The plaintiff, Manassen Foods Australia Pty Ltd (Manassen) imported salad dressing from the US to Australia in 2017 in three cargo shipments in refrigerated containers. The refrigerated containers were allegedly set to the wrong temperature for storage: -10^o C, rather than +10^o C. As a consequence, the salad dressing spoiled, leading to Manassen suffering loss and damage. Manassen filed a writ on 12 July 2018 against:

(a) Seaway Logistics Pty Ltd (Seaway), the first defendant, a transport and logistics provider, who was engaged to effect the import of the cargo; and

(b) ANL Singapore Pte Ltd (ANL), the second defendant, the ocean carrier of the cargo.

The statement of claim was filed one year later on 19 July 2019. It pleaded that the cargo was damaged as a result of Seaway’s conduct in instructing a third party freight forwarder, Intelligent SCM LLC, known as AWA, to set the refrigerated containers to -10^o C, or alternatively, that AWA instructed or arranged those temperatures. Manassen claimed that Seaway was responsible for AWA’s conduct, and made no separate claim against AWA.

In its defence filed on 23 August 2019, Seaway admitted that it engaged AWA to arrange carriage of the cargo, but denied that it instructed AWA to set the containers to -10^o C. Seaway said that the proper defendant to Manassen’s claim was AWA, as it was party to the relevant bills of lading.

As against ANL, the statement of claim alleged that by keeping the cargo at -10^o C, ANL breached duties owed to Manassen as bailee (in respect of the first and third cargoes), or alternatively, ANL breached common law duties of care in respect of all three cargoes.

AWA was subsequently added by a third party notice. On 19 May 2021, AWA admitted that it was the carrier of the cargoes pursuant to the bills of lading, but said that Seaway was the ‘Merchant’ under them. AWA denied that the bills of lading constituted contracts of agency or were subcontracts. Further, AWA pleaded that any claim under the bills of lading was out of time under the Hague-Visby Rules which apply by operation of Pt 2 of the Carriage of Goods by Sea Act 1991 (Cth) (the Act). Alternatively, AWA said that it did not pack or load the containers, and that therefore under the relevant terms and conditions, it had no responsibility or liability for damage arising from the incorrect temperature setting.

On 2 August 2021, AWA added an alternative claim of contributory negligence by Seaway under the Wrongs Act 1958 (Vic) (the Wrongs Act), by reason of Seaway failing to inform AWA of the correct carriage temperature. Seaway denied contributory negligence on the grounds that it did not know and could not know the correct carriage temperature.

On 8 March 2022, AWA sought an order for ANL to be joined as a defendant to the proceeding pursuant to s 24AL(1) of the Wrongs Act and further or alternatively, rule 9.06(b)(i) of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules’), on the basis that it sought to allege that Seaway’s alternative claim arising from a duty of care said to be owing by AWA to Manassen was also apportionable under the Wrongs Act, and that ANL was a concurrent wrongdoer in respect of this claim.

Pursuant to s 24AI(3) of the Wrongs Act, the Court must not have regard to the comparative responsibility of any person who is not a party to the proceeding. Thus, AWA sought ANL to be joined so that AWA might properly raise its proportionate liability defence.

Manassen and Seaway opposed AWA's application on the grounds that the proposed proportionate liability defence had no real prospects of success. They also argued that the delay in advancing this case had not been adequately explained, and that they would suffer prejudice should joinder be allowed.

Held: AWA's application to join ANL is dismissed.

Among other things, Manassen argues that the proportionate liability defence has no reasonable prospects of success because it is time barred by reason of art 3.6 of the Hague-Visby Rules. This Rule provides that the carrier and the ship are discharged of all liability in respect of goods unless suit is brought within one year of delivery of the goods. In relation to this argument, AWA’s submissions that art 3.6 only operates to discharge ANL from liability for claims that may be brought by 'suit', and does not affect the ability to bring a proportionate liability defence, are correct. By raising this defence, AWA does not seek any judgment or other relief against ANL, and accordingly, art 3.6 does not apply.

Manassen and Seaway also submit that due to AWA’s delay, they have been denied the opportunity to investigate and bring any claims they may have against ANL in a timely manner, and that should ANL be joined, they will likely be time-barred from bringing a separate claim against ANL. This could lead to the possibility that AWA’s liability is reduced by reason of ANL’s conduct, but Seaway (and Manassen) are prevented from separately pursuing ANL.

The parties are in agreement that the Hague-Visby Rules apply to the carriage of the goods. Article 3.6 provides that the carrier and the ship are discharged from all liability in respect of the goods unless suit is brought within 12 months of the delivery of the goods. Accordingly, any claim against ANL by Seaway or Manassen in respect of the goods appears to have been extinguished by August 2018. ANL’s terms of carriage also provide for a 12-month time limitation.

In response to this argument, AWA submits that any claim by Seaway against ANL was extinguished well before AWA was joined to the proceedings in March 2020. Even if AWA had acted promptly to bring its proportionate liability defence in response to the third party notice, any claim by Seaway against ANL would have already been extinguished. Thus, any delay on the part of AWA to seek to join ANL is unconnected to any prejudice to Seaway (or Manassen) arising from the operation of art 3.6 of the Hague-Visby Rules. Manassen is in a different position to Seaway, in that it did commence proceedings against ANL within time, but discontinued those proceedings on 7 February 2020, a month before AWA was joined to the proceeding.

The parties further dispute whether art 3.6 of the Hague-Visby Rules applies to prevent Manassen from bringing a claim against ANL. AWA submits that despite the definition of ‘Merchant’, Manassen is not a party to the bill of lading, and that therefore it is not prevented from bringing a claim against ANL by reason of the operation of art 3.6 of the Hague-Visby Rules. For the purpose of this application it is not necessary for me to determine whether Manassen is bound by ANL’s terms as a 'Merchant'. It is, however, arguable that Manassen is bound, such that the prejudice identified by it may arise should ANL be joined.

AWA’s delay gives rise to specific prejudice to Manassen and Seaway. Prompt joinder of ANL may have affected the ultimate settlement agreement reached between Manassen and Seaway. It is common sense that the introduction of a new party who is allegedly responsible to some extent for the damage suffered, would affect the terms on which parties might agree to resolve proceedings. Manassen may also suffer prejudice should ANL seek to enforce the indemnity provided for in ANL’s terms.

In the event that ANL is joined, it is likely that Seaway would be prevented by the Hague-Visby Rules from making a claim against ANL, thus leading to the possibility of AWA's liability to Seaway being reduced by reference to ANL's conduct, but Seaway not being able to recoup any of that loss from ANL or Seaway. Given Manassen's settlement of the claim with Seaway, AWA's submission that Manassen will not suffer prejudice in the same manner as Seaway might, is correct. AWA's submission that any delay on the part of AWA to seek to join ANL is unconnected to any prejudice to Seaway arising from the 12-month time limitation provided for in art 3.6 of the Hague-Visby Rules, is also correct. AWA was joined to the proceedings well after the 12 months had expired, and thus, even if it had acted promptly, the asserted prejudice would have arisen.

However, this argument does not address prejudice arising from AWA's delay in raising the defence following discovery of the damaged cargoes in 2017 and the insurance claims pursued at that time. AWA has not explained why it did not seek to attribute blame to ANL at any time in the period from August 2017 when the damage was discovered until it filed its defence on 18 February 2022. Whilst it may not have been under any duty to disclose its position to Seaway in 2017, its failure to do so at that time, or immediately following its joinder to these proceedings, calls into question whether the proportionate liability defence relating to ANL's conduct is a real issue in the proceeding. The Court's concern as to the genuineness of the defence is augmented by AWA's failure to satisfactorily explain the delay or its new defence in light of the contemporaneous records which contradict it.

By refusing joinder, AWA will be prevented from running its proportionate liability defence. However, the factors weighing against the exercise of discretion to join ANL, such as the significant delay, failure to satisfactorily explain that delay, and the prejudice which arises or may arise from that delay, are matters of significant weight. It would not be in the interests of justice to grant leave to AWA to join ANL to the proceedings.