1. The plaintiffs have filed this suit against the defendants to recover damages suffered by them in consequence of the defendants not taking proper delivery of a cargo of coals as they were bound to do under a contract made between the plaintiffs and defendants on the 30th January 1908.
2. The plaintiffs say that by that agreement defendants agreed to purchase from the plaintiffs 50,000 tons of coals, shipment January to May and August to December 1909, 5,000 tons monthly. I am told this agreement has been altered so as to extend the time to delivery of 25,000 tons in 1909 and 25,000 tons in 1910. But that is not material for the purpose of the summons.
3. On the 16th January 1909, the plaintiffs gave notice to defendants that the s. s. Blake had arrived in harbour with a cargo of 5,080 tons of coal; and tendered a delivery order in pursuance of the above mentioned agreement.
4. Delivery was taken of only 400 tons by the defendants or their assigns and the balance of the cargo was sold at defendants' risk. Hence the suit.
5. On the 25th day of May, the defendants obtained an order for the issue of a third party notice to Messrs. J.F. and B.F. Karaka, partners in the firm of Messrs. J.F. Karaka & Co.
6. The third party notice was issued on the 26th May Messrs. Karaka filed their appearance on 31st May.
7. On the 7th June the defendants took out a summons for third party directions. At the argument of the summons before me the plaintiffs adopted a purely neutral attitude, they did not allege that they would be in any way prejudiced or embarrassed by the introduction of the third parties into the suit.
8. Messrs. Karaka and Co. strongly objected to any directions being given on the summons.
9. Very lengthy affidavits have been filed but the main dispute between the defendants and the third parties appears to be that while defendants set up a contract between them and the third parties whereby the third parties agreed to buy from the defendants the Coals of which the defendants were under contract with the plaintiffs to take delivery in 1909, the third parties deny that any such contract had been made between them and the defendants and assert that the contract which did exist between them and the defendants was of quite a different nature. The general principle on which a Court will issue third party directions seems to be (1) that there must be a clear case of contribution or indemnity from the third party, (2) that all the disputes arising out of a transaction as between the plaintiffs and the defendants and between the defendants and a third party can be tried and settled in one action, and (3) that in cases of contract and sub-contract it must appear that the contract between the plaintiff and the defendant has been imported into the contract between the defendant and the third party. In this case if directions are given there must be a preliminary issue tried as regards the terms of the contract or contracts which existed between the defendants and the third parties. Until that has been decided it is impossible to say whether the contract between the plaintiffs and the defendants has been imported into a contract between the defendants and the third parties. This alone would be sufficient reason for the Court declining to give directions. But even if there was a clear case of indemnity I am satisfied that all the disputes between the defendants and the third party could not be jointly determined in this action: Baxter v. France (1895) 1 Q.B. 591. It has been urged by the defendants that there is one question which is common as between the plaintiffs and defendants and as between the defendants and Messrs. Karaka and Co., namely the quality of the coal which arrived in the s. s. Blake and that if this were so, it was most undesirable that this same question should have to be decided twice over in different suits. It was further urged that Messrs. Karaka and Co. knew all about the quality of the coal ex. s. s. Blake as they had taken delivery of some of it and defendants had only passed on to them the delivery order from the plaintiffs. The answer to this is that as the defendants themselves bought all the coal ex. s. s. Blake except the 400 tons taken delivery of by Messrs. Karaka and Co., they are in a better position to lead evidence as to its quality than Messrs. Karaka and Co. In England before 1883 if there was one question in the action, identical as between the plaintiff and defendant and as between the defendant and the third party the third party could have been cited so that he could be bound by the trial of that particular question, but that can no longer be done under the rules now in force, however desirable it might be, and the rules of the High Court are practically the same as the English rules.
10. In my opinion, this is clearly a case in which the Court should exercise its discretion in refusing to give third party directions. The summons is discharged and the third parties must be dismissed from the action. The defendants must pay the costs of the third parties and the plaintiffs. Summons discharged.