Baan Australia v George Weston

[1999] NSWSC 550

CITATION:	Baan Australia v George Weston [1999] NSWSC 550
CURRENT JURISDICTION:	Commercial
FILE NUMBER(S):	50217/97
HEARING DATE(S):	07/06/99
JUDGMENT DATE:	10 June 1999
PARTIES :	Baan Australia Pty Limited - Plaintiff George Weston Foods Limited - Defendant
JUDGMENT OF:	Rolfe J

COUNSEL :	Mr A.J.L. Bannon SC/Mr A.J. Payne - Plaintiff Mr S.G. Finch SC/Mr F. Kunc - Defendant
SOLICITORS:	Clayton Utz - Plaintiffs Gilbert & Tobin - Defendant
CATCHWORDS:	Separate Questions: General undesirability of separate questions re-stated.
DECISION:	The course of the litigation so far pursued should not be changed at this stage.

10

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

ROLFE J

THURSDAY, 10 JUNE 1999

50217/1997 - BAAN AUSTRALIA PTY LIMITED v GEORGE WESTON FOODS LIMITED

JUDGMENT

HIS HONOUR:

Introduction

1    These proceedings were commenced by a Summons filed as long ago as 1 December 1997, whereby the plaintiff, for which Mr A.J.L. Bannon of Senior Counsel and Mr A.J. Payne of Counsel apeared, sought declarations that the defendant, for which Mr S.G. Finch of Senior Counsel and Mr F. Kunc of Counsel appeared, had wrongly repudiated the Software Licence and Support Agreement and the Professional Services Agreement entered into between the parties and dated 31 December 1996; damages and ancillary relief. The plaintiff has claimed substantial damages in consequence of the alleged wrongful termination of these agreements.

2    The defendant’s Defence makes a number of admissions, including admissions that amounts otherwise prima facie payable to the plaintiff have not been paid; denies that it wrongfully repudiated the agreements; and relies on the matters set forth in its Cross-Claim, which was filed on 13 March 1998 and to which a Defence was filed on 7 May 1998.

3    The Cross-Claim sought declarations that the plaintiff had breached the agreements upon which the plaintiff relies, and that the defendant was entitled to and did effectively terminate them on or about 12 November 1997, and that in consequence of that termination the defendant is relieved from any obligations or liabilities to the plaintiff under those agreements.

4 In paragraph 5 a declaration was sought that the plaintiff and its holding company, the second cross-defendant, engaged in misleading or deceptive conduct in breach of s.52 of the Trade Practices Act 1974 and, in paragraph 6, that it made false representations in breach of s.53 of that Act. Orders were sought under s.87 of that Act, and for damages and ancillary relief.

5    The Cross-Claim alleged breaches of a number of terms of the agreement, and repudiatory conduct and, commencing at paragraph 69, relied upon a number of representations allegedly made by the plaintiff, which it is asserted were false and/or misleading or deceptive, or likely to mislead or deceive in various ways. Further representations were pleaded.

Determination of Separate Issues

6    On 15 May 1998 the matter came before Giles CJCommD. His Honour ordered, inter alia, that questions set out in a schedule attached to draft Short Minutes of Orders, which the parties brought in, be determined as preliminary questions. In doing so he noted that the parties were giving further consideration to the questions and an amended schedule and that, if there were to be any amendments, they should be prepared and agreed within twenty one days. The schedule set forth a number of questions relating to whether the representations pleaded in various paragraphs of the Cross-Claim were made and, if so, when; whether other representations were made; and whether certain terms were terms of the agreement. Thereafter further questions were asked as to whether representations were made by the plaintiff in trade or commerce.

7    There can be no doubt that careful consideration was given to this approach not only by the parties, but also by his Honour. The reason for having the separate questions was so that the defendant would be in a position to know, inter alia, the extent to which it had to consider testing procedures carried out by it on various pieces of equipment which, in turn, is dependent upon whether the representations and contractual terms for which it contends were made and were part of the contract.

8    There can be little doubt, in my mind, that the asking of separate questions in relation to whether a representation was made, without further questions and in circumstances where witnesses to the representations may also be witnesses in relation to other portions of the proceedings, can lead to great inconvenience in the conduct of the proceedings. These matters were well known to Giles CJCommD and, I have no doubt, the parties. None-the-less, the orders were sought and made.

9    On 16 September 1998 an Amended Cross-Claim was filed and, generally speaking, by that document the defendant sought to rely upon certain representations admittedly made by the plaintiff, in addition to the representations it had previously pleaded. This led to an issue under s.51A of the Act arising in the sense that the further issue was raised as to whether the defendant had reasonable grounds for making the representations.

10    When the matter came before me on 18 September 1998 I gave certain directions, and I noted that the parties would attempt to agree on a revised list of questions for preliminary determination to replace those ordered by Giles CJCommD on 15 May 1998.

11    This procedure was also being accompanied by discovery and inspection of documents, it being perceived that that was a necessary process in relation to the formulation and, more importantly, the answering of the questions to be raised.

12    On 23 October 1998 I made orders in accordance with Short Minutes of Order, and I added:-

“The only further observation I would make is that where matters are to be heard as separate questions it will ultimately be a matter for the Court’s determination when it has seen the questions.”

13    On 20 November 1998 the matter came back before me and, by consent, I vacated the orders made by Giles CJCommD on 15 May 1998, and ordered that the questions set out in several lists be determined as preliminary questions. I made further directions including that discovery be by tranches, that the defendant file and serve any affidavits in support of the preliminary questions on or before 29 January 1999, and that the cross-defendants, being the plaintiff and its holding company, file and serve any affidavits in support of the preliminary questions on or before 5 March 1999.

What Happened Thereafter

14    On 11 December 1998 I extended the time for the furnishing of evidence and, on 26 March 1999, I again extended that time.

15    When the matter came before me on 28 May 1999 the defendant made application for further and better discovery. I then raised with the parties my disquiet about the separate questions and the time being taken to have them determined. The Notice of Motion for further discovery was made returnable on 4 June 1999 on which dated Mr Bannon submitted that the time had now come to re-visit the matter as to whether separate questions should be determined, or whether the proceedings should not go forward in the ordinary way, viz on all grounds. Mr Finch resisted a change in the procedural regime which had been put in place.

16    Mr Bannon’s submissions were that at the time there was agreement to the separate questions it was envisaged that they would be heard reasonably promptly, and that the situation had been further complicated by the defendant’s reliance upon the representations admittedly made by the plaintiff, which resulted in the issue under s.51A, inter alia, being raised. He submitted that it was quite inappropriate, at this time, to allow the matter to proceed on separate questions and, as I understood his submissions, that that had always been the case, it being the defendant who “championed” that particular approach. He further submitted that the only party to benefit from the separate questions was the defendant because by having them answered it restricted the work it was required to do in relation to testing equipment, amongst other things, to determine how the balance of the case should be fought.

17    On behalf of the defendant it was submitted that the course of separate questions had been charted since 15 May 1998 and confirmed by me in November 1998 and that, in these circumstances, the defendant had proceeded on that basis and incurred considerable expense in preparing the case for the hearing of those questions. It was submitted that whilst there may be some overlap in witnesses on other issues, the defendant had been entitled, since 15 May 1998, to proceed as it had, and that in reality the only articulated reason for any change in the plaintiff’s approach had been brought about in consequence of the observations I had made on 28 May 1999. To this I should add that perhaps other reasons were the delay in preparing the separate questions for hearing, with which the question of discovery and inspection seemed to be linked.

The Present Position

18    I have considerable sympathy for the plaintiff in the circumstance in which it finds itself. It obviously never contemplated that its consent, in so far as it did consent, to separate questions would put it in its present position. It contemplated that it would have its case on and heard long before this. None-the-less, that sympathy is lessened to some extent by the fact that if it did not actively consent, there was acquiescence by the plaintiff in the course proposed by the defendant.

19 I have, on a number of occasions, set forth my disinclination to make orders for the hearing of separate questions. The reasons are essentially that in the majority of cases, particularly where the separate questions relate to factual issues, there is little likelihood of their answers bringing about any final resolution at first instance to the issues involved, and there is the real risk that the overlapping of witnesses will mean that at least two Judges have to hear the proceedings because of the difficulties brought about by adverse findings of fact against one or other of the parties, especially where there are decisions based on credit: Australian National Industries Limited v Spedley Securities Limited (in liq) (1992) 26 NSWLR 411. Further, many answers to separate questions merely stimulate an application for leave to appeal and the parties become engaged in far more litigation than otherwise would be the case. These are only some of the reasons, which I have mentioned in greater detail in other judgments and with which I do not propose to encumber these reasons. Suffice to say that the experience with this matter will merely harden my prima facie view that in most cases it is inappropriate to order separate questions. Generally the advantages said to arise are illusory and provide, in the end, no real benefit to the parties or the overall administration of justice. Particularly must that be so where not only are questions as to the making of representations involved, but so also are questions of reliance and falsity. In the present case this is compounded by the onus which falls upon the plaintiff pursuant to s.51A.

20    That all having been said, however, I think that in the present case I am bound by the position, because the Court has acquiesced in the course the parties, and more particularly the defendant, put forward. This occurred on two occasions and the stage has now been reached where the defendant will have its evidence on by 25 June 1999. I think, in all those circumstances, that the time has passed when the Court can reverse the process, which it has allowed to continue. In saying this I must bear in mind that in November 1998 I reserved to myself the right to disallow the further questions, but I did not take that course.

21    I must also have regard to the fact that if the course of proceedings is to be changed Mr Finch wishes to put on evidence to show the expense and cost to which the defendant has been put by following the procedures to which the Court has been prepared to accede and, from that, I am prepared to infer that such costs have been quite considerable.

22    For these reasons, which have been contributed to by the lack of more resolute opposition at an earlier time from the defendant to the separate questions, I do not consider that it is appropriate to change the course of the proceedings.

Conclusions

23    I direct that the defendants file and serve all affidavits upon which they seek to rely in relation to the separate questions by 4 pm on Friday, 25 June 1999. I stand the proceedings over for further mention to Friday, 2 July 1999.

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