500 Burwood Highway Pty Ltd v Australian Unity Limited & Anor (Ruling No 1)
[2009] VSC 285
•13 July 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 9759 of 2007
| 500 BURWOOD HIGHWAY PTY LTD (ACN 084 871 554) | Plaintiff |
| v | |
| AUSTRALIAN UNITY LIMITED (ACN 087 648 888) and AUSTRALIAN UNITY NOMINEES PTY LTD (ACN 006 803 041) | Defendants |
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JUDGE: | HARPER J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 18 & 19 NOVEMBER, 17 DECEMBER 2008, 30 JANUARY 2009 (plaintiff’s written submissions on costs), 2 FEBRUARY 2009 (defendants’ written submissions on costs) | |
DATE OF RULING: | 13 JULY 2009 | |
CASE MAY BE CITED AS: | 500 BURWOOD HIGHWAY v AUSTRALIAN UNITY (Ruling No. 1) | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 285 | |
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PRACTICE AND PROCEDURE – Application to split trial of liability and quantum – Whether issues of alleged misleading and deceptive conduct should be heard separately – Whether discrete issues relating to the assessment of cost of work performed between settlement date and deferred settlement date and actual costs to complete can be heard separately.
COSTS – Amendment of statement of claim – Interlocutory discovery applications – Whether new material discovered giving rise to amendment - Application to cross examine deponent – Abandonment of separate trial of preliminary issues - Application to separate issues of liability and quantum – Strike out application.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G. Golvan QC with Mr M. Clarke | Madgwicks |
| For the Defendants | Mr G. Garde QC with Ms S. Burchell | Russell Kennedy Pty Ltd |
HIS HONOUR:
The plaintiff, 500 Burwood Highway Pty Ltd, is vendor of property at 502-514 Burwood Highway, Vermont South. The second defendant is the purchaser. The contract of sale is dated 16 May 2007. At the core of this litigation is a dispute about the calculation of the purchase price. This depended upon the cost of completion of a residential aged care facility, independent living units and other improvements. Its final resolution remains for the future. But, in addition to this principal issue, there have been a number of interlocutory quarrels, including disputes about costs. It would I think be helpful were I to give a brief summary of the background before turning in more detail to the questions I am presently asked to answer.
The present dispute has its source in a summons dated 11 June 2008. It was issued by the defendants. Among the orders they sought was an order, pursuant to rule 47.04 of the Rules of the Supreme Court that the proceeding be set down for trial limited to four preliminary questions.
I acceded to the defendants’ application. On 26 June 2008, I ordered that the proceeding be set down for trial on 1 December 2008 on an estimate which (given the limited scope of the hearing) was of not more than 10 days.
That hearing did not eventuate. By a summons dated 5 August 2008, the plaintiff sought, amongst other things, an order that it have leave to file and serve an amended statement of claim to include an allegation that, contrary to the terms of the clause (special condition 14.5) of the contract of sale pursuant to which they were appointed, the quantity surveyors engaged by the defendants were not independent.
The application to amend was granted. As a result, the four preliminary questions that had been set down for trial could no longer usefully be dealt with under the rule (rule 47.04) that allows the trial of a separate question. Nevertheless, the defendants now seek a separate trial of, on the one hand, issues going to liability and, on the other, issues concerned with the quantum of damages. They submit that such a course, if adopted, would – if the resultant judgment renders irrelevant any otherwise remaining issues concerning the quantification of damages – reduce the time taken by the trial by two weeks. It would, the defendants also submit, have other consequential advantages. In particular, it would facilitate the assessment of quantum by a properly qualified expert who had been appointed in accordance with the letter and the spirit of the contract of sale.
The plaintiff, on the other hand, submits that the separation of the issues of liability and quantum is inherently dangerous, and that the dangers would not be avoided in this case because the two aspects of the hearing run together to such an extent that they are inseparable.
It is in these circumstances necessary to examine each of the amended statement of claim (amended pursuant to orders made by me on 19 November 2008), the further amended defence and counterclaim (likewise amended pursuant to my orders of 19 November) and the further amended reply and defence to counterclaim. Although each pleading has been amended, I shall refer to them respectively as “the statement of claim”, “the defence and counterclaim” and “the reply”.
The parties do not dispute the fact that they are bound by the contract of sale. It concerned the sale and purchase of a residential aged care facility together with independent living units and other improvements which were then in the course of construction by the plaintiff. The purchase price was $35 million. This was to be adjusted if certain permits and certificates, including the certificates of practical completion, had not been issued and provided by the plaintiff to the defendants by the date specified in special condition 14.5 of the contract: 1 November 2007.
There is likewise no dispute about other important points. First, the relevant permits and certificates had not been issued and provided by the appointed day. But the defendants were not for that reason entitled to refuse or delay settlement. Rather, they became entitled to appoint - at the cost of the plaintiff – an independent quantity surveyor to assess the cost of carrying out the works necessary to cause the certificates to be issued. Upon such assessment, the second defendant as purchaser would be entitled to settle the contract by paying the plaintiff as vendor the balance of the purchase price less the completion cost so assessed, together with any additional costs and expenses specifically incurred in connection with special condition 14.
Another point of agreement is that the certificates referred to in special condition 14 were not provided by the plaintiff to the defendants by 1 November 2007. In exercise of its resultant right to do so, the purchaser thereafter appointed a quantity surveyor, Donald Cant Watts Corke Pty Ltd (“DCWC”), “to assess the cost of carrying out the works necessary to cause the certificates to be issued”.[1]
[1]Statement of claim, para.9
It is at this point that the positions of the parties diverge. According to the plaintiff, the second defendant was obliged to appoint a quantity surveyor who was “independent” within the meaning of that word in special condition 14.5(a)(i). This person’s sole task was to assess the cost of carrying out the works necessary to cause the certificates to be issued as at the date for payment of the balance of the purchase price. It was not to assess any other costs or expenses. As I understand the position of the defendants, they deny that DCWC was restricted in this way, and assert that the firm met the contractual requirement of independence.
As the parties accept, DCWC prepared a report. It was submitted to the plaintiff on 15 November 2007. According to the plaintiff, the cost of completion was (wrongly) assessed, as at 8 November 2007, as being $2,862,704.00. It is not clear from the defence whether this figure is admitted (the defence, somewhat unhelpfully, merely refers the reader to a copy of the assessment, which the reader may not have). What is clear is that the defendants contend that “the actual cost to complete is approximately in the sum of $3 million”.[2]
[2]Defence and counterclaim, para.11(e)
$2,862,704.00 could be said to be “approximately in the sum of $3 million” – but the defendants’ reference must be to a figure greater than $2,862,704.00, because “since the preparation of the quantity surveyor’s report and assessment additional defects and non-compliances have been identified”.[3] It is also clear that, in stark contrast to the defendants’ figure, the plaintiff has assessed the cost of completion at $138,759.00.[4]
[3]Ibid, para. 12A(b)
[4]Statement of claim, para. 25.
The plaintiff puts forward two reasons for the difference. First, in completing its assessment, DCWC trespassed into forbidden territory: it included not only the cost of work which at the settlement date had already been done, but also the cost of having an independent builder and consultant team complete the project, and the cost of complying with various requirements of the Building Code of Australia. These were beyond the scope of DCWC’s brief. Secondly, the quantity surveyor “failed to assess the completion costs with the degree of impartiality and independence, or with the degree of independent skill and judgment required of an expert acting between two parties.”[5] As a result, “the purchaser failed to provide the vendor with a QS assessment of the completion cost as at the settlement date”.[6] This in turn disentitled the defendants “to reduce the purchase price by the amount of the completion cost alleged in the QS report”.[7] According to the statement of claim, the net purchase price payable on settlement was $31,483,147.53.
[5]Statement of claim, para.13A.
[6]Ibid, para.14.
[7]Ibid, para.15.
The defendants deny that DCWC moved outside its proper brief, and deny any partiality in the quantity surveyor’s work. They also plead that “there is no express contractual provision for the quantity surveyor to provide procedural fairness or natural justice to the plaintiff”.[8]
[8]Defence and counterclaim, para.13A(b)(4).
Given their differences, the parties were sensible in agreeing to a provisional settlement. This took place on 3 December 2007. But the pleadings do not make clear what particular amounts were then tendered and received. At all events, the plaintiff accepted the defendants’ tender, while reserving its right to challenge its adequacy. It is that challenge that has resulted in this litigation.
The plaintiff adds a further claim to its armoury of allegations. It contends that, in the circumstances, an implied term of the contract entitled it “to continue to carry out and complete the works necessary to cause the certificates to be issued and the completion cost would be assessed as at the date of actual settlement”.[9] And so continue it did, “the costs of which are assessed to be $93,818.00”.[10] This sum, according to the plaintiff, must be included in the calculation of the amount it ought to have received at settlement, and thus in calculating the amount of the defendants’ indebtedness.
[9]Statement of claim, para.21.
[10]Ibid, para.25.
A further issue is raised by the statement of claim. It is based upon special condition 18.3 of the contract. This clause provides for a defects liability period of six months from settlement. To ensure the plaintiff’s compliance with its obligation to rectify defects notified within time, the plaintiff was by special condition 18.8 required at settlement to provide a bank guarantee of $75,000.00. According to the plaintiff, this requirement was met when, at settlement (which I assume refers to 3 December 2007) the defendants’ solicitors “retained … in their trust account [the sum of $75,000.00] pending provision of a bank guarantee … in accordance with special condition 18.8 of the contract”.[11] The plaintiff goes on to allege that the defects liability period of six months expired on 3 June 2008 without it having received any relevant notice. It follows, or so the plaintiff contends, that “the purchaser is obliged to release the said sum of $75,000.00”.[12]
[11]Statement of claim, para.7.
[12]Ibid, para.31.
The defendants agree that $75,000.00 was retained and that this was by way of substitution for a bank guarantee; but they contend that its release to the plaintiff “is predicated upon the plaintiff having achieved practical completion, which did not occur by the settlement date”.[13] They add that notice of defects was in any event given (i) by way of the DCWC report, which was provided to the plaintiff on 15 November 2007; (ii) by their defence and counterclaim of 29 February 2008; and (iii) by further and better particulars dated 6 March last year and provided by them to the plaintiff. They deny the obligation to release the money in question, and allege in the alternative that, if they are obliged to account for it, they are entitled to set it off against an amount of $91,666.66 which is owed to them or one of them pursuant to special condition 29.6 of the contract. That sum, as the parties agree, is a security deposit paid by a tenant (identified by the parties in their respective pleadings as an incorporated body called Whitecross Community Care Group Pty Ltd) who, one assumes, occupied the land at some relevant time. As alleged in the defence and counterclaim, and admitted by the plaintiff in its reply, clause 29.6 provides that the security deposit “must be paid over to the purchaser at settlement”.[14] But this, as the parties agree, has not been done. The defendants alleged that this is despite notice of the default having been given on 1 September 2008.[15] The plaintiff in its reply denies receipt of any such notice.[16]
[13]Defence and counterclaim, para. 7(c).
[14]Defence and counterclaim, para.38.
[15]Ibid, para.41.
[16]Further amended reply and defence to counterclaim to the further amended defence and counterclaim, para.30.
Two additional matters are introduced by the defendants’ counterclaim. First, they allege that the plaintiff told them that the works would be completed by 1 November 2007. But (they claim) the plaintiff had no intention of making that statement good. Alternatively, it did not know whether such a completion date was realistic. Either way (or so the defendants contend) the plaintiff in what it said engaged in misleading and deceptive conduct within the meaning of that expression in s.52 of the Trade Practices Act 1974 and s.9 of the Fair Trading Act 1999. And, as the counterclaim continues, “relying on the accuracy of the representation, the defendants agreed to purchase the property and caused the defendants to enter into an agreement for the acquisition of provisional bed licences and engage additional staff for the residential care facility and independent living units to open on 1 February 2008 and appoint a project manager”.[17] Unwanted and unnecessary costs were thereby incurred.
[17]Defence and counterclaim, opera.35.
The second additional issue which is introduced by counterclaim (albeit having been touched upon in the defence) arises from special condition 16.1 of the contract of sale. The defendants allege that, by that clause, the plaintiff was, before settlement, obliged to provide them with certain documents. It failed to do so. As a result, the defendants incurred otherwise unnecessary expenditure.
These, then, are the issues between the parties. The proposal put forward by the defendants is that three of them be dealt with separately. These are (i) the assessment of the cost or value of the “further completion works”[18] allegedly done by the plaintiff between the original settlement date (referred to by the plaintiff as “the settlement date”, and identified by it as being 15 November 2007)[19] and the deferred settlement date (3 December 2007) - a cost said by the plaintiff to amount to $93,818.00; (ii) the amount alleged by the defendants to be the actual cost to complete the work which, under the contract, the plaintiff was obliged but failed to complete (this, the defendants allege, “is approximately in the sum of $3 million);”[20] and (iii) the damages which the defendants claim to have suffered as a result of their reliance upon what they contend was the plaintiff’s misleading and deceptive conduct in assuring the defendants (as the defendants claim the plaintiff did) that the works would be completed by 1 November 2007.
[18]Statement of claim, para.25.
[19]Ibid, para.10.
[20]Defence and counterclaim, para.11(e).
The plaintiff opposes the course advocated by the defendants. The basis of the opposition is that separation of these issues is inherently dangerous, and is especially so where there are allegations of misleading and deceptive conduct and relief is claimed under s.82 of the Trade Practices Act 1974 and s.159 of the Fair Trading Act 1999.
The claims under the Trade Practices Act and the Fair Trading Act cannot, it seems to me, be dealt with as proposed by the defendants. By contrast, the remaining two of the issues proposed by the defendants for separate trial can in my opinion be dealt with in that way. They are, in my opinion, quite distinct. The question whether any work was done by the plaintiff between 8 (or 15) November and 3 December (or, as paragraph 25 of the statement of claim would have it, “between settlement date and deferred settlement date”), and if it was, how much it was worth, has nothing to do with the independence of the quantity surveyor, or the assessment made by DCWC. Nor has it any connection with such other issues as any misrepresentation about the date by which the works would be completed, or whether or not a complete set of documents was supplied to the defendants, or whether the defendants had the right, at settlement, to retain the sum of $75,000.00, or set off the sum of $91,666.66.
The same may be said of the calculation of that which is referred to in paragraphs 10 and 25 of the statement of claim as the “completion cost”, and in paragraphs 11(e) and 12(c) of the defence and counterclaim as “the actual cost to complete”. This is the second issue which, according to the defendants, may conveniently be tried separately; and is, in any event, a matter which – depending on the outcome of the remaining issues – might properly be determined by a quantity surveyor in accordance with special condition 14 of the contract. Indeed, such a determination might also properly take into account the cost or value of any “further completion works” as claimed by the plaintiff.
The questions surrounding the claims made pursuant to the Trade Practices Act and the Fair Trading Act 1999 fall into a different category. I accept the plaintiff’s contention that these should not be dealt with as separate issues, but should be tried together with the remaining claims. Subject to any submissions by the parties, these may I think accurately be described as including not only the Trade Practices Act and Fair Trading Act claims, but also: (i) the validity of the assessment made by DCWC, including the identification of the principles by which, or the terms pursuant to which, that assessment was or should have been conducted; (ii) the consequences of any default by DCWC, excepting from those consequences the quantum of any consequential work done by any party; (iii) the lawfulness of the retention by the second defendant of the sum of $75,000, and whether that sum is owing to the plaintiff; (iv) the right asserted by the defendants to set off the security deposit; (v) whether the contact of sale included the implied term alleged in paragraph 21 of the statement of claim; (vi) whether the notice referred to in paragraph 29A of the defence and counterclaim was given; and (vii) whether documentation was withheld – and, if so, the consequences of that.
If the calculation of the “actual cost to complete”[21] and of the value of any “further completion works”[22] done by the plaintiff are dealt with together, and as issues which are separated from those tried initially, the trial of the remaining issues will of course be shorter than would be the case were all issues tried together. In addition, the way would thereby be open for questions of quantum to be assessed by an appropriately qualified expert.
[21]Defence and counterclaim, para.11(e) and 12(c).
[22]Statement of claim, para. 25.
In my opinion, the proceeding should go forward on the basis that the assessment of (i) the cost of any work performed by the plaintiff “[b]etween settlement date and deferred settlement date” (paragraph 25 of the statement of claim) and (ii) “the actual cost to complete” as referred to in paragraph 11(e) of the defence and counterclaim, be tried or otherwise dealt with as separate issues.
I turn now to the costs of a number of interlocutory applications. It is convenient to deal first with those of a summons issued by the plaintiff on 12 June 2008. It sought orders, pursuant to rules 29.08 and 29.09 of the Rules of the Supreme Court, for particular discovery and inspection of documents relating to the defendants’ dealings with DCWC. As the defendants recognised, these were orders to which the plaintiff was entitled. They responded with two affidavits of discovery sworn by Mr Dave van Sanden on, respectively, 17 June 2008 and the following 21 August. In the first of these, the deponent swore that the defendants did not, and never did, have any “DCWC” documents in their possession and control other than those already discovered.
But this was wrong. On 26 June, the quantity surveyors answered a request by the plaintiff to provide it with what relevant documentation DCWC had. The result was the provision to the plaintiff – it claims for the first time – of material indicating two relevant things. First, the material pointed to what the plaintiff characterises as an improper relationship between the defendants and DCWC during the period of the latter’s appointment as a supposedly independent quantity surveyor pursuant to special condition 14.5 (a)(i) of the contract of sale. Secondly, it disclosed the existence of further material which should have been, but to that point had not been, discovered by the defendants. The plaintiff accordingly included, among other orders sought by it in the summons issued by it on 5 August, an order that Mr van Sanden attend for cross-examination. In response, and before any cross-examination, he on 21 August swore his second supplementary affidavit of discovery. In this, he revealed the existence of 12 documents which the defendants contend were, by an oversight, omitted from earlier discovery. The defendants also claim that their oversight was made apparent to them when, on 21 July,[23] they were given by the plaintiff’s solicitors copies of the material supplied on 26 June by the quantity surveyor to the plaintiff. At all events, one result was that the application to cross-examine Mr van Sanden was not pursued.
[23]Affidavit sworn by Dave van Sanden, 21 August 2008.
In my opinion, the plaintiff acted properly in seeking particular discovery and, following receipt of Mr van Sanden’s affidavit in response, his cross-examination on that affidavit.
It is against this background that I must examine the cost issues which arise from the summons issued by the defendants on 11 June last year, and from the plaintiff’s summons of 5 August. As I have already noted,[24] the earlier of these sought orders that certain questions be tried separately pursuant to rule 47.04; and this application was successful when, on 26 June (the day on which DCWC provided the plaintiff with the documents to which I referred above) I made orders for a separate trial of four preliminary questions.
[24]Above, para.[2].
For its part, the summons of 5 August sought not only the cross-examination of Mr van Sanden, but also orders that the plaintiff have leave to file and serve a further amended statement of claim; that the preliminary questions be amended; and that paragraph 15(c) of the defence and counterclaim be struck out. To these the plaintiff on 12 November added a request that Mr van Sanden file a further affidavit of discovery. They contended that they were entitled to have identified specifically certain documents over which the defendants claimed legal professional privilege.
These applications were heard by me on 18 November 2008 and the following day. Both I and the defendants accepted the plaintiff’s position in relation to the identification of some (but only some) of the allegedly privileged documents. I accordingly ordered that, by 4.00 p.m. on Friday 5 December 2008, the defendants file and serve an affidavit “in respect of which legal professional privilege is claimed over documents within the period 1 November 2007 (date of settlement) to 3 December 2007 (actual settlement date)”.[25] Such an affidavit was filed, albeit ten days late (it was filed on 15 December). Given that the claim for privilege was originally couched in the usual terms, given that the plaintiff originally sought the specific identification of a wider range of documents than it was entitled to have dealt with in this way, and given the defendants’ willingness to be co-operative, it seems to me that there should be no order concerning the costs of this aspect of the interlocutory proceedings.
[25]Emphasis inserted for the purposes of this judgment.
By 18 November, the plaintiff had put forward a proposed further amended statement of claim. It had been through a number of drafts. Each attempted, with different degrees of success, to spell out in a new paragraph 13A the particulars relied upon by the plaintiff as substantiating its allegation that, in assessing the completion costs, the quantity surveyor failed to act independently of the defendants. The plaintiff also sought to add a claim for the release of the sum of $75,000 to which special condition 18.8 of the contract of sale refers.
I allowed the application to amend. The plaintiff must nevertheless pay the defendants’ costs of and occasioned by the amendments. It may (or may not) be that it was not until inspection of the 12 documents identified in Mr van Sanden’s affidavit of 21 August that the plaintiff appreciated the (alleged) extent of the subservience of the quantity surveyor to the defendants. It may (or may not) be that this appreciation dawned on 26 June, with the receipt by the plaintiff of the DCWC files. Either way, the defendants were not - in the absence of an order to that effect – obliged, before the writ and original statement of claim were issued, to supply the plaintiff with any information. It follows that unless, before issue, the defendants were guilty of some relevantly misleading conduct, the plaintiff cannot lay at their feet any gap in its knowledge. No such conduct is alleged.
The position is different when one comes to the costs of the defendants’ application for the trial of separate questions. That application was originally successful; but the idea had to be abandoned when the allegations of bias were raised. The plaintiff says that this is not something for which it should take any blame; these allegations, it submits, could not have been made before 26 June (the date upon which I determined that a trial of separate issues was appropriate). The defendants, by contrast, contend the opposite. According to them, the plaintiff knew enough before 26 June to frame such amendments as would have been sufficient to secure the still-birth of the notion of a separate trial.
Some, but not much, assistance in working out the rights and wrongs of these arguments may be found in correspondence between the parties in November 2007, at a time when the problems posed by the late completion of the facilities at 500 Burwood Highway were being examined by those involved. On 8 November, the then solicitors for the plaintiff wrote to the defendants’ solicitors. Among other things, they noted that their client:
… does not believe that DCWC has the required independence under special condition 14.5(a) [of the contract of sale] and has a preference for your client to engage a different quantity surveyor. The decision as to the quantity surveyor to be appointed rests with your client, so our client cannot take that matter further at this time, but reserves all its rights in this regard.
The solicitors for the defendants responded on 12 November. In their letter in reply, they said, in part:
We note your concession that the decision as to which quantity surveyor to appoint ultimately rests with our client. Our client maintains that Donald Cant Watts Corke Pty Ltd are “independent” quantity surveyors. Unless your client is able to provide evidence which suggests otherwise, no aspersions, however indirect they may be, should be cast upon this respectable firm of quantity surveyors.
The plaintiff’s solicitors recognised the force of the final sentence in that passage. It is indeed an important principle of pleading that an allegation of dishonesty or the like not be made unless the pleader is satisfied that there exists a proper foundation for such an allegation. The fact that the possible subject of the allegation is a professional firm of good repute in no way lessens that constraint. Yet, on one possible reading of what the defendants now contend, they complain that their own injunction against the making of loose accusations has been taken too far. On this reading, they submit that, on the basis of no more than the plaintiffs’ belief that DCWC did not have “the required independence under special condition 14.5(a)” of the contract of sale, the plaintiff ought in its original and any subsequent version of the statement of claim to have pleaded that lack of independence.
In my opinion, the plaintiff cannot on that basis be blamed for failing in its statement of claim to raise the issue of DCWC’s independence. But, in its present form, paragraph 13A of the statement of claim carries some suggestion that, in November 2007, an appreciable proportion of the evidence pointing to its claim of lack of independence was already known to it. It then knew (if it be the fact) that DCWC had not consulted with it in the preparation of the report which was provided to the plaintiff on 15 November. It was, I assume, in a position to discover – if it did not then know - whether or not the quantity surveyor had been in communication with the relevant building surveyor (Mr Hank Van Ravenstein). It certainly knew of its own and an associated company’s (as it would say, somewhat soured) previous connection with DCWC.
I cannot at present, however, come to any sufficiently firm findings to support a conclusion that, before 26 June 2008 the plaintiff was in a position to put before the court material upon which a different decision about the separate trial would have been based. While the plaintiff must have known that it was not consulted by DCWC, it may not have been aware that (as it now claims) DCWC was during the course of its “independent” assessment of the cost of completion, in close communication with one or other or both defendants. Nor may it then have been aware that an organisation referred to in paragraph 13A as “the C.H. Group” was (again, as the plaintiff now claims) working with the defendants, or DCWC, or both, in the preparation of the DCWC report – or, if there was such involvement, its extent.
As discussed with counsel during the course of oral submissions on cost issues, it may be that only after the trial will the evidence going to these matters be in such a state that properly-based conclusions can be made. That evidence is not at present at my disposal. For these reasons, I decline at this point to make any findings about the proper allocation of the costs thrown away by reason of the abandonment of the separate trial as envisaged when the relevant orders were made on 26 June last year.
The remaining cost issue concerns the plaintiff’s application to strike out paragraph 15(c) of the defence. That application succeeded. The plaintiff is entitled to the costs of and incidental to the application.
The parties are of course free, if they wish, to agree upon what particular amounts should be paid on either side to the other having regard to the rulings contained in this judgment. On the other hand, they may prefer to await the outcome of my decision on the costs of the abandonment of the separate trial as originally envisaged. My present view, which is subject to further submissions and evidence, is that the balance is close to even, and that any further attempt to untangle the various strands may not warrant the trouble and expense of that exercise. This may remain so even after the evidence surrounding the pleading of the “independence” question has been properly explored.
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