Dorset v American International Assurance Co (Aust) Ltd

[2003] VSC 135

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 7857 of 2002

J. RUSSELL DORSETT	Plaintiff
V
AMERICAN INTERNATIONAL ASSURANCE CO. (AUST.) LTD.	Defendant

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JUDGE:	BONGIORNO,  J
WHERE HELD:	Melbourne
DATE OF HEARING:	14 April 2003
DATE OF JUDGMENT:	14 April 2003
CASE MAY BE CITED AS:	J. Russell Dorset v. American International Assurance Co. (Aust.) Ltd.
MEDIUM NEUTRAL CITATION:	[2003] VSC 135

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PRACTICE and PROCEDURE – Application for determination of a preliminary issue before trial – RSC r 47.04 – whether contract of employment existed between the plaintiff and the defendant – fragmentation of litigation – embarrassment caused by pleading in the alternative

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R.R.S. Tracey, Q.C.	A.J. Macken & Co.
For the Defendant	Dr C.N. Jessup, Q.C. And Mr McDonald	Minter Ellison

HIS HONOUR:

1. This is an appeal from Master Wheeler dismissing an application by the defendant pursuant to RSC r 47.04 for the determination of a separate issue arising in this proceeding prior to trial.  The issue is that raised by paragraphs 2 of the statement of claim and 2 of the defence, and probably also paragraph 2 of the reply which seems to plead an implied contract or facts from which it is said a contract should be inferred.  This is apparently in addition to the express contract referred to in paragraph 2 of the statement of claim.

1. Clearly the defendant wishes to defeat the plaintiff’s claim on the preliminary point to save it having to litigate the whole of this case, which would involve extensive examination of issues of damages and issues of the conduct of both parties during the course of the employment period. 

1. The material filed shows that there is a serious issue as to the plaintiff’s contract of employment.  Each party has produced at least one document upon which it will rely at trial as allegedly strong evidence for the position it takes:  the plaintiff, that he was employed by the defendant;  the defendant, that he was employed as an expatriate on the parent company’s Bermuda payroll.  I might observe that if the defendant is correct, the plaintiff would have to overcome the difficulty, with respect to the parent company being the employer, of a clause in his apparent employment contract which acknowledges that it is a condition of his employment that he could be dismissed by his employer peremptorily and without notice.

1. Dr Jessup of Queen’s Counsel, on behalf of the defendant, put two points.  Firstly, he put the usual reasons for severance;  that is to say, the avoidance of delay, cost and inconvenience of litigating the whole case if a single issue might decide it.  He contended that there was no overlap of issues in this case so as to cause the Court to regard the usual reasons as not being enough.  To that he added that in this case the defence has not pleaded justification for a termination of the plaintiff’s employment should the defendant be found to have employed him.  He said that this has been done because to have gone into those issues of justification at this stage would have been embarrassing.  They would have needed to have been pleaded in the alternative;  that is to say, on the basis that there was an adverse finding against the defendant on the preliminary issue of employment. 

1. Mr Tracey of Queen’s Counsel, for the plaintiff, says that the overlapping issues in this case are many.  For example, the possible inference of a contract from the conduct of the parties over the term of the employment will permit evidence of such conduct to be led, all or much of which would also be relevant to other issues in the case as well.

1. The law on the trial of separate issues is relatively clear.  The High Court, in a dictum at the end of a case which dealt in fact with other issues, made the brief point that: 

“Single-issue trials should, in our opinion, only be embarked upon when their utility, economy and fairness to the parties are beyond question.[1]” 

See also the discussion by Byrne, J. in Hider Consulting Vic Pty Ltd v. CGU Insurance Ltd.[2]   In a case which I decided last year, Australian Communications Corporation Pty Ltd and Anor. v. Coles Myer Ltd[3], I referred to each of those cases.  Going back to an earlier age, the Full Court of this court in Dunstan v. Simmie & Co Pty Ltd[4] made similar comments.  The headnote of that case reads, in part: 

“Although every case must depend on its own facts, it will as a general rule only be appropriate to order that a preliminary issue be isolated for determination before trial where the determination of the issue in favour of the plaintiff or the defendant will put an end to the action, or where there is a clear line of demarcation between issues, and the determination of one issue in isolation from the other issues in the case is likely to save inconvenience and expense.”

Whilst here, as Dr Jessup says, a determination of the employment issue in favour of his client would put an end to this action, it may not put an end to the disputation between the parties as, either by amendment or other action, it would be not unlikely that the plaintiff would bring his case against another party.

[1]Tepko Pty Ltd and Ors. v. Water Board (2001) 206 C.L.R. 1 per Kirby and Callinan, JJ.

[2][2001] VSC 449, 7 December 2001.

[3][2002] VSC 43, 7 October 2002.

[4][1978] V.R. 669.

1. One of the difficulties referred to in one of the judgments of the High Court in Tepko, that is fragmentation of the process, by the determination of single issues was overcome in this case by Dr Jessup helpfully obtaining instructions to undertake not to appeal or seek to appeal a preliminary issue, if one was granted, until the trial of the action had been completed.  Whilst helpful in tipping the scales in his client’s favour, in my opinion, in this instance, they have not been tipped far enough.

1. I am not satisfied that I should make the orders sought in the original summons.  The grounds for it appear to me not to have been properly or fully made out.  The appeal from Master Wheeler is accordingly dismissed.

The orders I will make are as follows:

1.        The appeal from Master Wheeler is dismissed.

2.The plaintiff have leave to file and serve an amended statement of claim by 28 April 2003.

3.The defendant have leave to file and serve an amended defence by 12 May 2003.

4.The plaintiff have leave to file and serve an amended reply by 22 May 2003.

5.Leave to the parties to apply in respect of further discovery to a Master by 30 May 2003.

6.The defendant pay the plaintiff’s costs to be taxed in default of agreement.

7.That this order be drawn up by the solicitors for the plaintiff and signed by a Judge pursuant to r.60.04.