Todd Hadley Pty Limited v Lake Maintenance (NSW) Pty Limited

Todd Hadley Pty Limited (the plaintiff) appealed to the Court of Appeal of New South Wales against an order of the primary judge that refused to order the separate determination of a question concerning a limitation defence raised by Lake Maintenance (NSW) Pty Limited (the defendant). The plaintiff's claim was for professional negligence and statutory breaches arising from the defendant's valuation of property for mortgage valuation purposes.

The central legal issue before the Court of Appeal was whether the primary judge had erred in exercising their discretion by refusing to order a separate determination of the limitation defence. Specifically, the court considered whether the question, which was essentially one of law and capable of resolving the entire dispute if answered in favour of the defendant, should have been ordered for separate determination, taking into account the length and cost of such a hearing relative to a full trial.

The Court of Appeal found that the primary judge had miscarried their discretion due to an error in assessing the expected length of the hearing for the separate question. The court reasoned that the question posed was a discrete legal issue that, if answered favourably to the defendant, would dispose of the plaintiff's claims. The court determined that it was appropriate to re-exercise the discretion and ordered the separate determination of the question: "Did the plaintiff sustain loss or damage for the purposes of its claims against the defendant by the time of entry into the contract for the sale of the Property on 23 May 2012 with the consequence that the plaintiff’s claims against the defendant are statute barred?" The defendant agreed not to raise any other grounds for the limitation defence.

The Court of Appeal granted leave to appeal, allowed the appeal, and set aside the primary judge's orders. The court substituted its own order for the separate determination of the specified question. The costs of the motion at first instance and the costs of the appeal were made costs in the cause.