Williams v Rand Transport Pty Ltd & Haribo Australia Pty Ltd

First notice of motion - filed by first cross-defendant on 12 March 2020

1. The first cross-defendant's notice of motion filed on 12 March 2020 seeks the following orders: 1. The first cross-claim be dismissed. 2. In the alternative to Order 1, the first cross-claim be stayed pending the outcome of the plaintiff's claim against the defendant; 3. The subpoena for production addressed to the first cross-defendant (with an original return date of 19 January 2019) be set aside; and 4. The defendant/first cross-claimant pay the first cross-defendant's costs on an indemnity basis.
2. In support of its notice of motion, the first cross-defendant relies upon evidence in the form of an affidavit sworn on 12 March 2020 by Mr Samuel Witton, solicitor: Court Book, pp 37 - 129, and a further affidavit sworn on 26 March 2020 by Ms Debbie Kaminskas, solicitor: Court Book, pp 130 - 222.

Second notice of motion - filed by plaintiff on 15 May 2020

1. The plaintiff's notice of motion filed on 15 May 2020 seeks the following orders: 1. Leave to file an amended statement of claim in accordance with Annexure A; 2. Costs; 3. Such further or other orders as the Court deems fit.
2. The effect of the plaintiff's proposed amended statement of claim is that he seeks to add the first cross-defendant, Haribo Australia Pty Ltd, as a second defendant to the proceedings.
3. In support of his notice of motion, the plaintiff relies upon the evidence in the form of an affidavit sworn on 15 June 2020 by Ms Chantille Khoury, solicitor: Court Book, pp 248 - 273, and an affidavit sworn on 16 June 2020 by Mr Samuel Witton, solicitor: Court Book, pp 274 - 359.
4. Neither of the parties objected to the short service timing of the affidavits relied upon by the plaintiff.

Position of the defendant / first cross-claimant

1. The defendant first cross-claimant resisted the orders sought in each of the notices of motion. It did not serve any affidavits before the hearing. For expediency, pursuant to s 14 of the Civil Procedure Act 2005 (NSW) ("CP Act"), leave was given for the defendant to rely upon a bundle of relevant emailed correspondence: Exhibit "A".

Evidence

1. The parties have helpfully prepared a joint Court Book to enable these motions to be dealt with efficiently: Court Book, pp 1 - 359. None of the deponents of the affidavits relied upon by the parties were required for cross-examination.
2. A limiting order was made concerning a matter of hearsay within the affidavit of Ms Kaminskas appearing at page 68 of the Court Book: s 136 of the Evidence Act 1995 (NSW).

Legislation

1. Section 56 of the Civil Procedure Act 2005 (NSW) provides: 56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (3A) (Repealed) (4) Each of the following persons must not, by their conduct, cause a party to civil proceedings to be put in breach of a duty identified in subsection (3) - (a) any solicitor or barrister representing the party in the proceedings, (b) any person with a relevant interest in the proceedings commenced by the party. (5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs. (6) For the purposes of this section, a person has a relevant interest in civil proceedings if the person - (a) provides financial assistance or other assistance to any party to the proceedings, and (b) exercises any direct or indirect control, or any influence, over the conduct of the proceedings or the conduct of a party in respect of the proceedings. Note. Examples of persons who may have a relevant interest are insurers and persons who fund litigation. (7) (Repealed)
2. Section 58 of the Civil Procedure Act 2005 (NSW) provides: 58 Court to follow dictates of justice (1) In deciding - (a) whether to make any order or direction for the management of proceedings, including - (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court - (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant - (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case.
3. Section 64 of the Civil Procedure Act 2005 (NSW) provides: 64 Amendment of documents generally (1) At any stage of proceedings, the court may order - (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate.
4. Section 65 of the Civil Procedure Act 2005 (NSW) provides: 65 Amendment of originating process after expiry of limitation period (1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings. (2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as - (a) to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or (b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court's opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or (c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process. (3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced. (4) This section does not limit the powers of the court under section 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969. (6) In this section, originating process, in relation to any proceedings, includes any pleading subsequently filed in the proceedings.
5. UCPR r 33.4 provides: 33.4 Setting aside or other relief (1) The court may, on the application of a party or any person having a sufficient interest, set aside a subpoena in whole or in part, or grant other relief in respect of it. (2) An application under subrule (1) must be made on notice to the issuing party. (3) The court may order that the applicant give notice of the application to any other party or to any other person having a sufficient interest.

Convenient sequence for identification of issues for determination

1. In combination, the issues raised in the present notices of motion may be conveniently arranged in the following sequence: 1. Should the plaintiff be given leave to file an amended statement of claim joining the first cross-defendant, Haribo Australia Pty Ltd as a second defendant to his proceedings, notwithstanding that as a proposed second defendant, Haribo Australia Pty Ltd may have an arguable limitation defence. My reasons for determining that issue appear between paragraphs [20] to [25] of these reasons; 2. Is the first cross-defendant entitled, by reason of the terms of an agreement which subsisted between it and the defendant first cross-claimant, entitled to have the first cross-claim dismissed on account of the terms of that agreement concerning a dispute resolution clause in light of relevant provisions of the Commercial Arbitration Act 2010 (NSW). My reasons for determining that issue appear between paragraphs [26] to [38] of these reasons; 3. In the alternative to (2) above, should the first cross-claim be stayed pending the outcome of the plaintiff's proceeding against the defendant. My reasons for determining that issue appear between paragraphs [39] to [42] of these reasons; 4. Whether the subpoena for production, previously stated to have been returnable on 19 January 2020, should be set aside. My reasons for determining that issue appear between paragraphs [43] to [49] of these reasons.
2. I now turn to the consideration and the determination of those issues.

Issue 1 - Leave to the plaintiff to amend statement of claim

1. In my view, the form and the content of the plaintiff's proposed amended statement of claim, as annexed to his notice of motion, identifies an arguable case against the proposed defendant. That said, the plaintiff acknowledges that the draft may require a more refined final draft before it is ultimately filed. Although the proposed second defendant may well have some arguable defences to that claim, of itself, that is not a barrier to a grant of the leave sought by the plaintiff.
2. As the plaintiff has shown an arguable case against the second defendant, the application should not be refused on the ground that the proposed second defendant may have a limitation defence to that claim. A refusal on that ground is only available in the clearest of cases. This is not such a case: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69.
3. Subject to considerations as to the dictates of justice, the plaintiff has shown an entitlement to the order he seeks to add a second defendant to his proceedings: s 64(1) and s 65(2) of the CP Act.
4. In my view, the dictates of justice are in favour of making the order sought by the plaintiff in this case because the defendant, as first cross-claimant, has added the proposed second defendant to the proceedings as the first cross-defendant. In those circumstances, there is no material prejudice to the proposed second defendant being joined to the proceedings as it will be able to raise and rely upon any available defences it might have to the plaintiff's claim against it: s 58(2) of the CP Act.
5. In determining this issue I must have regard to the overriding consideration of the facilitation of a just, quick and cheap resolution of the real issues in the proceedings: s 56(1) of the CP Act. In this case, I consider that objective can only be effectively achieved if all parties with a relevant interest in the factual contest are joined so that a hearing may take place in the most cost efficient manner to determine issues in dispute that affect all parties.
6. I therefore find that the plaintiff is entitled to an order that Haribo Australia Pty Ltd be joined as the second defendant to the proceedings.

Issue 2 - Claim for dismissal of first cross-claim

1. On 30 September 2019, the first cross-defendant has filed a defence to the defendant's first cross-claim. In that defence it seeks to rely upon the terms of a 30 October 2012 agreement between the parties which purports to define how aspects of the commercial relationship between those parties would be transacted, particularly as to the manner in which disputes between them may be determined.
2. Clause 7 of that agreement provides an indemnity to Haribo Australia Pty Ltd in respect of the provision of services by any employee or agent of Rand Australia Pty Ltd.
3. Clause 7 is in the following terms: 7 Indemnity In Respect Of Claims By Rand's Employees, Agents And Contractor Rand has sole control over its employees and agents and indemnifies Haribo against any Demand (whether arising under statute or common law) in relation to the provision of the Services made by any employee or agent of Rand, including in respect of the termination of his or her services by Rand.
4. The first matter to be determined in the context of this issue is whether the plaintiff was an employee or an agent of Rand Australia Pty Ltd. In that regard, I find that at the relevant time the plaintiff was an employee of the labour hire company, Kurtainers. He was neither an employee nor an agent of Rand Australia Pty Ltd. Accordingly, the circumstances of the plaintiff's claim do not attract or engage clause 7 of the agreement between Rand Australia Pty Ltd and Haribo Australia Pty Ltd.
5. The relevant dispute resolution clause comprising clause 20 is engaged when a dispute arises in connection with the agreement. That clause provides as follows: 20. Dispute Resolution 20.1 Where any dispute arises in connection with this Agreement, the Haribo operations representative and Rand's operations representative shall first seek to resolve the dispute in the course of discussion in good faith. 20.2 If the dispute is not resolved by these discussions between the operations representatives of each party within 14 days of their first meeting to resolve the dispute, then the dispute shall be referred within the following 7 days to Rand's National Account Manager and Haribo' National Account Manager (or such other persons as agreed) for resolution in the course of discussion in good faith. 20.3 If the dispute is not resolved by discussion between Rand's National Account Manager and Haribo' Operations Manager within 14 days of their first meeting to resolve the dispute, then the dispute shall be referred within the following 7 days to Rand's General Manager and Haribo General Manager for resolution in the course of discussion in good faith. 20.4 If the dispute is not resolved by discussion between Rand's General Manager and Haribo General Manager within 30 days of the end of the 14 day period, referred to in clause 20.3 Rand or Haribo may then refer the dispute to mediation by a mediator agreed by Haribo and Rand, or failing agreement, by the President of the Law Society of New South Wales. The direct costs charged by the mediator for the determination of the dispute by such mediation shall be shared equally between Rand and Haribo. 20.5 If a dispute is not resolved following reference to mediation, either Rand or Haribo may then submit the dispute to arbitration in accordance with the Institute of Arbitrators Australia Rules for Conduct of Commercial Arbitration. Any decision, order or award arising from such arbitration shall be final and binding on all of the parties. The costs associated with the determination of the dispute by such arbitration shall be shared equally between Haribo and Rand."
6. Clauses 7 and 20 are said to form the basis of the first cross-defendant's claim for a stay of the dismissal of the first cross-claim. In construing clause 20 to determine whether it applies to these proceedings, it must be given a construction that recognises the need for business efficacy. This raises the threshold question of whether a dispute has relevantly arisen in connection with the agreement between the parties. In my view, until the plaintiff establishes that the defendant is liable to him for damages, a dispute has not relevantly arisen.
7. In the event that question is answered in the affirmative, a cascading series of stepped provisions may then come into play. In essence, those steps require that first, the operations representations of each of those companies shall seek to resolve the dispute in the course of discussion in good faith. That is a mandatory mutual obligation that has not yet occurred. I am informed that it cannot occur because corporate restructuring has meant those positions no longer exist: T38.13.
8. Secondly, in the event those discussions fail to resolve the dispute then within 14 days of non-resolution, the dispute must be referred to nominated office holders, that is, National Account Managers or such other persons as agreed for good faith discussions aimed at dispute resolution. That step has not yet occurred. I am informed it cannot occur because of the corporate restructuring referred to earlier, and because the first step cannot now occur.
9. Thirdly, in the event that discussions for dispute resolution between the respective Accounts Managers fail to resolve a dispute, within 7 days of such non-resolution, the respective General Managers of each company, in that event were to meet to have a good faith discussion aimed at resolution of a dispute. This did not occur.
10. Fourthly, in the event discussions between General Managers failed to resolve the dispute, either party may then refer the dispute to a mediator being an agreed mediator or one appointed by the President of the Law Society of NSW. That mediation reference has not occurred.
11. Fifthly, and finally, in the event of non-resolution at a mediation, either party may refer the dispute to arbitration in accordance with the Institute of Arbitrators Australia Rules for Conduct of Commercial Arbitration, which would then result in a final and binding determination, including by way of application of the processes of the Commercial Arbitration Act 2010 (NSW).
12. In my view, it is significant that the operative terms of the agreement concerning mediation and arbitration are expressed in the indicative and non-obligatory terminology of "may" (clauses 20.4 and 20.5) and not the obligatory term "shall" (clauses 20.2 and 20.3), as appears in the earlier portions of clause 20. This must mean that the requirements for mediation and then arbitration are not binding obligatory steps that must mandatorily be undertaken before litigation between the parties can be instituted over a dispute between them.
13. As I construe the terms of the agreement between the defendant first cross-claimant, Rand Australia Pty Ltd, and the first cross-defendant, Haribo Australia Pty Ltd, contrary to that which was submitted on behalf of that latter party, the agreement for dispute resolution does not preclude the initiation of the present cross-claim. The mandatory requirements of clause 20.2 and clause 20.3 have become frustrated because the nominated positions of relevant actors in the respective companies are no longer in existence. To the extent that the first cross-claimant is said to be in default of the dispute resolution clause, the same may be said of the first cross-defendant. A stalemate has been reached between those parties. In those circumstances, I consider that the claim in the first notice of motion for the dismissal of the proceedings comprising the first cross-claim has not been made out. I decline to make an order sought to that effect.

Issue 3 - Claim for stay of first cross-claim

1. Alternatively, a stay is sought pending the conclusion of the plaintiff's proceedings against the defendant.
2. For the reasons outlined in the preceding paragraphs, and on account of what now follows, I also consider that the claim by the first cross-defendant for a stay has not been made good.
3. I take that view because to grant a stay in this instance, that is, pending the outcome of the plaintiff's proceedings, would not be facilitative of a just, quick and cheap determination of the real issues between the respective parties: s 56 and s 58 of the CP Act. Instead, it would result in a multiplicity of hearings that would litigate the same factual circumstances. The result would be an unjust cost burden on the parties, and on the resources of the Court. This is particularly so where there is no reliable indication as to when the plaintiff's case against both Rand Transport Pty Ltd and Haribo Australia Pty Ltd, is likely to be listed for hearing.
4. I therefore decline to order a stay of the first cross-claim as sought by the first cross-defendant.

Issue 4 - Whether to set aside subpoena for production

1. On 7 January 2019, the solicitor for the first cross-claimant issued a subpoena seeking the production of documents by the first cross-defendant. That subpoena, which was returnable on 18 January 2019, remains unanswered. The first cross-defendant now seeks to have that subpoena set aside, asserting that the subpoena is too wide in its terms and is also, what is commonly referred to as a fishing expedition.
2. The schedule to that subpoena was in the following terms: "SCHEDULE 1. A copy of this subpoena, 2. All documents between Rand Transport Pty Ltd and Haribo Australia Pty Limited, including but not limited to all contracts, agreements, correspondence, file notes etc. 3 Copies of any 'Safe Work Method Statements', directions, work methodology, OH&S/WHS induction, policies and or instructions or any other documentation in any way relating to the task of packing/unloading of containers between 12 May 2012 to 12 May 2015. 4. Copies of any documentation in respect of warnings or guidance as to the procedure of the packing/unloading of containers as at 11 May 2015. 5. A copy of any risk assessment and any other records relating to the packing/unloading of containers as at 11 May 2015. 6. All records, files, documents and communications either internally or externally with respect to: (a) the packing of containers; and (b) the unloading of containers. 7 All documents including but not limited to complaints, registers, incident reports in any way relating to or in connection with the task of loading or unloading containers containing Haribo products."
3. The principles relating to the setting aside of a subpoena for production are well settled: National Employer's Mutual Insurance Association Ltd v Waind & Hill (1978) 1 NSWLR 372, at p 382; R v Saleam (1989) 16 NSWLR 14; [1999] NSWCCA 86, at [11]; Rinehart v Rinehart [2018] NSWSC 1102, at [48]-[52], at [51].
4. In the present case, the dispute over the terms of the schedule to the subpoena has an unusual foundation in the correspondence between the parties.
5. This is because the wording of the terms of the subpoena is the product of an agreed negotiation: T17.36; T17.50. That statement reflects the correspondence in the Court Book. In that regard, between 15 and 16 January 2019, there was an exchange of email correspondence between the solicitors for the first cross-claimant and the first cross-defendant which resulted in an agreement limiting the terms of the subpoena: Court Book, pp 54 - 57. In light of that agreement, the first cross-defendant should not be heard to now complain about the terms of that subpoena.
6. In my view, having regard to well-settled principles as referred to in the cases cited at [45] above, all the categories of documents sought by the subpoena are for a legitimate forensic purpose that is likely to add in some relevant way to the evidence in the case. They plainly have a sufficient connection to the issues in the case to warrant the production of those documents for inspection. They are also likely to possibly throw light upon the issues in the case, and "on the cards", they are likely to be of assistance in determining the real issues in dispute. Accordingly, it cannot be said reasonably that the quest for production of those documents amounts to a fishing expedition.
7. Accordingly, I decline to set aside the subpoena.

Disposition

1. The plaintiff should succeed in his motion and the first cross-defendant should fail in its motion. The hearing raised some case management issues which will be the subject of separate orders which I have flagged with the parties. I will make those orders after the delivery of these reasons.

Costs

1. As the plaintiff has succeeded in obtaining orders in his favour concerning the proposed amendment to his statement of claim, he should have an order that the first cross-defendant, which opposed that course, should pay his costs of his motion. As the first cross-defendant has failed in its motion it should pay the costs of the opposing parties to that motion on the ordinary basis unless a party can show an entitlement to some other costs order, for which there should be liberty to apply.

Orders

1. On the first notice of motion filed by the first cross-defendant on 12 March 2020, I make the following orders: 1. The first cross-defendant's notice of motion is dismissed; 2. The first cross-defendant is to pay the costs of the other parties who have appeared to contest the dismissed motion.
2. On the second notice of motion filed by the plaintiff on 15 May 2020, I make the following orders: 1. Leave is granted for the plaintiff, to within 14 days, file and serve an amended statement of claim having the effect of joining Haribo Australia Pty Ltd as a second defendant to the proceedings; 2. It is noted the proposed amended statement of claim the subject of Order (2) is to be in an updated form and content; 3. The first cross-defendant is to pay the costs of the plaintiff and the defendant, on the motion filed on 15 May 2020, on the ordinary basis unless otherwise ordered.
3. Liberty to apply if further or other orders are required.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 June 2020