Inpex Operations Australia Pty Ltd v AIG Australia Ltd [No 2]

In the case of Inpex Operations Australia Pty Ltd v AIG Australia Ltd [No 2], the plaintiffs, Inpex Operations Australia Pty Ltd and Inpex Australia Pty Ltd, sought a split trial of liability and quantum issues in a complex dispute with the defendant, AIG Australia Ltd. The plaintiffs alleged that the defendant had provided negligent services, resulting in significant defects in a project for which the plaintiffs were responsible. The case involved intricate technical issues, and the quantum of damages claimed by the plaintiffs was highly dependent on the outcome of the liability issues.

The primary legal issue before the court was whether it was just and convenient to order a separate trial of the liability issues from the quantum issues. The plaintiffs argued that the quantum of damages was inextricably linked to the liability issues and that a combined trial would be more efficient. The defendant, on the other hand, contended that the quantum issues were in a state of flux, and a separate trial of the liability issues would facilitate a clearer understanding of the damages, potentially leading to cost savings and an earlier resolution of the dispute.

The court found that the interests of justice and the need to avoid wasting resources on issues that were likely to change favoured a separate trial of the liability issues. The uncertainty surrounding the quantum of damages, exacerbated by potential early rectification works and the operational changes due to the COVID-19 pandemic, supported the defendant's position. The court concluded that a separate trial on liability would likely expedite the resolution of the entire proceeding, reduce costs, and facilitate a potential settlement.

The court ordered a separate trial on the liability issues, with the quantum of damages and other issues to be addressed in a subsequent trial if necessary. This decision highlights the importance of considering the practicalities and potential outcomes of complex litigation, and the role of the court in managing such disputes to achieve a just and efficient resolution.