Practice and procedure - Leave to issue a third party notice - Application to set aside amended contribution notice - Leave to amend contribution notice

Supreme Court Rules, O 21 r 1, O 21 r 7, O 59 r 9

Second defendant's application for leave to issue a third party notice refused

First defendant's application to set aside the second defendant's amended contribution notice granted

Second defendant's application for leave to amend the contribution notice refused

Chatworth Investments Ltd v Amoco (UK) Ltd [1965] Ch 665

Dow Jones & Co Inc v Gutnick [2002] HCA 56

Express Newspapers plc v News (UK) Ltd [1990] 1 WLR 1320

Myers v N & J Sherick Ltd [1874] 1 All ER 81

OF Gamble Pty Ltd v Whitemore Pty Ltd (1990) 2 WAR 327

Pioneer Concrete v Watkins (1983) 48 ALR 365

Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

Re Burford [1932] 2 Ch D 122

Tony Sadler Pty Ltd v McLeon Nominees Pty Ltd (1994) 13 WAR 323

Verschures Creameries Ltd v Hull & Netherlands Steamship Co Ltd [1921] 2 KB 608

Wesfi Pty v Jeffery & Ors, unreported; SCt of WA; Library No 920121.1; 11 March 1992

1 ACTING MASTER CHAPMAN: I have three applications before me. The first was filed by the second defendant on 1 October 2002 and seeks leave to issue a third party notice. The second was filed by the first defendant on 29 November 2002 and seeks to set aside the second defendant's amended contribution notice. The third was filed by the second defendant on 31 December 2002, seeking leave to amend the contribution notice.

First defendant's application to set aside the second defendant's amended contribution notice

2 I accept that it was necessary for the first defendant to bring this application. In my view, O 21 r 1 does not apply here. A contribution notice would fall within the category of "any document" referred to in O 21 r 7 and thus leave would be required.

3 As the amended notice of contribution was filed without leave, I agree with the first defendant that it is incompetent and should not be allowed to stand. This view seems to be consistent with the application of the second defendant filed on 31 December 2002, but at the hearing of the matter this point was not conceded.

Second defendant's application for leave to amend the contribution notice

4 The first defendant opposes the application on a number of grounds, namely (1) it seeks contribution based on breach of contract which is a remedy which could never possibly be given in these proceedings. This submission is based on the decision of Burke & Anor v LFOT Pty Ltd & Ors [2002] HCA 17. (2) The notice is embarrassing in its present form. (3) The second defendant cannot be heard to oppose the first defendant's application and make an application for leave which is based on identical grounds. (4) There has been no attempt to negotiate at all in terms of O 59 r 9.

5 At the hearing, counsel for the second defendant sought leave under O 59 r 9. What I think is being sought is that the operation of the rule be waived. I am not persuaded there is any good reason to do so. Further, I am not persuaded there has been proper conferral between the parties as contemplated by O 59 r 9 of the Supreme Court Rules. A memorandum was filed with the application, but it was not in the form of common form 83 and was really of little help. I would decline to make any orders on this application, as I am not satisfied that a proper memorandum pursuant to O 59 r 9 has been filed, nor am I satisfied the appropriate conferral has taken place.

6 It was argued that in considering this issue three matters need to be considered, namely:

(2) An assessment of the strength of the third party claim.

(3) Prejudice or potential prejudice to the other parties if the third party proceedings are visited on this set of proceedings.

7 The second defendant filed its defence on 2 March 2000. Prior to that date no leave was required to issue third party proceedings.

8 The second defendant relies upon the affidavit of Byron Andrew Winburn-Clarke sworn on 15 November 2002 to deal with the question of delay. It is apparent from the affidavit that on 29 July 1999 the second defendant was aware of Dr Anson and that Dr Anson had claimed the website was his and not the first defendant's.

9 On 18 June 2001 the solicitor for the second defendant wrote to Dr Anson requesting that he indemnify the second defendant. On 11 July 2001 the solicitors for Dr Anson refused any indemnity and advised they would accept service of any third party notice. The application for leave was filed on 1 October 2002.

10 The affidavit is no more than a chronology and, in order to distil any reason for delay, one really has to draw inferences from the chronology. There is no specific explanation as to why the third party notice was not issued prior to the filing of the defence of the second defendant. Even if inferences could be drawn in that regard, no adequate explanation is given for the delay of some 15 months from the time indemnity was refused until the application was filed.

11 Counsel for the second defendant submits that what the second defendant is seeking to do is to explain the reason for an omission. It was said all the second defendant could really do was to set out the circumstances that were applying at the time. From that, it is said the Court can be satisfied as to whether it is a reasonable explanation for the omission. I do not agree. Some of the circumstances that existed during the relevant period may have caused the second defendant to refrain from bringing the application at a time when leave was not required, but, at the end of the day, I really do not know. I consider the explanation for the delay is inadequate.

12 However, on what is before me, I am not persuaded that the second defendant had made a conscious decision not to join the third party prior to the bringing of this application.

13 It is apparent that the first defendant has raised some significant issues regarding the likely success of the third party claim. Whilst I find it unnecessary to deal with each of those issues, I consider each has merit and if leave were granted, I would anticipate a good deal of time would be occupied in dealing with those issues. Should the second defendant ultimately be successful in amending the contribution notice, it may be that some of those issues would have to be ventilated in any event. Even so, I am persuaded that any third party proceedings would add significantly to the interlocutory processes.

Prejudice or potential prejudice to the other parties

14 At par 19.2.1 of Civil Procedure in Western Australia, the following is recorded:

"Prejudice to the defendant will not necessarily predominate over prejudice to the plaintiff or to the public interest on belated applications to issue third party proceedings which will be considered in light of the principles of positive caseflow management referred to in O 1 r 4A and 4B. A significant consideration is that they are extremely disruptive of and delay greatly the course of the proceedings between the plaintiff and the defendant, in the event that usual third party directions are given."

15 Counsel for the plaintiff submitted that in assessing the impact the third party proceedings will have on the proceedings, one needs to take into account how the proceedings have so far progressed. This action has been on foot for some time. I am told the main action could be entered for trial by July 2003.

16 I accept that if leave were granted to issue the third party notice significant delay may be caused to the main action. This is particularly so given the nature of the issues likely to be raised in the third party proceedings, to which I have previously referred. The refusal to grant leave to issue a third party notice does not shut the second defendant out from litigating its case but I accept it would be beneficial to have the issues dealt with in conjunction with the main action because of the benefits referred to in par 19.0.1 of Civil Proceedings in Western Australia.

17 The application for leave has been brought very late without any satisfactory reason being given for the delay. The main action is not far from being entered for trial. The third party proceedings may raise some very difficult issues which are likely to result in interlocutory proceedings, which will inevitably delay the main action. In the circumstances I do not consider that leave should be granted.