Elgas Limited v Orica Australia Pty Limited & Anor [2004] NSWSC 506

New South Wales Supreme Court

CITATION : Elgas Limited v Orica Australia Pty Limited & Anor [2004] NSWSC 506 HEARING DATE(S) : 7/06/04, 8/06/04 JUDGMENT DATE : 8 June 2004

JURISDICTION: Equity Division Commercial List JUDGMENT OF : Einstein J DECISION : Hearing date vacated.

CATCHWORDS : Practice and procedure - Joinder of all joint venturers where claims made to a breach of joint venture agreement LEGISLATION CITED : Supreme Court Rules Lombard Australia Ltd v NRMA Insurance Ltd (1968) 72 SR (NSW) 45 CASES CITED : News Ltd v Australian Rugby League Ltd (1996) 64 FCR 410 Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52 Elgas Limited (ACN 002 749 260) (Plaintiff) PARTIES : Orica Australia Pty Limited (ACN 004 117 828) (First Defendant) Qenos Pty Limited (ACN 054 196 771) (Second Defendant) FILE NUMBER(S) : SC 50166/00 COUNSEL : Mr S Gageler SC, Mr D Studdy (Plaintiff) Mr C Scerri QC, Mr J Stoljar (Defendants) SOLICITORS : Gilbert & Tobin (Plaintiff) Mallesons Stephen Jaques (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

Einstein J

Tuesday 8 June 2004 ex tempore Revised 9 June 2004

50166/00 Elgas Limited v Orica Australia Pty Limited & Anor JUDGMENT 1 The final hearing of these proceedings was fixed to commence on 7 June 2004. 2 The proceedings had been very closely prepared. Both parties had raised significant issues in relation to a joint venture agreement entered into on 4 June 1982 which regulated the construction and on going operation of a LPG storage terminal at Botany Bay. 3 The issues are as pleaded in the current form of further amended summons and in the current form of further amended cross-claim. They were further carefully detailed in overview written submissions furnished to the court as part of the court's usual pre-trial directions. 4 The particular facts, matters and circumstances forming the background to the current dispute, as it was due to be heard in the final hearing, were also chronicled in a usefully prepared agreed statement of fact. 5 The original joint venture participants were the Commonwealth Industrial Gases Limited (CIG); the first defendant, Orica Australia Pty Limited, then known as ICI Australia Operations Pty Limited (Orica); Mobil Oil Australia Pty Limited (Mobil); The Shell Company of Australia Limited (Shell); and Hematite Petroleum Pty Limited (Hematite). 6 Following assignments by certain of the original joint venture participants of their joint venture interests to other entities, the present joint venture parties are Elgas, Mobil, Gogas Australia Pty Ltd [Gogas] and Orica. 7 Over time a number of agreements and arrangements were apparently put in place either by the original joint venture participants or by their successors. At the same time the agreed statement of facts suggests that there appear to have been significant changes in the use by particular joint venture participants, or in the use by parties associated with particular joint venture participants, of facilities in and around the HSF hydrocarbon storage facility at Port Botany. 8 At the commencement of the final hearing the court raised with both parties a question as to whether or not there may be attention required to the proper constitution of the record in terms of all necessary or appropriate parties being required to be joined or given notice of the proceedings. 9 That matter having been raised, following the parties being occupied during first morning in settlement discussions, the final hearing proceeded [those discussions apparently not bearing fruit] at 2 pm on the first day of the hearing. 10 On that occasion Mr Scerri QC, leading counsel for the defendant, contended that the proceedings were shown not to have been properly constituted by reason of the absence as necessary parties of Gogas and Mobil. Although submissions in relation to the question of joinder were very briefly commenced it seemed to me that the more convenient course was to permit the plaintiff's leading counsel, Mr Gageler SC, to open the case, standing over until this morning the taking of detailed submissions on the question of joinder. 11 That course was followed and Mr Gageler's opening from the bar table proceeded until shortly before 4 pm. He indicated that he had approximately one further hour in which time to complete those submissions. 12 At the court's request, the parties overnight, prepared outline submissions in respect of the joinder parameter. The defendants contended that the court should order, pursuant to part 8, rule 8(1)(a) or alternatively (1)(b) of the Supreme Court Rules, that the parties to the joint venture agreement, who were not presently parties to the proceedings, be added as defendants. 13 The defendants, in the alternative, contended that within the meaning of part 8 rule 3 of the Supreme Court Rules, the relief that the plaintiff is claiming is relief to which the absent parties are entitled, jointly with the plaintiff, and that consequently part 8 rule 3 required that Gogas and Mobil be joined as parties to the proceedings. 14 In its written submissions the plaintiff stated that consistently with the plaintiff's counsel's duty to the court, the plaintiff acknowledged a real difficulty with the constitution of the proceedings which it submitted, appeared to infect the summons and the cross-claim equally. The question of parties, it was said having been properly raised by the court, and having been belatedly [so it was said], taken up by the defendants/cross-claimants, there appeared to be no real alternative - adopting an appropriately conservative approach - but to vacate or adjourn the hearing and to joint the absent joint venture participants as defendants to the summons and as cross-defendants to the cross-claim. 15 The particular difficulties which were seen to arise were fleshed out in the plaintiff's written submissions: