Edwards v T G Wright Management Services Pty Ltd (in liq) [2003] QCA 289

SUPREME COURT OF QUEENSLAND CITATION: Pacific Century Productions P/L v Taylors Contracting Services P/L; Pacific Century Production P/L v Koppers Timber Preservation P/L [2003] QSC 289 PARTIES: PACIFIC CENTURY PRODUCTION PTY LTD TRADING AS EVERGREEN FARMS ACN 087 505 860 (plaintiff/applicant) v TAYLORS CONTRACTING SERVICES PTY LTD ACN 068 844 557 (defendant/respondent) PACIFIC CENTURY PRODUCTION PTY LTD (plaintiff/applicant) v KOPPERS TIMBER PRESERVATION PTY LTD ACN 003 947 680 (defendant/respondent) FILE NO: 8167 of 2001 9286 of 2002 DIVISION: Trial Division PROCEEDING: Application DELIVERED ON: 3 September 2003 DELIVERED AT: Brisbane HEARING DATE: 4 June 2003 JUDGE: B W Ambrose J ORDER: 1. I order that proceeding number 8167 of 2001 – Pacific Century Production Pty Ltd trading as Evergreen Farms v Taylors Contracting Services Pty Ltd be consolidated with action number 9286 of 2002 being Pacific Century Production Pty Ltd v Koppers Timber Preservation Pty Ltd. 2. I direct that Taylors Contracting Services Pty Ltd deliver forthwith any amended defence and/or counterclaim it wishes to file against the statement of claim delivered against it by Pacific Century Production Pty Ltd trading as Evergreen Farms in action number 8167 of 2001 on 1 August 2003. 3. I direct that the plaintiff Pacific Century Production Pty Ltd trading as Evergreen Farms file and deliver any reply and answer to any counterclaim that either Taylors -- 1 of 7 -- 2 Contracting Services Pty Ltd files in action number 8167 of 2001 or that Koppers Timber Preservation Pty Ltd files in action number 9286 of 2002 in conformity with the requirements of the Uniform Civil Procedure Rules. 4. I direct that the plaintiff in both actions appear by the same counsel in the consolidated proceedings. 5. I order that the costs of each party to these applications be its costs in the cause. 6. I give all parties liberty to apply for further directions in the consolidated actions upon reasonable notice to the others. CATCHWORDS: PRACTICE – directions – applications to have two actions heard one after the other and for directions – where plaintiff has filed two actions for breach of contract against separate defendants – where plaintiff has also filed action for negligence and breach of statutory duty against one defendant – where case against defendants differs substantially – where issue of contribution between defendants may arise if actions successful – whether actions should be consolidated Uniform Civil Procedure Rules 1999 (Qld), r 65(1), r 65(2), r 65(2)(b), r 78, r 78(a), r 78(b), r 79, r 80 Todd v Jones [1969] VR 169, considered COUNSEL: J Sweeney for the Pacific Century Production P/L D Savage SC for Taylors Contracting Services P/L D Tucker (sol) for Koppers Timber Preservation P/L SOLICITORS: HW Litigation for the Pacific Century Production P/L Gallagher Holcroft for Taylors Contracting Services P/L Tucker & Cowen for Koppers Timber Preservation P/L [1] AMBROSE J: These are applications made by the plaintiff (“Evergreen Farms”) in both actions for orders that they be heard and determined one following upon the other by the same judge pursuant to UCPR 79 and 80. [2] Directions are also sought as to the conduct of the proceedings. [3] There have been many pleadings delivered since the plaintiff instituted its proceedings against the defendant in action 8167 of 2001 – (“Taylors”) and its proceedings against the defendant in action 9286 of 2002 (“Koppers”). [4] These applications eventually came on for hearing on 4 June 2003. [5] On that occasion there was discussion and argument as to whether the two actions ought be consolidated and whether the issue of liability in each action ought be determined prior to the determination of the issue of quantum in each action. -- 2 of 7 -- 3 [6] The reason these steps were contemplated was that in essence the basis of the claim by Evergreen Farms against each of the defendants differs substantially. However if the plaintiff recovers judgment against either defendant or both, it is likely that the question will arise as to whether each defendant is partly responsible for significant financial loss which Evergreen Farms attributes to breach of contract on the part of Taylors and/or of Koppers. In addition there is a claim for negligence and breach of statutory duty on the part of Koppers. [7] When these applications came on for hearing counsel for Evergreen Farms indicated that it was proposed to further amend its statement of claims against each of Taylors and Koppers. I intimated that if it were possible to have the statements of claim delivered prior to 27 June 2003 the defendants might then deliver defences to the latest amended statements of claim; when pleadings were in a final form (after delivery of amended defences), it would then be appropriate to consider in the light of voluminous evidence contained in the various files what if any order would be appropriate upon the two applications brought by Evergreen Farms. [8] It would be unprofitable to embark upon a detailed analysis of all the issues raised in the various pleadings that have been amended. The latest amended statements of claim were delivered on 1 August 2003. On 4 June 2003 counsel for Taylors and Koppers indicated that it would probably be sufficient to permit me to glean what pleadings might be delivered by those defendants to any further statements of claim delivered on behalf of Evergreen Farms should I refer to various earlier defences delivered. On 2 September 2003 particulars of an amended defence and counterclaim on the part of Taylors were provided. No particulars of any amended defence to be filed on behalf of Koppers has been provided to date. [9] This litigation arises from work done by Taylors for Evergreen Farms, and the quality of treated logs supplied by Koppers, to enable that work to be done to establish a large table grape vineyard in the vicinity of Emerald. The vineyard extended over some 600 or 700 acres and its establishment involved Taylors installing thousands of treated pine posts of various dimensions supplied by Koppers, and attaching to some of them steel “v” frameworks and in effect establishing many many kilometres of trellises on Evergreen Farms’ land to support grapevines which Taylors also planted on that land. [10] It is the case for Evergreen Farms that Taylors breached its contractual obligations in four principal respects – (a) selecting and using logs for trellis posts that were too small; (b) installing many of such posts in the soil at only half the required depths; (c) failing to discard obviously defective posts supplied by Koppers; (d) so constructing parts of trellises (particularly metal “v” frames) that they fail to perform their function. There is also other relatively minor relief claimed which has no connection with the relief claimed against Koppers. [11] Stated shortly the essence of Evergreen Farms’ case against Taylors is its failure to design and construct the trellises in a proper and workmanlike manner with adequate posts, metal “v” frames etc with a consequence that the trellises are unable to bear the weight of grapes. It is asserted that some of the posts have not -- 3 of 7 -- 4 been set at a sufficient depth in the ground and strong wind actually blows them out of the ground. It is also asserted that the design is quite inadequate to support the grapevines when they are heavily laden with grapes. [12] It is the case for Taylors that it had nothing to do with supplying posts or determining their size, length etc. It is Taylor’s case that Evergreen Farms itself arranged for the supply of posts and Taylors is not responsible for any deficiencies in them. It is Taylors case that the trellises were built in a proper workmanlike manner and the techniques used in the construction of the trellises were in accord with techniques commonly used for such purposes in Australia. [13] It is Evergreen Farm’s case against Koppers that the logs delivered for use by Taylors were not properly treated to render them impervious to rot and insect infestation. Moreover they or some of them were not suitable for the purpose for which they were to be used of which Koppers was aware. Furthermore it is Evergreen Farms’ case that Koppers breached a statutory requirement for the supply of pine logs to be used for purposes of the sort that they were to be used for in constructing grape trellises, that they be properly treated with specific chemicals which would result in their preservation. It is Evergreen Farms’ case, that the logs will fail within five years but if properly treated would be expected to last for 30 years. It is the case for Evergreen Farms' that only 50% of the posts supplied for the construction of the trellises were properly treated and those are expected to last for 30 years. However 50% were not properly treated and will last no more than five years. It is Evergreens Farms’ case that one cannot determine by visual inspection how many and which of the tens of thousands of posts that have been used in the trellis construction will fail or precisely when. The only way to determine the time of their failure is to wait until they do fail. [14] Evergreen Farms also alleges that Koppers negligently advised it that in excess of 100,000 treated pine posts it supplied for use as intermediate trellis posts were suitable for such use when in fact they were not. [15] The replacement of failed posts it is said will be so expensive and interfere so much with grape production that the only way to remedy the use of the defective wood is to replace all posts which will involve taking the defective ones out (with those that may not be defective) and removing the trellis wire and various other attachments to the trellises to enable all the posts (and trellises) to be replaced to avoid their deficiencies impacting upon the commercial growing and harvesting of the grapes. [16] It is the case for Koppers however that many of the facts alleged by Evergreen Farms in its action are false. It is alleged that all the timber supplied was properly treated according to industry standards and suitable to meet the requirements of Evergreen Farms, and there is no necessity whatever to replace posts as Evergreen Farms contends. [17] In the assessment of damages of course a complication will arise if Evergreen Farms succeeds against Koppers and with the assistance of expert evidence shows that 50% of the tens of thousands of posts supporting the trellises will fail within the next couple of years. [18] One of the complaints Evergreen Farms has against Taylors is that some of the posts were not properly put in the ground to an appropriate depth. Some were not of sufficient diameter in the places where they were put in the soil to support the -- 4 of 7 -- 5 weight of the grapevines when bearing grapes – particularly when winds blow towards the grapes causing extra stress to be placed on various parts of the trellis structures. Another complaint is that about 9,000 weld joints on “v” frames attached to some of the posts forming part of the trellises have failed due to faulty welding. [19] One point then is the extent to which Taylors will be held liable for enormous financial loss running into millions of dollars which Evergreen Farms seeks to recover against it, should it emerge that the posts used or many of them in any event were so badly treated by Koppers that they would not last for 30 years but would only last for five and this result would have occurred irrespective of the way the trellises generally were constructed or the “v” frames welded. [20] This is the principal reason why consideration has been given on the hearing of the application to have determined in a consolidated action the liability of each of Taylors and Koppers to Evergreen Farms in respect of the breach of contract (if any) established by Evergreen Farms against Taylors and breach of contract, (if any), negligence, and breach of statutory duty established against Koppers. It will be arguable of course that if 50% of the logs supplied by Koppers to Taylors for the construction of the grape trellises on Evergreen’s vineyard were so defective that they would last for no more than five years then this will have an effect on the quantum of damage recoverable against Taylors. Similarly if the workmanship of Taylors in constructing the trellises was so defective by reason of the use of inappropriate material and design criteria and defective workmanship that they would have to be rebuilt within the next couple of years in any event that also might impact on the liability of Koppers to Evergreen Farms in the assessment of damages against it. [21] With respect to the issues raised upon the current pleadings, should Evergreen Farms establish a prima facie case against each defendant on liability, each defendant will have an interest to establish that the other should bear the greater contribution to the damages proved to result from any breaches of obligation on the part of both defendants. [22] Under UCPR 78 it is provided – “78 The Court may order that 2 or more proceedings be consolidated if – (a) the same or substantially the same question is involved in all the proceedings; or (b) the decision in 1 proceeding will decide or affect the other proceeding or proceedings.” [23] In my judgment on the facts of this case Evergreen Farms’ application clearly comes within the terms of UCPR 78(b) and probably within UCPR 78(a). [24] The object of consolidation of proceeding is to have the one court determine all proceedings. In effect the application by Evergreen Farms recognises the desirability of one court hearing both actions although it seeks to have one heard subsequent to and separately from the other. No authority was cited to support the -- 5 of 7 -- 6 making of such an order. I am unpersuaded that the making of such an order would achieve the results which an ordinary consolidation order is designed to achieve. It appears that the one judge in determining the subsequent action albeit immediately after the determination of the first action may feel inclined in the second action to make findings consistent with those made in the first action. Of course in the second action the parties would be different and perhaps so would be the evidence called. One of the objects of consolidation is to avoid the possibility of different findings on the same issues of fact canvassed in separate proceedings; such a result of course reflects adversely on the system of the administration of justice – Todd v Jones [1969] VR 169 at 171. [25] As a general principle actions will be consolidated if the claims properly made in different actions could have been made in the one action and the parties to the separate actions will not suffer. [26] It would have been open to Evergreen Farms to take the one proceedings against both Taylors and Koppers under UCPR 65(1) and (2). I refer in particular to the terms of UCPR 65(2) (b). [27] In my view upon the current pleadings it would be open to either Taylors or Koppers to deliver a contribution notice to the other. This was mentioned upon the hearing of the applications. However neither defendant apparently has yet attempted to do so. [28] In determining whether to make an order for consolidation, in my view it is clearly relevant under UCPR 78 to consider whether there will be any resulting embarrassment to either Taylors or Koppers. On the facts of this case to my mind the only “embarrassment” which might arise would be the additional expense incurred by each defendant in attending court while evidence is called by and against the other defendant. This of course will always be a consequence of any consolidation order that might be made in cases where there are common issues. [29] On the facts of this case on the material so far placed before me there will be a number of factual issues common to Evergreen Farms’ claim against each of Koppers and Taylors. [30] One such issue will be the length of the posts delivered by Koppers to Evergreen Farms’ vineyard site and the consequences of their use by Taylors. If Evergreen Farms demonstrate that some of the posts were only installed to a depth of 300mm beneath the surface of the land the question will clearly arise whether those were too short for the use for which Koppers had been informed they were to be put. If they were too short for use one question will be whether Taylors ought to have so advised Evergreen Farms and refrained from putting them in place at such a depth that the whole trellis installation would be defective. Another factual issue in common will be whether posts delivered were so defective as to render them unfit for use. The extent to which defective welding of the “v” frame parts of the trellis structure and the design of those frames and the manner of their attachment to trellis ports, combined with the use of defective parts to necessitate their replacement/repair will be a matter in which both Taylors and Koppers have a common if conflicting interest. Whether upon examination the posts should have appeared to Taylors to be defective by virtue of their quality will also be an issue to be addressed by both Koppers and Taylors. If they were obviously defective one -- 6 of 7 -- 7 might argue that Taylors ought to have advised Evergreen Farms of the defects apparent in them and not simply to have gone ahead and used them for the purpose of constructing vineyard trellises. [31] To the extent that each of Taylors and Koppers was in breach of obligation to Evergreen Farms – albeit that the breaches of obligation involved breaches of different contracts – any damage recovered by Evergreen Farms against each of Taylors and Koppers may involve an order being made for contribution between them in respect of the total or at least part of the damages recovered against each. [32] To the extent that an order for consolidation of the actions will involve one defendant attending trial of the consolidated actions for periods of time during which issues in which that defendant has no interest are canvassed, it will be open for it to seek leave not to attend the hearing during that period of time. In particular I have in mind any dispute that might arise concerning the way grapes were pruned by Taylors which I should think would have no impact on Evergreen Farms’ claim against Koppers. [33] I have concluded therefore that this is an appropriate case in which to make an order that proceeding number 8167 of 2001 – Pacific Century Production Pty Ltd trading as Evergreen Farms v Taylors Contracting Services Pty Ltd be consolidated with action number 9286 of 2002 being Pacific Century Production Pty Ltd v Koppers Timber Preservation Pty Ltd and I do so order. [34] I direct that Taylors Contracting Services Pty Ltd deliver forthwith any amended defence and/or counterclaim it wishes to file against the statement of claim delivered against it by Pacific Century Production Pty Ltd trading as Evergreen Farms in action number 8167 of 2001 on 1 August 2003. [35] I direct that the plaintiff Pacific Century Production Pty Ltd trading as Evergreen Farms file and deliver any reply and answer to any counterclaim that either Taylors Contracting Services Pty Ltd files in action number 8167 of 2001 or that Koppers Timber Preservation Pty Ltd files in action number 9286 of 2002 in conformity with the requirements of the Uniform Civil Procedure Rules. [36] I direct that the plaintiff in both actions appear by the same counsel in the consolidated proceedings. [37] I order that the costs of each party to these applications be its costs in the cause. [38] I give all parties liberty to apply for further directions in the consolidated actions upon reasonable notice to the others. -- 7 of 7 --