unfortunate that the parties were unable to agree on the conditions on which mediation was to take place, I do not see Fonterra’s actions as a factor which should weigh against joinder. Mediation is a voluntary process. It is to be encouraged but it cannot be compelled. The Court’s processes should not be used as a sanction in this situation.
Conclusion
[45] The interests of justice strongly favour joinder.
Result
[46] The plaintiffs’ applications to join Icepak Group Limited as an additional defendant in the proceedings are granted.
[47] Amended statements of claim should be filed forthwith and a conference arranged for early February 2011 to make any further consequential directions.
[48] The plaintiffs are entitled to the costs of the applications.
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