New South Wales Supreme Court CITATION : Alstom Australia Ltd v NAP Acoustics Pty Ltd [2004] NSWSC 217 HEARING DATE(S) : 22/03/04 JUDGMENT DATE : 26 March 2004 JURISDICTION: Equity Division Technology and Construction List JUDGMENT OF : Barrett J DECISION : Order for summary dismissal under Part 13 rule 5 dismissed CATCHWORDS : PRACTICE AND PROCEDURE - summary dismissal - application by one of two defendants - separate breaches of different contracts pleaded - time for filing evidence expired - no evidence against second defendant LEGISLATION CITED : Supreme Court Rules, Part 13 rule 5 Breheny v Cairncross [2002] NSWCA 69 Broken Hill Pty Co Ltd v Waugh (1988) 14 NSWLR 360 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Hummerstone v Leary [1921] 2 KB 664 CASES CITED : James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347 Menzies v Australian Iron and Steel Ltd (1952) 52 SR (NSW) 62 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 Rajski v Powell (1987) 11 NSWLR 522 Wickstead v Browne (1992) 30 NSWLR 1 Alstom Australia Limited - Plaintiff PARTIES : NAP Acoustics Pty Limited t/as NAP Silentflo - First Defendant Process Machinery Australia Pty Limited t/as DCL Engineering - Second Defendant FILE NUMBER(S) : SC 55056/02 COUNSEL : Mr S T White - Plaintiff Mr K N Gye - Second Defendant SOLICITORS : Ebsworth & Ebsworth - Plaintiff A R Conolly & Company - Defendant IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST BARRETT J FRIDAY, 26 MARCH 2004 55056/02 – ALSTOM AUSTRALIA LIMITED v NAP ACOUSTICS PTY LIMITED T/AS NAP SILENTFLO & ANOR JUDGMENT 1 On 22 March 2004, I heard an application by the second defendant for an order that the further amended summons be dismissed as against it pursuant to Part 13 rule 5 of the Supreme Court Rules. The second defendant says that no reasonable cause of action against it is disclosed. The application is opposed by the plaintiff. 2 The proceedings were commenced by summons filed on 25 November 2002. The plaintiff, at that point, sued the first defendant only. The second defendant was joined by means of an amended summons shortly before the filing of the further amended summons on 10 October 2003. The cause of action pleaded against each defendant in the further amended summons is in contract. It is alleged that each breached a contract between itself and the plaintiff. 3 The plaintiff was retained to perform certain works in relation to the construction of the Eastern Distributor by way of the design, supply and installation of sound attenuators for the exhaust outlets by which fumes from motor vehicles were removed from the tunnels. It, in turn, retained the first defendant and the second defendant as sub-contractors under distinct sub-contracts for separate purposes. The first defendant was engaged to design and supply the inlet and discharge silencers which formed part of the sound attenuators. The second defendant was engaged to design, fabricate, supply and install another element of the sound attenuators, being the supports for these discharge silencers. After about 400 hours of operation, the panels of the discharge silencers cracked and had to be replaced. The plaintiff says that the failure of the panels resulted from faulty design by the first defendant in that the panels themselves were made of aluminium and the securing rivets were of monel (or Monel metal), an alloy of nickel and copper the juxtaposition of which with aluminium in a moist environment led to a galvanic process causing corrosion of the aluminium. Any such shortcoming would be the fault of the first defendant. The plaintiff says, in the alternative, that the failure of the panels was caused by the incorrect design of the restraining mechanism for the panels within the supports and installation of the panels in the supports, these being matters within the contractual responsibility of the second defendant. 4 The second defendant, in its defence, denies that any shortcoming on its part caused damage to the panels. It admits that the first defendant made the panels of aluminium and fastened them with monel rivets, also that the panels were exposed to rain. The second defendant then points to the evidence served on it by the plaintiff, saying that none of that evidence in any way supports the contention that failure of the panels is attributable to incorrect design of the supports or installation in the supports by the second defendant. Significantly, written submissions handed up by Mr White, counsel for the plaintiff, say: "The plaintiff accepts that at present the plaintiff's evidence does not establish any liability on the part of [the second defendant]." I should interpolate here the observation that adverse interaction between the aluminium sheeting and the monel rivets is the only cause of the failure of the panels referred to in the two expert reports filed and served by the plaintiff. 5 Directions made by Bergin J on 31 October 2003 required various steps relevant to discovery and particulars to be taken by various dates before 12 December 2003. There was a direction that all witness statements and expert reports on which the plaintiff intended to rely by filed and served by 12 December 2003, a corresponding direction in respect of the defendants with a deadline of 16 February 2004 and a direction that any evidence of the plaintiff in reply be filed and served by 1 March 2004. In light of the fact that, according to this pre-trial timetable, all evidence should now be on, the second defendant attaches particular significance to the plaintiff's concession as quoted above from counsel's submissions and the content of the experts' reports as to the reasons why the panels failed. 6 The test to be applied upon an application for summary dismissal of this kind is exacting. It was stated by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129 as follows: "It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'." 7 The Chief Justice later said (at 130): "... in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed." 8 In Rajski v Powell (1987) 11 NSWLR 522 at 524, Kirby P explained why the summary dismissal jurisdiction must be used with care: "... the circumstances in which summary intervention is justified, effectively to prevent a party from submitting a case for determination on the merits, are limited indeed: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91. This is because, normally, a party is entitled to have the case proceed to trial when a full opportunity will be given to present evidence and argument in support of the claim. Necessarily, applications such as the present typically involve little or no consideration of evidence. The proceedings are telescoped. These and other reasons explain why the exercise of the jurisdiction now invoked is reserved to exceptional cases." 9 It is the second defendant's contention that the applicable test is satisfied because, on the evidence put forward by the plaintiff, the claims against the second defendant are simply not supported in any way and must be seen as doomed to fail. The plaintiff's response is that it is too early to come to that conclusion, despite the plaintiff's concession as to the import of the evidence as presently filed and served. According to the submissions made for the plaintiff, it cannot be said that there is no possibility of any evidence in the future being adduced which may inculpate the second defendant. The plaintiff therefore regards the second defendant's application for summary dismissal as misconceived. The appropriate time for any such application, the plaintiff says, will be when the evidence led on behalf of the plaintiff and the first defendant at the trial has been completed. 10 In support of these propositions, the plaintiff referred to a number of decided cases, particularly Menzies v Australian Iron and Steel Ltd (1952) 52 SR (NSW) 62, James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347, Broken Hill Pty Co Ltd v Waugh (1988) 14 NSWLR 360 and Wickstead v Browne (1992) 30 NSWLR 1, all of which draw upon principles recognised in Hummerstone v Leary [1921] 2 KB 664. In the last-mentioned case, the proceedings continued against one defendant only after an order of summary dismissal had been made in favour of the other but evidence implicating that other subsequently emerged and it became necessary to order a new trial. 11 It is, I think, sufficient, so far as the cases mentioned are concerned, to quote a passage from the judgment of Kirby P and a passage from the joint judgment of Handley and Cripps JJA in Wickstead v Browne. Kirby P said at 5: "Common experience teaches that it is usually more efficient and just to consider the viability of a cause of action when the facts said to support it are adduced and the suggested action can be judged with a full understanding of all relevant evidence. Testimony gives colour and content to the application and development of legal principle. That is why leave is usually required for an appeal from interlocutory orders. Appellate courts, including this Court, will usually require evidence to be adduced and a trial concluded before considering the application of the law to that evidence. Out of the detail of the evidence ultimately proved, affecting the relationship of the respondent and the appellant, may arise a finding of a duty of care which the common law of negligence would uphold." 12 Handley and Cripps JJA said at 11-12: "However for another reason, which was first raised by the Court, the respondent as one of a number of defendants cannot be entitled to summary dismissal before trial because of evidentiary deficiencies in the plaintiff's case. If at the close of the plaintiff's case at the trial there was no evidence against this respondent he would not be entitled at that stage to judgment if any of the other defendants intended to go into evidence: see Menzies v Australian Iron & Steel Ltd (1952) 52 SR (NSW) 62; 69 WN (NSW) 68. The effect of this rule is now embodied in Supreme Court Rules Pt 34, r 7(6) and r 8(5). The reason for the rules is clear and was explained in the decision referred to. At the close of the plaintiff's case there may be evidence against some defendants but not against others. The court will not entertain a motion for judgment by some only of the defendants because any gaps in the plaintiff's case against those defendants may be filled when the other defendants go into evidence. In particular one or more of the defendants going into evidence may seek to exculpate themselves by inculpating defendants against whom the plaintiff had no admissible evidence at the close of his case. If the respondent would not be entitled to succeed on a no evidence point at the trial until all the evidence has been called, including that from other defendants, it is clear that there can be no such entitlement on an application by one of several defendants for summary dismissal." 13 The approach thus taken in Wickstead v Browne was followed by the Court of Appeal in Breheny v Cairncross [2002] NSWCA 69, but it is pertinent to note the observation made by Hodgson JA in his short concurring judgment: "I agree with the orders proposed by Meagher JA and generally with his reasons. However, I would say that there may be cases where, following compliance with directions for particulars and service of evidence, it may be possible to say, before a hearing, that the case of one defendant will certainly not implicate another defendant; and thus there may be circumstances in which one defendant may be dismissed from a case before the actual hearing. However, it is quite plain that that situation has not been arrived at in this case." 14 The second defendant says that the reasoning exemplified by the decisions I have mentioned is confined to common law actions in which there are questions as to liability of joint or concurrent tortfeasors. That contention is correct only up to a point, in that many of the claims involved were tort claims. However, in Wickstead v Browne itself, the claims that went forward for trial as a result of the Court of Appeal's orders were a claim for debt of a statutory kind and a claim on the basis of knowing participation in a breach of fiduciary duty. In James v Australia and New Zealand Banking Group Ltd, there were claims against two defendants under s.52 of the Trade Practices Act 1974 (Cth), but the conduct alleged against them was not precisely the same. The third defendant's alleged liability was based on s.75B of that Act. There were claims in negligence against the first and second defendants, again not based on the same facts. The fact that this case involves independent causes of action based on alleged breaches of separate contracts does not, in my opinion, make inapplicable the principles under discussion. 15 The present case may, I think, be seen as on the border of the territory described by Hodgson JA in Breheny v Cairncross. But the fact that the time for the filing of further evidence by both the plaintiff and the first defendant, as set by the pre-trial directions, has passed cannot be taken as an absolute assurance that no such evidence will be forthcoming. As the High Court confirmed in Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146, there are occasions on which pre-trial timetables have to be extended after the event to accommodate the demands of justice. The plaintiff attaches significance to the fact that the first defendant, in paragraph 18 of its defence, has flagged an intention of seeking to ascribe responsibility for the plaintiff's loss to "the negligence or default of others or of the plaintiff itself". The possibility that the first defendant may, albeit in a tardy way, seek to introduce evidence in support of that contention cannot be ignored. Whether it would be permitted to do so is something that would have to be determined in the light of the circumstances as seen at that time. The first defendant has not played any part in the present application and there is nothing before the court throwing any light on its position or attitude, as to relevant matters, beyond the contention in paragraph 18 of the defence and the bare fact of its not having filed any evidence in support of that contention within the time allowed by the pre-trial timetable. 16 The expert evidence as to possible or likely causes of the failure of the panels will play a central role in this case. The expert evidence is, at this point, confined to that of the plaintiff's witnesses and that position will pertain at trial unless there is a successful application by either or both of the defendants to file and serve evidence notwithstanding the pre-trial timetable already in place. It is likely, however, that the plaintiff's experts will be cross-examined and there must be at least a possibility that cross-examination will bring to light aspects tending towards a version of technical matters supportive of the case pleaded against the second defendant. More precisely, perhaps, such a possibility cannot be regarded as entirely non-existent. 17 For these reasons, and while the matter may, as I have said, be seen as on the border of the territory referred to by Hodgson JA in Breheny v Cairncross, I consider that the principles stated in Wickstead v Browne and the other cases I have mentioned, applied in the context of the heavy burden an applicant for summary dismissal faces in the light of General Steel, indicate that it is premature for the second defendant to say, in effect, that there is absolutely no possibility of the case advanced against it being established. 18 I should observe, in conclusion, that the further amended summons filed on 10 October 2003 was accompanied by a certificate under s.198L of the Legal Profession Act 1987 by Ms Hobson of Ebsworth & Ebsworth, the solicitor for the plaintiff, stating that there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that the claims have reasonable prospects of success. I do not suggest that this expression of opinion by the solicitor should or can colour the view a judge takes of matters of the kind relevant to the determination of the present application. But it does mean that the solicitor has undertaken the preliminary screening now required by the legislation. 19 The second defendant's claim for an order of dismissal under Part 13 rule 5 is dismissed with costs. ********** Last Modified: 03/30/2004 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.