| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : STINGRAY HOLDINGS PTY LTD -v- AUSTRALIAN GUARANTEE CORPORATION PROPRIETARY LIMITED [2004] WADC 238 CORAM : FENBURY DCJ HEARD : 17 SEPTEMBER 2004 DELIVERED : 10 DECEMBER 2004 FILE NO/S : CIV 1887 of 2003 BETWEEN : STINGRAY HOLDINGS PTY LTD (ACN 051 424 278) Plaintiff
AND
AUSTRALIAN GUARANTEE CORPORATION PROPRIETARY LIMITED (ACN 000 015 485)
Defendant
Catchwords: Practice and procedure - Determination of preliminary question of law - O 31, r 2 Rules of the Supreme Court - Turns on own facts
Legislation: Nil
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Result:
Application dismissed Representation:
Counsel:
Plaintiff : Mr K E Yin
Defendant : Mr N P Gentilli
Solicitors:
Plaintiff : Frank Unmack & Cullen
Defendant : Jackson McDonald
Case(s) referred to in judgment(s):
Smith v Maloney (1998) 19 WAR 209
Wilsmore v Court [1983] WAR 190
Case(s) also cited:
Nil
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1 FENBURY DCJ: This is an application by chamber summons pursuant to O 31, r 2 of the Rules of the Supreme Court. The plaintiff is Stingray Holdings Pty Ltd ACN 051 424 278 – ("Stingray"). The defendant is Australian Guarantee Corporation Proprietary Limited ACN 000 015 485 – ("AGC").
2 The main action is for damages for conversion of a boat named the Shakari. The statement of claim contains the following paragraphs: 3 Paragraph A in the prayer of relief is in the following terms: "Subject to declarations and orders in the Supreme Court proceedings that it was the rightful owner of the boat as of the time of the conversion of the boat pleaded herein and entitled as against the defendant and to Dodd to possession thereof, damages for conversion."
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4 In its defence AGC admits the sale of the Shakari. It denies the plaintiff relevantly acquired the Shakari and asserts that Stingray was never a bona fide purchaser for value without notice.
5 In par 15 of the defence, AGC pleads the Statute of Limitations asserting that Stingray has brought the action more than six years after it arose. 6 It is as to this plea that the chamber summons the subject of these reasons has been brought. 7 In its reply, Stingray alleges that AGC, as plaintiff in the Supreme Court action abovementioned, (hat was commenced in 1991) and in its conduct of those proceedings, negotiated with people who later became directors of Stingray, knowing that those persons were unaware that the Shakari had already been sold. This was in 1993. 8 Accordingly Stingray pleads that AGC was under a duty to advise Stingray of that sale, AGC failed to so advise Stingray, and, in effect, AGC concealed the fact of the sale from Stingray. It is pleaded Stingray did not discover the fact of the sale until early 2001. 9 It is then asserted in the reply that it is unconscionable for AGC to rely on the Statute of Limitation because of its concealment in legal negotiations of the fact the Shakari had been sold. 10 Obviously if the Court took the view at the trial of this action that the claim by Stingray is statute barred, that would be a complete answer to the claim and that would be the end of the matter for Stingray. 11 Thus Stingray brings this application to have the issue determined as a preliminary point of law. The plaintiff relies upon O 31, r 2 of the Rules of the Supreme Court which states as follows: "2(1) Preliminary questions of law If it appear to the Court that there is in any cause or matter a question of law, which it would be convenient to have decided before any evidence is given or any questions or issue of fact is tried, or before any reference is made to a referee or an arbitrator, the Court may make an order accordingly, and may direct such question of law to be raised for the opinion of the Court, either by special
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case or in such other manner as the Court may deem expedient." 12 In Wilsmore v Court [1983] WAR 190 at 194 Burt CJ, concerning applications under O 31, r 2 (and O 32, r 4 for that matter) stated as follows: "It is an exceptional way of proceeding and should be reserved for the exceptional case and when it is used the question of law should be formulated in the order with precision and it should be a question which on the admitted facts will finally dispose of the action or of an identifiable cause of action within it." 13 Similar sentiments are expressed in a number of other cases to which the Court was referred, but I shall only refer to Smith v Maloney (1998) 19 WAR 209. In that case at 222 Ipp J, after referring to Wilsmore v Court (supra) states: "Preliminary questions of law should generally only be isolated for separate decision in circumstances where there will be no need for the matter to go back to the primary court whichever way the point of law is decided; (and his Honour refers to a case of Rocklea Spinning Mills Pty Ltd). This is not such a case. …the power to order the trial of a preliminary issue of fact will generally only be appropriate when its outcome will put an end to the action, or where there is a clear line of demarcation between the issues and the determination of one issue and isolation from the others is likely to save inconvenience and expense…" 14 In the case at hand there is considerable concern about whether any decision on the preliminary question of law raised, will dispose of the whole matter. Counsel for the applicant candidly conceded that the determination of the matter about which an order is sought will not dispose of the action. 15 Counsel for the defendant observed that the point sought to be raised, that it would be unconscionable for reliance to be placed on the Limitation Act, was a novel point of law in the circumstances, unsupported by authority and consequently it was: "precisely the sort of thing that should not go off to be determined as a preliminary issue because we end up as being a
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test case in the High Court and then find that the plaintiff loses on the facts at the beginning of his case because he didn't own the boat at all." 16 There seems no doubt that the weight of authority is very much against the use of this procedure in cases where the answer to the preliminary question does not determine the matter. Not only is the point novel in this case, but if it is decided in favour of the plaintiff, and thus the statute cannot be relied upon, the action still requires a determination on the merits. 17 That being the case then, in accordance with the authorities it seems to me that the application is doomed and must be dismissed.
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