FEDERAL COURT OF AUSTRALIA Jonsandi Transport Pty Ltd v Paccar Australia Pty Ltd [1999] FCA 1788 PRACTICE AND PROCEDURE – representative proceeding – application that proceeding no longer continue as representative proceeding – whether substantial common issue of law or fact Federal Court of Australia Act 1976 (Cth) s 33N Wong v Silkfield (1999) 165 ALR 373 at 381 applied JONSANDI TRANSPORT PTY LTD v PACCAR AUSTRALIA PTY LTD (NO.2) NO. 712 OF 1998 HEEREY J 15 DECEMBER 1999 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V712 OF 1998 BETWEEN: JONSANDI TRANSPORT PTY LTD (ACN 065 019 070) (for itself and representing the persons referred to in paragraph 1 of the Statement of Claim) Applicant AND: PACCAR AUSTRALIA PTY LTD (ACN 004 669 667) Respondent JUDGE: HEEREY J DATE OF ORDER: 15 DECEMBER 1999 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The applicant file and serve a third amended statement of claim on or before 24 January 2000. 2. Such statement of claim include all outstanding particulars requested by the respondent. 3. Respondent file and serve a defence by 16 February 2000. 4. Adjourn the directions hearing to 6 March 2000. 5. Costs are reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V712 OF 1998 BETWEEN: JONSANDI TRANSPORT PTY LTD (ACN 065 019 070) (for itself and representing the persons referred to in paragraph 1 of the Statement of Claim) Applicant AND: PACCAR AUSTRALIA PTY LTD (ACN 004 669 667) Respondent JUDGE: HEEREY J DATE: 15 DECEMBER 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The respondent has renewed its application for an order that this proceeding no longer continue under Part IVA of the Federal Court of Australia Act 1976 (Cth). Section 33N(1) provides: "33N. (1) The Court may, on application by the respondent or of its own motion, order that a proceeding no longer continue under this Part where it is satisfied that it is in the interests of justice to do so because: (a) the costs that would be incurred if the proceeding were to continue as a representative proceeding are likely to exceed the costs that would be incurred if each group member conducted a separate proceeding; or (b) all the relief sought can be obtained by means of a proceeding other than a representative proceeding under this Part; or (c) the representative proceeding will not provide an efficient and effective means of dealing with the claims of group members; or (d) it is otherwise inappropriate that the claims be pursued by means of a representative proceeding. 2 To be a proper claim within Part IVA, relevantly for present purposes, the claims of the various persons represented have to give rise to "a substantial common issue of law or fact": s 33C(1)(c). That concept is discussed by the High Court in Wong v Silkfield (1999) 165 ALR 373 at 381. 3 I must say at the outset that the considerable difficulty that this case has caused has been largely due to the way it has been advanced by the applicant's advisers. The application was filed on 18 December 1998, that is, almost exactly 12 months ago, and we have yet to get to the stage where an adequate statement of claim has been produced. More particularly, it was not until 16 August 1999 that the expert on whom the applicant relies, Associate Prof John Price, was retained. The history suggests that a number of complainants were collected and the proceedings launched in the hope that the requisite common issue of law or fact would emerge. 4 I shall not go into the interlocutory history of the matter, which is replete with failures by the applicant to comply with orders and provide proper particulars and the like. However, that said, I have to deal with the case as it is now, and decide whether it is an appropriate case to exercise the discretion under s 33N. This is not a matter of punishing one party or rewarding another. The current state of the applicant's case is represented by par 5 of the proposed further amended statement of claim, a document which was served on 9 September 1999, although leave has not yet been given to file it. 5 Paragraph 5 provides as follows: "5. The Kenworth Truck products acquired by the represented persons were not reasonably fit or fit at all for the purpose for which they were intended. The design and/or construction of the chassis of the Kenworth Truck products was defective in that:- (a) the chassis of the Kenworth Truck products were manufactured of 8mm or 9.5mm thick channel rails; (b) the chassis of the Kenworth Truck products were manufactured with the yield stress of approximately 758mpa; (c) the cross members and brackets of the chassis of the Kenworth Truck products were bolted to each rail rather than welded, riveted or joined by other fastening systems; (d) excessive cut was applied to the top and/or bottom rail flanges of the chassis in the vicinity of the engine placed in the Kenworth Truck products; (e) the rear of the engine underbelly cross member and its connection to the chassis rails in the Kenworth Truck products is grossly deficient; (f) the chassis of the Kenworth Truck products exhibit inadequate torsional strength." 6 Essentially the complaint of the respondent is that the applicant's case as set out in par 5 does not provide any objectively measurable standards or criteria and does not provide any theory of causal connection between the alleged defects and the defective performance complained of by the applicant and those whom the applicant represents. 7 Although my mind has wavered in the course of this hearing, I have come to the conclusion that Mr Kaye QC for the applicant is right in his contention that the case does raise a common issue of fact, namely, whether there is defective design of the chassis of Kenworth trucks which has resulted in excessive flexibility. Further, the proposed further amended statement of claim does identify six factors as being productive of that excessive flexibility. Given that on the respondent's evidence the respondent uses a common design and construction principle for the chassis of its vehicles, albeit that there is a considerable number of models with permutations of different engines, drive trains and the like, this does seem to me to raise a common issue of fact. Paragraph 5, even now, does not completely represent the applicant's case because it does not explicitly state that those factors contributed to excessive flexibility of the chassis which is said to be the causal factor resulting in the damage complained of. Nor does it refer to what Prof Price relies on as a separate defect, that is, failure to have any procedure for design against dynamic loads, the design being only directed to static loads. 8 Mr Larkins QC for the respondent pointed out a number of criticisms by the respondent's experts of alleged defects in Prof Price's reasoning. Suffice it to say at the moment that obviously I cannot go into the respective merits of both sides' competing arguments on matters of technical detail. Nor does it seem to me in the end that it is necessarily fatal to the existence of a common question of fact that the defects complained are not cast in terms of objective standards. Paragraph 5 does set out specific, identified details of the design. The extent to which those individually or in combination do or do not produce the results complained of is a matter for expert and other evidence at the trial. I will direct that: 1. The applicant file and serve a third amended statement of claim on or before 24 January 2000. 2. Such statement of claim include all outstanding particulars requested by the respondent. 3. Respondent file and serve a defence by 16 February 2000. 4. Adjourn the directions hearing to 6 March 2000. 5. Costs are reserved. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey . Associate: Dated: 15 December 1999 Counsel for the Applicant: S W Kaye QC and M D Wyles Solicitor for the Applicant: Slater & Gordon Counsel for the Respondent: J C Larkins QC and T North Solicitor for the Respondent: Mills Oakley Date of Hearing: 15 December 1999 Date of Judgment: 15 December 1999