Roache v Johansen

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
ROACHE & ANOR v JOHANSEN
[2021] SASC 39
Decision of the Honourable Justice Bampton

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SEPARATE DECISION OR DETERMINATION OF QUESTIONS AND CONSOLIDATION OF PROCEEDINGS
Application for an order pursuant to r 151.1(2) of the Uniform Civil Rules 2020 for a separate and preliminary trial of the applicants’ entitlement to advance a cause of action per quod servitium amisit – where the first applicant, who suffered a catastrophic brain injury during a collision on 28 October 2012, and the second applicant, commenced proceedings on 27 October 2015 claiming damages pursuant to a cause in action in negligence – where upon the filing of a second statement of claim on 21 December 2018, the applicants introduced claims pursuant to the cause of action per quod servitium amisit – where the respondent has denied negligence and in the alternative pleaded contributory negligence against the first applicant – where the respondent pleads that the claims by the applicants in their purported capacities as trustee pursuing actions per quod servitium amisit are misconceived, time-barred and would in any case be subject to s 54(2) of the Civil Liability Act 1936 (SA) – whether the general rule that all issues should be dealt with in a single trial should be departed from in the circumstances of the matter – whether the interests of the parties and the interests of justice would be advanced by an order for a preliminary trial.
HELD: Application seeking an order pursuant to r 151.1(2) of the Uniform Civil Rules 2020 dismissed.
Civil Liability Act 1936 (SA) ss 52, 54(2), 66; Limitation of Actions Act 1936 (SA) ss 48, 48(3); Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) s 7(4); Motor Vehicles Act 1959 (SA) s 125, referred to.
Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC [2008] SASC 369, applied.
Tepko Pty Ltd & Ors v Water Board (2001) 206 CLR 1; Craig & Craig v Jetmaster Fireplaces Pty Ltd (1988) 142 LSJS 258; Rivers v Rivers [2002] SASC 197; FAI General Insurance Co Ltd (in liq) v Sherry [2002] SASC 431, considered.

ROACHE & ANOR v JOHANSEN
[2021] SASC 39
Civil: Application

BAMPTON J: Brian Francis Roache (“the first applicant”) suffered a catastrophic brain injury during a collision on 28 October 2012. The first applicant was riding his bicycle on Piccadilly Road, Piccadilly when the respondent – who was driving his vehicle in the opposite direction along Piccadilly Road – made a right-hand turn across the path of the first applicant and the collision occurred.
The first applicant, by his litigation guardian,[1] and his wife, Yvonne Kay Dennis (“the second applicant”), commenced these proceedings on 27 October 2015 claiming damages pursuant to a cause in action in negligence (“the personal injury claims”). The second applicant’s claim included a claim for business losses pursuant to s 66 of the Civil Liability Act 1936 (SA) (“the Act”).
[1] The first applicant is a person under a disability pursuant to r 23.6 of the Uniform Civil Rules 2020 (SA) (“UCR 20”).
Upon the filing of a second statement of claim[2] on 21 December 2018, the applicants introduced claims pursuant to the cause of action per quod servitium amisit (“the per quod claims”).
[2] FDN 7.
By the third statement of claim[3] filed on 31 August 2020, the second applicant discontinued the claim for business losses and the applicants sought an order pursuant to s 48 of the Limitations of Actions Act 1936 (SA) for an extension of time to pursue the per quod claims.
[3] FDN 23.
The respondent has denied negligence and in the alternative pleaded contributory negligence against the first applicant. The respondent pleads in the third defence[4] “that the claims by the applicants in their purported capacities as trustee pursuing actions per quod servitium amisit are misconceived, time-barred and would in any case be subject to s 54(2) of the” Act.[5] The applicants do not concede the per quod claims are time-barred but have sought an extension of time in so far as it may be necessary.
[4] FDN 24.
[5] Section 54(2) of the Act provides that loss of earning capacity is not to exceed the prescribed maximum which in the first applicant’s case is $2,985,370.
The applicants’ application for a separate and preliminary trial
The applicants made application[6] for an order for a separate and preliminary trial to determine the applicants’ entitlement to damages for per quod and that the issues of apportionment and assessment of damages on the personal injury claims be adjourned until further order. The applicants now agree that any preliminary trial on the per quod claims must include determination of the negligence and contributory negligence issues. The applicants argued that this is a clear case where the issues for the Court to determine on the preliminary trial are separate and discrete from the issues to be determined in the personal injury claims.
[6] FDN 27.
The applicants submitted the circumstances in which an order for separate trials is to be made are a matter of judgment “arrived at as a product of the consideration of a balance of convenience”[7] and practicality affecting the litigation and the interest of the parties. The applicants contended if the per quod claims were separately determined by the Court there is a real prospect the personal injury claims will be resolve without the need for a further trial. The applicants submitted it is sufficient to justify the hearing and determination of a preliminary issue if to do so will dispose of some substantial issue in the action, or will at least substantially narrow the area of dispute.[8]
[7] Craig & Craig v Jetmaster Fireplaces Pty Ltd (1988) 142 LSJS 258 at 263.
[8] Rivers v Rivers [2002] SASC 197 (Bleby J) as cited by Doyle CJ in FAI General Insurance Co Ltd (in liq) v Sherry [2002] SASC 431.
The applicants argued the savings in time and costs to the Court and the parties are clear. They asserted that full discovery of their financial evidence has been made and they and the respondent have obtained expert accounting reports such that in all respects they are ready to proceed to trial on the per quod claims. The witnesses who will be called by the applicants at the preliminary trial would include:
·the first and second applicants;
·the applicants’ accountant;
·the applicants’ independent expert forensic accountant;
·a representative Radiology SA partnership;
·a witness to the collision if negligence is not conceded; and
·an accident reconstruction expert.
The applicants said the first applicant, whilst largely wheelchair-bound and no longer able to conduct a medical practice, has sufficient residual capacity to give evidence. He will say, however, consistent with his medical evidence, that he has no memory of the collision.
The personal injury claims
The first applicant claims damages for personal injuries including damages for pain and suffering, loss of earning capacity, past gratuitous and paid care, and past and future medical expenses. The second applicant claims damages for loss of consortium pursuant to s 65 of the Act.
The per quod claims
The applicants’ solicitor described in her affidavit sworn 1 March 2021 and filed in support of the application that the first applicant at the time of the sustaining of injuries was practising as a specialist radiologist.
The solicitor explained the second applicant is the trustee of the BFR Practice Trust which until 30 April 2013 was a partner in the radiological practice Radiology SA (“Radiology SA”).
The applicants are trustees of the Dennis Roache Family Trust which until 30 April 2013 held units in the Radiology SA Service Trust, a service trust associated with Radiology SA.
Upon the filing of the second statement of claim, the applicants alleged that they, as trustees of the BFR Practice Trust and the Dennis Roache Family Trust (“the trusts”), are entitled to damages per quod servitium amisit arising out of the destruction of the first applicant’s capacity to provide radiological services to the trusts.
The Radiology Trusts
The applicants’ solicitor deposed that in 2005 the first applicant became a partner with a number of other radiologists in Radiology SA.
As at 1 March 2006, Radiology SA became a partnership of companies with each company obligated to appoint a nominated individual to provide radiological services to Radiology SA in return for a fee and share of profits. The first applicant was the nominated individual of the BFR Nominees Pty Ltd, a partner in the Radiology SA Partnership and the trustee of the BFR Practice Trust.
Pursuant to clause 14.1 of the Radiology SA partnership agreement the first and second applicants as the trustees of the Dennis Roache Family Trust held units in Radiology SA Service Trust, a service trust set up to assist in the business of Radiology SA.
The applicants’ solicitor stated that, as she understands the financial records, the Dennis Roache Family Trust received distributions from the Radiology SA Service Trust to be determined at the end of each financial year.
Clause 12.2(g) of the Radiology SA partnership agreement provides “where a partner or its Nominated individual is on sick leave for a consecutive period of 6 calendar months or more”, a compulsory disposal event arises and the partner must depart the partnership in exchange for an entitlement to payment in terms pursuant to the agreement.
The applicants assert the compulsory disposal event for the first applicant arose as at 30 April 2013 when, after six months during which the first applicant as the nominated individual was unable to attend his employment, BFR Nominees Pty Ltd was required to resign from the Radiology SA partnership.
In accordance with the Radiology SA partnership agreement, on the same date, the Dennis Roache Family Trust was required to return/transfer all units in the Radiology SA Services Trust.
The applicants contend that it is on 30 April 2013 when the loss relevantly crystallised for the BFR Practice Trust and the Dennis Roache Family Trust.
BFR Nominees Pty Ltd was voluntarily deregistered on 15 June 2016, but it is the second applicant’s contention that did not determine the trust through the absence of an effective trustee. The first applicant in his capacity as the appointor under the BFR Practice Trust Deed exercised the power of appointment to appoint the second applicant as trustee of the BFR Practice Trust and did so on 19 December 2018.
The second applicant as trustee of the BFR Practice Trust brings the action per quod on behalf of the BFR Practice Trust. The first and second applicants as joint trustees of the Dennis Roache Family Trust bring the action per quod on behalf of the Dennis Roache Family Trust.
The applicants’ solicitor deposed that it is common ground that on any reasonable approach the first applicant’s personal loss of earning capacity will far exceed the cap prescribed by s 54 of the Act, which, for injuries occurring in 2012, amounts to $2,985,370.
Calculation of loss
Mr Timothy Clifton of Clifton Hall Forensic Accountants has provided a report dated 18 June 2020 to the applicants regarding his calculation of their losses. The respondent has obtained accounting opinion from Mr Martin White of Morris Forensics.
For the purpose of the per quod claims, Mr Clifton has imputed a cost to the BFR Practice Trust equivalent to the cost of employment of the first applicant in the Radiology SA practice for four days per week (that is, the first applicant’s actual days worked per week prior to the collision). That cost was calculated on a yearly basis and, as at 30 April 2013, was allowed at $387,000 gross per annum, and increasing at a rate of 2.5 per cent per annum thereafter. Alternatively, Mr White proposed an annual income of between $500,000 and $800,000 for fulltime employment. It was submitted by the applicants that the figures between those arrived at by Mr Clifton and Mr White are not inconsistent when modified for hours worked.
Mr Clifton has calculated the lost income for the BFR Practice Trust and the Dennis Roache Family Trust arising from the loss of the first applicant’s services from 30 April 2013 to the intended age of retirement of the first applicant as follows:
(1)BFR Practice Trust, 30 April 2013 to 30 June 2020, $4,285,892;
(2)BFR Practice Trust, 1 July 2020 to age 70, between $4,646,801 and $2,907,781;
(3)Dennis Roache Family Trust, 30 April 2013 to 30 June 2020, $1,628,806; and
(4)Dennis Roache Family Trust, 1 July 2020 to age 70, between $2,184,679 and $1,364,775.
The applicants disputed the assertion of the respondent that separation of trials on the per quod and personal injury claims will result in double counting of losses. It was contended that the second applicant’s per quod claim, as advanced in Mr Clifton’s report dated 18 June 2020, has already allowed a deduction from the gross income of the second applicant on account of the personal exertion of the first applicant as the nominated individual of the partner. Further, the amount imputed on account of personal exertion by Mr Clifton is, if extrapolated to provide five days’ work per week, within the range suggested by the respondent’s expert, as an appropriate rate of remuneration for the personal exertion of an experienced radiologist. Further, the applicants submitted that the first applicant will be bound by the findings and determinations as to the value of his personal services in the preliminary trial of the per quod claims and, in any event, he consents to be bound by such findings in respect of his claim for loss of earning capacity, past and future.
Contributory negligence
The applicants referred to the respondent’s interview with police at 8.21 pm on the day of the collision. During the interview, the respondent admitted that prior to colliding with the first applicant he had permitted his vehicle to cross the single unbroken white line on Piccadilly Road and attempted to enter Gores Road on the incorrect side of the road, “cutting the corner” to the position where the collision occurred. It was submitted the respondent admitted the manner in which he turned into Gores Road was dangerous. Further, it was submitted that on 18 December 2013, the respondent pleaded guilty to aggravated driving without due care and received a licence suspension. It was argued that, in view of the respondent’s guilty plea and his admissions during his record of interview, it is difficult to see how the respondent, properly advised, could deny liability or allege contributory negligence in these circumstances. It was suggested that the pleas in the revised defence (paras [3] to [5]) are in contravention of r 3.1(1)(c) and (d) of the overarching obligations of the parties pursuant to the Uniform Civil Rules. Accordingly, it was contended the questions of negligence and contributory negligence cannot seriously be maintained in relation to the per quod claims or the personal injury claims.
The respondent’s submissions
The respondent pointed out that the applicants’ claims were initially pleaded in the statement of claim filed on 27 October 2015 as, inter alia, for past and future economic loss, loss of superannuation benefits and loss of earning capacity of the first applicant, and a loss of behalf of the second applicant due to the impairment of the first applicant to participate in the conduct of the business in which they both participated at the time of the collision, relying on s 66 of the Act.
It was submitted that at least at the time the claim was filed on 27 October 2015, the first and second applicants were contending that they were spouses jointly engaged in the conduct of business.
The respondent disputed that the second applicant was entitled to compensation for business lost pursuant to s 66 of the Act, as she was not a person who was “jointly engaged in the conduct of the business” with the first applicant. The respondent contended the advancing of the s 66 claim of itself undermines the (inconsistent) per quod claim. The s 66 claim was discontinued upon the filing of the third statement of claim.
The respondent’s solicitor deposed in her affidavit sworn on 12 February 2021 that the first accounting report produced on behalf of the applicants by Mr Clifton dated 23 February 2018 quantified the past and future economic losses of the first applicant at $4,461,249 and of second applicant at $4,485,707. It was submitted that at least at that stage of the proceedings the applicants were contending the economic losses had been sustained by the first applicant and the second applicant personally. The respondent contended that the per quod claims are inconsistent with this.
Further, the respondent argued the claim for damages for loss of earning capacity on the part of the first applicant is subject to the cap of $2,985,370 pursuant to s 54(2) of the Act. It was submitted the interrelationship between the past and future economic losses of the first applicant that are the subject of the cap, and the per quod claims that are now sought to be advanced by the applicants, are important to the respective entitlement of each. The interrelationship between the past and future economic claims of the first applicant and the per quod claims, and the prospect of inconsistency should those matters be tried separately, is a matter that concerns the respondent.
The respondent’s solicitor referred to her affidavit filed on 1 May 2019, detailing the circumstances by which the applicants’ solicitors sought to amend the pleadings and filed the second statement of claim on 21 December 2018, which introduced the per quod claims.
The solicitor explained that on 9 October 2019, orders were made giving the applicants permission to file a third statement of claim.
By consent it was ordered the applicants have permission to file the third statement of claim on the basis that the respondent’s application dated 1 May 2019,[9] (which sought to disallow the amendments introducing the per quod claims in the second statement of claim filed 21 December 2018, or in the alternative for them to be operative only from 21 December 2018, or in the further alternative for them to only be operative from a date to be determined by the trial Judge) was to be a matter for determination at trial.
[9] FDN 9.
The respondents referred to the second accounting report of Mr Clifton dated 18 June 2020 in which he calculates the economic losses of the applicants as follows:
(1)the first applicant – $5,015,677;
(2)BFR Trust – $8,932,693 (or alternatively $7,193,672);
(3)Roache Family Trust – $3.813.484 (or alternatively $2,993,580).
It was submitted that, contrary to the opinions expressed in his report dated 23 February 2018, Mr Clifton now quantifies losses that were said to be losses of the second respondent at $4,485,707 as losses of the BFR Trust and the Roache Family Trust.
The respondent’s solicitor argued the evidence and arguments which would be the subject of a preliminary trial on the per quod claims would also be, of necessity, the same type of evidence and arguments relevant to the personal claim of the first applicant for his own impairment of earning capacity, and that the per quod claims cannot separately be heard without a risk of duplication of evidence, or different outcomes. It was submitted there is a real possibility of double counting of losses arising from the injuries to the first applicant if the per quod claims are heard separately to his own personal injury claims for loss of earning capacity.

It was contended there is a risk that a trial on the residual issues, including the personal claim for loss of earning capacity of the first applicant, would require attendance at each trial by witnesses whose evidence is likely to be controversial, and therefore involve a material prospect of credit findings at the first trial that would prejudice the hearing at the second trial.
It was submitted the assessment of whether per quod claims exist in this situation in fact and/or law will require a detailed examination of numerous issues including:
(1)whether there was a master/servant relationship and the first applicant was a servant of his own trust through which he was distributing monies earned through the Radiology SA partnership business to family members;
(2)whether there was a relationship between the trustee and the first applicant which entailed obedience by the first applicant to the orders of the trustee in doing work;
(3)whether the doing of that work was for the benefit of the trustee’s own affairs;
(4)whether in truth and substance the first applicant (who was the appointer of the trust) controlled the affairs of the trust rather than the trust having some quasi-proprietorial right or entitlement in respect of the first applicant as servant or employee;
(5)if the first applicant was subject to a master/servant relationship in respect of the BFR Practice Trust (which the respondent denies), how the role for the trust interrelated to the role performed by the first applicant for the Radiology SA partnership;
(6)how each of the propositions as to the relationship between the first applicant, the Radiology SA partnership and BFR Nominees Pty Ltd would interrelate with the regulatory overlay which permits only persons authorised by the Commonwealth government to recover charges in respect of services covered by Medicare;
(7)if a per quod claim by the trustee were to be available, for the purposes of quantifying such a claim, what is to be regarded as the value of the services lost (as distinct from the loss which is merely consequential upon the injury to the first applicant);
(8)the likely extent of the future participation of the first applicant in Radiology SA partnership business;
(9)the interrelationship between the first applicant’s future plans regarding the manner in which he would have been engaged personally for remuneration or other purposes, and the extent to which he would have continued to be engaged in Radiology SA partnership, taking into account the requirement contained in the Radiology SA partnership agreement at clause 12.2(h), whereby a partner or its nominated individual must, upon turning 65, unless the partners by the applicable voting protocol agree to extend that period for a further period of 12 months, dispose of that partner’s interest in the partnership;
(10)the contingencies to be taken into account regarding the chances of the first applicant returning to participate in the Radiology SA partnership, which may not be the same as the contingencies in his own personal injuries claim;
(11)whether the per quod claims are subject to the operation of s 54(2) of the Act; and
(12)any comorbidities suffered by the first applicant which might have impacted his life expectancy, length of working life, fulltime engagement with Radiology SA partnership and/or other activities.
It was submitted the assessment of the per quod claims would also involve a detailed examination of the issues in relation to the claim for an extension of time, including:
(1)whether the second applicant has alleged any or sufficient material facts to empower the Court to grant an extension of time;
(2)whether the matters pleaded are legal concepts of the effect of legal advice and not facts, or are not material facts, or are not relevant to the case made by the applicants;
(3)whether the second applicant can rely on an ignorance of matters known to her predecessor as trustee on the basis of the second respondent having been appointed trustee of the BFR Practice Trust in December 2018;
(4)whether the second respondent did not learn of the availability of the per quod cause of action until 12 December 2018;
(5)if the second respondent did not learn of the availability of the per quod cause of action on 12 December 2018 by reason that she had not received legal advice to that effect, whether the receipt of legal advice as to the effect of facts otherwise known to her constitutes a material fact;
(6)whether the appointment of the second applicant as trustee of the BFR Practice Trust was effective to constitute her standing to pursue a per quod action and, if the second applicant did not learn of the matters pleaded in paragraphs 31(b) and (c) of the third statement of claim until the times alleged, whether or not those matters constituted a material fact;
(7)the facts as to when the second applicant first ascertained the availability of the per quod cause of action and that she did not learn that an application could be made to the Australian Securities and Investments Commission to reinstate BFR Nominees Pty Ltd as trustee of the BFR Practice Trust until 12 December 2018;
(8)having regard to her status as trustee, whether the second applicant must establish no previous trustee was aware of the relevant fact or facts; and
(9)having regard to the matters pleaded, whether it is appropriate to exercise a discretion in favour of the second applicant.
It was contended there is a material overlap between the alleged losses of the different applicants and, having regard to the cap prescribed by s 54(2) of the Act, it is likely to be an important issue at trial.
The respondent said that matters relating to the first applicant’s participation in the Radiology SA and other related matters will arise both on the per quod claim and his economic loss claim. It was submitted the expert evidence as to loss traverses both issues and the experts will need to be called, both in respect of the per quod claims and the economic loss claims advanced by the first applicant.
The respondent asserted it is open to him to rely upon contributory negligence in answer to the per quod claims, if they otherwise succeed, by reason of s 7(4) of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA). The respondent submitted a preliminary trial of per quod claims must include questions of negligence and contributory negligence (as detailed above, the applicants now agree a preliminary trial of the per quod claims should include a determination of the questions of negligence and contributory negligence).
The respondent submitted that many of the issues in dispute in a preliminary trial would require evidence from the first and second applicants as to factual matters.
The respondent said the first applicant will need to give evidence (if he has capacity) regarding the assessment of loss of the per quod claims.
Further, the second applicant will need to give direct evidence regarding the extension of time issue, in particular, what she ascertained and when in order to meet the threshold prescribed by s 48(3) of the Limitation of Actions Act 1936 (SA). She would also need to give evidence regarding the circumstances in which the per quod claims were commenced by the applicants. The first applicant would need to give evidence regarding the circumstances concerning the collision which are relevant to proving negligence and assessing contributory negligence. He would need to give evidence in relation to his own personal claim for loss of earning capacity, and whether there was a possibility he might have ceased working in the Radiology SA partnership and instead undertaken some other activity.
The respondent’s solicitor deposed that counsel have informed her there are relatively few examples of per quod claims that have received detailed judicial consideration in modern Australian tort law. Further, counsel are not aware of any judicial consideration of a per quod claim involving a claim on behalf of a trustee (at all, let alone where the injured person is the appointor of the trust), nor where the applicant derives profits not only on their own account but as a partner of a partnership. Counsel are also not aware of any authority where an applicant has recovered damages on the basis formulated by the applicants pursuant to Mr Clifton’s report dated 18 June 2020 (namely by reference to the asserted difference between the “but for” receipt of the trustee from the partnership and an imputed market value for putative servant’s services as a radiologist). Counsel have said that, in their view, whilst the issues regarding the claim in respect of the Dennis Roache Family Trust are less complex, they will also potentially give rise to similar risks in terms of delay, inconsistent findings and forensic disadvantages if they are considered separately from the balance of the issues in the case.
Counsel have also advised they have been involved in cases where, by consent, an appeal is deferred on matters determined in a preliminary trial so that there would only be a single appeal following determination of the balance of the case. As such, it was submitted, given the novelties of the per quod issues and the “scheme critical” nature of the arguments, a preliminary determination is unlikely to be of assistance. The respondent’s solicitor explained that her instructions are provided by the Motor Accident Commission, which is the CTP insurer of the respondent’s vehicle pursuant to s 125 of the Motor Vehicles Act 1959 (SA). The solicitor stated the Motor Accident Commission has in the past exhibited a commitment to maintaining what it perceives as the integrity of the South Australian CTP scheme, including appealing matters to the Full Court of the Supreme Court and the High Court on issues considered “scheme critical”. The solicitor stated she believes a claim whereby the use of a family trust by a professional person to mount a per quod claim or claims and thereby potentially circumvent the prescribed maximum for damages for loss of earning capacity prescribed by s 54(2) of the Act, would be considered a “scheme critical” issue.[10]
[10] The applicants’ solicitor took issue in her affidavit 1 March 2021 with the respondent’s solicitor’s assertions that the claim by a family trust to mount a per quod claim and thereby circumvent the prescribed maximum for damages for loss of earning capacity would be considered to be a scheme critical issue and stated that it is her understanding, supported by a media release from the office of the Treasurer, that on 1 January 2019 the Motor Accident Commission’s insurance liabilities were transferred to Berkshire Hathaway, and that the Commission ceased operations entirely and certainly in respect of the management of the CTP scheme as at 30 June 2019. Accordingly, the solicitor stated that, given the respondent’s solicitor’s assertions on this issue, if the respondent (and his insurer) continue to maintain that stance, it will be necessary to put into evidence and give consideration to any agreement regarding the transfer of the management of the CTP scheme from the Motor Accident Commission to Berkshire Hathaway.
It was submitted given the relatively uncertain scope of the per quod claims in modern Australian tort law, the relative uncertainty regarding the proper quantification of such claims, the novelty of the factual substratum underlying the per quod claims in this matter, and the quantum of the claims as formulated, if the per quod issues were to be decided adversely to the respondent, there is a high prospect instructions would be received to appeal against the judgment, and if the appeal failed, to apply for special leave to the High Court. Accordingly, it was submitted this would result in potentially significant and undesirable fragmentation and delay of the proceedings.
It was submitted if a preliminary trial were heard, it would occupy potentially two weeks of hearing time.
It is estimated if the preliminary trial judgment were to be appealed, the time from the commencement of the preliminary hearing to exhaustion of the appellate process would be in the order of 2.5 to three years.
Conclusion
In considering the application, I start from the general rule that all issues should be dealt with in a single trial.[11] As White J said in Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC:[12]
The trial process should not be unduly fragmented. … the experience of the courts has been that splitting issues arising from the one action for separate determination with a view to shortening proceedings and saving costs frequently results in a prolongation of the proceedings and the incurring of additional costs.
[11] Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC [2008] SASC 369 at [93] (White J).
[12] Ibid.
I also heed the cautions expressed in Tepko Pty Ltd & Ors v Water Board by Kirby and Callinan JJ:[13]
The appeal should be allowed. However, we should not leave this case without making four comments. Both Mason P and Fitzgerald JA were critical of the course of limiting the issues to be tried that the primary judge adopted. In Perre v Apand Pty Ltd attention was drawn to difficulties that can be caused when that course is adopted. In light of the experience in this case, what was there said should be restated with emphasis. 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.
(Footnotes omitted)
[13] (2001) 206 CLR 1 at [168]-[170].
This is not a matter where the utility, economy, and fairness to the parties dictates an order for a preliminary trial should be made. As pointed out by the respondent, it is now common ground that a number of witnesses of fact would need to be called in both trials in respect of the disputed issues of fact.
There are factors that, in my view, militate against splitting the issues in dispute such that there should be one trial on all issues. As I indicated to the parties during the hearing of the application, there is capacity to list the matter on all issues for a four-week trial in the latter part of this year. The applicants responded that they are not ready for a trial on quantum as the first applicant requires an updating of his medical reports.
The applicants’ claims are complex and of large quantum. During the hearing of the application, the respondent’s counsel referred to authorities which demonstrate how fact-sensitive and nuanced the inquiry into the existence of a master and servant relationship may be for the purposes of the per quod claims. I accept the submissions that:
(1)this is an area of law that is uncommonly deployed;
(2)the application of it to these circumstances is unusual;
(3)the factual inquiry will be detailed and complex;
(4)the application of these unusual facts to this scenario will involve a serious challenge to the evidence that will inevitably need to be adduced from the applicants;
(5)these are disputed issues of fact which will involve an assessment of the credibility and reliability of the applicants; and
(6)there is a significant prospect of appeal arising out of any decision.
Further, the issue of the interrelationship between the first applicant’s claim for damages for economic loss, for loss of earning capacity, and the per quod claim, in my view, dictate there should not be a separate determination.
At first glance, a separate preliminary trial of the per quod claims has some attraction. However, a preliminary trial in the circumstances of this matter necessarily requires a determination of the contested extension of time issues as well as questions of negligence and contributory negligence. The attraction of a preliminary trial of these issues rather than of the matter in its totality is “more chimerical than real”.[14]
[14] Tepko Pty Ltd & Ors v Water Board (2001) 206 CLR 1 at [168] (Kirby and Callinan JJ).
Having considered the interests of the parties and the interests of justice, it is my view that neither would be advanced by a preliminary trial. I agree with the respondents that a preliminary trial would be a relatively complex exercise, accompanied by a high likelihood of fragmentation and delay. In my view, if the second trial proceeded there would be an overlap of witnesses and the possibility the Court would be asked to reconsider certain issues such that there would be no shortening of the proceedings and saving of costs but rather a prolongation of the proceedings and additional costs.
The first applicant’s injuries occurred over eight years ago and the proceedings were instituted almost five and a half years ago. It is high time the matter went to trial on all issues.
Accordingly, I dismiss the application seeking an order pursuant to r 151.1(2) of the Uniform Civil Rules 2020 for a separate and preliminary trial.

[2021] SASC 39

15 April 2021