Idoport Pty Ltd v National Australia Bank Ltd

[2000] NSWSC 1215

CITATION:	IDOPORT PTY LTD & ANOR V NATIONAL AUSTRALIA BANK LTD & 8 ORS; IDOPORT PTY LTD & MARKET HOLDINGS PTY LTD V DONALD ROBERT ARGUS; IDOPORT PTY LTD "JMG" V NATIONAL AUSTRALIA BANK LTD [15] [2000] NSWSC 1215
FILE NUMBER(S):	SC 50113/98; 50026/99; 3991/00
HEARING DATE(S):	15/12/00
JUDGMENT DATE:	15 December 2000
PARTIES :	Idoport Pty Ltd (Plaintiff) Market Holdings Pty Ltd (Plaintiff) National Australia Bank Limited (Defendant) Donald Robert Argus (Defendant)
JUDGMENT OF:	Einstein J

COUNSEL :	JJ Garnsey QC, R Titterton, R Alkadamani (Plaintiffs)) T Bathurst QC, J Sackar QC, H Insall, J Halley (Defendants)
SOLICITORS:	Withnell Hetherington (Plaintiffs) Freehill Hollingdale and Page (Defendants)
CATCHWORDS:	Practice and Procedure - Separate determination of an issue - Supreme Court Rules Part 31 Rule 2 - Principles applicable - Just, quick and cheap resolution of real issues, Part 1 Rule 3(1), (2) Supreme Court Rules - Application to order separate hearing of liability/quantum of damages or of liability/causation and quantum of damages dismissed
LEGISLATION CITED:	Fair Trading Act (1987) NSW Supreme Court Rules Trade Practices Act 1974 (Cth)
CASES CITED:	Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 441 CBS Productions Pty Ltd v O’Neil [1985] 1 NSWLR 601 Dunstan v Simmie & Co Pty Ltd [1978] VR 699 Century Medical v THLD [2000] NSWSC 5; (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J). Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996 per Rolfe J). Law Society of NSW v Bruce (unreported, Supreme Court of NSW, 23 April 1996, per Rolfe J), Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J). Rajski v Carson (1988) 15 NSWLR 84 Story of Sydney Pty Ltd v Ling (unreported, Supreme Court of NSW 15 November 1994, per Rolfe J), Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130
DECISION:	1. Notice of motion dismissed; 2. Costs of the notice of motion to be costs of the cause

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION - COMMERCIAL LIST

EINSTEIN J

Friday 15 December 2000 ex tempore
Revised 18 December 2000

50113/98 IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED & 8 ORS

50026/99 IDOPORT PTY LIMITED & ANOR v DONALD ROBERT ARGUS

3991/00 IDOPORT PTY LIMITED (“JMG”) v NATIONAL AUSTRALIA BANK

JUDGMENT

The Notice of Motion

1 There is before the court a notice of motion filed on 15 December 2000 under cover of which the plaintiffs seek orders under part 31, rule 2 of the Supreme Court Rules for the hearing of certain questions separately from other questions in the proceedings in which all issues are now being heard together. The notice of motion seeks orders as follows:

‘1. That the following issues be determined prior to and separately from any issues of quantum of damages or equitable compensation or other relief in proceedings N. 50113 of 1998 and 50025 of 1999 in the Commercial List of the Equity Division of the Court and proceedings No. 3991 of 2000 in the Equity Division of the Court:

(a) issues relating to alleged breaches of section 52 of the Trade Practices Act 1974 (Cth) and section 42 of the Fair Trading Act 1987 (NSW);

(b) issues relating to alleged breaches of contract by the Defendants or some of them;

(c) issues relating to alleged breaches of fiduciary duties owed by some or all of the Defendants;

(d) issues relating to alleged procuring and inducing breaches of contract by some or all of the Defendants;

(e) issues relating to participation by some or all of the Defendants in alleged breaches of fiduciary duty.

2. In the alternative to paragraph 1, that the following issues be determined prior to and separately from any issues of quantum of damages or equitable compensation or other relief in proceedings No. 50113 of 1998 and 50026 of 1999 in the Commercial List of the Equity Division of the Court and proceedings No. 3991 of 2000 in the Equity Division of the Court.

(a) issues relating to alleged breaches of section 52 of the Trade Practices Act 1972 (Cth) and section 42 of the Fair Trading Act 1987 (NSW);

(b) issues relating to alleged breaches of contract by the Defendants or some of them;

(c) issues relating to alleged breaches of fiduciary duties owed by some or all of the Defendants;

(d) issues relating to alleged procuring and inducing breaches of contract by some or all of the Defendants;

(e) issues relating to participation by some or all of the Defendants in alleged breaches of fiduciary duty.

except that no issues of causation are to be determined in the separate liability issues hearing but are to be determined in the hearing relating to quantum of damages or equitable compensation and the relief, if any, which should be ordered.

3. That such issues as to liability and/or causation as the Court shall order be determined prior to and separately from any issues of quantum of damages or equitable compensation or relief.’

2    Whilst I am clearly cognisant of the alternative ways in which the plaintiffs put the motion, it is convenient that I use shorthand in referring to the motion as seeking to split liability and damages. Paragraph 3 of the motion seeks to leave it to the court to identify and order certain issues as to liability or causation as the court may see appropriate to be determined prior to and separately from any issues of quantum, of damages or equitable compensation or relief. 3    The application is pursued on the last day of term in circumstances in which the final hearing commenced on 24 July 2000. The first notification to the court or to the defendants of any possibility of such an application being pursued was given over the last few days. Mr Hetherington in the affidavit in support of the notice of motion has stated that he first sought instructions from the plaintiffs relating to the issue of a possible separate trial application on 7 December 2000 and received instructions relating to the making of an application for a separate trial as to liability issues on 11 December 2000. 4    In a judgment delivered on 7 December 2000 dealing with questions relating to the defendants statements dealing with the patent case issue, the court had occasion to briefly summarise the nature of the proceedings, the case management of the proceedings through the interlocutory stages leading to the hearing and the position which had obtained from the commencement of the hearing up to that point in time. That short summary should suffice as an overview for the purpose of the court dealing with the notice of motion which is now pressed. The summary was in the following terms:

“The Instant Proceedings

In the three related sets of proceedings the plaintiffs' claim from the defendants damages in the order of $50 billion. The general nature of the proceedings was outlined in an interlocutory judgment delivered on 19 August 1999. Since that date there have been numerous contested motions and contested directions hearings. The pleadings have also moved on in terms of a number of further issues being raised and further particulars being furnished. The MLC proceedings which commenced in September this year are being heard together with the two earlier sets of proceedings. Very extensive discovery has been given and numerous statements filed and served from a large number of witnesses. The general state of the matter as at mid April 2000 was set out in a judgment dealing with a contested application relating to use of the Technology Court. [SC 50113/98].

The final hearing of the proceedings commenced on 24 July 2000. Very extensive openings have occupied most of the court hearing days since the final hearing commenced. The defendants have not completed their opening addresses but the court in the last weeks of term has moved into dealing with the urgent issues of ensuring that as soon as possible at the commencement of term next year, the first witnesses take the witness box. These include the plaintiffs attempts to accommodate certain of the attacks mounted by the defendants upon the Further Amended Statement of Claim by seeking to propound limited amendments and to add some more precise particulars particularly in relation to the cases to be litigated against the individual defendants. The hearing of the plaintiffs’ motion for leave to amend is fixed for 13 December.

The court has also in the closing weeks of term, commenced dealing with objections to the expertise of the plaintiffs first witness in chief namely Mr Maconochie. The current proposal is that following the court dealing with these objections and the admission (on the basis of the ‘Directions on Admissibility’) into evidence of Mr Maconochie’s many statements, objections to the expertise of the next witness, Mr Martin, will be determined and his statement read (again on the basis of the ‘Directions on Admissibility’). The defendants will then for approximately two weeks (anticipated to commence in early February next year), complete a section of their remaining opening address. Mr Martin will then be cross-examined. Statements of certain other of the plaintiffs’ witnesses will then be read subject to objections. Those witnesses will then be cross-examined. Interspersed with this exercise at particular points in time, prior to certain groups of the plaintiffs’ witnesses giving evidence, the defendants will shortly complete the balance of their remaining opening addresses going to matters required to be properly understood before those groups of witnesses are called and cross-examined Mr Maconochie is to be cross examined following the giving of evidence of all of the other plaintiffs’ witnesses. The plaintiffs’ case may not close until late next year.

I have been responsible for case managing these proceedings from relatively early in 1999. The proceedings have been before the court on enumerable notices of motion and applications and directions. A large number of interlocutory judgments have been delivered. Because of the extreme complexity of the subject matter of the litigation and the number of issues being litigated, it is inappropriate and impracticable to here do more than refer the reader to the pleadings and to the folders of particulars and to the transcript of the months of detailed openings.

Case managing the proceedings - the ‘enough is enough’ proposition

One of the most difficult aspects of case managing the proceedings has been the frequency of complaints by each party as to the conduct of the other in so far as the filing and service of statements going to the disparate issues is concerned. The court has sought to achieve a proper balance between:

· on the one hand, the usual approach taken to contested litigation before the commercial list which requires the court to carefully monitor compliance with directions so as to ensure that the parties do not take control of the proceedings and so as to ensure that neither party is permitted to ambush the other law

· on the other hand, the somewhat more flexible approach which has required to be taken in these proceedings where the scale of the litigation, the stakes in issue and the public interest most particularly require the court within obvious constraints to permit either party to mobilise such evidence as goes to relevant issues, wherever practicable and wherever case management procedures, as a matter of protecting the fair interests of the other party, seem capable of permitting this to occur,

The way in which this issue has arisen has involved allegations by the defendants that the plaintiffs in filing statements ostensibly in "reply", have in fact sought to steal a march on the defendants by in truth including further evidence which ought to have been included in the plaintiffs’ statements in chief. The court in granting leave to the defendants to respond to what clearly appeared in a number of cases to be additional evidence in chief, has then been faced with the plaintiffs co-relative claims that the defendants have sought to steal a further march, this time on the plaintiffs, by themselves now going well beyond properly answering the plaintiffs’ ‘new’ evidence. The volume of statements, the number of witnesses and complexity of the issues has meant considerable difficulty in the Court being able to do otherwise than adopt a reasonably broad brush approach in working through these complaints - a pragmatic approach has been taken so as to ensure that, within limits, neither party has room for further complaints. But clearly the line has to be drawn somewhere and the stage has now been reached where, subject to


(a) the plaintiffs’ entitlement to respond to the most recent evidence filed by the defendants going to regulatory materials and technical requirements and timing - see the separate judgment delivered on 8 December 2000 (this is required to take place in February),

(b) matters which may arise flowing from the plaintiffs foreshadowed application to further amend the current version of the Statement of Claim,

(c) leave sought by both parties to rely on statements filed slightly out of time and

(d) the defendants further statements replying to new liability materials in the plaintiffs’ so called ‘reply’ statements,


a rigorous approach is to be taken to any steps by either party to supplement their cases which have already been supplemented on a number of occasions. The “enough is enough” proposition, even in litigation of this order, must clearly now be applied.

Speaking very generally, the action consists of claims by the plaintiffs for damages in connection with the alleged failure of the defendants to properly commercialise what has sometimes been described as an Automated Market Quotation System called 'AUSMAQ.' Whether that description is apt is to be litigated. This alleged failure is said by the plaintiffs to sound in damages for, inter alia, breach of contract, breach of fiduciary duty, contravention of s52 of the Trade Practices Act and s42 of the Fair Trading Act, the tort of procuring breach of contract, knowing involvement in breach of fiduciary duty and accessory liability for contravention of the Trade Practices Act under s75B of the Act. In part, those damages are claimed in respect of what are alleged to have been commercial opportunities to exploit the AUSMAQ System in various parts of the world, including the United Kingdom, the United States, Japan and Taiwan, which opportunities are said to have been lost as a result of the alleged malfeasance of the defendants. In the interlocutory judgment [2000 NSWSC 1077 delivered on 24 November 2000] the Court ruled upon foreign law issues which arise because the defendants seek to lead evidence from experts to show that for various foreign law or foreign regulatory reasons, those commercial opportunities for the worldwide exploitation of the AUSMAQ System either did not exist or were not opportunities of the nature or extent posited by the plaintiffs' claim.”

5    The above short summary remains accurate, save that the plaintiffs’ notice of motion seeking leave to amend the current version of the statement of claim is now to be dealt with at the commencement of next term.

Principles Applicable to the Separate Determination of Issues

6 Part 31, Rule 2 of the Supreme Court Rules contains the power of the Court to order the determination of separate issues in the proceedings:

The Court may make orders for -

(a) the decision of any question separately from any other question, whether before or after any trial or further trial in the proceedings; and
(b) the statement of a case and the question for decision.

7 Without examining specific cases in relation to the power conferred on the Court in Part 31, Rule 2, I proceed on the basis of the following principles. (1) The power of the Court to order the separate determination of an issue is a discretionary power which must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 699 at 670 per Young CJ and Jenkinson J.

(2) In exercising the power under Part 31, Rule 2, the Court is now enjoined to give effect to the overriding purpose of the Supreme Court Rules ; namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings and cannot be stated in a more confined way: Part 1, Rule 3 (1), (2) Supreme Court Rules .
(3) The Court begins with the proposition that it is ordinarily appropriate that all issues in a proceeding should be disposed of at the one time: Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141 per Giles CJ in Comm D, Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996 per Rolfe J). Accordingly, it is for the party who wishes to have a question separately determined to show that it is desirable for that to occur.
(4) Without being exhaustive, the separate determination of an issue may prove to be an appropriate procedure in at least the following sets of circumstances:

(a) where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy: CBS Productions Pty Ltd v O’Neil [1985] 1 NSWLR 601 at 606 per Kirby P, Dunstan v Simmie & Co Pty Ltd (supra, at 671 per Young CJ and Jenkinson J);
(b) where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation: Tallglen v Pay TV Holdings (supra, at 141 - 142 per Giles CJ in Comm D);
(c) where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of witnesses: CBS Productions Pty Ltd v O’Neil (supra, at 606 per Kirby P), Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Rajski v Carson (1988) 15 NSWLR 84 at 88 per Kirby P and Hope JA. (5) Conversely, the separate determination of an issue will rarely be an appropriate procedure where: (a) there are intertwined issues of fact or law between the separated question and the other questions such that the determination of the separate question will not have any substantial effect upon the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation: Law Society of NSW v Bruce (unreported, Supreme Court of NSW, 23 April 1996, per Rolfe J), Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J).

(b) where there is a commonality of witnesses and issues of credit as between the separate issue and other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witness, thus possibly precluding that same judicial officer from again dealing with the matters going to the credit of the common witness in accordance with the decision of the Court of Appeal in Australian National Industries Ltd v Spedley Securities Ltd (in liq ) (1992) 26 NSWLR 441 : Story of Sydney Pty Ltd v Ling (unreported, Supreme Court of NSW 15 November 1994, per Rolfe J), Century Medical v THLD [2000] NSWSC 5; (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J).
(c) there is a possibility that the resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings: Story of Sydney Pty Ltd v Ling (supra), Century Medical v THLD (supra).
(6) The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Parramatta Stadium Trust v Civil and Civic Pty Ltd (supra), Century Medical v THLD (supra).

8    As Giles CJ in Comm. D (as his Honour then was) said in Tallglen (supra, at 142):

"Part 31, rule 2 of the rules empowers the court to make orders for the decision of any questions separately from any other question, whether before, at or after any trial or for the trial in the proceedings, and for the statement of a case and the question for decision. In the ordinary course, all issues in proceedings should be decided at the one-time, but separate decision of a question may be appropriate where, for example, the decision of the question is critical to the outcome of the proceedings and (at least if decided in one-way) will bring the proceedings to an end. In particular circumstances the separate decision of a question may be appropriate even if it will not bring the proceedings to an end, such as where there is a strong prospect that the parties will agree upon the result when the core of their dispute is decided or where the decision will obviate unnecessary and expensive hearing of other questions, but such occasions must be carefully controlled lest fragmentation of the proceedings (particularly when the exercise of right of appeal is borne in mind) brings delay, expense and hardship - that which the making of an order was intended to avoid. It is often the case that the need to make findings of fact for a decision of the separate question, especially findings which may involve issues of credit, tells strongly against the making of an order because related facts, and renewed issues of credit, will or may arise at a later stage in the proceedings . Experience teaches that it should be able to be seen with clarity that decision of a separate question will be beneficial in the conduct of the proceedings and the resolution of the parties dispute.”
[emphasis added]

Dealing with the Notice of Motion

9    In fairness to the plaintiffs’ submissions, it is appropriate to set out the whole of paragraph 4 of the letter from Withnell Hetherington Solicitors to Freehills of 13 December 2000, which was in the following terms:

“In those circumstances the Plaintiffs have given consideration to a split trial on liability and damages. The advantages of such a split trial would appear to include the following:

· if the Defendants are successful on liability then clearly no damages issues would have to be determined, thus shortening the length of the proceedings by about 50%. Substantial savings in relation to costs would thus eventuate for all parties;
· if that occurred, Einstein J would be released for other matters. There would appear to be a clear public interest in a Supreme Court Judge being made available a year earlier than otherwise anticipated;
· difficulties relating to factual evidence impacting upon expert evidence would be substantially avoided. Expert evidence could be corrected to take into account the factual evidence findings;
· the Court could determine issues of liability in a highly complex case untrammelled by the weight of the detail of the expert damages evidence. This would substantially lessen the burden on the trial Judge;
· although some factual witnesses are to be called on expert damages issues (Mr Maconochie, and Mr Hume for a minor aspect of the evidence), in terms of the overall quantum and timing of evidence the impact on the case would be marginal;
· the resources of the parties could be directed towards the liability part of the case, untrammelled by damages issues;
· the highly significant similar or equivalence issue would be dealt with in the liability part of the case;
· if the Court dealt with liability first it would reduce the length of time any Judgment was reserved;
· damages issues could be more clearly and directly considered in the light of the liability findings.”

10 My very clear impression of the issues in the proceedings and of the nature of the evidentiary subject matter to be litigated is that as a matter of reality and practicability, the proceedings could not be and certainly should not be split into liability and damages (nor into liability and causation/damages). That impression is gained from the explanations of the issues given in extensive openings by the plaintiffs and the defendants which have occupied most of the second half of this year - although as will be apparent from what I had earlier said, the defendants’ opening on damages is even now not yet complete. 11 It is quite plain to my observation that the intertwined nature of many aspects of the evidence to be adduced in relation to liability, causation and damages is such that any attempt to split the case as sought in the notice of motion almost certainly would cause great difficulty for the court and for the parties. Recognition of these difficulties may well explain why the plaintiffs even attempt to pursue paragraph 2 in the notice of motion. A cursory examination of MFI P72 being part of the plaintiffs’ opening on causation, discloses the intertwined nature of the liability, causation and damages issues and of the common witnesses to be called to give evidence straddling such issues. At worst, and to my mind this is a clear possibility, the splitting of liability and damages would ultimately lead to the case aborting and this for the reason that vital issues of credit are raised with respect to particular witnesses who will give evidence both as to liability as well as to damages. The most obvious such witness is Mr Maconochie whose many statements (apparently approximately 20) fill a trolley. Other such witnesses are Mr Hume and Professor Aitken, although to a dramatically lesser extent than Mr Maconochie. Mr Maconochie gives evidence going to liability, including the similar or equivalence issue, causation and quantum of damages. 12 Importantly, Mr Maconochie is put forward as not only a lay witness, but also as an expert witness. The defendants have in the course of their extensive opening made very plain that they intend to attack Mr Maconochie's credit at every level and to suggest that his evidence lacks the objectivity and impartiality said to be necessary in relation to the court being able to either accept or to give any real weight to the evidence of an expert. As Mr Maconochie is clearly an extremely important witness on many aspects of the plaintiffs’ several cases, assuming for the moment that it was feasible or possible in this case to separate liability from damages, the notion that Mr Maconochie’s credit could be dealt with when liability was being heard and that this should not or would not vitally affect the ability of the court to deal with his credit in relation to so much of his evidence as is to be adduced on damages or on causation/damages, is clearly misconceived. The probability that grave difficulties would be encountered by the court in so approaching the hearing is so very high that in my view, this factor alone clearly requires that the notice of motion be dismissed. 13 One of the issues sought to be litigated by the defendants is to be whether or not a reasonable board of directors of NMG would have exploited the Ausmaq Service overseas over particular periods of time and, if so, with what likely result in terms of profitability. Although the plaintiffs resist the entitlement of the defendants to litigate this issue on the present state of the pleadings and particulars, there is at the least a real possibility that the relevant directors of NMG from time to time will be tested not only in relation to the part which they played in relation to the exploiting of Ausmaq in the real world, but also in relation to what they are likely to have done in the hypothetical world which the plaintiffs claim to have been required by the contractual obligations entered into. This is only one of a number of examples which may be given of circumstances in which a splitting of the case into liability and damages could very likely have the inexorable result that many witnesses would require to be dealt with in terms of their credit on both the liability and damages or causation/damages sections of the case. Many other examples may be given across the range of witnesses and issues. 14 There is then the question of the way in which the plaintiffs have sought to present their case up to this point in time. For certainly most of this year, the plaintiffs have made very plain that they propose to present their case by mixing and matching evidence going to liability with evidence going to damages. The plaintiffs’ opening address covered causation and damages in detail. Hence up until very recently, that is to say the last week or so, the plaintiffs have on enumerable occasions made plain that they intend to proffer Mr Maconochie for cross-examination as their very last witness. The plaintiffs have suggested and the defendants have accepted that Mr Maconochie's many statements would be read at the commencement of the plaintiffs’ adducing of evidence and that thereafter the plaintiffs would be calling their many witnesses in a fashion such that evidence to be given by lay witnesses would be interspersed with evidence to be given by witnesses going to damages; the latter consisting chiefly of expert evidence. . The defendants have been required to prepare to meet a case to be presented in this fashion. 15 To my observation the recent judgments dealing with the defendants’ entitlement to rely upon particular statements and the consequential need for the plaintiffs to be in a position to respond to those statements [see [2000] NSWSC 1077, [2000] NSWSC 1140, [2000] NSWSC 1141], while certainly a factor to be taken into account in the continued case management of the proceedings, could not possibly be suggested as necessitating what I view as the radical suggestion now put forward by the plaintiffs suggesting a splitting of liability and damages (whether treated with in the manner suggested by paragraph 1 or by paragraph 2 of the notice of motion or whether treated as suggesting that the court ought produce a template for such exercise). The ability of the court to accommodate the need for the plaintiffs to be able to respond to the defendants’ relevant recent statements as explained in the recent judgments, says nothing to the critical question of the feasibility of the suggested new approach in terms of the advantages and disadvantages of now ordering a split hearing. A new approach which would almost certainly have far reaching implications in my view likely to derail the proceedings. 16 Even the suggestion that the issue that 'similar or equivalence' could be dealt with in the liability part of the case raises fundamental questions. As I have understood the openings, that issue is so interrelated with questions going to damages that this suggestion is fundamentally misconceived. It is impractical. It is impracticable. It does not treat with the fact that there are so many closely related questions of contractual construction, liability and damages that it is simply impossible to extricate these questions from one another. To order the separate determination of liability in a case such as the present where there is so much at stake in terms of the obvious need for the court to avoid any chance of aborting the hearing, simply makes the point that the motion ought not succeed. 17 It is then suggested by the plaintiffs that they accept that their proposal would require that Mr Maconochie be cross-examined twice. The submission is that provided appropriate steps are taken to limit the scope of such cross-examination, the plaintiffs do not regard this as a major difficulty. 18 In my view, the notion of Mr Maconochie being cross-examined twice in relation to these particular proceedings, and bearing in mind the central part which he plays on many of the issues, simply has to be stated to be rejected. The court would not be in a position to reasonably limit his cross-examination in either bracket of the suggested occasions when the court would be hearing the suggested separate issues. 19 There is then the special situation which obtains in relation to the amount of judicial time set aside by the court for the hearing at first instance of the proceedings. It must be clear that regardless of which party might succeed on liability issues, there is a high prospect that the losing party would appeal. Hence, clear difficulties may arise in relation to whether it would be appropriate for the court to continue to examine the damages issues, notwithstanding that the plaintiffs may have lost on liability or whether it would be appropriate for the court to continue to examine the damages issues, notwithstanding that the plaintiffs may have succeeded on liability, in circumstances in which the defendants determined to seek leave to appeal on the liability leg of the hearing before the damages leg of the hearing could be continued. 20 It is also likely to be the case that a decision in favour of the plaintiffs on liability will lead both parties back to the drawing board in an attempt to substantially bolster/supplement the already voluminous evidentiary statements going to this issue. 21 There are also special difficulties involved in the parties and the court having to return to the second leg issues after a hiatus in a set of proceedings of this scale and complexity. Difficulties for the court in the sense of having to return to the facts after a hiatus. Judges are not often faced with litigation of this magnitude and complexity. Substantial breaks in the hearing of separated issues simply heighten the already apparent difficulties in the court keeping track of the multiple issues and carefully following the pleaded issues which not only cover a number of disparate areas but have changed over time and are still the subject of an application to amend. 22 The high likelihood is that if the court were disposed to make any of the orders sought in the notice of motion, the net effect of the exercise would, it seems to me, in fact increase rather than decrease the amount of court time to be taken by these proceedings. This is because there is a high likelihood of interlocutory appeals which would be prosecuted going to the problems thrown up by the separation of issues at a number of levels. 23 Whilst I certainly accept that the plaintiffs have yesterday for the first time indicated that they now intend to generally seek to call their evidence on liability en banc and to follow that evidence with their evidence on damages and that this forensic decision is apparently driven by the now need for the plaintiffs to procure statements in response to the three recent judgments earlier referred to, this new tack proposed to be taken by the plaintiffs does not entitle the plaintiffs to reformulate in radical fashion the hearing of extremely complex proceedings where all issues are being heard together in the interests of the efficient case management of the proceedings. The panacea which the suggested separate questions would achieve is clearly to my mind a recipe for disaster in these particular proceedings or highly likely to be such. 24 Ultimately many of the circumstances described in paragraph 7(5) - and I refer back to the paragraph which I had set out, including the circumstances where the separate determination of an issue would rarely be an appropriate procedure - make plain that the appropriate exercise of the court's discretion is to dismiss the notice of motion: there are intertwined issues of fact and law between the proposed separated initial question and the other questions [whether causation/damages or simply damages] such that the determination of the separate question will not have any substantial effect upon the width of the field of litigious controversy; there is a commonality of witnesses and issues of credit as between the suggested separate issue and other issues in the case which would necessitate a ruling on the credit of a number of common witnesses, thus precluding the court from again dealing with the matters going to the credit of such common witnesses [or at the least causing a high prospect of such preclusion]; there is a clear possibility and to my mind real likelihood that the resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings. 25 I do not accept that an approach which separated the hearing into either of the categories pursued by the plaintiffs has such prospects of increasing the chance of the settlement of the balance of the litigation as would justify the radical step, if it could be achieved practicably (which in my view it cannot), of the court making either of the alternative orders sought by the plaintiffs in paragraphs 1 and 2 of the notice of motion. I am unable to discern how treating with paragraph 3 of the notice of motion, the court could make such an order. 26 For those reasons, to my mind, the notice of motion requires to be dismissed.

[Following delivery of the ex tempore judgment orders were made:

1. Dismissing the notice of motion

2. That costs of the notice of motion be costs of the cause.]

I certify that paragraphs 1 - 26
are a true copy of the reasons
for judgment herein of the
Hon. Justice Einstein
given on 15 December 2000 ex tempore
and revised on 18 December 2000

___________________
Susan Piggott
Associate

18 December 2000

Last Modified: 06/13/2002