Regional Power Corporation v Pacific Hydro Group Two Pty Ltd

Regional Power Corporation (the plaintiff) is the successor in title to the State Energy Commission of Western Australia (SECWA) and is proceeding against Pacific Hydro Group Two Pty Ltd and two other defendants (the defendants) in the Supreme Court of Western Australia. The plaintiff claims damages for breach of contract arising from an incident in August 2006 at the Ord Hydro Power Station, which resulted in flooding. The plaintiff claims the defendants breached the Power Purchase Agreement (PPA) by failing to operate the power station in compliance with the agreement. The defendants deny any liability for damages and raise various contractual defences, including an exclusion clause that limits liability for indirect or consequential losses. The court must determine whether certain preliminary issues should be decided before proceeding to trial.

The main legal issues before the court are whether the exclusion clause in the PPA applies to the plaintiff's claimed losses, and if so, whether those losses are recoverable. The court must also determine whether the parties' agreed facts are sufficient to decide the preliminary issues without a trial. The court must consider whether the proposed fourth preliminary issue, concerning the characterisation of the plaintiff's claimed losses, is suitable for determination as a matter of law or if it requires a factual determination. The court must also consider the criteria for determining a preliminary issue, including whether it is a question of law, whether it necessarily arises in the proceeding, and whether its determination would lead to a substantial saving in time and expense.

The court found that the fourth proposed issue, concerning the characterisation of the plaintiff's claimed losses, is suitable for determination as a preliminary issue. The court noted that the issue involves assessing whether the claimed losses fall within the exclusionary scope of the PPA's exclusion clause, which is a question of law. The court held that the issue can be determined by assuming the facts as pleaded in the plaintiff's amended statement of claim to be true. The court also found that the exercise of characterising the losses is a relatively confined one and would likely lead to a substantial saving in time and expense. The court ordered that the four preliminary issues be tried and that the costs of determining the fourth issue be reserved.