The Tap Inn Pty Ltd v Matthews

The appeal concerned a dispute between The Tap Inn Pty Ltd (in liquidation) and Mr Matthews. The District Court Judge had determined a preliminary question of law, but the appellate court found that this determination was based on hypothetical facts rather than established facts.

The legal issue before the court was whether the District Court Judge had erred in determining a preliminary question of law when significant factual disputes remained unresolved. The court was required to consider whether such a determination could definitively resolve the controversy between the parties or if it risked being advisory.

The court reasoned that a decision on a preliminary question of law is only useful if the facts determinative of that issue have been established. In this instance, the pleadings revealed considerable factual disputes, which were confirmed by counsel. Consequently, the Judge should not have proceeded to determine the preliminary question as it was hypothetical and would not finally resolve the dispute. The court noted that while neither party had challenged the process, it was flawed.

The appeal was allowed, the District Court Judge's answer was set aside, and directions were given for the trial. The proceedings were to be referred to the appellate court for hearing as a complex commercial cause, and the costs of the District Court hearing and the appeal were to be costs in the cause.