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- Unreported Judgment
McPherson v Mount Isa Mines Ltd QDC 37
DISTRICT COURT OF QUEENSLAND
McPherson v Mount Isa Mines Ltd & Anor  QDC 37
MOUNT ISA MINES LIMITED (ACN 009 661 447)
MCA ENGINEERING GROUP PTY LIMITED
(ACN 166 079 885)
District Court at Cairns
25 March 2019
22 March 2018
Morzone QC DCJ
CIVIL PROCEDURE – APPLICATION – DEFAULT JUDGMENT – Where the applicant seeks to issue a Third Party Statement of Claim to the third party- Second defendant applies for court ordered mediation - Negligence for damages – 192 Uniform Civil Procedure Rules 1999 (Qld.
Law Reform Act 1995 (Qld)
Personal Injuries Proceedings Act 2002 (Qld)
Uniform Civil Procedure Rules 1999 (Qld)
Workers’ Compensation and Rehabilitation Act 2003 (Qld)
MGM Containers Pty Ltd v Wockner  QCA 502
Phonesivorabouth v Tops Services Pty Ltd (1992) 106 FLR 471
Villinger Group Ltd v Redmond  QSC 60
L. Neil for the Plaintiff
J. Trevino for the First Defendant
J.M Sorbello for the Second Defendant
- The first defendant applies pursuant to rule 194 for leave to issue a Third Party Statement of Claim against a proposed third party, MCA Engineering Pty Ltd. The second defendant opposes the application, and the plaintiff points to potential increased delay and costs.
- The second defendant applies for court ordered mediation of the proceeding, which is unopposed except its timing and participating parties will be subject of the determination of the first defendant’s application.
- The parties have provided detailed written outlines of argument, and made further oral submissions.
- The plaintiff sues the first and second defendants in negligence for damages for personal injuries suffered while working at the Mt Isa Mine on 31 July 2016.
- The first defendant is the operator of the mine. The second defendant operated a labour hire business and, at the time of the alleged injury, the plaintiff‘s services were provided by the second defendant to the first defendant pursuant to Purchase Order MCFUFR SRV.
- After complying with the pre-court procedures under the Workers’ Compensation and Rehabilitation Act 2003 (Qld) and Personal Injuries Proceedings Act 2002 (Qld), the plaintiff commenced proceedings on 28 June 2018. The first and second defendant gave notice of intention to defend the proceeding on 10 August 2018 and 3 August 2018 respectively. The second defendant has sought contribution against the first defendant pursuant to s 6 of the Law Reform Act
- On 27 August 2018, the first defendant issued, without obtaining the leave of the administrator, third party proceedings against the second defendant. The first defendant discontinued these defective proceedings on 7 January 2019 before a defence was filed.
- On 18 January 2019, the plaintiff proposed the matter proceed to mediation. While, all parties are willing to attend and participate in mediation, they were unable to settle on final arrangements by the end of February 2019.
- On 1 March 2019, the proposed third party, MCA Engineering Pty Ltd, gave notice to the first defendant pursuant clause 4.1 of a Deed of Novation between the first defendant and second defendant.
- By the Deed of Novation dated 4 April 2017, the second defendant has purported to assign its rights and liabilities in respect of the Purchase Order to the proposed third party. Clause 4.1 of the Deed of Novation provides that “The parties agree that on and from the Effective Date the Contractor (the second defendant) novates the Contracts to the Assignee (MCA Engineering) on the terms set out in this Deed.” “Effective date” is defined as the date the third party notifies the first defendant in writing of certain matters.
- The second defendant has applied for referral orders to mediation. It did so cognisant of the first defendant prospective application for leave to issue third party proceedings. Both applications are before me.
THIRD PARTY PROCEEDINGS
- Rule 192, of the UCPR allows a defendant to file a third party notice if it wishes to:
- (a)claim contribution or indemnity against a person who is not a party;
- (b)claim relief against a person who is not a party:
- (i)relating to or connected with the original subject matter of the proceedings;
- (ii)substantially the same relief claimed by the plaintiff;
- (c)require a question or issue relating to or connected with the original subject matter of the proceedings to be decided not only as between the plaintiff and the defendant but also as between either of them and a person not already a party to the proceedings.
- While it is undisputed that r 192 would allow for the joinder of the proposed third party, the issue is whether leave should be given to commence third party proceedings out of time in circumstances caught by r 194(1)(b)(i) absent agreement by the plaintiff.
- Rule 194 provides for filing third party proceedings:
“194Filing third party notice
- (1)Unless the court gives leave—
- (a)a third party notice may not be filed by a defendant until the defendant has filed a defence; and
- (b)a third party notice must be filed within 28 days after the end of whichever of the following periods ends last—
- (i)the time limited for the filing of the defence of the defendant who makes the third party claim (the prescribed period);
- (ii)if the plaintiff agrees to an extension of the prescribed period—the period agreed to.
- (2)An application for leave to file a third party notice must be served on the plaintiff.
- (3)However, the court may order the application to be served on another party who has filed a notice of intention to defend.
- (4)If the court gives leave to the defendant to file a third party notice, it may give directions about filing and serving the notice.”
- The relevant considerations for an application pursuant to Rule 194 were summarised by Daubney J in Villinger Group Ltd v Redmond, as follows:
“…. The authorities make it clear that the exercise of discretion on an application for leave such as this requires a balancing exercise; as Chesterman J (as he then was), with whom Williams and Keane JJA agreed, said in MGM Containers Pty Ltd v Wockner  QCA 502 at :
‘The applications called into question two conflicting principles. The first is that there are good reasons why a third party should be joined in an action where a defendant has an arguable case for contribution or indemnity from the third party against a plaintiff’s claim. Such a joinder ensures finality in litigation, avoids multiple proceedings with associated extra cost, and obviates the possibility that there might be different decisions given on the same issues if tried by different courts. The second principle is that a plaintiff should be allowed to prosecute its action and obtain judgment without being delayed or inconvenienced by the defendant’s endeavors to offset its liability. See Phonesivorabouth v Tops Services Pty Ltd (1992) 106 FLR 471.’
 The inherent nature of the balancing exercise can be discerned in the observations made by Chesterman J at paragraph  of his judgment:
‘The applications judge was obliged to choose which of these competing principles to apply. Both are important but they pull in different directions. There was, I think, no “right” answer to the applications which Philippides J had to decide. A decision in the circumstances of this case could have gone either way and each would have been justified by one of the principles I have mentioned. Her Honour was right to consider that the delay by the appellant in applying for leave to join the third parties was relevant, as was the added inconvenience and expense to which the respondent would be exposed should the joinder be allowed. Also relevant was the further delay to the trial of the respondent’s action, should the joinder have been permitted. These factors tended to attract the operation of the second principle and had to be balanced against the factors which were relevant to attract the operation of the first principle. Neither set of factors can be said to have been predominant.’
 In the judgment at first instance in the MGM Containers matter, Philippides J usefully set out a catalogue of matters to which regard might expect to be had when considering applications of this nature. Her Honour’s approach was endorsed by the Court of Appeal.1 After referring to the inherent balancing exercise, her Honour identified the following factors for consideration:
- (a)The extent of delay by the defendant in bringing the application, and whether there has been a satisfactory explanation for any such delay;
- (b)Whether the issuing of the third party proceedings would unduly complicate the hearing of the matter, having regard to the complexity of the issues which would be required to be determined at trial, and also having regard to the additional length and cost of the proceedings;
- (c)Whether the issuing of the third party proceedings would unduly delay finalisation of the extant proceeding; and
- (d)Whether it is available to the defendant to bring separate proceedings against the proposed third parties, and whether the issues that arise in the proposed third party proceedings are of a distinct nature from those raised in the defence.”
- The plaintiff is concerned about the action being delayed and costs being increased by the inclusion of a third party, but otherwise does not consent nor oppose the application.
- The second defendant opposes the application on the grounds that the proposed third party proceedings would:
- unduly complicate the hearing of the matter, having regard to the complexity of the issues that would be required to be determined at trial in respect of the proposed third party proceedings;
- unduly delay the finalisation of the extant proceeding – the matter is otherwise ready for a mediation and there is no apparent reason why, in the event the mediation is unsuccessful, it is not otherwise ready to proceed to trial.
Unduly complicated hearing & availability of separate proceedings
- The proposed third party proceedings assert a contractual indemnity given by the proposed third party to the first defendant. It is alleged that the proposed third party, through a Deed of Novation, retrospectively assumed responsibility to indemnify the first defendant for any damages it is liable to pay to the plaintiff.
- The defendants’ respective pleadings join issue in relation to the terms and effect of the Purchase Order. The first defendant relies on the terms of the Purchase Order in defence of both the plaintiff’s claim and the second defendant’s claim for contribution against it. The latter is in defence of the second defendant’s notice of contribution pursuant to s 6 of the Law Reform Act 1995 (Qld), which provides for proceedings against, and contribution between, joint and several tortfeasors.
- Relevantly, s 6(c) provides:
“Where damage is suffered by any person as a result of a tort (whether a crime or not) the following apply — … (c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by the person in respect of the liability in respect of which the contribution is sought.”
- Whilst, it is true as the second defendant argues that the contribution notice is so limited, the first defendant in defence of the notice is entitled to rely upon defences as between those parties in respect of the same damage, whether as a joint tortfeasor or otherwise.
- Faced with those pleadings and the effective date of the assignment pursuant to the deed of novation by notice given on 1 March 1999, the first defendant looks to the proposed third party, as the responsible party now standing in the shoes of the second defendant, having assumed responsibility indemnity the first defendant for any damages it is liable to pay to the plaintiff.
- The second defendant argues that the issues enlivened by the prospective third party proceedings are complex and will traverse matters not otherwise issues in the present proceeding including:
- determination of terms of the contract between the first and second defendant including whether the terms and conditions of the first defendant’s purchase order applied to the contract between the first defendant and the second defendant;
- in the event it so did:
- (a)whether the purchase order provided an indemnity to the first defendant for any damages payable to the plaintiff;
- (b)whether, pursuant to the retrospectively enacted section 236B of the WCRA, the indemnity is void;
- determination of whether the Deed of Novation retrospectively assumed that liability
- It seems to me that these are largely questions of law, and involve some overlap of the factual matters, to enable convenient and efficient disposal in the context of extant proceeding. I am also not satisfied that the disclosure will be extensive given the confinement of the disputed documents and relevant contractual and construction principles. To the extent that the issues identified by the second defendant are distinctly between the defendants and the third party, they may be amendable to determination as a separate question or even summary judgment under rules 483, or 292 or 293 of the UCPR respectively, and thereby minimise any inconvenience, cost and delay to the plaintiff.
Delay finalisation of proceedings
- The proposed third party procedures will occasion delay in the extant proceedings, but the question is whether it will unduly delay finalisation of the extant proceeding.
- The proceeding is at a nascent stage and is not ready for trial. I agree with the first respondent’s submission that the joinder of the third party at this juncture would ensure finality in litigation, avoid the associated extra costs of multiple proceedings and obviate the risk of different decisions being given as to the proper interpretation of the second defendant’s obligations pursuant to the Purchase Order.
- All parties will be bound by their undertaking under rule 5 of the UCPR.
- On balance, I am not satisfied that the proposed third party proceedings will unduly delay finalisation of the extant proceeding.
- The second defendant also argues that in the event the proposed third party is joined to the proceedings, they will require separate legal representation and any liability it has to pay damages will not be indemnified by the second defendant’s statutory insurer.It is not clear to me whether there is any conflict between the insurer and the insured company, which would necessitate separate representation. In any event, even if separate representation is required, I do not accept that that will unnecessarily delay, complicate or increase the costs of the proceeding.
- Further, the first defendant gave timely notice of its desire to claim an indemnity in respect of the plaintiff’s claim arising from the Purchase Order since the pre-litigation stage. The first defendant’s delay is largely attributed to very unusual circumstances beyond its control, as follows:
- (a)the second defendant was placed in administration;
- (b)the second defendant’s obligations pursuant to the Purchase Order were the subject of the Deed of Novation;
- (c)the effective date of the assignment of the obligations pursuant to the Deed of Novation was 1 March 2019.
- I am satisfied, in these circumstances, that the first defendant has provided a satisfactory explanation for the delay of about 7 months in bringing the application. In my view, the first defendant has acted reasonably quickly in the unusual circumstances.
- For these reasons, I will order that the first defendant have leave to issue the third party proceedings.
- The second defendant has applied for referral orders to mediation.
- While, all parties are willing to attend and participate in mediation, they have been unable to settle on final arrangements pending resolution of the proposed third party proceedings. The first defendant application’s is timely, and it seems to me that the second defendant should have appreciated the likelihood of the first defendant’s application at this time, and the limited utility of mediation if successful.
- Ideally, all relevant parties, including the proposed third party, ought participate in mediation as soon as practicable. However, the manner and mode of any mediation dispute resolution procedure, may appropriately involve all or some of the proceeding, and some or all of the parties. There is enough time to do so before a likely trial allocation likely later this year.
- In the circumstances, the second defendant’s application filed 27 February 2019 ought be adjourned to the registry for a future hearing date to be fixed, if required.
- For these reasons, I make the following orders:
- The first defendant has leave to file and serve a third party notice and statement of claim on MCA Engineering Pty Ltd ACN 149 957 353 on or before 29 March 2019.
- The second defendant’s application filed 27 February 2019 is adjourned to the registry for the registrar to fix a hearing date if requested by any party after that party gives the other parties at least three business days written notice.
- Unless either party applies for a different costs order, or the parties otherwise agree, within 14 days of this judgment, the costs of and incidental to the applications filed 27 February 2019 and 15 March 2019 will be each parties’ costs in the proceedings.
Judge Dean P Morzone QC
- Published Case Name:
Jamie McPherson v Mount Isa Mines Ltd & Anor
- Shortened Case Name:
McPherson v Mount Isa Mines Ltd
 QDC 37
25 Mar 2019