Seapeace Ltd v Meridian Marine Sales Ltd & Ors [1998] FCA 789 (8 June 1998)

Last Updated: 9 July 1998

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - leave to amend application and statement of claim - leave to join two additional parties - whether prejudice to existing respondents - costs.

Federal Court Rules Order 6 rule 8(1)(b).

SEAPEACE LIMITED -v- MERIDIAN MARINE SALES LIMITED and ORS

VG 792 of 1995

RD FARRELL JR

8 JUNE 1998

PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	VG 792 of 1995

BETWEEN:	SEAPEACE LIMITED Applicant
AND:	MERIDIAN MARINE SALES LIMITED First Respondent OCEANFAST PTY LTD Second Respondent PHILIP E CURRAN PTY LTD Third Respondent DONALD BRIAN JOHNSTON Fourth Respondent
COURT:	RD FARRELL JR
DATE OF ORDER:	5 JUNE 1998
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The Applicant have leave to amend its application and its statement of claim in terms of the proposed further amended application and proposed further amended statement of claim being exhibits "TK5" and "TK6" respectively to the affidavit of Theo Kalyvas sworn 19 May 1998.

2. That Vessey Chemicals Pty Ltd (A.C.N. 000 171 228) of 9 Lanceley Place, Artarmon, NSW, 2064 be and is joined as the Fifth Respondent.

3. That Maxwell Chemicals Pty Ltd (A.C.N. 000 247 067) of 19 Hale Street, Botany, NSW, 2019 be and is joined as the Sixth respondent.

4. That a notice pursuant to Order 4 be filed and served by the Applicant on the Fifth and Sixth Respondents by 12 June 1998, with a copy of the Further Amended Application and the Further Amended Statement of Claim.

5. That the Further Amended Application and Further Amended Statement of Claim must be filed and served on all parties by the Applicant by 12 June 1998.

6. That the Directions Hearing be adjourned to a date to be fixed.

7. That any costs of the first, second, third and fourth Respondents thrown away as a consequence of the amendments be paid by the Applicant in any event.

8. That the costs of this motion be paid by the Applicant in any event.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	VG 792 of 1995

BETWEEN:	SEAPEACE LIMITED Applicant
AND:	MERIDIAN MARINE SALES LIMITED First Respondent OCEANFAST PTY LTD Second Respondent PHILIP E CURRAN PTY LTD Third Respondent DONALD BRIAN JOHNSTON Fourth Respondent

court:	RD FARRELL JR
DATE:	8 JUNE 1998
PLACE:	PERTH

REASONS FOR JUDGMENT

This is a motion brought by the applicant ("Seapeace") for leave to again amend its application and statement of claim, and to join two additional parties, viz. Vessey Chemicals Pty Ltd ("Vessey") and Maxwell Chemicals Pty Ltd ("Maxwell"), as Fifth and Sixth respondents respectively to the proceedings.

The motion was referred to me for hearing and determination. The hearing was on 5 June 1998.

Counsel for the first to fourth respondents opposed the orders, submitting that there had been delay in joining the parties, with consequential prejudice to the existing respondents, which prejudice could not be rectified by any costs order made against the applicant.

I made the orders sought at the conclusion of the hearing, together with orders as to costs. These are my reasons for making the orders.

According to the pleadings, these proceedings arise from a ship building and sale agreement made between Seapeace and the first respondent ("Meridian") in March 1991, whereby it was agreed, among other things, that Meridian would enter a contract with the second respondent ("Oceanfast") for Oceanfast to construct for Meridian a large, ocean going, twin-hulled motor yacht and would sell that vessel ("the Moecca") to Seapeace. Seapeace took delivery of the Moecca in March 1993.

Seapeace claim that the Moecca suffers from several significant defects in design and construction, one of the most serious of which is the defective painting and fairing of the vessel. The affidavit evidence suggests the claim relating to defective painting and fairing exceeds $4,000,000.00, exclusive of consequential costs.

Seapeace commenced proceedings against the first to third respondents in September 1995.

The thrust of the applicant's case, so far as it is relevant for present purposes, is that Seapeace has suffered loss and damage due to:

* Seapeace's reliance upon misrepresentations made by Meridian and Oceanfast;

* Meridian and Oceanfast acting in breach of their contractual obligations;

* negligent conduct on the part of Oceanfast and the Third Respondent, ("Curran"), a naval architect.

According to the affidavit of Mr Theo Kalyvas, the solicitor with the conduct of the matter for Seapeace, he became generally aware in or about late 1996 of proceedings between Oceanfast and the proposed additional respondents, Vessey and Maxwell, in the Supreme Court of Western Australia. Oceanfast is, in those proceedings, claiming damages against Vessey and Maxwell for the defective painting and fairing of three vessels, one of which was the Moecca.

Between October 1997 and April 1998, Mr Kalyvas sought Counsel's advice, caused the file in the Supreme Court proceedings to be searched and contacted the legal representatives of Vessey and Maxwell, in order to pursue settlement discussions prior to issuing proceedings against them. These discussions concluded in April 1998, at which time Seapeace gave instructions to join Vessey and Maxwell in these proceedings. The Notice of Motion was filed in May 1998. The proposed amended application and statement of claim seek damages in negligence from Vessey and Maxwell.

Counsel for Seapeace points out that Oceanfast's allegations against Vessey and Maxwell in the Supreme Court proceedings concerning the defective painting and fairing of the Moecca in substance mirror Seapeace's allegations against the respondents on that issue. He submits that Seapeace has a sound argument that Vessey and Maxwell are liable to Seapeace in negligence in respect of the defective painting and fairing of the Moecca, because they owed a duty of care to Seapeace as well as to Oceanfast.

I accept that there is a substantial commonality and overlap of issues in the two proceedings.

Unfortunately, because the construction of vessels other than the Moecca is also in issue in the Supreme Court proceedings, the joining of Vessey and Maxwell as parties to these proceedings will not necessarily avoid all multiplicity of proceedings. It is, however, desirable to avoid the possibility of contradictory findings of fact by the respective courts on the same issue, in so far as it relates to the painting and the fairing of the Moecca, and the orders sought by Seapeace will at least avoid the prospect of additional proceedings brought by Seapeace against Vessey and Maxwell in a State Supreme Court.

In all the circumstances, I am satisfied that the joinder of Vessey and Maxwell is necessary for the purposes of Order 6 rule 8 (1) (b) of the Federal Court Rules.

I turn to consider whether any prejudice to the existing respondents is such that leave to amend the application and statement of claim to join the additional respondents should nevertheless be refused.

There was no evidence on affidavit from the existing respondents in support of their contention that they would be prejudiced. The submission was based solely on the prospect that the amendments would have the effect of delaying the trial of the matter, and the general assertion from the bar table that the evidential position of the respondent would be diminished by the effluxion of time. It was contended that Seapeace's delay from late 1996 to May 1998 was such that leave to amend should not be granted.

I am satisfied that the delay from October 1997 to May 1998 was not unreasonable and was sufficiently explained in the affidavit material. It may be that the earlier component of the delay has not been completely explained, if we are to hold Seapeace's legal representatives to the standards of angels.

The existing respondents are not, however, in a position to insist that such standards be applied. My examination of the court file has revealed no past indication that the respondents have been impatient to have the matter ready for trial. Indeed, my attention was drawn by Counsel for Seapeace to a number of interlocutory orders made by the Court with which the existing respondents had not complied within time and, in some instances, had yet to comply.

I also note in passing that there was no evidence from the respondents to suggest that the Supreme Court proceedings, which arose out of the same events and in which the solicitors for the respondents act for the plaintiff, had reached any more advanced stage than these proceedings as prosecuted by Seapeace.

Further, the pleadings tend to support Counsel for Seapeace's submission that the evidence relevant to the matters in issue in these proceedings is likely to be primarily (though not entirely) documentary in nature, and that the quality of the evidence is thus less susceptible to deterioration from the effluxion of time than might be the case in other cases. Certainly there was no affidavit evidence from the respondents to the contrary.

I am not satisfied on the material before me that the respondent will suffer prejudice viz a viz the applicant from the grant of leave to amend. In any event, any such prejudice would be outweighed by the prejudice to the applicant of requiring it to commence separate proceedings against the proposed additional respondents, and the public interest in avoiding a multiplicity of proceedings on the same issue.

I have thus made the orders sought, with appropriate orders as to costs.

I have ordered that the matter be adjourned to a further directions hearing on a date to be fixed. Given that the respondents have expressed their desire that the matter proceed to trial with minimal delay, it will be possible for them to seek appropriate directions to that end.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar RD FARRELL JR

Associate:

Dated: 8 June 1998

Counsel for the Applicant:	Mr A. Southall, QC Mr A. Laird Mr A. Pocock
Agents for the Applicants Solicitor:	Allan Pocock & Associates
Counsel for the 1st, 2nd, 3rd & 4th Respondents:	Mr J. Stranger
Solicitor for the Respondent:	Cocks Macnish
Date of Hearing:	5 June 1998
Date of Judgment:	8 June 1998