ADAMA NEW ZEALAND LIMITED v RAAM CHEM PTE LIMITED [2019] NZHC 2637

ADAMA NEW ZEALAND LIMITED v RAAM CHEM PTE LIMITED [2019] NZHC 2637 [16 October 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2018-485-961[2019] NZHC 2637BETWEEN ADAMA NEW ZEALAND LIMITEDPlaintiffAND RAAM CHEM PTE LIMITEDDefendantFALCON INTERNATIONALBIOSCIENCES PRIVATE LIMITEDFirst third partyAND OTHERSSecond to fifth third partiesHearing: 14 October 2019Appearances: A Darroch for plaintiffW Holden and N Cannon for defendantNo appearances for first to fifth third partiesJudgment: 16 October 2019JUDGMENT OF ASSOCIATE JUDGE JOHNSTON[1] In November 2016 the defendant, Raam Chem Pte Ltd, a Singaporean concern,sold, and Adama New Zealand Ltd, the local subsidiary of a global manufacturer anddistributor of agricultural products, bought, a large quantity of broad spectrumprotectant fungicide known as Mancozeb. No other parties were directly involved inthis sale and purchase transaction. The terms of the transaction are unimportant forpresent purposes. The Mancozeb arrived in New Zealand in January 2017. Adamasold the bulk of the product at the wholesale level to a local concern by the name ofHorticentre Ltd. Horticentre thereafter sold the product at the retail level to a numberof apple growers who applied it in their orchards. The plaintiff says that the Mancozebwas contaminated, with the result that it caused damage to trees or crops. As a result,Adama and Horticentre have been on the receiving end of claims by the orchardists.Adama has assumed responsibility for dealing with these. It has arranged for testingof the Mancozeb, satisfied itself that the product was contaminated and that this wascausative of the damage, and settled claims for a total of over $13 million.[2] The only other aspect of the background which needs to be mentioned here isthat Adama advised Raam of these claims and has kept that company informed. Raamhas apparently notified its insurers who have instructed loss adjusters. The lossadjusters have asked for samples of the product, presumably so that they can arrangetheir own testing. Adama has not received any report as to the outcome of that testing.[3] In December 2018 Adama commenced this claim against Raam alleging abreach of the Fair Trading Act and two other causes of action, all founded on theallegation that Raam supplied a contaminated product.[4] Adama's claim is defended.[5] Within the time period provided for in r 4.4(2)(a) of the High Court Rules,Raam commenced third party proceedings against five third parties, all companiesbased abroad. Those third party proceedings were commenced in March 2019. Todate the defendant has managed to serve the fifth third party which has signalled achallenge to the jurisdiction of the New Zealand courts to hear the claim against it.The originating documentation in the third party proceedings has not yet been servedon the first to fourth third parties.[6] By notice of interlocutory application dated 10 June 2019 the plaintiff appliesto set aside the third party notices, essentially on the basis that its proceeding againstRaam would be delayed unreasonably if the third party proceedings were allowed tostand. The defendant has filed a notice of opposition to that application dated 24 June2019.[7] The plaintiff's application came on for hearing on 14 October 2019.[8] I am grateful to both Mr Darroch for Adama and Mr Holden and Ms Cannonfor Raam for the responsible approach they have taken to this matter, and for theirassistance in formulating a consent order.[9] The plaintiff's application is made pursuant to r 4.16 which materially says thatwhen an application is made to set aside a third party notice or third party notices:(3) the court may—(a) set the third party notice aside and dismiss the defendant'sstatement of claim against the third party—(i) on the merits; or(ii) without prejudice to the right of the defendant topursue that claim against the third party in anindependent proceeding; or(b) give other directions.[10] There is much to be said for both parties' arguments. On the one hand, theplaintiff is entitled to pursue its claim without undue delay and it is clear on theevidence that allowing the defendant's third party proceedings to continue wouldresult in considerable delay. On the other hand, the defendant has a right to commencethird party proceedings and, on the basis of its allegations at least, this case involvesclassic examples of such claims. Without indicating any concluded view as to themerits of the plaintiff's application, it became obvious to me as the argumentdeveloped that there was an alternative to the polemic positions adopted by the parties,that is to say an order that would effectively sever the plaintiff's claim against thedefendant on the one hand from the defendant's claims against the third parties, so asto enable the former to proceed without delay but also enable the defendants to takeadvantage of the current proceeding and the steps that it has already taken vis-a-visthe third parties (in other words, not requiring the defendant to start again).[11] Bearing in mind the wide discretion in r 4.16 entitling the Court to "give otherdirections" it seems to me that such a course is quite open to the Court.[12] Both Mr Darroch for the plaintiff and Mr Holden for the defendant agreed tothis course.[13] Accordingly, pursuant to rr 4.16 (3)(b) and 10.4, by consent, I make an orderdirecting that the plaintiff's claim against the defendant be tried separately from thedefendant's claims against the third parties.[14] The plaintiff's claim against the defendant is to be allocated a casemanagement conference as soon as conveniently possible with a view to dealing withany outstanding interlocutory matters, setting the case down for trial and making anynecessary pre-trial directions.[15] The defendant's claims against the third parties need not be allocated a casemanagement conference until such time as one or more of the third parties enters adefence or takes some other formal step in the proceeding. However, I grant thedefendant leave to apply further in order to bring its claims against the third parties onby way of a case management conference or to take any other step that it wishes toexpedite those claims.[16] I make no costs order in relation to the plaintiff's application for an ordersetting aside the defendant's third party notices. Although the plaintiff has beenlargely successful in its objective of shedding the third party claims, the defendant wasentitled to issue third party proceedings, and the defendant, through counsel, has actedresponsibly in ensuring that this application was disposed of as efficiently andeconomically as possible.Associate Judge JohnstonSolicitors:Darroch Forest Lawyers, Wellington for plaintiffWotton Kearney, Wellington for defendant