When a party is sued, it is not uncommon for it to look to join a third party to the proceeding, on the basis that that party also contributed to the loss at issue.  However, joinder is not an automatic right, as the High Court recently made clear in Marley New Zealand v Skellerup Rubber Services [2013] NZHC 1443.

The case concerned a claim by Marley, a manufacturer of PVC pipes, against the manufacturer, Skellerup, of rubber rings which serve as seals in those pipes.  Marley claimed that the rings were not watertight and led to leaks.

Skellerup sought to join as third parties to the proceeding two companies responsible for the installation of the pipes.  They responded by applying to have the notices of joinder set aside.  In order to succeed, they had to show that Skellerup's claim for contribution was not arguable and had no possibility of success.

The Court noted that in order for the joinder to be permitted, Skellerup had to establish that the installers also owed a duty of care to Marley and that, although that duty did not need to be the same as that owed by Skellerup, the installers had to be liable in respect of the same damage Marley had claimed for.

The Court found that Skellerup was unable to satisfy this test, holding that: 

  • There was no established duty of care owed by installers to a business in Marley's position.  Therefore, the alleged duty would be a novel one
  • A key consideration in determining whether such a novel duty should be imposed was whether a reasonable person in the shoes of the installers could be expected to have Marley in contemplation as a person who would be materially affected by poor installation
  • This threshold had not been met.  The installation work was not being carried out for Marley and Marley had no part in the installation
  • There were no policy reasons as to why a duty should be imposed.  Moreover, the fact that the parties were commercial entities and their relationship was governed by contract, negated the existence of a duty of care.

While third party joinders are relatively common, the decision emphasises the value for a potential third party in carefully analysing and – when appropriate – challenging a claim for contribution on procedural grounds as soon as it is served.  As a result of the decision (barring an appeal) the installers have been spared the time and expense of involvement in the High Court proceedings that will continue as between Marley and Skellerup.