N1149

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 130 OF 1990

PAPUA NEW GUINEA PRINTING CO. PTY LTD
Plaintiff

-V-

ANDREW THOMPSON
Defendant

Waigani: Brown J.
1991: 10 July

Practice - Injunction granted against defendant in these proceedings between existing parties - Intervener (which is the present employer of the defendant) seeks to be joined to cross claim for damages from injunction - whether "sufficient interest" in the cause or matter - Principles discussed - National Court Rules O 5 rr 2, 5, & 8.

The defendant was a former employee of the plaintiff. Defendant currently employed by the intervener Daltek Pty Ltd which is seeking to intervene. The plaintiff sued the defendant for damages for breach of contract of employment. The plaintiff successfully obtained an injunction against the defendant restraining him for 6 months from being involved in the sales servicing or promotion of Nashua photocopying or facsimile machines whilst in the employ of Daltek Pty Ltd. Daltek seeks to be joined as a second defendant to enable it to cross-claim against the plaintiff for alleged damages suffered as a result of the injunctive Order affecting the defendant Andrew Thompson and further damages in costs attaching the plaintiffs undertaking as to damages given on its application for injunctive Orders against Andrew Thompson.

Held: 

(1) 	The words "cause or matter" in the National Court Rules means the action as it stands between the existing parties.

(2) 	The intervener is able to sue, perhaps on either the undertaking or any other cause of action as of right as it may be advised. It is not precluded from instituting separate proceedings and pleading any such right which it may assert notwithstanding the success or otherwise of the plaintiff case. The only reason which makes it necessary to add the name of a party to an action is so that the party may be bound by the result of the trial. The question to be settled must be a question which cannot be effectually and completely settled unless that party is so joined.
	Miguel Sarchez & Companion S.L. v. Result (Owners) (The Result) 1958 p.174 adopted.

(3) 	The intervener has insufficient interest in the cause or matter as it presently stands between the existing parties to justify an order that it be joined as a second defendant.

Cases cited:

The following cases are cited in the judgment:
Montgomery v. Foey Morgan & Co (1895) 2 QB 321.
Miguel Sanchez & Companion S.L. & Result (Owners)(The Result) supra Adopted.

Notice of Motion

The intervener by notice of motion seeks to be joined as a second defendant to allow it to cross-claim against the plaintiff damages arising from the injunctive Order against its employee and former employee of the plaintiff.

Mr W. Frizzel, for intervener
Mr P. Steele, for plaintiff.

Written Reasons

10 July 1991

BROWN J.: By notice of motion the intervener Daltek Pty Ltd sought to be joined as a second defendant in proceedings instituted by the plaintiff seeking damages from the defendant for alleged breach of a term of a contract of employment. In support of the notice of motion, an affidavit by a Director of Daltek deposed to the present employment by that company of the defendant, Andrew Thompson. Daltek says that the company has suffered loss as a consequence of an injunction originally given in the plaintiff's favour on the 28 February 1990 whereby the defendant Thompson was restrained for a period of six months from the 30 November 1989 from being involved directly or indirectly in the sales servicing or promotion of Nashua photocopying or facsimile machines whilst in the employ of Daltek. The plaintiff company had previously employed the defendant in that field.

Daltek Pty Ltd alleges loss or damage including -

a. Mr Thompson's salary;
b. Mr Thompson's accommodation;
c. Vehicle leased for Mr Thompson;
d. Additional accounting expense incurred;
e. Loss of profits during March to May 1990.

Daltek pleaded to be joined as a second defendant so that at the hearing of the claim by the plaintiff, the second defendant could effectively cross claim against the plaintiff for damages which it alleges its suffered as a result of the injunctive order affecting Andrew Thompson. Further the company seeks to claim damages in costs against the plaintiff relying on the plaintiff's undertaking as to damages given on its application for the injunctive orders against Andrew Thompson. 

Mr Frizzel, for the intervener, stated that Daltek was a third party affected by the injunction. The plaintiff, having given an undertaking as to damages is consequently liable to the intervener as a party likely to have suffered damage as a result of its loss of Mr Thompson's services as an employee. Consequently it would be appropriate to join Daltek as a defendant in these proceedings for Daltek is entitled to take proceedings on its own account. Mr Frizzel further referred me to O 5 r 2 of the National Court Rules as supporting his argument that the parties with an interest should be joined in the one set of proceedings.

Mr Steele for the plaintiff opposed the application stating that it was incompetent and misconceived. He stated that the Court had no jurisdiction to grant the application or in the alternative in the exercise of a discretion it should not in these circumstances. He stated that the plaintiff's undertaking as to damages related to damages suffered by the defendant Andrew Thompson as between the parties and that the intervener had no right to benefit in that undertaking given by the plaintiff to the Court.

Mr Steele argued that the relevant rules were O 5 r 2 (b) and O 5 r 8 (1)(b). Leave is required in relation to first mentioned rule and sub r 1(b) relates to the case where joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated upon. Mr Steele relied on r 8(1)(b) as this specific rule in these circumstances for in the absence of any contractual relationship Daltek cannot be joined in these proceedings for the plaintiff owes no duty to Daltek under the undertaking as to damages. The general power under r 2(b) must be read subject to this specific provision in r 5(1) or if under r 2 then the specific provision is r 8. Mr Steele referred me to the White Book where it defines cause or matter dealing as it does with the action between the existing parties and the case law touched on which included Montgomery v. Foey Morgan & Co (1895) 2 Q.B. 321 and Miguel Sanchez & Compania S.L. v. Result (Owners). (The Result) 1958 p. 174.

In that first mention case there was in fact a dispute between the respective parties as to the right to moneys deposited for freight and that while the Court ordered that the shippers of cargo should be added as defendants in the action in order they might claim against the plaintiff, damages for short delivery and injury to cargo, such joinder does not establish a general rule. Mr Steele distinguished that case. I am inclined to agree with him. The second case mentioned is authority for the plaintiff's assertion that the words "cause or matter" in the National Court Rules mean the action as it stands between the existing parties. In "the Result" the legal rights sought to be asserted by the party seeking to be joined were unaffected by the plaintiff's claim in the "cause or matter". The Court found that the only reason which makes it "necessary" to add the name of a party to an action is so that, that party may be bound by the result of the trial and the question to be settled must be a question which cannot be effectually and completely settled unless that party is so joined. The test which Mr Steele suggested the Court should apply is whether, by refusing to acceed to the intervener's request to be joined, would the Court's order directly affect the intervener's legal rights and not just his commercial interest. The plaintiff asserts that the matters in the affidavit of Daltek's director relate to commercial interests and not legal rights. In the case of Montgomery & Foey, joinder was permitted to enable the intervener to claim pursuant to a legal right. Mr Steele says that it is difficult to assert a legal right in the absence of any undertaking in favour of the intervener by the plaintiff.

I am satisfied that allowing the joinder of the intervener in these circumstances would protract this litigation. The intervener is able to sue, perhaps on either the undertaking or any other cause of action, as of right. It is not precluded from instituting proceedings and pleading any such right which it may assert notwithstanding the success or otherwise of the plaintiff's case. I adopt the reasoning in "The Result".

The intervener's argument is of no interest to the defendant Thompson. The intervener is not estopped from seeking to ground a cause of action on the undertaking, if the intervener considers the undertaking includes "strangers", even were the present litigation to be concluded. There may arise an argument over "issue estoppel" if the plaintiff was successful against any damages claimed by Mr Thompson, but I need not consider that possibility here. The intervener was also aware of the circumstances of the defendant's prior employment before it engaged the defendant and consequently may be seen to be in full knowledge of the possible effect of an injunctive order in the nature of that threatened by the plaintiff at the time it engaged Mr Thompson in employment.

I consequently find the intervener has insufficient interest in the cause or matter as it presently stands between the existing parties to justify an order that it be joined as a second defendant. I accordingly refuse leave to join the intervener and the motion must fail. The plaintiff/respondent shall have his costs of his application to be agreed or taxed.

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Lawyer for Intervener: Warner Shand Lawyers
Lawyer for Plaintiff: Steele Lawyers