FEDERAL COURT OF AUSTRALIA

Sherrin Hire Pty Ltd v Tidd Ross Todd Ltd (No 3) [2017] FCA 181

ORDERS

THE COURT ORDERS THAT:

1.    Leave be granted to the cross-claimants to amend their Cross-Claim so as to include therein a claim against the first cross-respondent (Sherrin Rentals Pty Ltd) based upon cl 22.3 of the contract between the cross-claimants and the first cross-respondent dated 16 September 2005, which leave was previously provisionally granted by Edelman J on 9 August 2016.

2.    The Interlocutory Application filed by the cross-claimants on 28 February 2017 otherwise be dismissed.

3.    The cross-claimants pay the costs of the first cross-respondent of and incidental to the said Interlocutory Application.

4.    Leave be granted to the cross-claimants to discontinue their Cross-Claim insofar as it includes claims against Michael Patrick Sherrin.

5.    Any Notice of Discontinuance filed pursuant to the leave granted in Order 4 above be filed and served by 3 March 2017.

6.    The question of costs arising from the discontinuance of the cross-claimants’ Cross-Claim against Mr Sherrin be reserved to the Trial Judge.

7.    By 3 March 2017, the cross-claimants file and serve an Amended Cross-Claim incorporating the amendment in respect of which leave has been granted pursuant to Order 1 above.

8.    By 10 March 2017, the first cross-respondent file and serve its Defence to the Amended Cross-Claim.

9.    By 14 March 2017, the cross-claimants file and serve their Reply (if any) to the first cross-respondent’s Defence to Cross-Claim.

10.    The proceeding be listed for further case management at 9.30 am on 3 March 2017 before Foster J.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

FOSTER J:

1    Tidd Ross Todd Ltd (TRT), a New Zealand company, and its wholly owned Australian subsidiary TRT (Aust) Pty Ltd (TRT Aust) (together, the TRT companies), have applied to the Court to amend their Cross-Claim which was filed in this proceeding (NSD 379 of 2014) on 16 February 2016. In essence, the TRT companies wish to make significant changes to their Cross-Claim in order to raise a new case for damages for breach of contract against Sherrin Rentals Pty Ltd (ABN 52 074 173 756) (old Sherrin). In addition, the TRT companies wish to discontinue or abandon that part of their Cross-Claim which involves a case against Michael Patrick Sherrin (Mr Sherrin) who is the principal of old Sherrin. They gave notice of their intention to abandon that claim some time ago but have not taken the appropriate formal steps to put that intention into effect.

2    As the Cross-Claim presently stands, the TRT companies have also made claims against Panalam Technologies Limited (Panalam), which is a New Zealand company. The present application does not concern Panalam nor do the TRT companies seek to change the terms of the Cross-Claim as against that party.

3    For reasons which follow, I propose to refuse the TRT companies’ application to amend with costs.

Background

4    Sherrin Hire Pty Ltd (Sherrin Hire) is a wholly owned subsidiary of Boom Logistics Limited (Boom Logistics). It carries on the business of hiring cranes, elevating work platforms (EWPs) and other work access equipment on both short-term and long-term hiring arrangements.

5    Old Sherrin (formerly called Sherrin Equipment Pty Ltd) once traded in Australia as the manufacturer and supplier of Sherrin brand truck-mounted Model 18 “glove and barrier” boom supported EWPs (the Sherrin EWP).

6    Sherrin Equipment Pty Ltd (ABN 39 083 732 012) (new Sherrin) trades in Australia as the manufacturer and supplier of the Sherrin EWP.

7    In about March 2005, Boom Logistics entered into negotiations with Mr Sherrin with a view to Boom Logistics purchasing the entire undertaking of Sherrin Hire by acquiring all of the issued capital of Sherrin Hire from Mr Sherrin and entities related to him.

8    On or about 27 June 2005, Mr Sherrin and Boom Logistics executed a Call Option Deed and Share Sales Agreement. Clause 9.8 of the Share Sales Agreement gave Sherrin Hire a right of first refusal to purchase all Sherrin EWPs manufactured and sold by old Sherrin or by new Sherrin.

9    In the period from about November 2005 to March 2008, Sherrin Hire agreed to purchase ten Sherrin EWPs from old Sherrin and six Sherrin EWPs from new Sherrin. These EWPs were delivered to Sherrin Hire from time to time in the period from 2006 to 2008. Additional Sherrin EWPs were subsequently acquired by Sherrin Hire through financial acquisitions. All of these purchases were made pursuant to separate contracts in writing, although the transactions were contemplated by the June 2005 arrangements referred to at [8] above.

10    In 2006 and subsequently, Sherrin Hire discovered a number of defects in the Sherrin EWPs which it had purchased from old Sherrin and new Sherrin. These defects were said to have resulted from negligent design, negligent manufacture or a combination of the two.

11    On 11 November 2011, Sherrin Hire instituted a proceeding in this Court (NSD 1981 of 2011) (the 2011 proceeding) against old Sherrin, Mr Sherrin and new Sherrin for damages for breach of contract, damages in tort for negligent design and damages for misleading and deceptive conduct, relying upon ss 52, 82 and 87 of the Trade Practices Act 1974 (Cth). The latter statutory cause of action is founded upon misrepresentations allegedly made by Mr Sherrin to representatives of Boom Logistics during the course of the dealings between Boom Logistics and Mr Sherrin in 2005.

12    Mr Sherrin, old Sherrin and new Sherrin are defending the 2011 proceeding. Those parties have raised proportionate liability defences in that proceeding. Some of those defences rely upon the conduct of the TRT companies in relation to the manufacture of the defective Sherrin EWPs. Other proportionate liability defences rely upon the conduct of Panalam and Innovation Lamination (NZ) Limited (Innovation) in relation to the design and/or manufacture of the defective Sherrin EWPs. Innovation is not a party to either of the proceedings now before the Court.

13    In addition, on 9 December 2013, old Sherrin, new Sherrin and Mr Sherrin filed a Notice of Cross-Claim against the TRT companies, Panalam and another New Zealand company, Arotahi Trading Limited (Arotahi). All of those companies are based in New Zealand. Only TRT Aust was incorporated in Australia.

14    In their Cross-Claim in the 2011 proceeding, old Sherrin, new Sherrin and Mr Sherrin claim damages or contribution against each of the cross-respondents upon the basis that they were all concurrent wrongdoers with old Sherrin, new Sherrin and Mr Sherrin and were, in any event, liable in tort for negligence in the design and manufacture of the Sherrin EWPs.

15    The TRT companies are actively defending this Cross-Claim, as is Panalam, at the moment. I have been informed that there is some possibility that Panalam will not participate in the trial. Arotahi has been served with the Cross-Claim but has not taken any part in the proceeding.

16    The TRT companies’ Defence to Cross-Claim was filed on 8 May 2014.

17    On 14 April 2014, Sherrin Hire instituted this proceeding (NSD 379 of 2014). The respondents in this proceeding are the TRT companies, Panalam and Arotahi.

18    In this proceeding, Sherrin Hire seeks to make the TRT companies, Panalam and Arotahi directly liable to it as concurrent wrongdoers vis-à-vis it, together with Mr Sherrin, old Sherrin and new Sherrin, in respect of the same defects as are the subject of the 2011 proceeding. In addition, as against the TRT companies, Sherrin Hire maintains an action for damages for negligent design and/or negligent manufacture in respect of those defects.

19    Since September 2015, the TRT companies have been endeavouring to obtain the leave of the Court to file and serve a Cross-Claim or, as the case may be, amend their Cross-Claim in this proceeding against old Sherrin and against Mr Sherrin. To some extent these efforts have proceeded in parallel with efforts undertaken by Sherrin Hire to amend its Statement of Claim in the 2011 proceeding. The history of these amendment applications in that proceeding is catalogued by Edelman J in his Honour’s judgment published on 15 October 2015 (Sherrin Hire Pty Ltd v Sherrin Rentals Pty Ltd [2015] FCA 1107 (Sherrin No 1) at [4]–[31]) and also in his Honour’s judgment published on 9 August 2016 (Sherrin Hire Pty Ltd v Tidd Ross Todd Ltd (No 2) [2016] FCA 891 (Sherrin No 2) at [2]–[10]).

20    The only Cross-Claim in this proceeding which was ever actually filed by the TRT companies was, as I have already mentioned, filed on 16 February 2016. That version was, in fact, the TRT companies’ second attempt at propounding a viable Cross-Claim.

21    In opposition to the TRT companies’ application for leave to amend their Cross-Claim, old Sherrin and Mr Sherrin read and relied upon the affidavit of Marguerite Jessica Xavier sworn on 24 February 2017. Senior Counsel for the TRT companies also placed reliance upon material in that affidavit. I was also provided by Senior Counsel for old Sherrin and Mr Sherrin with a Chronology which recorded the history of the TRT companies’ endeavours to bring forward a viable Cross-Claim.

22    As is demonstrated by the evidence of Ms Xavier and by the Chronology, during the period between March 2016 and February 2017, the TRT companies served a further eight iterations of their proposed Cross-Claim. None of those iterations was the subject of any consent from old Sherrin or Mr Sherrin nor did any of them find favour with the Court.

The Principles Governing Leave to Amend

23    In Sherrin No 2, at [11], Edelman J said:

It is well established that the Court has a broad power to grant leave to amend, consistently with the overarching purpose to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: Federal Court of Australia Act 1976 (Cth) s 37M(1). In Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm), in the matter of Tamaya Resources Limited (in liq) [2015] FCA 1098 [127], Gleeson J summarised the relevant factors to be considered in this Court, deriving from Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 and Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75. The principles were approved by the Full Court in Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2 [125] (the Court). It is unnecessary to repeat them because it became common ground between the parties that this application would rise or fall based upon whether the pleading in relation to the “indemnity” was doomed to fail.

24    I agree with his Honour that Gleeson J helpfully summarised the relevant principles emanating from Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (see Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm), in the matter of Tamaya Resources Limited (in liq) [2015] FCA 1098 (Tamaya)) and that the Full Court in Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (A Firm) (2016) 332 ALR 199 at 221 [125] endorsed her Honour’s exposition of those principles.

25    At [125]–[128] in Tamaya, Gleeson J said:

The applicable principles are well established. The Court’s powers in rules 8.21(1) and 16.53 are broad. Consideration of whether to grant leave to amend must be undertaken in accordance with the overarching purpose set out in s 37M(1) of the Federal Court Act: Australian Competition and Consumer Commission v Jutsen (No 2) [2010] FCA 982 at [12]; Suzlon Energy Ltd v Bangad [2011] FCA 92; (2011) 196 FCR 259 at [19]; University of Sydney v ResMed Limited (No 5) [2012] FCA 232 at [14]; Bowen Energy Ltd v 2KD Drilling Pty Ltd [2012] FCA 275 at [8].

The onus is on the party seeking leave to amend to persuade the Court that such leave should be given: Dye v Commonwealth Securities Ltd (No 2) [2010] FCAFC 118 at [17].

The principles articulated by the High Court in Aon apply to matters in this Court: Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 (“Cement Australia”) at [43]. Relevant matters the Court is to consider include:

(1)    The nature and importance of the amendment to the party applying for it: Aon at [102];

(2)    The extent of the delay and the costs associated with the amendment: Aon at [102];

(3)    The prejudice that might be assumed to follow from the amendment, and that which is shown: Aon at [5], [100] and [102];

(4)    The explanation for any delay in applying for that leave: Aon at [108]; and

(5)    The parties’ choices to date in the litigation and the consequences of those choices: Aon at [112] and Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75 (“Luck”) at [44];

(6)    The detriment to other litigants in the Court: Aon at [93], [95] and [114] and Luck at [44]; and

(7)    Potential loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification: Aon at [5], [24] and [30].

The weight to be given to the considerations identified in Aon, individually and in combination, and the outcome of the balancing process, may vary depending on the facts in the individual case: Cement Australia at [51].

26    Here, in addition to the factors listed by her Honour at [127], there are strong reasons for the Court to conclude that the case sought to be made by the TRT companies in the proposed Amended Cross-Claim (ACC) is hopeless or close to hopeless.

The proposed amended cross-claim

27    As I have already mentioned, the TRT companies wish to maintain their case against Panalam as currently pleaded. The present application does not involve any alteration to that case. Accordingly, the current pleading against that company will stand without alteration.

28    In addition, the TRT companies have raised a claim for indemnity founded upon cl 22.3 of an agreement entered into between the TRT companies and old Sherrin dated 16 September 2005 (the 2005 Agreement). That claim is made in pars 10, 11 (in part) and 15 of the ACC. Justice Edelman had previously indicated to the parties that he was prepared to allow that claim to go to trial. I have not undertaken any reconsideration of that claim. In the circumstances, that claim should go to trial as indicated by his Honour.

29    The remaining claims sought to be made in the ACC are confined to claims against old Sherrin only for damages for breach of contract. The contract in question is the 2005 Agreement.

30    The TRT companies rely in particular upon cl 4.4 of the 2005 Agreement as giving rise to enforceable contractual obligations on the part of old Sherrin undertaken by it for the benefit of the TRT companies which, so it is alleged, were breached by old Sherrin in the respects outlined in the ACC.

31    Paragraph 9 of the ACC is in the following terms:

The 2005 Agreement

9.    Pursuant to a written agreement between the Cross-Claimants and the First Cross-Respondent dated 16 September 2005 (the Agreement), the First Cross-Respondent expressly contracted:

a.    pursuant to clause 4.4, to be responsible for all signwriting, commissioning, producing and supply of the operating manuals, design verification and all training in respect of the operation of the Travel Towers (defined in the 2005 Agreement as being truck or trailer mounted elevated work platforms);

b.    further to clause 4.4, it was inferred that being responsible for the matters in 9(a) above, was an obligation on the First Cross-Respondent to ensure that:

i.    the commissioning of the Travel Towers resulted in a safe and functional operating piece of plant and equipment that met the agreed design, manufacturing, purchaser and regulatory requirements for the use and operation of the Travel Towers in Australia; and/or

ii.    the design verification was that the Travel Towers were in accordance with all regulatory requirements in Australia.

32    Leaving aside for the moment the cl 22.3 indemnity argument, it is in par 9 that the TRT companies specify the contractual obligations relied upon by them to support their contract case and the source of those obligations.

33    Clause 4.4 of the 2005 Agreement is in the following terms:

SE [referring to old Sherrin] is responsible for all sign writing, commissioning, producing and supply of the operating manuals, design verification and all training in respect of the operation of the Travel Towers.

34    In effect, the TRT companies contend that by cl 4.4 there was imposed on old Sherrin a contractual obligation to ensure that the commissioning of the Sherrin EWPs produced the result described in par 9b.i and further to ensure that the design verification of the Sherrin EWPs complied with all regulatory requirements in Australia. The TRT companies then contend that these obligations were breached in the present case leading to the loss claimed in the ACC, namely, the amount for which the TRT companies might be found to be liable to Sherrin Hire in respect of the claims made by Sherrin Hire in this proceeding.

35    It may immediately be observed that par 9b amounts to an allegation that, in some fashion which is completely obscure and which is not articulated (but which is “… further to cl 4.4 …”) and which is said to be upon the basis that cl 4.4 provided that old Sherrin would “… be responsible …” for the commissioning and design verification of the Sherrin EWPs, old Sherrin took on additional binding contractual obligations to ensure that the “results” described in subpars i and ii of par 9b were actually achieved. This allegation is not pleaded as an allegation that, upon the true construction of cl 4.4, old Sherrin had such obligations to ensure those results. Nor is it said to be an implied term. Rather, the TRT companies appear to be contending that these additional obligations “… may be inferred …” as arising from the text of cl 4.4. Such a plea is embarrassing and not anchored in any comprehensible principle of law. There is no sound basis upon which this plea could be allowed to stand.

36    It is not for me at the moment to express any final views as to the true construction of cl 4.4 of the 2005 Agreement. However, a number of matters should be noted as matters which might, in due course, be considered as pertinent to the question of the true construction of that clause. These are:

(a)    In Recitals A and B in the 2005 Agreement, reference is made to an earlier agreement dated 21 September 2004 between the same parties which, according to Recital B, was replaced and superseded entirely by the 2005 Agreement. The existence and terms of the September 2004 agreement were facts and matters known to both the TRT companies and old Sherrin in September 2005 when they entered into the 2005 Agreement.

(b)    TRT is described in the 2005 Agreement as the manufacturer of the Sherrin EWPs. It is not described as the designer of those EWPs.

(c)    Recital F is in the following terms:

This Agreement does not cover in detail the designs and specifications of the various Travel Towers models which TRT has agreed to manufacture and supply as such designs and specifications are subject to further discussions/agreements between the parties.

(d)    There is a definition of “Specifications” in cl 2.8.

(e)    Clause 3 contains the principal obligation of the TRT companies under the agreement, which is to manufacture and supply the Sherrin EWPs for the price set out in cl 10.

(f)    Clause 4 is headed “Travel Tower Models”. It deals with the specifications for the Sherrin EWPs and, to some extent, fleshes out the concept of “commissioning” found in cl 4.4. I have in mind, in particular, the terms of clause 4.3, which provide:

TRT will supply each Travel Tower model as a complete unit functionally tested, painted, plumbed and wired and fitted to a truck to be agreed by TRT and which SE [referring to old Sherrin] agrees to supply. TRT will paint all Travel Towers (excluding the truck) in two colours, black and white.

(g)    Clause 8 deals with the designs and drawings of the Sherrin EWPs. A fair reading of cl 8 in its entirety suggests that, as between the TRT companies and old Sherrin, the responsibility for preparing or organising the preparation of designs and drawings rested with old Sherrin, subject to the possibility of TRT playing a subsidiary role in design as contemplated by cl 8.5.

(h)    The price to be paid for the Sherrin EWPs did not, other than through the mechanism specified in cl 8.5, involve any payment for design work.

(i)    Clause 13.3 provides that TRT gave no warranty in respect of the design of the Sherrin EWPs.

37    When all of these matters are considered, as well as the context in which the 2005 Agreement was signed, two questions concerning the construction of cl 4.4 arise.

38    First, there is a question whether cl 4.4 applies to anything other than the operating manuals.

39    Second, as I have already discussed at [35] above, there is a real question as to whether, pursuant to cl 4.4, old Sherrin undertook a binding contractual obligation of a promissory nature to do anything at all, let alone to ensure that the asserted results were actually achieved. It seems to me that it is strongly arguable that all that cl 4.4 is doing is setting out, in effect, the line of demarcation between the parties’ responsibilities for various things in the development of the design, manufacture and supply of the Sherrin EWPs. I think that it is strongly arguable that the clause simply states for the benefit of the parties to the 2005 Agreement that certain matters are the responsibility of old Sherrin but does not impose a contractual obligation in the sense of a binding promise to do anything upon which TRT could rely or ultimately sue.

40    Paragraph 14 of the ACC contains the allegations of breach. Those allegations are directed to breaches of the alleged commissioning obligation and of the alleged design verification obligation.

41    In par 14a of the ACC, the pleader addresses the breaches of the alleged commissioning obligations. The TRT companies there allege that old Sherrin “… failed to ensure [that] the commissioning of the [Sherrin EWPs] resulted in a safe and functional operating piece of plant and equipment that met the agreed design, manufacturing, purchaser and regulatory requirements for the use and operation of [EWPs] in Australia”. The particulars of this breach (an alleged “failure to ensure” certain outcomes) comprise a catalogue of descriptions of various defects.

42    A similar approach is taken with the allegations of breach in respect of design verification (as to which, see par 14b and the particulars provided in respect of that paragraph).

43    All of the allegations concerning the commissioning obligation are entirely new. They have not previously been made in this proceeding at all. The design verification allegations are, to some extent, related to matters raised by the TRT companies in their Defence to the Cross-Claim made against them by old Sherrin and new Sherrin in the 2011 proceeding. So, to that extent, those allegations are not entirely new, although the framework in which they are now made is entirely new.

44    In addition, the allegations made in par 14 do not descend into any detail at all as to what it was either by act or omission that old Sherrin did or did not do which constituted the breaches of the alleged contractual terms. I suspect that providing details such as that would be impossible in the present case because the true meaning of the 2005 Agreement is not that which is reflected in par 9b of the ACC. Nonetheless, details of the acts or omissions relied upon are simply not pleaded.

45    A significant problem arises when one considers par 16 of the ACC. That paragraph purports to be a pleading of the necessary causal link between the alleged breaches in par 14 and the loss which is claimed. Paragraph 16 is in the following terms:

Further, or in the alternative, to paragraph 15 above, in the premises, the First Cross-Respondent as a result of the breaches, or any of them, pleaded in paragraph 14 above, is liable to the Cross-Claimants for damages for breach of clause 4.4 of the 2005 Agreement in an amount equal to any damages or liability found to be owing by the Cross-Claimants to the Applicant upon determination of the Statement of Claim.

46    In other words, in the event that the TRT companies are found liable to Sherrin Hire for either negligent design or negligent manufacture or both in respect of the claimed defects, the TRT companies seek contractual damages for breach of cl 4.4 in the nature of an indemnity against their liability to Sherrin Hire. No facts, matters or circumstances are articulated in the ACC which would justify an allegation that the loss claimed is in any way causally linked to the breaches alleged.

47    In addition, when one thinks about it, the only circumstance in which the TRT companies’ claim for damages by way of indemnity could be invoked is if the TRT companies are actually found liable to Sherrin Hire. Obviously, that will only happen if those companies breached some duty or obligation owed to Sherrin Hire in respect of the design or manufacture of the Sherrin EWPs. If the TRT companies were found liable as alleged, it seems very unlikely that the Court would uphold the present claim sought to be made by the TRT companies against old Sherrin for failing to detect, in effect, the breaches of duty committed by the TRT companies vis-à-vis Sherrin Hire. They would be seeking indemnity, in effect, against the consequences of their own breaches of duty.

48    For the above reasons, I consider that the case now sought to be made in the ACC is hopeless or close to hopeless.

49    Given that the trial of both the 2011 proceeding and this proceeding is imminent (it is currently due to commence within three to four weeks) and given that it is a joint trial, I consider that, in order to justify leave being granted to file and rely upon the ACC at this late stage, the TRT companies would need to persuade the Court that the case which they now seek to make in the ACC is not only arguable but has some prospects of success. I do not think that the TRT companies have discharged that burden.

Discretion

50    The parties have filed Written Submissions directed to the present application and they will remain with the file. They also made oral submissions yesterday designed to amplify and supplement their Written Submissions.

51    It is not necessary, in light of those matters, and in light of the evidence read on the present application, for me to traverse the sorry history of the TRT companies’ endeavours to bring forward a viable Cross-Claim. It is sufficient for present purposes for me to note that many attempts to propound a viable Cross-Claim have been made over the course of many months, all unsuccessfully. In addition, the current proposed causes of action are, in the case of the commissioning claim, entirely new and, in the case of the design verification claim, substantially new, in the sense that at no time before the present application did the TRT companies seek to rely upon some obligation on the part of old Sherrin in respect of design verification as a source of a claim for damages for breach of contract.

52    The general practice of the Court, informed by the Federal Court Rules 2011, is that a Cross-Claim should be filed at about the same time as the party’s Defence. The TRT companies’ Cross-Claim should have been filed in 2014. No real effort was made to bring forward a Cross-Claim until September 2015 and none was actually filed until February 2016. Now, just before the commencement of the trial, those companies seek to introduce a vastly different case against old Sherrin from the cases previously sought to be relied upon.

53    There has been substantial and unacceptable delay on the part of the TRT companies in bringing forward the case which they now wish to run against old Sherrin and that delay has not been explained at all, let alone satisfactorily.

54    I have considered the likely impact of allowing the ACC, were I minded to do so, on the trial and on the costs to be incurred by the parties in respect of the trial.

55    It is probably correct that old Sherrin could, with a significant and immediate application of time and resources, meet at the upcoming trial at a factual level the cases which are now sought to be brought against it by the TRT companies. However, that is not the whole story.

56    Old Sherrin would need to investigate, perhaps not for the first time, a significant number of events which took place more than ten years ago in order to ascertain what was done or not done in relation to both commissioning and design verification, to consider whether expert evidence was required and then to obtain that evidence in due course. It seems to me that this would lead to additional expense and an application of resources by old Sherrin which would add significantly to its costs burden. In addition, requiring it to meet this new case would constitute a serious distraction from what by now must be a busy pre-trial preparation period designed to deal with the current case.

The Case Against Mr Sherrin

57    When they brought forward the ACC, the TRT companies made clear that they no longer wish to press any case against Mr Sherrin personally. It seems to me that they took the view that merely deleting him as a named party in the ACC was sufficient to bring to an end the proceeding which they had instituted against him. In my view, however, if the TRT companies are to cease action against Mr Sherrin, they should discontinue or abandon their Cross-Claim insofar as it pleads and presses a case against him personally. I will provide for the discontinuance of that claim in the orders which I will make. I will reserve the question of costs of any such discontinuance to the trial for consideration by the trial judge at the same time as he or she is considering all of the other matters raised in this litigation.

Conclusion

58    Having regard to the weakness of the case, the delay in bringing forward the ACC and the significant disruption that would be caused were I to grant leave to the TRT companies to file and rely upon the ACC, I propose to refuse leave to do so. I except from that conclusion the cl 22.3 claim.

59    There will be orders accordingly.

Associate:

Dated:    3 March 2017

SCHEDULE OF PARTIES