CHAPTER IX.

THIRD PARTY (a).

(a) The "third party procedure," which is applicable where a defendant claims to be entitled to contribution or indemnity over against a person not already a party to the action, or against a co-defendant, is regulated by O. XVI. rr. 48–55, and is based upon the Judicature Act, 1873, s. 24 (3), cited “Counterclaims," ante, p. 571. It is quite distinct from the procedure under the same sub-section by way of counterclaim against the plaintiff and a third person (or co-defendant) joined as defendant along with the plaintiff to the counterclaim. The latter procedure can only be adopted in cases where the relief sought by the counterclaim is such as affects or concerns the plaintiff so as to be claimable against him as well as against the person joined as defendant along with him to the counterclaim.

The third party procedure applies only in cases where a defendant claims contribution or indemnity against a third person or co-defendant (see O. XVI. rr. 48-55, and the form of notice in the text); and it is consequently inapplicable in cases where the defendant's claim against a person sought to be made liable as a third party is not substantially a claim for contribution or indemnity in respect of the plaintiff's claims in the action (Pontifex v. Foord, 12 Q. B. D. 152; 53 L. J. Q. B. 321; Speller v. Bristol Steam Nav. Co., 13 Q. B. D. 96; 53 L. J. Q. B. 322; Catton v. Bennett, 26 Ch. D. 161; 53 L. J. Ch. 685; Carshore v. N. E. Ry. Co., 29 Ch. D. 344; Birmingham Land Co. v. L. & N. W. Ry. Co., 34 Ch. D. 261; see also Horwell v. London General Omnibus Co., 2 Ex. D. 365). As to what amounts to a claim for indemnity, see further Lampleigh v. Brathwait, 1 Smith's L. C. 10th ed., p. 136; Hornby v. Cardwell, 8 Q. B. D. 329; 51 L. J. Q. B. 89; Indemnities," ante, p. 232; Hammond & Co. v. Bussey, 20 Q. B. D. 79. As to claims for contribution between co-sureties and joint-contractors, see Money Paid," ante, p. 291, and Leake on Contracts, 3rd ed., pp. 59, 60.

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By O. XVI. r. 48, Where a defendant claims to be entitled to contribution or indemnity over against any person not a party to the action, he may, by leave of the Court or a judge, issue a notice (hereinafter called the third-party notice) to that effect, stamped with the seal with which writs of summons are sealed. A copy of such notice shall be filed with the proper officer and served on such person according to the rules relating to the service of writs of summons. The notice shall state the nature and grounds of the claim, and shall, unless otherwise ordered by the Court or a judge, be served within the time limited for delivering his defence. Such notice may be in the form or to the effect of the Form No. 1 in Appendix B., with such variations as circumstances may require, and therewith shall be served a copy of the statement of claim, or if there be no

statement of claim, then a copy of the writ of summons in the action." See the form of notice set out in the text, which may easily be adapted to the requirements of the particular case.

The defendant's claim against the third party for contribution or indemnity need not be co-extensive with the whole of the plaintiff's claim against the defendant (see O. XVI. r. 52, cited infra; Pontifex v. Foord, supra), and leave may be granted to serve a third party notice even where the indemnity was not given till after action brought (Edison, &c. Co. v. Holland, 33 Ch. D. 497). If there is a bona fide claim for contribution or indemnity, leave to serve the notice may be granted without inquiring into the validity of the claim. (Ib.)

Where a third party desires to dispute the defendant's liability to the plaintiff's claim, or his own liability to the defendant for contribution or indemnity, he must enter an appearance in the action within eight days from the service of the notice. (See O. XVI. r. 49.) As to the effect of default in entering such appearance, see O. XVI. rr. 49–51. The fact of his so appearing will not preclude him from raising any objections which he may have to the third-party proceedings against him on the hearing of a summons for directions under r. 52, cited infra (Benecke v. Frost, 1 Q. B. D. 419, 421; 45 L. J. Q. B. 693; Pontifex v. Foord, supra; Jones v. Elderton, W. N. 1884, p. 39; Baxter v. France, (1895) 1 Q. B. 455; 64 L. J. Q. B. 335); and it would seem that the proper time for raising such objections is upon the hearing of such summons (Baxter v. France, supra.)

By O. XVI. r. 52, "If a third party appears pursuant to the thirdparty notice, the defendant giving the notice may apply to the Court or a judge for directions, and the Court or judge, upon the hearing of such application, may, if satisfied that there is a question proper to be tried as to the liability of the third party to make the contribution or indemnity claimed, in whole or in part, order the question of such liability, as between the third party and the defendant giving the notice, to be tried in such manner, at or after the trial of the action, as the Court or judge may direct; and, if not so satisfied, may order such judgment as the nature of the case may require to be entered in favour of the defendant giving the notice against the third party."

On an application for directions under r. 52, the refusal of such directions has the effect of putting an end to the proceedings against the third party. (Schneider v. Batt, 8 Q. B. D. 701; 50 L. J. Q. B. 525; Baxter v. France, (1895) 1 Q. B. 591; 64 L. J. Q. B. 337.) Directions will not, in general, be given where there would remain a dispute arising out of the same transaction between the defendant and the third party to be tried in another action even if directions were given as asked in the original action. (Baxter v. France, supra.) If the third party, on an application for directions under r. 52, does not set up any defence to the defendant's claim, and it does not appear that there is any question to be tried as to his liability, judgment may be ordered to be entered for the defendant against the third party, where the defendant's claim against the third party is a liquidated one. (Gloucestershire Banking Co. v. Phillipps, 12 Q. B. D. 533; 53 L. J. Q. B. 493; Bell v. Von Dadelszen, W. N. 1883, p. 208.) But judgment will not be ordered against a third party on a summons under r. 52, where he sets up a bona fide counterclaim of equal or greater amount against the defendant, such as might have been properly set up and disposed of in an action brought by the defendant against the third party for the same cause. (Caister v. Chapman, W. N.

B.L.

Q Q

1884, p. 31; Borough v. James, 1b., p. 32.) Where a person not already a party to the action has been added, under O. XVI. r. 48, as a third party, he cannot counterclaim against the plaintiff in the action, and it seems that this is so, even where the third party has obtained leave to defend the action under r. 53, below cited (Eden v. Weardale Colliery Co., 28 Ch. D. 333; 35 Ib. 287; 54 L. J. Ch. 384; 56 lb. 178; Alcoy v. Greenhill, (1896) 1 Ch. 19; 65 L. J. Ch. 99); but it has been held that he might counterclaim against the defendant (Borough v. James, W. N. 1884, p. 32; Re Salmon, 42 Ch. D. 354; but see Eden v. Weardale, supra).

If the defendant does not apply for directions under r. 52 within a reasonable time after the third party has appeared in the action, the third party may apply to be dismissed from the action, and to have the proceedings against him set aside with costs.

A married woman may properly be made a third party in respect of her separate estate. (Gloucestershire Banking Co. v. Phillipps, supra.)

By O. XVI. r. 53, "The Court or a judge upon the hearing of the application mentioned in Rule 52, may, if it shall appear desirable to do so, give the third party liberty to defend the action, upon such terms as may be just, or to appear at the trial and take such part therein as may be just, and generally may order such proceedings to be taken, documents to be delivered, or amendments to be made, and give such directions as to the Court or judge shall appear proper for having the question most conveniently determined, and as to the mode and extent in or to which the third party shall be bound or made liable by the judgment in the action."

After service of the third party notice, the third party is deemed a party to the action, and has the same rights in respect of his defence against the defendant's claim as if he had been sued in the ordinary way by such defendant. (Jud. Act, 1873, s. 24 (3), cited ante, p. 571; Hornby v. Cardwell, supra.) He may therefore contest the defendant's claim against him on any ground which he would be entitled to set up as a defence to an action for the same cause brought against him by the defendant after satisfaction of the plaintiff's claim in the original action. (See O. XVI. rr. 48-55, and the form of notice in the text.) As to whether he is entitled to set up a counterclaim against the defendant, vide supra.

It seems doubtful whether a person brought in as a third party can properly bring in as a fourth party a person who has contracted to pay him a contribution or to indemnify him in respect of the defendant's claim, although this has been allowed to be done in some cases. (Walker v. Balfour, 25 W. R. 511; Yorkshire Waggon Co. v. Newport Coal Co., 5 Q. B. D. 268; 49 L. J. Q. B. 527; though see Fowler v. Knoop, W. N. 1877, p. 68; 36 L. T. 219; Witham v. Vane, 49 L. J. Ch. 242, and 1 Chitty's Practice, 14th ed., p. 423.)

If the third party disputes the defendant's liability to the plaintiff's claim, directions may be given that the third party shall have liberty to defend against the plaintiff's claim in the action (see r. 53, above cited; Coles v. Civil Service Ass., 26 Ch. D. 529; 53 L. J. Ch. 638; Callender v. Wallingford, 53 L. J. Q. B. 569; Fowler v. Knoop, supra; Eden v. Weardale Colliery Co., supra; Barton v. London & N. W. Ry. Co., 38 Ch. D. 144; 57 L. J. Ch. 676; Edison Co. v. Holland, 41 Ch. D. 28), and in such case pleadings may be ordered to be delivered between him and the plaintiff, where the pleadings delivered between the plaintiff and the defendant do not sufficiently raise the questions to be tried (see Ib.).

Where the third party obtains leave to defend the action against the plaintiff he will in general be allowed to defend the action upon any ground which would have been available to the original defendant as a defence to the plaintiff's claim (Callender v. Wallingford, supra; Eden v. Weardale Colliery Co., supra), unless as regards any set-off or counterclaim which the latter may have had against the plaintiff. It seems that the leave given him to defend the action will not entitle him to set up a counterclaim on his own account against the plaintiff. (Vide supra.)

Where it appears desirable that the question of the third party's liability to the defendant should be raised by pleadings, pleadings may be ordered to be delivered between him and the defendant. (O. XVI. r. 53; see Hornby v. Cardwell, ante, p. 592; Schneider v. Batt, ante, p. 593; Bates v. Burchell, W. N. 1884, p. 108.) In such cases the pleadings will be in substantially the same form (mutatis mutandis) as ordinary pleadings in an action between the parties for the same cause, but the words "E. F., Third Party," should be added to the title of the action, and the heading of the pleadings should describe them according to the fact.

As to what defences are open to the third party as against the defendant, vide supra. Where directions have been given that pleadings shall be delivered between the defendant and the third party, the third party may pay money into Court in respect of the defendant's claim, together with a defence denying liability. (See Jud. Act, 1873, s. 24 (3), above cited; " Payment into Court," post, p. 798; Bates v. Burchell, W. N. 1884, p. 108.)

A claim for contribution or indemnity against a third party is not within the enactments of the County Courts Act, 1888, s. 116, as to costs. (See Bates v. Burchell, supra.) Nor are such claims against third parties within the provisions of O. LXV. r. 12, as to costs. They are within O. XVI. r. 54, infra.

By O. XVI. r. 55, "Where a defendant claims to be entitled to contribution or indemnity against any other defendant to the action, a notice may be issued and the same procedure shall be adopted, for the determination of such questions between the defendants, as would be issued and taken against such other defendant, if such last-mentioned defendant were a third party; but nothing herein contained shall prejudice the rights of the plaintiff against any defendant in the action."

Where a defendant claims contribution or indemnity over against a co-defendant under this rule, the latter may be served with a third party notice without any leave being obtained for that purpose, as such codefendant, being already a party to the action, is not within the provisions of r. 48. (Towse v. Loveridge, 25 Ch. D. 76; 53 L. J. Ch. 499; Chitty's Practice, 14th ed., p. 425; though see Catton v. Bennett, ante, p. 592.)

In other respects the procedure and the rights of the parties in respect of a claim for contribution or indemnity over against a co-defendant are in general the same as in cases where a person not already a party to the action is added as a third party. (1b.; see the rules above cited, and Jud. Act, 1873, s. 24 (3), above cited; Chitty's Practice, 14th ed., p. 425.)

O. XVI. r. 54, gives power to the Court to make such order as to costs against a third party as it may think right. (Edison Co. v. Holland, 41 Ch. D. 28. See also Jud. Act. 1890, s. 5.)

As to the cases in which a co-defendant may be joined as a defendant along with the plaintiff to a counterclaim, see "Counterclaims," ante, p. 588.

Take notice that this action has been brought by the plaintiff against the defendant [as surety for M. N. upon a bond conditioned for payment of £2,000 and interest to the plaintiff.

The defendant claims to be entitled to contribution from you to the extent of one-half of any sum which the plaintiff may recover against him, on the ground that you are (his co-surety under the said bond, or, also surety for the said M. N., in respect of the said matter, under another bond made by you in favour of the said plaintiff, dated the

-).]

day of

A.D.

Or as acceptor of a bill of exchange for £500, dated the day of A.D. drawn by you upon and accepted

by the defendant, and payable three months after date. The defendant claims to be indemnified by you against liability under the said bill, on the ground that it was accepted for your accommodation.]

Or [to recover damages for a breach of a contract for the sale and delivery to the plaintiff of 1,000 tons of coal.

The defendant claims to be indemnified by you against liability in respect of the said contract, or any breach thereof, on the ground that it was made by him on your behalf and as your agent.]

And take notice that, if you wish to dispute the plaintiff's claim in this action as against the defendant C. D. or your liability to the defendant C. D., you must cause an appearance to be entered for you within eight days after service of this notice.

In default of your so appearing, you will be deemed to admit the validity of any judgment obtained against the defendant C. D., and your own liability to contribute or indemnify to the