Latteria Holdings Pty Ltd v Corcoran Parker Pty Ltd (No 2)
[2014] FCA 1378
•19 December 2014
FEDERAL COURT OF AUSTRALIA
Latteria Holdings Pty Ltd v Corcoran Parker Pty Ltd (No 2) [2014] FCA 1378
Citation: Latteria Holdings Pty Ltd v Corcoran Parker Pty Ltd (No 2) [2014] FCA 1378 Parties: LATTERIA HOLDINGS PTY LTD v CORCORAN PARKER PTY LTD and DARREN ASKEW File number: VID 97 of 2014 Judge: MORTIMER J Date of judgment: 19 December 2014 Catchwords: PRACTICE AND PROCEDURE – Application for hearing and determination of separate question – whether “just and convenient” – whether appropriate for Court to determine separate question based on assumptions of fact and law – application refused Legislation: Competition and Consumer Act 2010 (Cth) Part VIA ss 87CB, 87CH, Sch 2 s 18
Corporations Act 2001 (Cth)
Fair Trading Act 1999 (Vic) s 9
Federal Court of Australia Act 1976 (Cth) s 37M
Judiciary Act 1903 (Cth) s 79
Wrongs Act 1958 (Vic) Part IVAA ss 24AI, 24ALFederal Court Rules 1979 (Cth) O 29 r 2
Federal Court Rules 2011 (Cth) div 30.1, rr 30.01, 39.05Cases cited: ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445; [2014] FCAFC 65
Australian Energy Regulator v Snowy Hydro Ltd [2014] FCA 1013
AWB Ltd v Cole (No 2) (2006) 233 ALR 453; [2006] FCA 913
BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 2) [2008] FCA 1656
Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450; [2007] FCA 1216
Latteria Holdings Pty Ltd v Corcoran Parker Pty Ltd [2014] FCA 880
Olbers v Commonwealth (No 3) [2003] FCA 651
Rainsford v Victoria (2005) 144 FCR 279; [2005] FCAFC 163
Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495; [1999] FCA 718
Rod Investments (Vic) Pty Ltd v Abeyratne (No 2) [2009] VSC 278
Save the Ridge Inc v Commonwealth (2005) 147 FCR 97; [2005] FCAFC 203
Spirits International BV v Federal Treasury Enterprise (FKP) Sojuzplodoimport (2011) 91 IPR 438; [2011] FCAFC 69
Street v Luna Park Sydney Pty Ltd [2007] NSWSC 697
Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130
Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19
Wealthsure Pty Ltd v Selig (2014) 221 FCR 1; [2014] FCAFC 64Date of hearing: Heard on the papers Date of last submissions: 12 December 2014 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 62 Counsel for the Applicant: Mr S Minahan Solicitor for the Applicant: Simpson Law Counsel for the Respondents: Mr NP de Young Solicitor for the Respondents: Moray & Agnew Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 97 of 2014
BETWEEN: LATTERIA HOLDINGS PTY LTD
ApplicantAND: CORCORAN PARKER PTY LTD
First RespondentDARREN ASKEW
Second Respondent
JUDGE:
MORTIMER J
DATE OF ORDER:
19 DECEMBER 2014
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The respondents have leave to file and serve an amended defence in the form annexed to the affidavit of Mr Jonathan Shakenovsky sworn 11 December 2014.
2.The application for the determination of a separate question pursuant to r 30.01 of the Federal Court Rules 2011 (Cth) is refused.
3.The respondents pay the applicant’s costs of the application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 97 of 2014
BETWEEN: LATTERIA HOLDINGS PTY LTD
ApplicantAND: CORCORAN PARKER PTY LTD
First RespondentDARREN ASKEW
Second Respondent
JUDGE:
MORTIMER J
DATE:
19 DECEMBER 2014
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
INTRODUCTION AND SUMMARY
By an application filed with the Court on 19 November 2014, the respondents in this proceeding, Corcoran Parker Pty Ltd and Mr Darren Askew, seek an order for hearing and determination of a separate question pursuant to r 30.01(1) of the Federal Court Rules 2011 (Cth). If the nominated question is answered “no”, the application seeks the joinder of Mr Lucas James O’Brien as a party. The Court has previously refused a joinder application by the respondents in relation to Mr O’Brien: see Latteria Holdings Pty Ltd v Corcoran Parker Pty Ltd [2014] FCA 880 (the joinder judgment).
For the reasons which follow, the application for determination of a separate question is refused.
THE SUBSTANTIVE PROCEEDING AND PROCEDURAL HISTORY
In the substantive proceeding in which this application is made the applicant, Latteria Holdings Pty Ltd, makes claims against the respondents for breach of contract, breach of duty of care and for misleading and deceptive conduct pursuant to s 18 of Sch 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law) and s 9 of the Fair Trading Act 1999 (Vic), in relation to livestock agency services provided by the respondents to the applicant in November and December 2011. Latteria seeks declarations of the respondents’ contraventions and damages for economic loss. On 4 August 2014, by consent of the parties and with leave of the Court, Corcoran Parker filed a cross-claim for alleged outstanding monies owed to it by Latteria for its ongoing provision of livestock services. The applicant’s claims and the first respondent’s cross-claims, and the respondents’ defences to the applicant’s claims, are set out in the joinder judgment: at [4]-[12].
The proceeding was commenced on 17 February 2014. It has been the subject of active and ongoing case management since that date.
On 28 March 2014, I made orders listing the matter for trial commencing on 1 December 2014. The parties expressed no difficulties meeting that trial timetable.
On 28 March 2014, I also made orders referring the proceeding to mediation before a Registrar of this Court on a date not before 14 September 2014, after the time in which the parties were to have filed the evidence, including expert reports, on which they sought to rely. The mediation was scheduled for 30 September 2014.
An application to join Mr O’Brien was filed on 28 May 2014, and judgment refusing the application was delivered on 22 August 2014.
In late August 2014, in correspondence with the Court, both the applicant and respondents advised the Court that they were of the view that the mediation scheduled for 30 September 2014 could not proceed. The respondents had not filed their lay evidence in response to the applicant’s lay evidence, and neither party had filed their expert evidence in compliance with my orders of 28 March 2014. The applicant also sought orders that the hearing date of 1 December 2014 be vacated. The respondents foreshadowed a further application to join Mr O’Brien, an option left open to them by my judgment of 22 August 2014.
At a directions hearing on 2 September 2014 I declined to make orders vacating the hearing date. Instead, orders were made vacating the mediation. In its place the parties were directed to attend a case management conference before a Registrar, to explore the options for the preparation and presentation of expert evidence to ensure the trial date of 1 December 2014 could be maintained. That case management conference was conducted by Registrar Pringle on 30 September 2014.
Following the case management conference it became apparent to the Court that the parties were unlikely to be in a position to proceed to trial on the scheduled date of 1 December 2014. Given that situation, on 6 October 2014 I made orders vacating the December trial dates and listing the matter for hearing on liability only commencing 10 March 2015. The parties were each ordered to file a “mediation paper” setting out each party’s key arguments on liability and quantum, and the proceeding was referred for a telephone conference in late October 2014, the purpose of which was to establish whether the proceeding would be ready for a substantive mediation in November 2014. I also made orders requiring the respondents to file any further interlocutory application to join Mr O’Brien by 1 November 2014, and ordered that any such application would be listed for hearing at 10.15am on 16 December 2014.
A telephone conference was conducted by Registrar Pringle on Friday 31 October 2014. Following that conference it was clear that there would be little utility in the parties proceeding to mediation in November. Accordingly, on 7 November 2014 I vacated the order for a mediation to be conducted in November, and made further directions preparing the matter for trial commencing on 10 March 2015.
On 19 November 2014, the respondents filed the current interlocutory application. The respondents’ application seeks the following orders:
1.An order pursuant to Rule 30.1 (a) of the Federal Court Rules 2011 (Cth) that the following question be determined as a separate question in the proceeding, and be heard and determined forthwith:
On the assumed facts that:
(a) the matters alleged in paragraphs 26, 27 and 30 (except the reference to the said contraventions of the ACL) of the Applicant’s Statement of Claim dated 6 February 2014 are established (Common Law Claim);
(b) the matters alleged in paragraphs 28 and 29 of the Applicant’s Statement of Claim dated 6 February 2014 are not established;
(c) the matters alleged in paragraphs 31 to 36 of the Respondents’ Defence dated 8 May 2014 are established (O’Brien Conduct); and
(d) Lucas James O’Brien is not joined as a party to these proceedings;is the Common Law Claim an apportionable claim under section 87CB of the Competition and Consumer Act 2010 (Cth) (CCA) and can the liability of the Respondents for the Common Law Claim be reduced to reflect that proportion of the loss and damage that the Court considers just having regard to the O’Brien Conduct pursuant to section 87CD of the CCA or otherwise.
2. An order the Court dispense with the requirement in Rule 30.1(b) of the Federal Court Rules 2011 (Cth).
3. In the event that the answer to the questions in paragraph 1 above are “no”, an order pursuant to section 24AL of the Wrongs Act 1958 (Vic) and/or Rule 9.05 of the Federal Court Rules 2011 (Cth) that Lucas James O’Brien be joined as a party to these proceedings.
4. Costs follow the event.
5. Such other or further orders as the Court deems fit.The application purports to be filed pursuant to my orders of 6 October 2014, but in substance it is clearly a different interlocutory application altogether. In light of the short timeframes and the impending trial date, at a directions hearing held on 4 December 2014 I ordered that the application be heard and determined on the papers.
In support of their application the respondents filed an affidavit, sworn by the respondents’ solicitor Mr Jonathan Saul Shakenovsky on 19 November 2014. In it Mr Shakenovsky makes reference to the joinder judgment, where I found at [51]:
Part IVAA of the Wrongs Act operates to “modify” the common law with respect to proportionate liability, for claims for economic loss or damage to property. In Blunden v Commonwealth (2003) 218 CLR 330; [2003] HCA 73 at [18], Gleeson CJ, Gummow, Hayne and Heydon JJ held that s 80 operates to apply the common law as modified by the statute law in force in the relevant state. Relevantly, s 80 requires that the common law as modified by Part IVAA of the Wrongs Act can only apply in this proceeding to the extent that it is “not inconsistent with the Constitution and the laws of the Commonwealth”. For the reasons I have given above, s 24AI of the Wrongs Act is inconsistent with the provisions of Part VIA of the Competition and Consumer Act, and Part IVAA is not applied by either ss 79 or 80 of the Judiciary Act in this proceeding. Whether or not the term “inconsistent” might be seen to have a different meaning from “irreconcilable” as that term had been used in respect of s 79 (see Hill, G, and Beech, A, “‘Picking Up’ State and Territory Laws under s 79 of the Judiciary Act — Three Questions” (2005) 27 Aust Bar Rev 25), in the present circumstances the term “inconsistent” is equally applicable to the operation of s 24AI(3), compared to Part IVA of the Competition and Consumer Act. The former requires joinder of a current wrongdoer, the latter expressly contemplates that may, but need not, occur. Applying the former will produce an outcome the latter does not require and will remove or render nugatory the discretion given to the Court by s 87CH. That is an inconsistent operation.
In light of this finding, Mr Shakenovsky’s affidavit then states the purpose of the respondents’ application:
The purpose of the Respondents’ application for the determination of a preliminary question in the proceeding is to clarify and determine whether for the purposes of the determination of the Applicant’s claim at trial the Respondents will have the benefit of the apportionment provisions contained in the Consumer and Competition Act 2010 (Cth) in respect of the Applicant’s common law claims for breach of contract and negligence in light of the above decision of the Honourable Justice Mortimer made in an interlocutory context and the decisions in Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450 at [33]; ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445 at [1 586]; and Wealthsure Pty Ltd v Selig (2014) 221 FCR 1 at [65).
In support of the alternative orders sought by the respondents that Mr O’Brien should otherwise be joined, Mr Shakenovsky’s affidavit then annexes and summarises passages from the outlines of evidence of the second respondent, Mr Darren Askew (filed by the respondents), and Mr Tony Iaria and Mr Lucas O’Brien (filed by the applicant):
The Applicant’s Outline of Lay Evidence to be given by Tony Iaria relevantly states:
(a) at paragraph 6, that the Applicant engaged Mr O’Brien as a sharefarmer for the Farm;
(b) at paragraph 5, that Mr O’Brien was judged by the Applicant to have the necessary local dairy experience to operate a dairy farm which the Applicant lacked at the time;
(c) at paragraph 6, that Mr O’Brien was involved with the establishment of the Farm during November 2011 ;
(d) at paragraph 11, that Mr O’Brien travelled with the Applicant to Sale to select cows for the Farm.The Applicant’s Outline of Lay Evidence to be given by Mr O’Brien relevantly states:
(a) at paragraph 6, that he has been a dairy farmer in the local region for more than 20 years;
(b) at paragraph 2, that he agreed to share farm for the Applicant when it purchased the Farm in late 2011;
(c) at paragraph 4, that he had been helping out at the Farm during December 2011 ;
(d) at paragraph 5, that he saw ticks on the Gloucester Cows within a day of their arrival at the Farm.… Askew’s Evidence states as follows, which I am informed by Mr Askew and verily believe is true:
(a) at paragraph 6(a), that in November 2011 he was told by the Applicant that Mr O’Brien was employed by the Applicant as an experienced local share farmer with many years of experience;
(b) at paragraph 9(a), that on 22 November 2011, Mr O’Brien told him that he was a share farmer hired by the Applicant because of his experience in dairy farming, selecting dairy cattle, milking dairy cattle and managing dairy farms;
(c) at paragraph 9(b), that on 22 November 2011, Mr O’Brien told him that he had much experience in dairy farming, running dairies in the area and that he was there to show Joe Iaria how to run the farm.
(d) at paragraph 11, that on 22 November 2011, Mr O’Brien and Mr Iaria selected a total of approximately 200 cattle to buy for the Farm;
(e) at paragraph 19, that shortly after the Gloucester Cows were delivered to the Farm, Mr Askew saw that the Gloucester cows at the Farm were being milked with the other cows in the milking herd;
(f) at paragraph 19, that shortly after the Gloucester Cows were delivered to the Farm, Mr O’Brien told Mr Askew that the Gloucester cows were being milked with all the other cattle;
(g) at paragraph 19, that shortly after the Gloucester Cows were delivered to the Farm, Mr Askew saw that the Gloucester Cows were mixed with other cattle on the farm.Mr Shakenovsky’s affidavit also annexes an affidavit of Mr Maxwell Hilton Hardes, a bovine artificial insemination sales agent and expert witness on whose evidence it appears the respondents intend to rely at trial. Mr Shakenovsky summarises Mr Hardes’ evidence as follows:
(a) at paragraph 12, that it has always been normal practice for a dairy farmer to have his/her own “biosecurity measures” to prevent the introduction to and outbreak of any possible diseases on the farm;
(b) at paragraph 13, that in his opinion, as part of normal “‘biosecurity measures”, Mr Iaria and Mr O’Brien should have taken the following steps when introducing the Gloucester Cows into the Farm:(i) put newly introduced cows into a paddock by themselves for at least 5 days so that they could rest (especially the Gloucester Cows given their 10 hour journey), so that any type of disease, pest or condition which the cow has brought may show itself, so that any ticks or other pests can be seen and controlled before introducing to the remaining herd;
(ii) separate the Gloucester Cows from the rest of the herd immediately upon noticing ticks and not allowing contact between the Gloucester Cows and the other cows until the ticks have been removed;
(iii) treating the Gloucester Cows and any other cows they have come into contact with as soon as the ticks are noticed;
(iv) contact their veterinarian as soon as ticks are noticed and seek their advice;
(v) after removing ticks, spray all cattle with the appropriate spray as recommended by a veterinarian so that ticks which are not noticed and any left-over residue from the ticks can be eliminated;
(vi) never mix the herd with cows on another farm; and
(vii) ensure that all movements between different farms are recorded into the national NLIS database.THE APPLICANT’S INITIAL RESPONSE TO THE RESPONDENTS’ APPLICATION
In correspondence sent to the Court on 25 November 2014, the applicant opposed the respondents’ application for hearing and determination of a separate question. The applicant submitted that the respondents’ application was “grossly out of time”, having been filed with the Court 18 days after the respondents were ordered to file any further application seeking to join Mr O’Brien, and in the context of a hearing date (either in December 2014 or March 2015) having been fixed for “many months”.
The applicant contended that the respondents have already unsuccessfully pursued an application to join Mr O’Brien, which had been refused by the Court. It contended that there is “no new factual basis” different to that upon which the first application to join Mr O’Brien was made, such as to justify a reassessment of the issues arising on the first application. The evidence before the Court, the applicant submitted, has not changed, as only outlines of evidence have been filed (on the basis that the trial will be conducted on oral evidence) and, in any event, there is no difference between the factual contentions made on each application.
The applicant further submitted that the respondents have failed to provide sufficient explanation to satisfy the Court that there is more than a “fanciful possibility” the hypothetical scenario set out as the basis for the separate question sought to be heard and determined — that is, that the applicant might fail on the Australian Consumer Law claim but succeed on its common law claims — would be likely to result in a different outcome.
The applicant also referred to the applicable principles relating to r 30.01 of the Federal Court Rules (which I set out in detail below) and submitted that the application would amount to a de facto rehearing or appeal of the initial joinder application.
THE RESPONDENTS’ SUBMISSIONS
On 10 December 2014 the respondents filed written submissions in support of their application. The respondents also filed a further affidavit of Mr Shakenovsky, sworn on 11 December 2014.
The respondents’ written submissions contended that each of the applicant’s claims (of breach of contract, negligence, and misleading and deceptive conduct under the Australian Consumer Law and Victorian Fair Trading Act) separately is an apportionable claim in relation to the respondents.
They submitted that the purpose of the Court determining the separate question prior to trial is to enable the Court to decide “whether the provisions of Part VIA of the CCA apply to the Applicant’s contract, negligence and FTA claims”, this question being necessary for the determination of the matter at trial.
The respondents contended that the joinder judgment did not specifically deal with the proposed separate question in the form raised by the respondents. They submitted Part IVAA of the Wrongs Act 1958 (Vic) has a wider field of operation than Part VIA of the Competition and Consumer Act. The respondents submitted that therefore there is room for s 24AI(3) of the Wrongs Act to operate in federal jurisdiction, for example in relation to accrued tort and contract claims which are not covered by s 87CB of the Competition and Consumer Act. Second, the respondents submitted, should the applicant’s claim under the Australian Consumer Law fail in its entirety, it is questionable whether Part VIA of the Competition and Consumer Act would be enlivened at all. The better view, the respondents submitted, is that
Part IVAA of the Wrongs Act is inconsistent with the Commonwealth law only to the extent that the Part applies to claims covered by Part VIA of the CCA, and is otherwise picked up under s 79 of the Judiciary Act so to apply to the contract, negligence and FTA claims made by the Applicant in this proceeding.
The respondents pointed to r 39.05(c) of the Federal Court Rules, which provides that the Court may vary or set aside an interlocutory judgment or order after it has been entered, as support for their proposition that “Any interlocutory determination by the Court is not binding on parties at trial”. They submit that, if the applicant’s submission that the Court has already determined the proposed question is accepted, this gives support to their submission that the determination should be “given effect to as a final determination in the proceeding (e.g. to guard against the risk of the Applicant’s seeking to propound a contrary position at trial).”
The respondents submitted that it is “just and convenient” to determine the proposed separate question. The proposed question, the respondents submit, is not a hypothetical question and, contrary to the applicant’s submission, would not involve the determination of any contested facts. Therefore, the respondents contended, the preliminary determination of the proposed question would be “the most efficient course as a matter of case management and may contribute to a substantial saving of time and money”.
In support of this submission the respondents relied on the decision of Hansen J in Rod Investments (Vic) Pty Ltd v Abeyratne (No 2) [2009] VSC 278, where, the respondents submit, his Honour determined the applicability of the Wrongs Act and federal law proportionate liability provisions as preliminary questions and on the basis of assumptions arising from the plaintiff’s pleaded case. A positive answer on the separate question, the respondents submitted, would remove any need for them to further pursue joinder of Mr O’Brien.
However, should the Court decide it is not appropriate to determine the separate question, the respondents will press the joinder application of Mr O’Brien. This would be, they submitted, on the basis of a risk, at trial or on appeal, that the provisions of Part VIA of the Competition and Consumer Act do not apply to enable apportionment of the applicant’s contractual, tortious or Fair Trading Act claims.
The delay in filing the interlocutory application was explained in Mr Shakenovsky’s second affidavit. Mr Shakenovsky explained his numerous unsuccessful attempts to contact a proposed expert witness and the eventual, alternative retainer of Mr Hardes, whose affidavit was annexed to Mr Shakenovsky’s first affidavit. Mr Shakenovsky’s evidence is provided to support the respondents’ explanation for the delay in filing their application. The respondents submit that Mr Hardes’ evidence, along with the “admissions” the respondents say the applicant made in its outlines of evidence (set out in Mr Shakenovsky’s first affidavit), provide evidentiary support for their submission that Mr O’Brien is a concurrent wrongdoer.
The proposed amended defence
The respondents sought leave to amend their defence, in order to clarify their position on their claim to proportionate liability. A draft proposed amended defence was annexed to the second affidavit of Mr Shakenovsky. The relevant amendments are to paragraph [36] of the Defence, in the following terms:
36. Further and alternatively, if the matters pleaded in the SOC are established and the Respondents are liable to Latteria (which is denied) then:
(a) Each of Latteria’s claims against the Respondents is an apportionable claim within the meaning of section 24AE of the Wrongs Act 1958 (Vic) (Act)
andor section 87CB of the Competition and Consumer Act 2010 (Cth) (CCA);
(b) any loss and damage suffered by Latteria was suffered wholly or partly as a result of its own failure to take reasonable care; andPARTICULARS
The Respondents refer to and repeat the particulars to paragraph 31 above.
(c) O’Brien is a concurrent wrongdoer in relation to Latteria’s claim against the Respondents within the meaning of s 24AH of the Act and section 87CB of the CCA; and
PARTICULARS
The Respondents refer to and repeat paragraphs 32 to 35 above.
(d) the liability of the Respondents (if any) in relation to each of Latteria’s claims should be reduced to reflect that proportion of the loss and damage that the Court considers just having regard to the extent of their responsibility for the loss and damage pursuant to section 24AI of the Act or section 87CB of the CCA.
The applicant made no submissions in opposition, and in my opinion leave should be granted. The amendment does make it clear the respondents seek to raise a proportionate liability claim in relating to each of the applicant’s claims, and to do so by invoking either s 24AI of the Wrongs Act or s 87CB of the Competition and Consumer Act, whichever is found to be applicable.
THE APPLICANT’S SUBMISSIONS IN REPLY
In reply submissions filed with the Court on 12 December 2014, the applicant restated its submission that the respondents have not provided a sufficient evidentiary basis for their application. In response to Mr Hardes’ evidence, the applicant submitted it “should not be regarded as evidence or considered since it is late served, it traverses matters of expertise and opinion and so calls for substantive answer which the applicant has not embarked on at this point”. The applicant submitted that the respondents’ reliance on Rod Investments was flawed, as that case involved a different proportionate liability regime under the Corporations Act 2001 (Cth), and the Court in that case had found on an analysis of the plaintiff’s claims that there were no apportionable claims covered by the federal law, which is not so in the instant case.
The applicant disputed the respondents’ submission that there would be case management efficiencies to be derived from a preliminary determination of the proposed separate question. The applicant submitted that there would be no consequent reduction in the evidentiary process or time required at trial for either evidence or submissions on the law. The applicant restated its submission that, by way of this application for determination of a separate question, the respondents seek to re-agitate their previously unsuccessful application to join Mr O’Brien.
THE APPLICABLE LEGAL PRINCIPLES
The trial process is designed so that all issues of fact and law in a proceeding should be decided at the one time. However, like similar state provisions and the previous rule (see Federal Court Rules 1979 (Cth) O 29 r 2), div 30.1 of the Federal Court Rules confers a discretion to make separate decisions on questions, generally where the “core” of a dispute can be decided by such a process or if there will be an avoidance of costly and/or time-consuming hearing of other questions: Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141-142 per Giles CJ.
Rule 30.01 provides:
(1) A party may apply to the Court for an order that a question arising in the proceeding be heard separately from any other questions.
(2) The application must be made before a date is fixed for trial of the proceeding.By their application the respondents sought an order dispensing with compliance with subs (2). The presence of subs (2) indicates that the Federal Court Rules contemplate this procedure arising before the parties have undertaken the commitment involved in preparation for trial.
The principles applicable to whether an order should be made under r 30.01 were summarised by Branson J in Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495; [1999] FCA 718 at [8] ( in relation to the predecessor rule):
The principles that govern the circumstances in which an order will be made under O 29 r 2 are relatively well established. They may be summarised as follows:
(a) the term “question” in O 29 r 1 includes any question or issue of fact or law in a proceeding. The distinction in the rule between an “issue” and a “question” is the distinction between that which, when resolved, will result in an adjudication in favour of one party or the other, being an “issue”, and less decisive matters of dispute being “questions” (Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 425; 113 ALR 643 at 647);
(b) a question can be the subject of an order for a separate decision under O 29 r 2 even though a decision on such a question will not determine any of the parties’ rights (Landsal Pty Ltd (in liq) v REI Building Society at FCR 425; ALR 647);
(c) however, the judicial determination of a question under O 29 r 2 must involve a conclusive or final decision based on concrete and established or agreed facts for the purpose of quelling a controversy between the parties (Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; 161 ALR 399; [1999] HCA 9 at [45]);
(d) where the preliminary question is one of mixed fact and law, it is necessary that the question can be precisely formulated and that all of the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable either as facts assumed to be correct for the purposes of the preliminary determination, or as agreed facts or as facts to be judicially determined (Jacobson v Ross [1995] 1 VR 337 at 341, referring to Nissan v Attorney-General [1970] AC 179 at 242–3; [1969] 1 All ER 629 at 663–4 per Lord Pearson; Bass v Perpetual Trustee at [53]);
(e) care must be taken in utilising the procedure provided for in O 29 r 1 to avoid the determination of issues not “ripe” for separate and preliminary determination. An issue may not be “ripe” for separate and preliminary determination in this sense where it is simply one of two or more
alternative ways in which an applicant frames its case and determination of the issue would leave significant other issues unresolved (CBS Productions Pty Ltd v O’Neill (1985) 1 NSWLR 601 per Kirby P at 606);
(f) factors which tend to support the making of an order under O 29 r 2 include that the separate determination of the question may:(i) contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the action; or
(ii) contribute to the settlement of the litigation (CBS Productions Pty Ltd v O’Neill per Kirby P at 607);(g) factors which tell against the making of an order under O 29 r 2 include that the separate determination of the question may:
(i) give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial (GMB Research & Development Pty Ltd v Commonwealth [1997] FCA 934);
(ii) result in significant overlap between the evidence adduced on the hearing of the separate question and at trial — possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: GMB Research & Development Pty Ltd v Commonwealth; Arnold v Attorney-General (Vic) (unreported, Fed C of A, Sundberg J, Nos VG629–37 of 1995, 8 September 1995, BC9502745). This factor will be of particular significance if the court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or
(iii) prolong rather than shorten the litigation (GMB Research & Development Pty Ltd v Commonwealth).(See also Spirits International BV v Federal Treasury Enterprise (FKP) Sojuzplodoimport (2011) 91 IPR 438; [2011] FCAFC 69 at [150] per Buchanan J, with whom Foster J agreed (at [160])).
In Bass v Permanent Trustee Co Ltd (1998) 198 CLR 334; [1999] HCA 9, the High Court held that it is inappropriate for a court to state and answer preliminary questions not based on facts found or agreed: at [49] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ. Therefore, as Kenny J stated in Rainsford v Victoria (2005) 144 FCR 279; [2005] FCAFC 163 (at [36], Hill and Finn JJ agreeing):
In order for a court exercising federal jurisdiction to utilise the separate questions procedure, either the parties must agree upon the relevant facts or the court must determine the facts before seeking to decide the question.
Ultimately, the issue for the Court to determine is whether it is “just and convenient” for an order under r 30.01 to be made: Reading Australia 217 ALR 495; [1999] FCA 718 at [9]. In making that assessment, consistent with the overarching purposes enunciated in s 37M of the Federal Court of Australia Act 1976 (Cth), in Olbers v Commonwealth (No 3) [2003] FCA 651, French J stated the overarching consideration informing the discretion to make such an order is “efficient case management”: at [8].
Separate determination of questions remains, however, an “exceptional course” (Street v Luna Park Sydney Pty Ltd [2007] NSWSC 697 at [5] per Brereton J) that can be “fraught with difficulties” and is to be “adopted with caution”: Save the Ridge Inc v Commonwealth (2005) 147 FCR 97; [2005] FCAFC 203 at [15] per Black CJ and Moore J. In Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19, Kirby and Callinan JJ observed (at [168]-[170]):
…The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap.
The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court’s, rather than the parties’, interests.
Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question.CONSIDERATION
The respondents have identified the separate question in their application by reference to whether, given certain assumed facts and certain assumed legal conclusions, what they identify as the applicant’s “common law claim” is within the meaning of an “apportionable claim” for the purposes of s 87CB of the Competition and Consumer Act.
In their written submissions, the respondents express the question as whether the provisions of Part VIA of the Competition and Consumer Act apply to the applicant’s contract, negligence and Fair Trading Act claims.
Differently expressed, this was the matter which was left open in the joinder judgment as a matter to be determined at trial: see at [64] of the joinder judgment. All the respondents have done is to turn the issue expressed at [64] of the joinder judgment on its head, and articulate it by reference to the Competition and Consumer Act provisions rather than the Wrongs Act provisions. As I noted in that paragraph, whether Part IVAA of the Wrongs Act applies to the contractual, tortious and Fair Trading Act claims made by the applicant is factually and legally complicated. So much is obvious from Full Court decisions such as Wealthsure Pty Ltd v Selig (2014) 221 FCR 1; [2014] FCAFC 64 and ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445; [2014] FCAFC 65.
Given the respondents have pleaded (and clarified in their amended defence) that their liability in respect of each and every of the applicant’s claims is apportionable under either the Wrongs Act or the Competition and Consumer Act, the scope and application of Part IVAA of the Wrongs Act, and Part VIA of the Competition and Consumer Act will be a central aspect of their defence at trial. Nothing in the joinder judgment precludes or impedes that occurring. The joinder judgment determined the confined issue of whether s 24AI(3) applied so as to require the joinder of Mr O’Brien. I found that provision was not “picked up” by s 79 of the Judiciary Act 1903 (Cth). The application of the remainder of Part IVAA of the Wrongs Act, and its relationship to the operation of Part VIA of the Competition and Consumer Act, were matters left for trial. It is implicit in the determination that s 24AI(3) is not “picked up” that Mr O’Brien is not required to be a party for the remainder of Part IVAA to have application, if the Court determines that to be the case.
There is no doubt there is authority for the proposition that a provision such as s 87CB of the Competition and Consumer Act is confined in its terms and should not be construed to cover tortious and contractual claims based on a failure to take reasonable care, which may or may not be involved in a claim of misleading and deceptive conduct: see BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 2) [2008] FCA 1656, referred to with approval by the Full Court in ABN AMRO 309 ALR 445; [2014] FCAFC 65 at [1586].
In Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450; [2007] FCA 1216, Middleton J identified the distinction at [29]-[31] (although in that case his Honour was not dealing with a pleaded claim which alleged failures to take reasonable care):
As the respondents observed, in drafting the provisions of Pt VIAA of the Wrongs Act, the legislature deliberately chose to define “apportionable claim” by reference to an action for damages arising from a failure to take reasonable care. The provisions do not require that the claim itself be a claim in negligence or for a breach of duty — it only requires that the claim arise from a failure to take reasonable care.
…. In these circumstances, where a respondent desires to rely upon Pt IVAA of the Wrongs Act, it will need to plead and prove each of the statutory elements, including the failure to take reasonable care. In a proceeding where the applicant does not rely upon any such failure, then the need for a particularised plea by a respondent may be particularly important for the proper case management of the proceedings: see eg Ucak v Avante Developments Pty Ltd [2007] NSWSC 367 at [41]. It would be desirable at an early stage of proceedings for a respondent to put forward the facts upon which it relies in support of the allocation of responsibility it contends should be ordered. If a respondent calls in aid the benefit of the limitation on liability provided for in Pt IVAA of the Wrongs Act, then the respondent has the onus of pleading and proving the required elements. The court, after hearing all the evidence, will then need to determine, as a matter of fact, whether the relevant claim brought by the applicant is a claim arising from a failure to take reasonable care.
These matters should be resolved at trial. In my opinion it is not appropriate, nor is it “just and convenient”, for the nominated separate question (or any variation of it) to be determined in this proceeding.
The application fails at the first and critical hurdle identified in many of the authorities to which I have referred. The respondents have not provided any clear substratum of facts on which to decide the matter. No statement of agreed facts is proffered. No admissions on the pleadings cover what is necessary to determine the question. Nor is there a scintilla of admissible evidence about the role of Mr O’Brien. Outlines of evidence are put forward, which can have no probative value and are simply part of the case management process in a trial which has been ordered to be conducted by oral evidence. The only affidavit relied upon (that of Mr Hardes) is likely to be highly contentious opinion evidence, and to be matched at trial by expert evidence to be adduced by the applicant. Mr Hardes’ opinion is based on factual assumptions about the nature and extent of Mr O’Brien’s involvement.
The evidentiary base proposed by the respondents falls far short of what is required. Although some authorities do refer to the possibility of a trial of a separate question on the basis of assumptions, in my opinion particular caution would need to be exercised before such an order should be made: see Australian Energy Regulator v Snowy Hydro Ltd [2014] FCA 1013 at [46] per Beach J, citing AWB Ltd v Cole (No 2) (2006) 233 ALR 453; [2006] FCA 913 at [35] per Young J. One of the points, and advantages, of a separate question is that it is a final determination of a matter in issue between the parties. It is not interlocutory in nature. That being the case, it is difficult to see how, except in the most exceptional circumstances, such a final determination could be made based only on assumptions that a party can not only prove what is alleged, but fail to prove other matters. The difficulties are compounded by assumptions in the question about the application of the law to those circumstances.
It appears that, in this proceeding, almost all of the evidence is contentious. The respondents do not propose, nor would it be feasible for, the Court to determine the factual issues about Mr O’Brien’s role in advising the applicant, selecting the cows, attending at the property after the delivery of the cows and performing his role as share farmer. Aside from the amount of evidence such a task would involve (including, apparently as the respondents foreshadow, expert evidence), the evidence about Mr O’Brien’s role will be inextricably linked to evidence about what the applicant itself did, or should have done, in relation to receiving the cows into its farm, and treating them once they were on the farm.
Further, the assumptions the application asks the Court to make are assumptions of law as well as fact. Particular care must be exercised in ordering a separate question which involves mixed questions of fact and law: see AWB Ltd 233 ALR 453; [2006] FCA 913 at [32] per Young J. The question as set out in the application assumes particular causes of action are made out, and particular causes of action fail, both of which involve questions of law as well as fact. The question assumes that the respondents’ allegations against Mr O’Brien are made out, which also involves questions of law and fact, given that, for example, the respondents allege Mr O’Brien owed the applicant a duty to take reasonable care (which appears to be pleaded in both tort and contract). The nature and level of assumptions the question asks the Court to make demonstrates why the process would be inappropriate in this proceeding. These matters need to be tried fully on the expert and lay evidence, and submission on law and fact made in the usual way.
The inevitable fragmentation occasioned by a separate question is not justified in the present proceeding. Even if the factual substratum could be established (contrary to my opinion), the legal issues concerning the scope and application of Part IVAA of the Wrongs Act and Part VIA of the Competition and Consumer Act are complex. It is difficult to see the benefit in determining them on a hypothetical basis outside their actual application in this proceeding, to facts found at trial.
The possibility of appeal by the respondents if they do not secure the answer to the separate question which they seek cannot be discounted. With a trial date of March 2015, an appeal would be disruptive to trial preparation, and in all likelihood would result in the trial dates having to be vacated. That is in a circumstance where trial dates have already been vacated on one occasion. Even the full hearing and determination of a separate question at this late stage would in my opinion threaten the trial date. The respondents’ submissions do not develop any legal submissions to answer the separate question as posed. All they do is cross-reference back to their previous submissions on the joinder application. This tends to make good the applicant’s submissions that this application under r 30.01 is in reality another way of challenging the Court’s decision on the joinder application. For present purposes what is important is that the respondents have not sought to address the authorities about the correct approach to the resolution of the relationship between Part IVAA of the Wrongs Act and Part VIA of the Competition and Consumer Act on the assumptions they submit the Court should make. Having not attempted to undertake that exercise, if a separate question were to be determined, there would need to be a fresh round of submissions, and this would take the matter well into 2015, and very close to the trial date.
The condition precedent in r 30.01(2) to the ordering of a separate question is purposive. It is there to ensure that, if there is to be a separate question determined, it occurs at a time well before trial. Otherwise, much of the policy basis behind the determination of separate questions (saving of resources, promotion of settlement) is lost. It is true that in this case a trial date was fixed very early in the case management process, and at a time before the joinder of Mr O’Brien had been sought. There may of course be circumstances in which a dispensation from the operation of r 30.01(2) is appropriate, but this proceeding is not one of them. This application is, as the applicant submits, a reaction to the Court’s joinder judgment and seeks to achieve the joinder of Mr O’Brien through another mechanism.
If Mr O’Brien had been joined, the same legal issues as those raised in the proposed separate question would still exist. The scope and application of Part IVAA of the Wrongs Act and its interrelationship with Part VIA of the Competition and Consumer Act would remain to be determined at trial. In those circumstances, it seems the respondents have no objection to those issues falling for determination at trial. There is a certain inconsistency in that position.
The respondents do not submit that determination of this question saves the parties, and the Court, any time or resources. Indeed, on the respondents’ hypothesis of assumed facts, and assumed legal outcomes, the evidence to be called at trial will remain the same in nature and extent. Given the history of the matter to date, the respondents do not submit (nor could it sensibly be suggested) that determination of this (hypothetical) question will result in settlement of the proceeding. The applicant has made it abundantly clear it has no interest in pursuing Mr O’Brien.
The respondents’ claims that Mr O’Brien has a legal liability to the applicant form no part of the applicant’s case. Thus, the proposed question is incapable of determining any issue of liability as between the applicant and the respondents; it is not directed to that issue at all. It seeks, on a hypothetical basis, to address the extent of the respondents’ exposure to damages in relation to a third party. It can hardly be said to “quell” any controversy between the parties to the proceeding, but rather gives the respondents a preliminary indication of one aspect of their prospects of successfully reducing their exposure to damages. That is hardly a convincing basis for a separate question. The respondents make no submission of prejudice if the separate question is not determined. The only matter which has been determined by the Court to date is that Mr O’Brien’s joinder is not required as a matter of law, because s 24AI(3) of the Wrongs Act — as a particular provision within the scheme of Part IVAA of the Wrongs Act — is not “picked up” by s 79 of the Judiciary Act 1903 (Cth). The joinder judgment expressly reserved for trial the question of the scope and application of Part IVAA generally. Having never submitted that s 24AI(3) did apply, there would be a strong argument the applicant could not make that contention at trial in order to preclude the application of the remainder of Part IVAA. In any event, the applicant’s submissions on the separate question make it clear that issue is of no concern to the applicant.
One purpose of the respondents’ application appeared to be to address, by a different route, the finding in the joinder judgment that there was insufficient evidence for the Court to be satisfied that Mr O’Brien was a “concurrent wrongdoer”, even if s 24AI(3) applied in this proceeding. Nothing adduced by the respondents on this application has changed that position. The only evidence adduced is the affidavit of Mr Hardes, which cannot be used to prove the nature of Mr O’Brien’s involvement, as Mr Hardes is put forward as an expert witness, after the event, to express an opinion on what the applicant should have had in place by way of “biosecurity measures”. In contrast, Darren Askew is the second respondent and proposed as a witness on behalf of the respondents. His outline of evidence contains material which could go to Mr O’Brien’s role at material times. Yet, despite the clear ruling to this effect in the joinder judgment, the respondents have not sought on their interlocutory application to adduce any admissible evidence from Mr Askew. Further, there has been an extensive process of discovery between the parties, on at least one occasion requiring Court orders sought by the respondents. Yet the respondents have not sought to adduce any documentary evidence to support their allegation that Mr O’Brien is a concurrent wrongdoer.
The continued absence of any admissible evidence on this issue, in the face of the matters set out in the joinder judgment at [57]-[58], confirms three matters. First, having found s 24AI(3) does not apply so as to require the joinder of Mr O’Brien, there are no changed circumstances to warrant reconsideration of the discretion to join him. Second, the assumption in para 1(c) of the proposed separate question would be an inappropriate one to make in the circumstances of this case, especially where the applicant makes no allegations against Mr O’Brien. Third, the order sought in para 3 of the interlocutory application could not be granted in any event because s 24AL(1), like s 87CH(1), contemplates joinder of a person who is a concurrent wrongdoer, and there remains no admissible evidence capable of proving that Mr O’Brien is within that statutory term.
These matters support the refusal of the respondents’ application.
CONCLUSION
The application will be refused. The applicant should have its costs of the application.
I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. Associate:
Dated: 19 December 2014
3
25
8