Duke Group Ltd (in liq) v Alamain Investments Ltd (in liq) (No 2)

Case

[2006] SASC 33

7 February 2006

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

DUKE GROUP LIMITED (IN LIQ) (ACN 007 554 690) v ALAMAIN INVESTMENTS LIMITED (IN LIQ) (ACN 007 756 945) & ORS  (No 2)

Judgment of The Honourable Justice White

7 February 2006

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PRACTICE UNDER RULES OF COURT - OTHER MATTERS ARISING BEFORE TRIAL

Application for certain issues in the trial to be determined as preliminary issues - Trial likely to be lengthy and complex - Where one defendant in poor health and two defendants with limited financial resources - Where plaintiff said to be seeking findings of fact which were inconsistent with findings in previous litigation resulting in a judgment in the plaintiff's favour - Where it was said that resolution of the issues in the defendants' favour would render further pursuit of the claim by the plaintiff futile - Consideration of principles applicable to decision to determine certain issues as preliminary issues.

Held:  refusing the application - no agreement as to the issues to be determined, nor the evidence necessary for their determination, nor that determination of some or all of them would render the pursuit of the proceedings futile - Inappropriateness of determining issues which are likely to be ultimate issues in an interlocutory decision - Fragmentation of determination of issues undesirable - Prospect of appeal from the decisions on the determination of the preliminary issues - Prospect of determining issues which would be hypothetical - Application dismissed.

Limitation of Actions Act 1936 (SA) s 48; Supreme Court Rules 1988 (SA) r 75.02; Companies (South Australia) Code s 229; Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 s 38, referred to.
Rivers v Rivers [2002] SASC 197; (2002) LSJS 174; Rogers v Baillieu Bullock Wilkinson Pty Ltd (1981) 28 SASR 595; Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; FAI General Insurance Co Ltd (In Liq) v Sherry [2002] SASC 431; (2002) 225 LSJS 141, applied.
Duke Group  Ltd (In Liq) v Pilmer & Ors (1998) ACSR 1; Duke Group Ltd (In Liq) v Pilmer & Ors (1999) 73 SASR 64; Pilmer v Duke Group Ltd (In Liq) (2001) 207 CLR 165, discussed.
Reichel v Magrath (1889) 14 AC 665; Haines v Australian Broadcasting Commission (1995) 43 NSWLR 404; Commissioner for Taxation v Macquarie Health Corporation Ltd (1998) 88 FCR 451; Craig and Craig v Jetmaster Fireplaces Pty Ltd (1988) 142 LSJS 258; Re Multiplex Constructions Pty Ltd (1999) 1 Qd R 287; Beach Petroleum NL v Johnson (1993) 43 FCR 1, considered.

DUKE GROUP LIMITED (IN LIQ) (ACN 007 554 690) v ALAMAIN INVESTMENTS LIMITED (IN LIQ) (ACN 007 756 945) & ORS  (No 2)
[2006] SASC 33

  1. WHITE J: The second and fourth defendants (“D2” and “D4”) seek an order that five issues be determined as preliminary issues in the trial of this action. Three of those issues relate to the nature of the loss and damage alleged by the plaintiff and/or the damages/compensation claimed by it, one to a form of liability sought to be established against D2 and D4, and the last relates to the claim by the plaintiff for an extension of time pursuant to s 48 of the Limitation of Actions Act 1936 (SA) (“LAA”) for the institution of a particular claim in the proceedings.

  2. D2 and D4 contend that the issues identified by them for preliminary determination would, if determined in their favour, render the trial futile, or at least indicate that the plaintiff has not suffered any actionable loss in respect of which it has not already made recovery.  Given the likely length, complexity and expense of the trial, D2 and D4 submit that a preliminary determination of issues is particularly appropriate in the present litigation.

  3. In addition to these contentions, D2 and D4 submit that the health of D2 is such that he cannot withstand the rigours of a full trial, and, further that neither D2 nor D4 have sufficient financial resources so as to be able properly to defend themselves at a full trial.

  4. The application is opposed by the plaintiff.  Although, as I understand it, the remaining defendants will wish to support the submissions of D2 and D4 on the issues identified by D2 when they arise for determination, they did not support the present application and expressed some reservations about its appropriateness.

  5. The order is sought pursuant to SCR 75.02 which provides:

    Subject to the preceding subrules, the Court may at any time or from time to time in any proceeding, order:

    (a)    that different questions of fact arising therein be tried by different modes of trial;

    (b)    that one or more questions of fact be tried before the others;

    (c)    that any point or points of law arising on the pleadings be disposed of before proceeding to trial of the facts;

    and may appoint the place or places of such trials.

    Background

  6. The background to this litigation lies in the takeover by the plaintiff in late 1987 of a company called Western United Ltd (“Western United”).  That takeover gave rise to substantial litigation in this Court against the former directors of the plaintiff and against the firm of accountants known as Nelson Wheeler.[1]  The trial before Mullighan J at first instance commenced on 15 June 1994 and concluded on 29 September 1997, and occupied more than 300 hearing days.  The plaintiff recovered compensation from the former directors on the basis of breach of fiduciary and statutory duties.  It recovered damages against Nelson Wheeler for breach of contractual and common-law duties of care. 

    [1]    Duke Group Ltd (In Liq) v Pilmer& Ors (1998) 27 ACSR 1; Duke Group Ltd (In Liq) v Pilmer& Ors (1999) 73 SASR 64; Pilmer v Duke Group Ltd & Ors (In Liq) (2001) 207 CLR 165.

  7. The present proceedings were instituted on 13 November 2002.  The plaintiff seeks to recover from the defendants damages or compensation in respect of losses said to arise from the same takeover transaction in late 1987 which was the subject of the litigation in Duke v Pilmer.  D2 and D4 contend that if the preliminary issues, in particular the first three issues, are resolved in their favour, the recoveries made by the plaintiff so far will exceed the recoveries which it could achieve by this action.

  8. For present purposes, the defendants to this action can be categorised as being in two groups:  the Autocure defendants (comprising the first four defendants) and the Hambros defendants (comprising the fifth to eighth defendants).  The matters which I now record concerning the identity and involvement in 1987 of the various defendants are taken from the plaintiff’s Amended Substituted Statement Of Claim (“ASSOC”).  They are therefore allegations only although I do not understand these particular matters to be in dispute.  The first defendant was formerly known as Autocure Limited (“Autocure”).  At the time of the takeover of Western United Ltd in October 1987 Autocure held a substantial parcel of shares in the plaintiff.  I have been informed that Autocure is now in liquidation.  The plaintiff has not sought leave to proceed against Autocure.  It has played no part in the litigation and to date no orders have been made against it.  Each of D2, D3 and D4 was formerly a director of Autocure. 

  9. Autocure retained one or other, or both, of the fifth and sixth defendants (“Hambros Australia” and “Hambros Securities”) to assess the proposed takeover by the plaintiff of Western United and to provide advice in relation to that takeover.  In October 1997 each of the seventh and eighth defendants (“D7” and “D8”) were directors of Hambros Australia and Hambros Securities.

  10. The plaintiff alleges that the Autocure defendants and the Hambros defendants became aware prior to the takeover taking place that it was imprudent.  It alleges that the defendants adopted a strategy by which Autocure could sell its shares in the plaintiff at a price in excess of the prevailing market price to a purchaser to be located by the plaintiff’s former directors in consideration for not raising publicly their concerns about the prudence of the takeover.  That strategy was implemented.  Autocure sold its shares in the plaintiff to a third party located by the plaintiff’s former directors.  The takeover proceeded without publicity of its imprudent nature.  In consequence, interests associated with the former directors of the plaintiff were considerably advantaged but the plaintiff itself suffered a substantial loss.  I appreciate that the summary which I have just given is somewhat general and incomplete.  It is however, I think, sufficient for present purposes.[2]

    [2]    The transaction described fully in Duke Group (In Liq) v Pilmer& Ors (1998) 27 ACSR 1.

  11. In these proceedings the plaintiff alleges that each defendant knowingly assisted its former directors to breach fiduciary and statutory duties owed by them to the plaintiff.  The allegations of breach of statutory duty (being duties arising pursuant to s 229 of the Companies (South Australia) Code were added by amendment on 3 May 2005.  By the consent of the parties, the date at which that amendment was to take effect was adjourned for further consideration.

  12. On 1 October 2004, the plaintiff instituted a second set of proceedings in this Court against the same defendants (Action No 1274 of 2004).  The allegations in Action No 1274 of 2004 are in substance the same as the allegations in the present proceedings save only that in the 2004 Action the plaintiff alleges breaches of the statutory duty only.  On 1 December 2005, by consent, I made an order that Action No 1274 of 2004 be heard and determined together with this Action.  D2 and D4 have made a like application to the present application in Action No 1274 of 2004.  The fate of that application is to be determined by reference to the fate of the present application.

    The Claim and Recovery in Duke v Pilmer

  13. In Duke v Pilmer, after resolution of all appeals, the plaintiff was found to be entitled to damages against Nelson Wheeler for breach of common law and contractual duties of care in carrying out the terms of its retainer, and entitled to recover compensation from the former directors in respect of their breach of fiduciary and statutory duties.  The measure of damages and compensation in each case was held to be the same.  The damages and compensation were assessed on the basis that but for the respective breaches by the former directors and Nelson Wheeler, the takeover would not have proceeded.[3] 

    [3]    Duke Group Ltd (In Liq) v Pilmer & Ors (1998) 27 ACSR 1 at 389. On appeal, (1993) 73 SASR 64 at 173 [516]-[519], 236 [802]; Pilmer v DukeGrup Ltd (In Liq) (2001) 207 CLR 165 at 193 [58]-[60].

    The Claim for Recovery in this Action

  14. In these proceedings the plaintiff seeks to recover, before allowance for recoveries from other parties, damages or compensation which it pleads should be assessed (in round terms) at either $75m or $81m.  In addition, the plaintiff pleads an entitlement to compound interest.  The total claim of the plaintiff as at 30 June 2005 was of the order of $227m.

  15. D2 and D4 point to a number of contrasts between the plaintiff’s present claims and the claims made and assessed in Duke v Pilmer.  It is sufficient for present purposes to give a quite general summary of the submissions of D2 and D4 in this respect.  First, despite the express findings in Duke v Pilmer that had it not been for the respective breaches of the plaintiff’s former directors and its accountants the takeover would not have proceeded, and despite the damages/compensation being assessed on that basis, in these proceedings the plaintiff seeks, in a number of respects, to have its losses assessed by reference to the position which would have pertained had the takeover proceeded but at fair value.[4]

    [4]    For example, ASSOC [127.3]-[127.5].

  16. Secondly, Mullighan J at first instance in Duke v Pilmer made an express finding as to what would have happened to the plaintiff if the takeover of Western United had not proceeded.

    [The plaintiff] would not have made wise and successful investment of the proceeds from the sale of the Marvel Loch Mine or its other assets.  It would have remained as a speculative investor and eventually its cash reserves would have been dissipated.[5]

    Despite that finding, the plaintiff in the present case pleads a loss of opportunity to undertake future capital raisings, both of equity and debt, which it says it would otherwise have been able to undertake and a loss of opportunity to invest profitably.[6]

    [5] (1998) 27 ACSR 1 at 415.

    [6]    ASSOC [127.3]-[127.5].

  17. Thirdly, although in relation to the liability of Nelson Wheeler, Mullighan J assessed the plaintiff’s entitlement resulting from the loss of use of assets by reference to the period ending on 30 June 1998 in an amount of $1,303,802.00, the plaintiff seeks against the present defendants compound interest on the losses alleged in these proceedings “in such an amount and for such period as to the court seems equitable” and, as was seen above, asserts an entitlement in this respect to substantially more than $1.3m.

  18. Finally, although it was held on appeal in the High Court that the plaintiff had suffered no actionable loss itself by the issue of shares in itself to Western United as part of the consideration for the takeover, in these proceedings the plaintiff pleads a claim of $55,720,438.28 by way of loss in respect of those shares.

  19. Central to the application of D2 and D4 is their submission that it is not open to the plaintiff to seek to contradict findings of fact which were essential to the judgments in its favour in Duke v Pilmer, nor to assert an entitlement to recover from the defendants as accessories damages or compensation in excess of that which it recovered from its former directors, as principals.

    The Preliminary Issues

  20. The matters which I have just summarised form the basis of the first three issues which D2 and D4 seek to have determined as preliminary issues.  I summarise the five issues as follows:

    1.Whether the plaintiff is precluded from asserting that any damages or compensation to which it is found entitled should be assessed on the basis that were it not for the breaches alleged against the defendants the takeover would have proceeded but at fair value, and whether the plaintiff is precluded from claiming in these proceedings damages in respect of the lost opportunities alleged in the ASSOC?  If it is not precluded from claiming damages for loss of opportunity, is it precluded from claiming an amount in excess of that which was awarded in Duke Group v Pilmer?

    2.Whether the plaintiff is entitled to compound interest in equity and, if so, the period and rate by reference to which that entitlement is to be calculated?

    3.Whether the plaintiff is entitled to recover as damages any amount attributable to the shares in itself issued to Western United as part of their consideration for the takeover?

    4.Whether having regard to the provisions of s 229 of the Companies Code and s 38 of the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980, D2 and D4 can be found liable to the plaintiff for knowingly assisting the breach of duties of the plaintiff’s former directors?

    5.Whether the statutory duty claim has been instituted within the relevant limitation period and, if not, whether the plaintiff has pleaded facts which could enliven the exercise of the discretion to extend time found in s 48 of the LAA?

  21. This summary is my paraphrase of the issues which are the subject of the application.  If, contrary to the view I have reached as to the fate of the application, the application was to be allowed, the precise expression of the issues would need close attention.

  22. The plaintiff accepted that each of these issues involved matters of both fact and law.  Underlying the first and third issues, and to some extent the second, is a submission which D2 and D4 wish to make as to abuse of process.  D2 and D4 wish to contend that in these proceedings the plaintiff is abusing the process of this Court by seeking to impeach findings made in Duke v Pilmer on issues decided adversely to it.  D2 and D4 wish to rely in this respect on the principle discussed in Reichel v Magrath;[7] Haines v Australian Broadcasting Commission;[8] and Commissioner of Taxation v Macquarie Health Corporation Ltd[9].

    [7] (1889) 14 AC 665 at 668.

    [8] (1995) 43 NSWLR 404 at 410.

    [9] (1998) 88 FCR 451 at 495.

    The Relevant Principles

  23. The principles which should guide a court in determining whether or not to determine issues in litigation as preliminary issues are well established.  In relation to preliminary issues which raise questions of law only, the relevant principles were discussed by Bleby J in Rivers v Rivers[10].  Bleby J referred in particular to the following principles derived from the judgment of Walters J in Rogers v Baillieu Bullock Wilkinson Pty Ltd[11]:

    1.An order that a point of law be set down for hearing and disposal before trial ought only to be made when the objection in point of law raises a question which, if decided in favour of the party objecting, would dispense with further trial of some substantial issue in the action.  His Honour did not go as far as to say, as some judges have, that the point must be conclusive of the whole matter, whichever way the point is decided.

    2.Such a reference ought only to be made where there is no dispute on the relevant facts giving rise to it. 

    3.It will seldom be an appropriate procedure where facts have to be decided by the trial Judge in order to determine the preliminary point.

    4.The procedure should not be adopted when assumptions must be made as to the correctness of allegations of fact made in the statement of claim or defence.

    5.If the procedure is adopted, there should be a clear definition of the point of law raised for determination.

    6.It is not the function of the Court to advise parties as to what would be their rights under a hypothetical state of facts.  “The function of the Court is not to decide abstract questions of law, but to decide questions of law when arising between the parties as the result of a certain state of facts”. (Stephenson Blake & Co v Grant, Legros & Co (1917) 86 LJ Ch 439 per Warrington LJ at 440).

    [10] [2002] SASC 197; (2002) 220 LSJS 74.

    [11] (1981) 28 SASR 595.

  24. As already noted, Rivers v Rivers concerned an application for preliminary consideration of certain questions of law.  Additional considerations arise where the preliminary issues raise mixed questions of fact and law.  In relation to such circumstances, the High Court in Bass v Permanent Trustee Co Ltd said:

    Special problems can arise where the preliminary question is one of mixed fact and law. As Brooking J pointed out in Jacobson v Ross [1995] 1 VR 337 at 341, referring to Nissan v Attorney-General [1970] AC 179 at 242-243, per Lord Pearson, it is necessary in that situation that there be precision both in formulating the question and in specifying the facts upon which it is to be decided. His Honour added:

    “Care must be taken to ensure that, in one way or another, all the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable ... as facts assumed to be correct for the purposes of the preliminary determination, or as facts which both sides accept as correct, or as facts which are to be judicially determined. Failure to do this, and in particular failure to perceive that the facts alleged in a pleading are some only of the facts relevant to the determination of the preliminary question, may make the order for preliminary determination unfruitful."

    Quite apart from rendering the "order for preliminary determination unfruitful", the failure to identify the relevant facts or the means by which they are to be ascertained may result in procedures which do not conform to the judicial process. [12]

    [12] (1999) 198 CLR 334 at 358 [53].

  1. Later in Bass, the High Court said:

    Judicial power involves the application of the relevant law to facts as found in proceedings conducted in accordance with the judicial process.  And that requires that the parties be given an opportunity to present their evidence and to challenge the evidence led against them.  It is contrary to the judicial process and no part of judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence in the case.[13]

    [13] (1999) 198 CLR 334 at 359 [56].

  2. The inappropriateness of deciding preliminary issues where the facts are in dispute was discussed by Doyle CJ (with whom Bleby and Besanko JJ agreed on this point) in FAI General Insurance Co Ltd (In Liq) v Sherry:

    … It is sufficient to justify the hearing and determination of a preliminary issue if to do so will dispose of some substantial issue in the action, or will at least substantially narrow the area of dispute.  But it remains the case that when the question in issue is one of law and fact, the question of the factual basis upon which the question is to be answered will necessarily be critical.  In some cases it may be appropriate to answer a question on the basis of the facts alleged by the plaintiff, even though they are not admitted by the defendant.  It may be appropriate to determine whether, even if the plaintiff makes out the facts alleged, the plaintiff’s claim can succeed.  But subject to that, when the facts are in dispute it will rarely be appropriate to answer a mixed question of law and fact.  The reason for this is that even if a satisfactorily precise question can be formulated, the application of the answer to the case will depend upon the facts as ultimately found.  Accordingly, answering the question before the facts are found will usually be of no benefit, because the trial will still proceed.  Moreover, in all probability it will be necessary to revisit the question and the answer once the facts are found, because the facts as found may raise issues as yet unconsidered.[14]

    [14] [2002] SASC 431 at [38]; (2002) 225 LSJS 141 at 148.

  3. The determination of these proceedings is likely to involve a lengthy, complex and expensive trial.  That fact by itself makes it desirable that the Court decide issues as preliminary issues, consistently with the principles outlined above, if that is likely to bring about a termination, or even a substantial shortening, of the litigation.[15]  Those considerations are even more pertinent in this case because of the evidence that the health of D2 is such that he is unlikely to be able to withstand the rigours of a full trial, at least without interruption, and of the limited financial resources available to D2 and D4 with which to conduct a defence.

    [15]   Cf Craig and Craig v Jetmaster Fireplaces Pty Ltd (1988) 142 LSJS 258 at 263 per von Doussa J; Re Multiplex Constructions Pty Ltd (1999) 1 Qd R 287 at 288 per Davies JA and Lee J.

    Decision

  4. Many of the submissions of the parties on the hearing of the application were directed to the merits (or otherwise) of the issues of which D2 and D4 sought preliminary determination.  This was inevitable as some understanding of the issues is necessary in order to determine whether they are of a kind appropriate for preliminary determination.  It was accepted that each is an issue of substance and complexity.  But in these reasons, I do not intend to address matters relating to the substantive merits of each issue.  I have reached the conclusion that the application should fail.  That being so, it is unnecessary and undesirable for this Court to express any view about the issues which may have to be determined later in the proceedings. 

  5. Nor do I think it necessary to address all of the submissions bearing on the appropriateness of an order for preliminary determination of certain issues.

  6. I consider it very relevant that the parties are not in agreement about the course proposed by D2 and D4.  This consideration is not fatal to the application but it is, as I say, a relevant consideration.  It means that there is no agreement as to the identification of the precise issues, or as to the facts which might be necessary for the determination of each issue, nor is there any agreement as to the way in which the prospect of appeal from a decision on the issues determined in a preliminary way should be dealt with.  There is no common ground as to the effect which an early determination of the issues would have on the conduct of the trial.

  7. As already noted, an important part of the submissions of D2 and D4 is the contention that resolution of the preliminary issues in their favour would render the further prosecution of the trial futile, or at least indicate that the plaintiff has not suffered any actionable loss in respect of which it has not already made recovery.  The plaintiff disputes that contention.  There is a difficulty in expressing a concluded view on this issue at this stage.  In some respects, it may become an ultimate issue in the trial.  In some respects it is hypothetical as the submission of D2 and D4 depends, as I understand it, on the assumption that they succeed on each of the first three issues and that may, or may not, ultimately be the case.  It is evident that there is considerable contention between the parties about the plaintiff’s assertion of its losses, and the damages or compensation to which it says it is entitled.  I do not intend to express a concluded view on this issue.  Rather, as I say, I think that it is a relevant matter to take into account that there is no agreement by the parties that resolution of the preliminary issues adversely to the plaintiff would bring the proceedings to an end.  On the contrary, the plaintiff contended that even if the issues were determined adversely to it, the action would still proceed to trial.

  8. The plaintiff points to the undesirability of fragmentation of the adjudicative process. It points to the possibility, even probability, of appeals from the decision on the preliminary issues. This point is made in respect of each of the issues identified by D2 and D4. It is made with particular force in relation to the fourth issue. D2 and D4 accepted that the conclusion for which they contend in relation to the effect of s 38 of the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 is contrary to that expressed by von Doussa J in Beach Petroleum NL v Johnson[16]  A decision on that issue in favour of D2 and D4 would mean therefore that there would be conflicting decisions of single judges as to the effect of s 38. The prospect of appeal in those circumstances is palpable. If there were appeals, that is likely to have a delaying or disruptive effect. Should the hearing of the remaining issues be deferred pending the resolution of those appeals? Alternatively, if the trial proceeds on the remaining issues but the appeals are allowed, will the trial have to be re-opened?

    [16] (1993) 43 FCR 1 at 48.

  9. Fragmentation of the adjudicative process is evident in other respects. In relation to the fifth issue (the limitation of actions issue) the course proposed by D2 and D4 may involve a separation in time of the Court’s identification of the relevant limitation period, and the existence of matters enlivening the discretion to extend the limitation period so identified, pursuant to s 48 of the LAA, from the consideration of the exercise of the discretion to extend time (if that became necessary). Further again, the course proposed by D2 and D4 has the potential to involve some fragmentation in the determination of the damages and compensation to which the plaintiff may be found to be entitled.

  10. In relation to the fourth issue (the s 38 issue), the advantages in the trial of a determination of the issue in favour of the defendants is not readily apparent. Much of the evidence which would be led in relation to that issue would have to be led, in any event, in relation to the remaining issues, in particular in relation to the allegation that the defendants were knowing participants in the breaches by the plaintiff’s former directors of the fiduciary duties which they owed to the plaintiff. In that circumstance, a determination in a preliminary way of the fourth issue would not “dispense with further trial of some substantial issue in the action”.[17]

    [17]   Rivers v Rivers [2002] SASC 197 at [14]; (2002) 220 LSJS 74 at 77.

  11. In the ordinary course, a court addresses issues of the relief to which a plaintiff is entitled after it has addressed the issues concerning the defendant’s liability to the plaintiff.  The course proposed by D2 and D4 involves a departure from that ordinary course.  That is not, by itself, a fatal consideration to the success of the application but it is, in my opinion, a relevant matter.  It increases the prospect of the Court being asked to determine issues which are hypothetical, or which may never arise at all in the litigation.

  12. Although the course proposed by D2 and D4 does have some attractions in the context of what is likely to be a long and complex trial, the matters to which I have just referred, in combination, have led me to the conclusion that the application should be refused.

  13. I am concerned by the evidence regarding the health of D2.  However, the difficulties disclosed by the evidence are difficulties which are likely to be experienced however the trial proceeds:  whether in a staged way as D2 and D4 propose or in one continuous trial.

  14. I also appreciate that the financial burden of conducting a defence to the plaintiff’s claim is likely to be not inconsiderable.  Again, however, that financial burden is likely to exist whether or not the trial proceeds in a staged manner, as D2 and D4 propose, or as a continuous trial.  Further, it is likely that there will be issues upon which all defendants (and perhaps third parties) have common cause.  It may be that the defendants will be able to reach some agreement as to the conduct of the defence on such issues so as to reduce the extent of the financial burden on individual defendants.

  15. For these reasons the application of D2 and D4 made in the Notice for Specific Directions filed on 21 September 2005, as amended on 26 September 2005, is refused.  I will hear the parties as to costs and any consequential matters.