Traderight Pty Ltd v Bank of Queensland

[2010] NSWSC 139

Reported Decision: 266 ALR 503
238 FLR 358
[2010] ALMD 5943
[2010] ALMD 6095
[2010] ALMD 5945

New South Wales

Supreme Court

CITATION:	Traderight Pty Limited v Bank of Queensland; Bank of Queensland v Traderight Pty Limited; Jude Financial Services Pty Limited v Bank of Queensland; Rossmick No 1 Pty Limited v Bank of Queensland; Bank of Queensland v SME Business Assist Pty Limited; Geraghty & Palmer Pty Limited v Bank of Queensland [2010] NSWSC 139 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	11 February 2010
JUDGMENT DATE :	4 March 2010
JURISDICTION:	Equity Division
JUDGMENT OF:	Ward J
DECISION:	Application refused for the BOQ parties to have the matter referred to the Court of Appeal in order to determine theseparate questions.
CATCHWORDS:	TRADE PRACTICES – Trade Practices Act 1974 (Cth) – s 51A – deeming provision in s 51A – nature of the onus on representor (whether merely evidentiary) – PRACTICE AND PROCEDURE – Uniform Civil Procedure Rules – Rule 1.21 – Rule 28.2 – motion for separate determination of questions of law – application for removal to the Court of Appeal – conflicting precedent – whether proposition of law assumed, but not considered, in a judgment is binding on a later court – nature of dicta and the extent to which it is binding on a lower court
LEGISLATION CITED:	Civil Procedure Act 2005 Fair Trading Act 1987 (NSW) Supreme Court Rules Trade Practices Act (1974) (Cth) Uniform Civil Procedure Rules
CATEGORY:	Procedural and other rulings
CASES CITED:	ACCC v Capalaba Pty Limited [2003] FCA 1226 ACCC v Universal Sports Challenge Limited [2002] FCA 1276 ASIC V Cycclone Magnetic Engines Inc & Ors (2009) 224 FLR 50 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 Baker v The Queen [1975] AC 774 Beveridge v Whitton [2001] NSWCA 6 Brunner v Greenslade [1971] Ch 993 Buzzle Operations v Apple Computer Australia [2009] NSWSC 225 Chief Executive Officer of Customs v Tony Longo Pty Limited (2001) 52 NSWLR 458 Commissioner for Railways (Qld) v Peters (1991) 24 NSWLR 407 CSR Limited v Eddy (2005) 226 CLR 1 Customs Act 1901 (Cth) D’Orto-Ekenaike v Victoria Legal Aid & Or (2005) 223 CLR 1 Dawson v LNG Holdings [2008] NSWSC 137 Digi-Tech (Australia) Limited v Brand & 5 ors; Digi-Tech (Australia) Limited v Kelliher & 3 ors; Kalifair & 3 ors v Digi-Tech (Australia) Limited; McLean Technic Pty Limited & ors v Digi-Tech (Australia) Limited & 3 ors [2004] NSWCA 58 Eleftheriou v Water Board [1991] NSWCA 91 Farah Constructions Pty Limited v Say-Dee Pty Limited (2007) 230 CLR 89 Flore v NSW Department of Education and Training [2006] NSWSC 1227 Fubilan Catering Services Limited v Company Group (Australia) Pty Limited [2007] FCA 1205 Gosper v Sawyer (1985) 160 CLR 548 Harkianakis v Skalkos (1999) 47 NSWLR 302 Idoport Pty Limited & anor v National Australia Bank Limited & 8 ors (15) [2000] NSWSC 1215 Lewarne v Momentum Productions Pty Limited [2007] FCA 1136 Markisic v Commonwealth of Australia (2007) 69 NSWLR 737 Matrix Film Investment 1 Pty Limited & ors v Alameda Films llc and Warner Brothers Entertainment and Pictures Inc [2007] NSWSC 523 McGrath v Australian Natural Care Products Pty Limited (2008) 165 FCR 230 North East Equity Pty Limited v Proud Nominees Pty Limited [2007] FCA 1587 Pan Pharmaceuticals v Australian Natural Care Products Pty Limited (2008) 165 FCR 230 Pioneer Park Pty Limited (in liquidation) v ANZ Banking Group Limited & ors [2005] NSWSC 832 Proctor v Jetway Aviation Pty Limited [1984] 1 NSWLR 166 Re Tyler; Ex parte Foley (1994) 181 CLR 18 Readymix Holdings International Pty Limited v Wieland Process Equipment Pty Ltd (No 2) [2008] FCA 1480 Rosebanner Pty Limited v Energy Australia [2009] NSWSC 43 Sivakumar v Pattison [1984] 2 NSWLR 78 Skiwing Pty Limited t/as Café Tiffany’s v Trust Co of Australia Ltd (Stockland Property Management Ltd) (2009) 255 ALR 339 Stewart v Ronald & ors [2009] NSWSC 455 Street & 7 ors v Luna Park Sydney Pty Limited & 3 ors [2007] NSWSC 697 Sydney South West Area Health Service v MD [2009] NSWCA 343 Tyram Pty Limited v Grainco Australia Limited [2003] NSWSC 812 Union Shipping New Zealand Limited v Morgan (2002) 54 NSWLR 690 Wing On and Co Ltd v Collector of Customs for New South Wales (1938) 60 CLR 97 Wright v TNT Management Pty Limited (1989) 15 NSWLR 679 Ying v Song [2009] NSWSC 1344 Zotti v Australian Associated Motor Insurers Limited [2009] NSWCA 323
TEXTS CITED:	J Dyson Heydon, Limits to the Powers of Ultimate Appellate Courts (2006) 122 LQR 399 Professor Peter Gillies, Misrepresentations as to Future Matters – Current Issues in Interpretation (2009) 17 TPLJ 25
PARTIES:	Traderight Pty Limited (First Plaintiff in 06/258216 and First Defendant in 06/258225) Bronwyn Smith (Second Plaintiff in 06/258216 and Second Defendant in 06/258225) Geoffrey Versace (Third Plaintiff in 06/258216 and Third Defendant in 06/258225) Smith Partners Development (Fourth Plaintiff in 06/258216) Verich Holdings (Fifth Plaintiff in 06/258216) Bank of Queensland (Defendant in 06/258216; Plaintiff in 06/258225; First Defendant in 09/287824; First Defendant in 09/282126; First Plaintiff in 08/279848 and Defendant in 08/281332) Jude Financial Services Pty Limited (First Plaintiff in 09/287824) Russell Jude Edward Gardner (Second Plaintiff in 09/287824) Penelope Ann Gardner (Third Plaintiff in 09/287824) David Liddy (Second Defendant in 09/287824; Second Defendant in 08/282126 and Second Plaintiff in 08/279848) Rossmick No 1 Pty Limited (First Plaintiff in 09/282126) Rossmick No 2 Pty Limited (Second Plaintiff in 09/282126) Michael Bradley (Third Plaintiff in 08/282126) Ross Chapman (Fourth Plaintiff in 08/282126) Luke Nolan (Fifth Plaintiff in 08/282126) SME Business Assist Pty Limited (First Defendant in 08/279848) Scott Rolfe McCoy (Second Defendant in 08/279848) Geraghty & Palmer Pty Limited (First Plaintiff in 08/281332) Shauna Geraghty (Second Plaintiff in 08/281332) Barry Palmer (Third Plaintiff in 08/281332) Donna Quinn (Third Defendant in 09/287824) Gary Allsop (Fourth Defendant in 09/287824)
FILE NUMBER(S):	SC 2006/258216; 2006/258225; 2009/287824; 2008/282126; 2008/279848; 2008/281332
COUNSEL:	Mr A Moses SC with him Mr B Miles (Bank of Queensland Parties) Mr N Cotman SC (OMB Parties)
SOLICITORS:	HWL Ebsworths (Bank of Queensland Parties) McCabe Terrill Lawyers (OMB Parties)

- 39 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

THURSDAY 4 MARCH 2010

WARD J

06/258216 Traderight Pty Limited, Bronwyn Smith, Geoffrey Versace, Smith Partners Development Pty Limited & Verich Holdings Pty Limited v BANK OF QUEENSLAND

06/258225 BANK OF QUEENSLAND v Traderight Pty Limited Bronwyn Smith & Geoffrey Versace

09/287824 Jude Financial Services Pty Limited Russell Jude Edward Gardner & Penelope Ann Gardner V BANK OF QUEENSLAND

08/282126 Rossmick No 1 Pty Limited Rossmick No 2 Pty Limited Michael Bradley, Ross Chapman & Luke Nolan v BANK OF QUEENSLAND & David Liddy

08/279848 BANK OF QUEENSLAND & David Liddy v SME Business Assist Pty Limited & Scott Role McCoy

08/281332 Geraghty & Palmer Pty Limited, Shauna Geraghty & Barry Palmer v BANK OF QUEENSLAND

JUDGMENT

1 Before this Court are a number of matters (some of which were commenced in other tribunals and jurisdictions and later cross-vested to this Court) involving disputes between the Bank of Queensland and parties associated with it (the BOQ parties) and various Bank of Queensland franchisees (the OMB parties).

2 Broadly speaking, the OMB parties have made allegations against the Bank of Queensland of (inter alia) misleading and deceptive conduct in breach of both the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW) and have brought claims against various of its officers for accessorial liability under both Acts. The OMB parties have invoked s 51A of the Trade Practices Act and s 41 of the Fair Trading Act in relation to those of the alleged representations which are in respect of future matters. For its part, the Bank of Queensland, in separate proceedings which are to be heard at the same time as the OMB proceedings, has brought claims (including claims for the recovery of amounts allegedly owing by various of the OMB parties under the facility arrangements entered into in connection with their bank franchises) against various of the OMB parties.

3 By the end of August last year, the OMB parties (who had been pressing for some time to have a hearing date fixed in these matters) had served the entirety of their lay evidence in chief. The issue which then arose, in the course of the case management of these various proceedings, was the timetable to be fixed for the filing and service of evidence on the part of the BOQ parties.

4 I made directions on 11 September 2009 pursuant to which the BOQ parties were required to file and serve affidavits by two named witnesses by 26 February 2010 and were to file and serve by 30 April 2010 any affidavit evidence in relation to the s 51A issues (ie as to any affirmative case the BOQ parties wished to raise as to the existence of reasonable grounds for any representations found to have been made as to future matters). On that occasion, the main dispute as between the parties was as to the period of time which had been sought by the BOQ parties for the purpose of filing and service of their evidence (the OMB parties pressing for a much shorter time frame), though there was also some debate as to whether any expert evidence should be served at the same time as the lay evidence. At that stage, although the BOQ parties, through their Senior Counsel, had indicated that thought was being given to the s 51A evidence, it seemed to be contemplated that at least some affidavit evidence would be filed. (Reference was made to an economist who the BOQ parties contemplated would be asked to provide evidence on the issue as to the reasonableness of the grounds for the making of representations as to future matters.)

5 Before me for hearing on 11 February 2010 was an application brought by the BOQ parties (the defendants in most of these proceedings), by notice of motion filed on 14 December 2009, seeking an order for the separate determination of certain questions relating to the proper interpretation of s 51A of the Trade Practices Act (the s 51A issues) before any other questions in the proceedings and that the matter be remitted to the Court of Appeal for that purpose. (A consequential order is also sought for the vacation of the directions made in relation to the filing of expert evidence by the BOQ parties.)

6 By affidavit sworn 11 December 2009, the solicitor supervising the conduct of the matter on behalf of the BOQ parties, Mr Jenkins, deposes that, in preparing for these proceedings (and for other proceedings concerning the BOQ in the Federal Court which, as at February, were part heard), consideration had been given to the operation and application of s 51A of the Trade Practices Act by the Full Court of the Federal Court of Australia and by the Court of Appeal in this State, respectively.

7 It is perceived by the BOQ parties’ representatives that there is a clear conflict between these two intermediate appellate courts in their approach to the operation of s 51A in relation to the onus of proof on a party defending allegations of misleading and deceptive conduct in relation to future matters in respect of which s 51A has been invoked (a conflict which has added significance insofar as it gives rise to the issue as to whether it is open to a single judge in this Court to depart from the approach said to have been adopted by the Court of Appeal).

8 Mr Jenkins’ affidavit deposes that the BOQ parties will be contending at trial that the proper approach in this regard is that set out in the judgment of the Full Court of the Federal Court in McGrath v Australian Natural Care Products Pty Limited (2008) 165 FCR 230 (Pan), namely that s 51A of the Trade Practices Act imposes no more than an evidential onus (satisfied once there is some evidence from which the court could conclude that there were reasonable grounds for the representations in question and then leaving the persuasive onus on the party asserting the representation). The opposing approach (that the section reverses the persuasive onus) is said to be evident in the New South Wales Court of Appeal judgment in Digi-Tech (Australia) Limited v Brand & 5 ors; Digi-Tech (Australia) Limited v Kelliher & 3 ors; Kalifair Pty Limited & 3 ors v Digi-Tech (Australia) Limited; McLean Technic Pty Limited & ors v Digi-Tech (Australia) Limited & 3 ors [2004] NSWCA 58) and is said to be binding on a trial judge sitting in this Court.

9 It is said that in these circumstances it is appropriate and desirable for the Court of Appeal to resolve the question (Stewart v Ronalds & ors [2009] NSWSC 455 at [19]), accepting that the High Court has discouraged the position where there are conflicting authorities of two intermediate appellate courts as to the interpretation of a federal statute (Farah Constructions Pty Limited v Say-Dee Pty Limited (2007) 230 CLR 89 at 135).

10 The practical relevance of this issue, at this stage in the proceedings compendiously referred to as the OMB proceedings, is that Mr Jenkins says that the proper approach to s 51A will determine the nature and extent of the evidence that the BOQ parties will file in respect of the s 51A issues and how the BOQ parties will conduct the proceedings. Indeed, Senior Counsel for the BOQ parties (Mr Moses SC) confirmed in his submissions his view that the early resolution of the s 51A issues may obviate the need for the BOQ parties to file, read or lead any evidence in reply, including any expert evidence.

Questions posed for separate determination

11 The questions which the BOQ parties have formulated and seek to have determined by the Court of Appeal are as follows:

(i) Does s 51A of the Trade Practices Act 1974 (Cth) reverse the legal or persuasive onus so as to place it on the representor in relation to representations as to future matters?

(ii) If not, is the proper approach in applying s 51A of the Trade Practices Act 1974 (Cth) to consider whether the representor has adduced some evidence that there were reasonable grounds for making a representation (that is the evidential onus)? If so, does the deeming provision in s 51A cease to operate and the persuasive onus (not a mere evidential onus) of proving that there were no reasonable grounds for the making of the representations as to future matters rest with the party asserting the representation?

Issues

12 The application for removal to the Court of Appeal is predicated on there being an order for the decision of a question separately from any other question in the proceedings. Uniform Civil Procedure Rule 28.2 empowers the court to make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings. Uniform Civil Procedure Rule 1.21(1)(a), relevantly, permits the removal of proceedings into the Court of Appeal if an order is made for the separate determination of a question of law. Unlike the position for applications made under r 1.21(1)(b), in an application brought under sub-rule (a) it is not necessary that the court be satisfied that there are special circumstances which render it desirable for the proceedings to be removed into the Court of Appeal, although in Stewart v Ronalds, Fullerton J noted that it was still necessary that compelling circumstances to be shown to warrant such an order.

13 There are, therefore, two separate issues raised on the application before me (although the second may potentially impact on the first): first, should there be a separate determination of the s 51A issues at this stage in the proceedings and, secondly, if so, should the matter be removed to the Court of Appeal for the separate determination of those issues.

Separate determination

14 In Idoport Pty Limited & anor v National Australia Bank Limited & 8 ors (15) [2000] NSWSC 1215 at para 7, Einstein J summarised the applicable principles when considering an application for the separate determination of an issue. In so doing, his Honour noted that the power of the court in this regard is a discretionary power which must be exercised judicially but cannot otherwise be fettered; that the court is enjoined to give effect to the overriding purpose of the Supreme Court Rules (namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings); and that the court begins with the proposition that it is ordinarily appropriate that all issues in the proceedings should be disposed of at the one time and thus that it is for the party who wishes to have a question separately determined to show that it is desirable for this to occur.

15 Mr Moses noted that the principles enunciated by Einstein J in relation to the former Pt 31 r 2 of the Supreme Court Rules are equally applicable to the court’s exercise of discretion under its successor (r 28.2 of the Uniform Civil Procedure Rules) (citing Pioneer Park Pty Limited (in liquidation) v ANZ Banking Group Limited & ors [2005] NSWSC 832; Matrix Film Investment 1 Pty Limited & ors v Alameda Films llc and Warner Brothers Entertainment and Pictures Inc [2007] NSWSC 523).

16 Einstein J, in Idoport, said [at 7]:

Without being exhaustive, the separate determination of an issue may prove to be an appropriate procedure in at least the following sets of circumstances:

(a) Where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy: CBS Productions Pty Limited v O’Neill [1985] 1 NSWLR 601 at 606 per Kirby P, Dunstan & Simmie & Co Pty Limited [1978] VR 670 at 671 per Young CJ and Jenkinson J;

(b) Where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their disputes themselves and thus avoid further litigation: Tallglen v Pay TV Holdings Pty Limited (1996) 22 ACSR 130 at 141-142 per Giles CJ in Comm D;

(c) Where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of witnesses: CBS Productions Pty Limited v O’Neill (supra at 606 per Kirby P), Tallglen v Pay TV Holdings Pty Limited (supra at 142 at Giles CJ in Comm D), Rajski v Carson (1988) 15 NSWLR 84 at 88 per Kirby P and Hope JA.

17 It is not suggested that this case falls within the category of case outlined in paragraphs (a) or (b) above. The separate determination of the questions posed by Mr Moses will not have the effect of resolving the entirety of the litigious controversies in these proceedings (and, having regard to the corresponding Fair Trading Act claims, is unlikely substantially to narrow the field of litigious controversy); nor does it seem to me at all likely that a resolution of the s 51A issues will enable the parties to resolve their disputes without further litigation.

18 However, although Senior Counsel for the OMB parties (Mr Cotman SC) contends otherwise, the case does seem to me to fall within category (c). The questions posed by the BOQ parties for referral are discrete questions of law which are capable of determination without considering any of the factual issues in the case and without requiring any determination as to credit.

19 Einstein J also set out the circumstances in which he considered that, conversely, the separate determination of an issue would rarely be an appropriate procedure. Those included where there are intertwined issues of fact or law (such that the determination of the separate question would not have any substantial effect on the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation); where there is a commonality of witnesses and issues of credit; and where there is a possibility that the resolution of the separate issue will not finally determine the issue but merely result in an appeal from that decision in relation to that separate issue creating a multiplicity of proceedings, interruptions to the court and undesirable fragmentation of the proceedings.

20 Again, it seems to me that it is only the last such circumstance which would potentially be apposite in this case (particularly in light of the fact that the litigation has been marked by a number of contested interlocutory applications, including various cross-vesting applications, and even during the course of the hearing of this application further interlocutory applications were foreshadowed on each side).

21 Einstein J sounded a cautionary note in Idoport when he said:

The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings, (citing Tallglen v Pay TV Holdings Pty Limited, Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J) and Century Medical v THLD [2000] NSWSC 5; (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J). (my emphasis)

22 What is the perceived benefit of dealing with the s 51A issues now rather than if and when they arise in the ordinary course at the conclusion of the hearing? The BOQ parties place considerable weight on the desirability of reducing the cost of preparation for and length of what is estimated to be a lengthy hearing. To the extent that the early resolution of the s 51A issues would obviate the need for the BOQ parties to file evidence (including expert evidence) in rebuttal of the s 51A issue, then it can readily be seen that an order for the separate determination of those issues at this stage could save both the court and parties unnecessary time and expense in dealing with any such evidence. Mr Moses indicated, quite candidly, that if the BOQ parties bear no more than an evidential onus then they may seek to discharge that otherwise than by calling evidence (or expert evidence) in chief as to the existence of reasonable grounds for the alleged representations. Hence, it is submitted that the separate determination of the s 51A issues may “achieve economies in time and expense in the resolution of the proceedings and … would be appropriate and desirable”. Reliance is placed on Flore v NSW Department of Education and Training [2006] NSWSC 1227 at [32] and Street & 7 ors v Luna Park Sydney Pty Limited & 3 ors [2007] NSWSC 697 at [6] in this regard. In Stewart v Ronalds, Fullerton J recognised that where a definitive ruling on discrete questions identified by the parties will efficiently avoid a trial on some, if not all, issues then the appropriate procedure is that provided under r 28.2.

23 In response, Mr Cotman raises three matters. First, Mr Cotman contends that the issues posed in this motion are academic and that whether there will ultimately be a s 51A issue in this case is a matter dependent upon the forensic decision-making of the BOQ parties. Secondly, he submits that as there is no clear demarcation between evidence going to the alleged breaches of the Fair Trading Act and that which may go to the Trade Practices Act issues, the perceived saving of time and expense arising from a separate determination of the s 51A issues is illusory. Thirdly, he submits that this Court should not be concerned to assist a litigant in the process of making tactical decisions as to the conduct of its case (characterising the present application as one simply for the purpose of resolving doubts in the lawyers’ minds as to the sufficiency of evidence that might be filed and to obtain some guidance as to how to conduct the proceedings.)

24 As to the first of the matters put by Mr Cotman in resisting this application, he argues (with some force) that, until all the evidence is in, the nature and extent of any s 51A issue that may be alive before the court will not be known and points out that there is no issue in the authorities to gainsay the conclusion that s 51A operates as a deeming provision when no evidence of reasonableness is adduced. Whether the BOQ parties bear anything more than an evidential onus will only become relevant in determining the issues before the court if the evidence as to the existence of reasonable grounds for the making of any of the representations as to future matters is “equally poised” or “evenly balanced”, as explained in the analysis of this issue by Allsop J, as his Honour then was, in Pan. It is entirely possible (whether or not, as Mr Cotman suggests, it can at this stage be said to be probable) that the construction of s 51A will not be critical at the end of the trial to the disposition of these proceedings.

25 I accept that the question as to the operation of s 51A may never arise as a practical matter in this case, whether because the quality of the whole of the evidence is such as to establish a want of reasonable grounds (so that the statutory deeming provision is irrelevant) or because the quality of the evidence as to reasonable grounds is such that it is clear that s 51A(2) is not satisfied (in which case the statutory deeming provision will unquestionably apply). Hence, the submission that it is premature to determine now a question which may never arise as a practical matter (a submission which Mr Cotman says is reinforced by the rarity of cases in which the operation of s 51A has actually had a dispositive effect on the outcome of litigation).

26 Mr Moses’ response to this is that the pleadings squarely raise an assertion that the representations made by the BOQ parties or on their behalf, concern future matters, and thus the s 51A issues go to a critical issue which will be raised in the conduct of the case. Mr Moses submits that it will assist in the resolution of the real issues in the case if the questions as to onus were to be resolved at this stage.

27 As to the second matter, Mr Cotman submits that there is no utility in the court proceeding with the separate question motion because, mirrored in each of the cases where the OMB parties rely upon s 51A, is a cause of action pursuant to s 42 of the Fair Trading Act and reliance on s 41 of that Act. (As Stone J noted in Lewarne v Momentum Productions Pty Limited [2007] FCA 1136, s 41(2) does not operate as a statutory deeming provision; rather, there is a clear statement that the onus of establishing reasonable grounds is on the person making the representation.) Therefore, Mr Cotman submits that unless the BOQ parties’ position is that they will not be seeking to satisfy the onus placed on them by the invocation of s 41, there is no practical difference in the evidence that must be filed by them (and when it should be filed), whatever may be the result of the argument on the s 51A issues. Mr Cotman handed up a “Note on the Course of Evidence” to illustrate this point and in his supplementary submissions has summarised the various references to s 41 in the OMB parties’ pleadings.

28 Mr Moses did not seem to suggest that there was, relevantly, any difference in the nature and extent of the evidence that the BOQ parties might seek to address as between the s 41/s 51A issues. Rather, he addressed this argument (which was developed in Mr Cotman’s supplementary written submissions) by reference to the pleading in the Rossmick case.

29 In paragraph 227 of the Statement of Claim filed on 8 April 2007 in those proceedings a claim is made against one of the Bank officers (Mr Liddy) on the basis of accessorial liability. It is not alleged that Mr Liddy bears any primary liability for any contravention of the Fair Trading Act. Mr Moses (while accepting that the OMB parties could not be required to make any election at this stage as to the alternative causes of action they may wish to pursue) suggested that, insofar as the OMB parties assert that Mr Liddy is an accessory liable both under s 75B of the Trade Practices Act and under s 61 of the Fair Trading Act, but make no claim against him as a principal under the Fair Trading Act, then a question may arise as to whether there is a s 109 inconsistency between the operation of the respective onuses under s 51A and s 41 of the respective Acts. Mr Moses raises the question whether s 51A and s 41 are of concurrent operation or are in direct conflict in that regard. He referred to the judgment of Lee J in the Federal Court (ACCC v Capalaba Pty Limited [2003] FCA 1226 at [17-18]) where there was a question of accessorial liability under s 75B of the Trade Practices Act and the corresponding provision of the Fair Trading Act in Western Australia and his Honour there exercised a discretion not to issue notices under s 78B(5) of the Judiciary Act. (I was also referred to the comments made in a recent article by Professor Gillies in (2009) 17 TPLJ 25 on current issues of interpretation in respect of s 51A in this regard.)

30 Mr Cotman, in response, noted that the potential for a different outcome on alternative claims does not give rise to any inconsistency from a constitutional point of view and refers to the comments made by Allsop J as to the result of the procedural and evidentiary regimes applicable under the respective sets of legislation (in Pan [at 193]).

31 Ultimately, it was not suggested that the issue was one arising for consideration under the present application. (Although Mr Moses did in passing suggest that there might be some merit in referring an additional question, as to whether there is inconsistency between ss 41/51A where a party seeks relief under both statutes, to the Court of Appeal, I did not understand this to be formally pressed and there was no application to amend the motion to add a question of inconsistency to the questions sought to be referred to the Court of Appeal.)

32 After the hearing of the notice of motion my attention was drawn by the OMB parties to the decision of White J in Dawson v LNG Holdings [2008] NSWSC 137 which considered whether a party was liable as an accessory pursuant to s 75 of the Trade Practices Act in respect of a contravention of a corporation of s 51 of that Act or pursuant to s 61 of the Fair Trading Act. My attention was drawn in particular to paragraph 102 of the judgment where his Honour said:

The issues in question are technical. ... The onus is on the defendants to show a reasonable basis for the representations (s 51A Trade Practices Act ; s 41(2) Fair Trading Act ). It is unnecessary to consider whether the effect of s 51A(2) is spent once the corporation adduces evidence. In this case, LNG did not adduce any evidence. Section 41(2) of the Fair Trading Act, which applies to the claim against Mr Vaughan as a primary contravener, does not have the same difficulties in interpretation. It simply provides that the onus of establishing that a person had reasonable grounds for making a representation with respect to any future matter is on the person. That onus has not been discharged. I conclude that LNG and Mr Vaughan, in trade or commerce, engaged in conduct that was misleading or deceptive or was likely to mislead or deceive by making the first two representations referred to in para [84] without reasonable grounds.

33 I note that, there, his Honour recognised (but did not, in light of his findings on the Fair Trading Act claim, need to address) the onus issue under s 51A(2). Mr Cotman, as I apprehend it, refers to this case not only as an illustration that any debate over the s 51A(2) onus may be hypothetical and irrelevant in light of whatever decision the BOQ parties may choose to take on the s 41 issue, but also that the perceived inconsistency between the onus under s 51A and that under s 41 is not one which should give rise to any need for an election by the BOQ parties at this stage as to the alternative relief it seeks.

34 In any event, I think I can take little from the fact that in the LNG case the matter proceeded as it did. It does not appear that the present issues were a matter for debate before his Honour in that case.

35 The utility of the present question in light of the mirror claims under the Fair Trading Act was highlighted by the fact that Mr Cotman foreshadowed a possible summary judgment application on the OMB parties’ s 42 claims once all the evidence has been filed by the BOQ parties (presumably, if the indication given by Mr Moses as to the service of no evidence as to reasonable grounds were to be put into place, so to speak) and indicated that the OMB parties might choose not to pursue a s 52 claim if there were to be success in that regard (a course which might suggest there is a greater possibility of the separate determination as to the s 51A issues being dispositive of the proceedings, albeit indirectly, than had otherwise been suggested.)

36 However, the real force of Mr Cotman’s submission in relation to s 41, it seems to me, is the suggestion that I cannot be confident that the resolution of the s 51A issues will do anything materially to change the length/complexity of the trial, however those issues might be determined. It is difficult to avoid the conclusion that even if the evidence relevant to the s 51A issues would not otherwise be adduced it will in this case be put before the court in order to meet the onus under s 41 and hence, in a practical sense, there is unlikely to be any real saving of time and expense by the separate determination of the s 51A issues.

37 The third matter raised by Mr Cotman goes to issues as to the tactical conduct of litigation in this Court. In that regard, I note that Mr Moses expressed concern that there had been varying estimates of the hearing length (from six weeks to six months and, at last count, at least up to three months) and that if this issue were left unresolved then at the end of the day it might be said that the evidence had been based on a misapprehension of the law or the trial judge would be invited to make an order as to inconsistency or there might be a wrong application of s 51A, none of which scenarios would be in the interests of a just, quick and cheap resolution of the real issues in dispute.

38 I note that in Sydney South West Area Health Service v MD [2009] NSWCA 343, Allsop P, though there in a different context (addressing the situation where his Honour considered that a particular objection had seemingly been ‘kept up counsel’s sleeve’ for some time in order to obtain a tactical advantage) expressed the firm view that the ‘ambush theory of litigation is dead in this State. At [53] his Honour noted that:

The same thing has been said in the Federal Court: see in particular Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243; and Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206. As I said in White v Overland [2001] FCA 1333 at [4], which was approved in terms by the Court of Appeal in Nowlan at [28]:
… by way of general principle I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between parties, it should always be recognised that in the propounding of issues for trial the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are. … [I]f, something has been said, where it is evident, or indeed suspected, that the other side is proceeding on a basis of a misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public and private) likely to be wasted by confusion in litigation will mandate that a party, through his or her representative, ensure that the other side is not proceeding on a misconception or that the other side does appreciate something that has been said. Litigation is not a game. It is a costly and stressful, though necessary, evil. … [N]o one’s interests are advance by litigation proceeding on assumptions which are seen or suspected to be false.”

39 His Honour noted that it was the responsibility of parties through their legal representatives to exercise a degree of cooperation to express the issues for trial before and during the trial. While there is no basis to suggest that the OMB parties could be criticised for conduct of the kind to which his Honour was there referring, and it should not be thought that I am in any way critical of the manner in which the OMB parties, through their legal representatives, are approaching this application, I am concerned that the effect of the objection taken by the OMB parties on this motion is to raise the very real prospect that if the evidentiary issue raised by the BOQ parties is not determined at this stage, this will merely be deferring to a later stage of the proceedings (at the potential cost of the pursuit of unnecessary interlocutory steps and a longer trial than would otherwise be necessary) an argument on an issue already in dispute and which can be very quickly determined. To some extent it appears that the OMB parties are seeking to reserve argument as to the evidentiary onus until the end of what seems likely to be a lengthy trial on the basis that the BOQ parties should form their own view, and live with the consequences of that view from a tactical perspective, as to the outcome of the inconsistency argument raised on this application.

40 I do not accept that to rule on the questions at this stage is tantamount to giving the BOQ parties advice as to the sufficiency of their evidence. Indeed, I do not know what the state of their evidence is or might be.

41 Mr Cotman seemed to suggest that to determine this interlocutory point would be “to deny the possibility of asserting that there is an argument, let alone a separate argument to be had before the conclusion of the trial and evaluation of the evidence by that judge”. I do not consider that the expeditious conduct of the proceeding will be served by not ruling on the s 51A issues which have now, for better or worse, been placed before the court even if they may well turn out not to be dispositive of the matters at the conclusion of the hearing. Although not directly applicable, I consider that the philosophy underlying the approach indicated by Allsop P in White v Overland and affirmed by his Honour in the Sydney South West Area Health Service case, makes it incumbent on me to take such steps as I can to avoid parties incurring potentially unnecessary expense to be incurred in the present case.

42 Mr Cotman submits that I cannot be confident that the resolution of this issue will do anything materially to change the aspect of this case and in particular that I cannot be confident that length/complexity of trial will be materially changed either way. I consider, however, that the possibility that a ruling of this kind may have a positive impact on the efficient conduct of the hearing is one which I should not disregard.

Removal to the Court of Appeal

43 Commonly, cases which have considered the question of removal of matters to the Court of Appeal have dealt with an application under Rule 1.21(1)(b) (or its predecessors) and, hence, the question whether there are special circumstances for the removal, needs to be determined. In the present case, insofar as the BOQ parties seek such an order under 1.21(1)(a), it is not necessary that special circumstances exist. Nevertheless, there ought to be some compelling reason for removal and the likelihood of an appeal from a decision of a single judge on the determination of a separate question is not of itself sufficient to warrant removal to the Court of Appeal. In Stewart v Ronalds, Fullerton J said at para [19]:

Despite the fact that r 1.21 confers power to order that the proceedings be removed into the Court of Appeal if an order is made under r 28.2 for the separate determination of a question of law without the need for the Court to be satisfied that special circumstances exist rendering it desirable to make an order for their removal, the defendants concede the need for me to be satisfied that there at least sufficiently unusual circumstances to warrant their removal. The mere fact that the parties are likely to appeal any determination of the separate questions by a single judge is not in my view persuasive . (my emphasis)

44 The fact that parties, if the proceedings are not removed, retain their usual rights of appeal and the fact that a separate question may turn out to be academic once the evidence is heard, are matters which would tend against an order for removal. In Harkianakis v Skalkos (1999) 47 NSWLR 302, Dunford J addressed a notice of motion which sought the removal of separate questions to the Court of Appeal. His Honour noted that it was not appropriate for proceedings to be removed to the Court of Appeal in part. In relation to one proposed separate question, his Honour said (at 307):

I see no reason why the defendants should “side-track” the proceedings at this stage so as to have this issue ventilated once again either in the Court of Appeal or elsewhere. If the plaintiff succeeds in relation to this issue the defendants will have all their ordinary rights of appeal in respect of this or any other issue of law involved in the proceedings.

45 In Harkianakis, Dunford J (at 308) addressed a submission regarding the existence of inconsistent authorities:

I am not sure that in a case such as the present there is such inconsistency, but in any event it is not a matter which calls for removal into the Court of Appeal at this stage. If the defendants succeed on their defences, the assessment of damages will never arise so consideration of questions relating to such assessment may turn out to be academic. I can see no valid reason for referring to the Court of Appeal at this stage any questions which may ultimately turn out to be academic.

This case has now been pending for over seven years without going to trial and therefore without any determination of any issues of fact. During that time there have been, and by this application continue to be, numerous interlocutory applications, most of which it is claimed would clarify the issues at the trial and make its conduct more manageable. Whether that claim is justified may be open to some doubt, but in any event it seems to me that the stage has been reached where the proceedings should go to trial and the findings of the jury be ascertained on the relevant issues of fact. Any matters of law which are relevant can then be taken to the Court of Appeal if either side is dissatisfied with any of the findings or rulings. (my emphasis)

46 That said, if it were the case that Digi-Tech was relevantly binding on me on this issue, then the removal of the questions posed by the BOQ parties to the Court of Appeal would not be inconsistent with the approach adopted by Fullerton J in Stewart and would be consistent with what was said by Moffitt P in Proctor v Jetway Aviation Pty Limited [1984] 1 NSWLR 166 at 177:

Prior error in a decision can be adjusted only by a court higher in the appellate hierarchy or in exceptional cases by the appellate court itself. However, there are ways whereby a court can deal with a binding decision which appears to it to be unsatisfactory. Where practicable to do so having regard to the other issues raised, an option open is to order the removal of the case into the Court of Appeal under Pt 12, r 2. Such an option was open in Chapple and would have avoided the uncertainty which has existed until now, on the part of the Master, Cross J and members of the profession and public who were confronted with conflicting decisions. This uncertainty would have been avoided whatever the decision of this Court. The same option was open to Cross J. If such a course is not practicable, the judge is bound to follow the binding precedent, but it is open to him in his reasons for decision to draw attention to matters of doubt and the possible need for review of the earlier binding decision. This Court and the Full Court before it, over the years, has adopted this course when considered appropriate.

(I note that in Sivakumar v Pattison [1984] 2 NSWLR 78 at 84 Moffitt P referred to the decision in Proctor and said:

Nothing which was said in that case absolves or was intended to absolve the court in a Division, before it makes an order under Pt 12, r 2, from being first satisfied that special circumstances exist which render it desirable to order that the whole proceedings be removed into the Court of Appeal.)

47 In Sivakumar, the Court of Appeal did not see great utility in removal of a part of the proceedings to the Court of Appeal so that a separate question could be heard alongside a pending appeal and said, at 85:

The present is but another example of what this Court has encountered so often, where the splitting of proceedings made with the best of motives at the instance of parties or judges in order to streamline the judicial process, in the end complicates the proceedings, delays them and adds to the cost and often leads to decisions which in the end turn out to be academic.

Is there an inconsistency?

48 Section 51A, relevantly, provides:

(1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

(2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation . (my emphasis)

49 I noted briefly in Rosebanner Pty Limited v Energy Australia [2009] NSWSC 43, the issue as to the operation of s 51A, by reference to the judgment of Allsop J (as his Honour then was) in Pan (though without reference to the Court of Appeal dicta in Digi-Tech, which Mr Moses contends gives rise to the inconsistency in appellate authorities). In Rosebanner, I said [at 422-424]:

The disagreement as to [the] effect of s 51A(2), or its equivalent in the Fair Trading Act, namely whether it throws a persuasive or merely evidentiary onus upon the representor was considered by Allsop J, as his Honour then was, in Pan Pharmaceuticals v Australian Naturalcare (2008) 165 FCR 230 at 274:

Does it [s 51A(2)] place the burden of proof upon the representor to prove, on the balance of probabilities, that there were reasonable grounds for making the representation? Does it merely require that the representor adduce some evidence "to the contrary" as a means of nullifying the statutory deeming provision?

His Honour, having explored the history of the drafting of the section and the various cases dealing with its operation, concluded that:

If evidence is adduced by the representor that is said to be evidence to the contrary, it will be for the Court to determine whether it is to the contrary in the sense just discussed. If it is, the deeming provision will cease to operate . (my emphasis)

His Honour emphasised that this did not mean that s 51A(2) had changed the legal or persuasive onus:

For instance, if evidence "to the contrary" is adduced by the representor, and if the representee itself adduces evidence tending to the lack of reasonable grounds, the matter might be equally poised. In such a case, there has been evidence "to the contrary" adduced by the representee, thereby eliminating the operation of the deeming provision, and, on the totality of the evidence, the proof of the reasonableness (or lack thereof) of the grounds is evenly balanced. Section 51A(2) does not, in my view, mean that in those circumstances the representor has not met an onus. The section does not cast the legal or persuasive onus, in such a case, on the representor.

50 Mr Moses submitted that the view expressed there by Allsop J (that s 51A(2) placed no more than an evidential burden upon the alleged representor (to adduce sufficient evidence to rebutt the deeming provision in s 51A(2)) [at 152-197]) was one on which Emmett J agreed [at 44]; and thus that their Honours’ reasoning in relation to s 51A(2) of the Trade Practices Act (though they differed in the ultimate result in a particular case) was not a matter of obiter dicta but gave rise to a binding ratio upon this Court as presently constituted.

51 Mr Moses submitted that even if there is no clear ratio arising from the decision in Pan the reasons of Allsop and Emmett JJ remain persuasive and of precedential authority (D’Orto-Ekenaike v Victoria Legal Aid & Or (2005) 223 CLR 1 at [133] citing Re Tyler; Ex parte Foley (1994) 181 CLR 18 at 37-8; noting that the well considered dicta of an intermediate court of appeal should be followed unless considered to be plainly wrong (Beveridge v Whitton [2001] NSWCA 6).

52 In terms of the ultimate result in Pan, Allsop and Stone JJ ordered that the appeal should be dismissed (but Stone J did not consider it necessary to determine the s 51A(2) question). Insofar as Emmett J agreed with Allsop’s reasons except in relation to a different conclusion as to the outcome of the appeal, it is submitted by Mr Moses that their Honours shared the same view as to the operation of the onus cast by s 51A(2) of the Trade Practices Act which gives rise to a binding ratio.

53 Mr Cotman, on the other hand, submitted that the observations of Allsop J in Pan were obiter (forming part of the contribution to judicial debate) but did not form part of any binding ratio.

54 Mr Cotman submits that there is a clear issue as to whether the question now said to found the conflict asserted by the BOQ parties had in fact arisen. He says this because Stone J was not satisfied that there had been argument on the s 51A(2) point sufficient to found a judgment of the court on the subject [76], [195]; that on Emmett J’s findings (that Pan had adduced evidence affirmatively satisfying the court that there were reasonable grounds for the representation) no application of the deeming provision could arise; and that Allsop J accepted that the applicants had established at first instance that there was a fact of reasonable grounds as a matter of fact. On the disposition of the Pan appeal, therefore, it is said that no onus point actually arose.

55 Turning to what was said in Digi-Tech, the Court of Appeal (Sheller, Ipp and McColl JJA) noted [at 71:

[71] In para 44 of its defence, Digi-Tech dealt with para 95 of the summons by asserting in effect that the Profit Potential Representation was made on reasonable grounds, and those grounds were identified. Digi-Tech denied that its conduct was misleading or deceptive, but appeared to accept the onus placed on it by s 51A to prove reasonable grounds for any representations as to future matters that it had made. (my emphasis)

56 Mr Moses submits that what the Court of Appeal concluded was that Digi-Tech had not discharged a (persuasive) burden upon it to establish that there were reasonable grounds for the making of the impugned representations [121]. He places weight on the following statement by the Court of Appeal at paragraph 73, which appears to recognise that Digi-Tech bore the onus of proof that there were reasonable grounds for the making of certain statements:

These documents [a list of issues and an overview submission] demonstrate that Digi-Tech recognised then that it bore the onus of proving that it had a reasonable basis for the statements (made by or on behalf of Digi-Tech in the documents relied on by the appellants) that the Products had high revenue and profit potential.

57 Their Honours referred to what had been said by McHugh JA in his dissenting judgment in Wright v TNT Management Pty Limited (1989) 15 NSWLR 679 at 688. There, his Honour described the effect of s 51A in the following terms (at 690):

But for the purposes of Part V, s 51A must be taken to have abolished the distinction between a promise and a representation with respect to a future event. A promise to do something in the future is to be regarded as a representation that it will be performed. It will be deemed misleading, therefore, unless the corporation proves that it had reasonable grounds for making the promise. (my emphasis)

and said at [93]:

Although McHugh JA was in dissent in the case concerned, the force of his observations are, with respect, self-evident.…

58 However, in Digi-Tech the onus under s 51A was not ultimately dispositive of the relevant question decided by the Court of Appeal, since Digi-Tech had not adduced any evidence as to the existence of reasonable grounds. Accordingly, s 51A(2) operated to deem that it did not have reasonable grounds and the question where the persuasive onus lay did not arise. Whether or not the deeming provision cast a persuasive onus on Digi-Tech to prove the existence of reasonable grounds cannot therefore have been necessary to the court’s decision.

59 This seems to me to be clear from the fact that the fourth issue raised on the appeal was whether a particular representation was misleading and deceptive because Digi-Tech had not adduced evidence that it had reasonable grounds for making it. Their Honours expressly noted that no evidence had been adduced by Digi-Tech that it had reasonable grounds for making the representation (the evidence having revealed at least three respects in which the relevant estimate was defective). Mr Cotman therefore submits that the plaintiff in Digi-Tech had discharged any onus it might have had in evidence left unrebutted (and therefore the question whether it bore any such onus was ultimately unnecessary for the court’s decision.)

60 Their Honours said at [119]:

No other evidence was adduced that could justify the 50% market penetration figure. In the course of argument in the appeal, Ipp JA put to Mr Sheahan: “80% or 20% would be equally credible apparently. There is no explanation as to how the 50% could be achievable for the reasons expressed by Mr Reid. Why 50%?” Mr Sheahan replied: “It is impressionistic”. He suggested that the surrounding circumstances must have played a part in the assessment. He said:

It was made clear the product had not been sold, [there was] no market research, there was little independent support for the penetration rates. They believed they had very good prospects of selling it to Telstra in Australia because of an approach from them. They had an understanding of the market and so on, but it is compressed into [the passage quoted from Mr Reid’s evidence].

Mr Sheahan’s submission is understandable, but the fact is that no evidence was given to the effect that Digi-Tech took into account the matters to which he referred in arriving at the 50% market penetration estimate. There was also no evidence that explained what impact the factors to which Mr Sheahan referred would have on the market penetration estimate, and what weight should reasonably be attributed to each…
For the reasons we have expressed, we conclude that the Profit Potential Representation was misleading and deceptive in material respects (namely, those to which we have referred above). In coming to this view we take into account the omission of Digi-Tech to adduce evidence that they had reasonable grounds for making the representation. (My emphasis)

61 Aside from the reference to the strength (or self-evidence) of McHugh JA’s observations (which reference is, I think, to be understood in the context of his Honour there dealing with the question as to whether certain representations made were as to future matters), there is no discussion in Digi-Tech as to whether s 51A places an onus upon a representor to prove the existence of reasonable grounds for the making of a representation as to a future matter. At best, it seems to be a matter assumed by the Court of Appeal or the subject of an implicit recognition by the court.

62 The onus issue is certainly one as to which there has been ongoing judicial and academic debate. Prior to Pan, Emmett J had expressed the view, in ACCC v Universal Sports Challenge Limited [2002] FCA 1276 at [46] that s 51A “does not ultimately reverse the onus but simply provides that the deeming takes effect unless the corporation adduces some evidence to the contrary”. Stone J, on the other hand, in Lewarne [at 82] did not accept that interpretation of s 51A at [82]:

I would read the phrase “evidence to the contrary” as meaning evidence adduced by the person making the representation that, to the satisfaction of the court, establishes that there were reasonable grounds for making the representation. In other words, I interpret the sub-section as providing that the person making the representation can only avoid the deeming provision by establishing on the usual balance of probabilities that there were reasonable grounds for making the representation.

63 In Fubilan Catering Services Limited v Compass Group (Australia) Pty Limited [2007] FCA 1205, French J, as his Honour then was, adopted the interpretation which had been expressed by Emmett J in Universal Sports Challenge, noting that the section did not impose on the representor a legal or persuasive burden to prove that the representor had reasonable grounds for making the representation and that “the section does not reverse the onus of proof when it applies. It merely requires the alleged representor to ‘adduce evidence to the contrary’”, and postulated that the representor might be able to discharge the evidential burden by pointing to evidence which forms part of the applicant’s case, saying “In my opinion a respondent may rely upon evidence called by an applicant which answers the description ‘evidence to the contrary’.” Rares J in North East Equity Pty Limited v Proud Nominees Pty Limited [2007] FCA 1587 expressed his agreement with the reasoning of French J in Fubilan.

Is Digi-Tech binding in this regard?

64 The BOQ parties suggest that not only is there an inconsistency between the construction adopted by the Court of Appeal in Digi-Tech (Australia) Ltd v Brand [2004] NSWCA 58 and by the Full Federal Court in Pan Pharmaceuticals v Australian Naturalcare (2008) 165 FCR 230, but that I am bound by Digi-Tech.

65 It seems to me that in Digi-Tech, the Court of Appeal did little more than repeat (and perhaps implicitly acknowledge) the onus which had been accepted by Digi-Tech at trial. The existence of a persuasive onus on the part of Digi-Tech was not the subject of argument on the appeal and was not directly addressed by their Honours.

66 A trial judge is not bound by a proposition of law contained in a judgment of the Court of Appeal where that proposition has been conceded or assumed, without the proposition being addressed by counsel or within the judgment, even if the conceded or assumed proposition forms an essential part of the decision. (Here, for the reasons outlined above, it is doubtful in my view that the proposition did form an essential part of the decision in Digi-Tech.)

67 As a matter of precedent, therefore, I do not consider that a trial judge of this Court is bound by a decision of the Court of Appeal in respect of a principle which has been conceded or assumed, without the principle being addressed by counsel or within the judgment, even if that principle forms a necessary part of the decision (even though, in the present case, one would take note of the fact that there was an apparent recognition or assumption by the Court of Appeal of an onus having been placed on or accepted by the representor).

68 In Baker v The Queen [1975] 1 AC 774, the judgment of the majority of the Privy Council was delivered by Lord Diplock, who (at 785) said:

[I]n its opinions delivered on an appeal the Board may have assumed, without itself deciding, that a proposition of law which was not disputed by the parties in the court from which the appeal is brought is correct. The proposition of law so assumed to be correct may be incorporated, whether expressly or by implication, in the ratio decidendi of the particular appeal; but because it does not bear the authority of an opinion reached by the Board itself it does not create a precedent for use in the decision of other cases.

69 His Lordship noted that this is distinct from the per incuriam rule, which cannot be applied by a lower court so as to allow it to choose not to follow a higher court.

70 In Digi-Tech, the proposition of law (ie the operation of the onus of proof once s 51A is invoked) does not seem to have been disputed by the parties at trial. At best, the correctness of the position which had been adopted by Digi-Tech was accepted or assumed by the Court of Appeal. Whether it formed part of the Court of Appeal’s ratio decidendi is a moot point, but, even if it did, on the authority of Baker a single judge of this court would not be bound by it.

has been applied in a number of Australian cases. In CSR Limited v Eddy (2005) 226 CLR 1 at 11 [13], Gleeson CJ, Gummow and Heydon JJ said:

These events placed the Court of Appeal in a difficult position. It is of course commonplace for the courts to apply received principles without argument: the doctrine of stare decisis in one of its essential functions avoids constant re-litigation of legal questions ( Moragne v States Marine Lines Inc (1970) 398 US 375 at 403 per Harlan J (for the Court); Planned Parenthood of Southeastern Pennsylvania v Casey (Governor of Pennsylvania) (1992) 505 US 833 at 854 per O'Connor, Kennedy and Souter JJ (for the Court)). But where a proposition of law is incorporated into the reasoning of a particular court, that proposition, even if it forms part of the ratio decidendi, is not binding on later courts if the particular court merely assumed its correctness without argument ( Baker v The Queen [1975] AC 774 at 787-789 per Lords Diplock, Simon of Glaisdale and Cross of Chelsea and Sir Thaddeus McCarthy (holding the Court of Appeal for Jamaica not bound by a Privy Council decision in which "the Board were doing no more than assuming for the purpose of disposing of the particular case, and without any further consideration on their own part, that the proposition of law relevant to the issue of fact in dispute between the parties to the appeal had been formulated correctly by counsel for both parties in agreement with one another"). See also National Enterprises Ltd v Racal Communications Ltd [1975] Ch 397 at 405-406 per Russell LJ; at 407 per Cairns LJ; at 408 per Sir John Pennycuick; Barrs v Bethell [1982] Ch 294 at 308 per Warner J; In re Hetherington [1990] Ch 1 at 10 per Sir Nicolas Browne-Wilkinson V-C). "[T]he presidents, ... sub silentio without argument, are of no moment" ( R v Warner (1661) 1 Keb 66 at 67 [83 ER 814 at 815]). (My emphasis)

72 A similar issue was addressed in Chief Executive Officer of Customs v Tony Longo Pty Limited (2001) 52 NSWLR 458 at 474 by Heydon JA when considering the effect of the judgment of the Full Court of the High Court in Wing On and Co Ltd v Collector of Customs for New South Wales (1937) 60 CLR 97. The appellant in Wing On had not advanced before the Full Court a construction of s 132 of the Customs Act 1901 (Cth) which had been rejected by Starke J sitting at first instance in the High Court’s original jurisdiction. In the Tony Longo case, Heydon JA at 474, with whom Mason P and Rolfe AJA agreed, said the following:

In Wing On and Co Ltd v Collector of Customs for New South Wales , counsel for the appellant, Clancy KC (at 101), whose interest it was to argue that duty was not payable, said: “the imposition of the duty is contemporaneous with the importation of the goods into the Commonwealth”. He thus abandoned the s 132 argument advanced before Starke J by Spender KC…
because of the appellant's concession, the dismissal by the High Court of the appeal against Starke J's orders cannot be regarded as containing as part of its ratio decidendi a rejection of the s 132 argument : Baker v The Queen [1975] AC 774 at 788. (My emphasis)

73 Similarly, in Markisic v Commonwealth of Australia (2007) 69 NSWLR 737 at 748 [56], Campbell JA, with whom Handley AJA and Bell J agreed, stated:

That decision is not decisive of whether a right of appeal exists in the present case for two reasons. … Second, in any event it appears that there was no argument about whether s 101(6) precluded any right of appeal. A decision is not authority for a matter that has been assumed, rather than actually decided, in the course of making the decision : Baker v The Queen [1975] AC 774 at 788; Archer v Howell (1992) 7 WAR 33 at 46 ; Savouts v Minister for Immigration and Multicultural Affairs [2000] FCA 1059 at [32]-[33]; R (Kadhim) v Brent London Borough Council Housing Benefit Review Board [2001] QB 955 at 962 [20]-[25], 965 [33]-[39]. (again, my emphasis)

74 In Eleftheriou v Water Board [1991] NSWCA 91, Clarke and Handley JJA said:

A judicial decision is not binding in respect of questions which are either conceded or not argued . See The Queen v Hughes [1866] LR 1 PC 81 at 92-93 and National Enterprises Limited v Rascal Communications Limited [1975] Ch 397. (My emphasis)

75 In Tyram Pty Limited v Grainco Australia Limited [2003] NSWSC 812 at [67], Palmer J said the following of the reliance which counsel sought to place on the decision of the High Court in Gosper v Sawyer (1985) 160 CLR 548,

Mr Doyle's submission is really that the majority in Gosper decided "sub silentio" the general principle for which he contends. However, it was said as far back as 1661 that "precedents sub silentio without argument, are of no moment": R v Warner (1661) 1 Keb 66, at 67 [83 ER 814] per Twisden J. Cross & Harris Precedent in English Law (1991) 4th Ed, at p158 says: " It seems always to have been accepted that if a proposition of law, though implicit in a decision, was never expressly stated either in argument or in the judgment, the decision constitutes no binding authority for it, whether on the ground that there is here an exception to stare decisis, or for the reason that such a proposition is not truly part of the ratio ." (My emphasis)

76 Mr Moses in his submissions addresses the question whether or not a recognition by Digi-Tech that it bore the legal onus would undervalue the precedential force of the Court of Appeal’s decision. Mr Moses submits that even if such a recognition amounted to a concession (which he says is not clear) it related to a matter of law and not merely a legal issue between the parties, noting that the Court of Appeal is not bound to accept a concession made on a question of law if one was in fact made (Commissioner for Railways (Qld) v Peters (1991) 24 NSWLR 407 at 444-445). In any event Mr Moses says that in Digi-Tech the Court of Appeal did not merely accept the recognition or concession, it applied the legal onus by finding that it had been discharged. (For the reasons adverted to earlier, I do not accept that the Court of Appeal in fact applied a persuasive onus deriving from s 51A, nor does Peters meet the difficulty posed by the authorities referred to above in relation to the weight to be attached to the acceptance or assumption by an appellate court of a point not argued before it.)

77 If the BOQ parties were (and I do not think they are) to be correct in the contention that the Court of Appeal in Digi-Tech did not simply recognize or, in passing, endorse, but rather approved and applied an operation of s 51A(2) which is inconsistent with that expressly espoused by Allsop J and Emmett JJ respectively in Pan (and by other judges of the Federal Court sitting as single judges), then I would be faced with a position in which there was a binding Court of Appeal decision, which conflicted with a decision to which I would otherwise be bound to accord due deference and apply (unless, which I do not, I considered it to be plainly wrong). Put another way, Mr Moses submits that I cannot rely upon Pan in the face of binding authority to the contrary from the Court of Appeal (citing Buzzle Operations v Apple Computer Australia [2009] NSWSC 225 at [13]).

78 In Ying v Song [2009] NSWSC 1344 I had reason to consider the question as to the binding force of dicta in appellate courts. I noted that the High Court in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492 had stated the position as follows:

[ U]niformity of decision in the interpretation of uniform national legislation such as the Law is a sufficiently important consideration to require that an intermediate appellate court -- and all the more so a single judge -- should not depart from an interpretation placed on such legislation by another Australian intermediate appellate court unless convinced that that interpretation is plainly wrong.

79 The position stated in Marlborough was reiterated in Farah Constructions Pty Limited v Say-Dee Pty Limited (2007) 230 CLR 89, by reference to the weight to be placed on long established authority and seriously considered dicta (this formulation being matter referred to by Campbell JA in Zotti v Australian Associated Motor Insurers Limited [2009] NSWCA 323).

80 As I noted in Ying v Song, the weight to be accorded to obiter dicta will vary depending on the circumstances in which such dicta fell. Considered dicta of appellate courts, though not strictly binding on courts in a lower or equal position within the judicial hierarchy, must be afforded great weight and should be departed from only with the greatest of caution.

81 In Ying v Song I noted some examples of the historical approach to considered dicta and I do not propose to repeat those here. Suffice it to note that even if the observations of Allsop and Emmett JJ in Pan were not a necessary part of the reasoning in their respective determinations of the matter there before their Honours, it could not be said that they were not “considered dicta” to which great weight should be attached.

82 By contrast, it seems to me difficult to characterise the passing references in Digi-Tech to the acceptance by Digi-Tech of the onus of proof as amounting to “considered dicta” in the sense referred to above.

83 The distinction seems to me to be of a similar kind to that referred to in Brunner v Greenslade [1971] Ch 993 at 1002-1003, where Megarry J said:

A mere passing remark or a statement or assumption on some matter that has not been argued is one thing , a considered judgment on a point fully argued is another, especially where, had the facts been otherwise, it would have formed part of the ratio. (my emphasis)

84 Justice Heydon writing in “Limits to the Powers of Ultimate Appellate Courts” (2006) 122 LQR 399 at 415 observed that:

The attention to be paid to a statement on a point of law by an unquestionably great judge will vary with the circumstances in which it was made – whether it was made in the course of argument in open court while dealing with an example far removed from the case in hand; or made during an application for leave or special leave to appeal; or made in argument to counsel during an application for ex parte relief; or made in an interlocutory unreserved judgment; or made in a judgment in a case in which the loser was not represented, or argued by a litigant in person, or argued by very incompetent counsel; or made in an obiter dictum very far removed from either the core of the case or the arguments of the parties; or made in a case in which no party argued that the proposition was wrong . (Footnotes omitted) (my emphasis)

85 One of the factors in determining the weight to be accorded to obiter dicta is whether the point was argued before the court in which such dicta was uttered. In Digi-Tech, the question of the onus imposed by s 51A seems not have been argued before the court. While the Court of Appeal clearly had regard to the question of onus, and commended the observation of McHugh JA, this seems to have been only passing reference in the sense of “passing dicta”, (to use the terminology considered by Heydon JA (as his Honour then was) when sitting in the Court of Appeal, in Union Shipping New Zealand Limited v Morgan (2002) 54 NSWLR 690 at 734.

86 In the absence of the brief (and in my view) passing comments made by the Court of Appeal in Digi-Tech, I would have had no doubt in adopting the approach of Allsop J in Pan to the question of the s 51A(2) onus as it seems to me (irrespective of whether it formed part of the ratio in that case), with respect, to be correct. Do the comments by Court of Appeal in Digi-Tech compel me to following a different course? In the absence of argument before the Court of Appeal on the s 51A issues, and in light of the apparent adoption at first instance by Digi-Tech of a persuasive onus which seems to have informed the approach taken in the Court of Appeal, I do not consider that (with all due deference to that Court) I am bound to follow an approach contrary to that in Pan.

87 Had I been of the view that Digi-Tech was binding on a trial judge in this court on the question of the application of the s 51A onus in a matter such as this, then I would have had little doubt that this was an appropriate matter to refer to the Court of Appeal for separate determination of the s 51A issues. As I am not convinced that the relevant dicta in Digi-Tech area binding on a trial judge, not only does this tend against the remittal of the matter to the Court of Appeal but also the force of this factor when considering whether there should be any separate determination of the s 51A issues is lessened.

Discretion

88 Turning lastly to questions going to discretion, Mr Moses points to the fact that no position was taken by the OMB parties on the application before me as to the proper interpretation of s 51A(2) or as to how any apparent conflict in the authorities should be decided. Rather, Mr Cotman’s position was that, having invoked s 41, any onus issue under s 51A “simply fades into irrelevance or insignificance” in relation to the procedural aspects of the case, those being the very aspects of the case that are said to be the benefit of the separate determination or disposition of the case at this stage.)

89 That said, I consider that it was made clear by Mr Cotman at the directions hearing on 11 September 2009 that the OMB parties understand s 51A, when invoked as it has clearly been in these proceedings, to cast more than a mere evidential onus on the maker of representations as to future matters.

90 During the course of the hearing of the motion I raised with Counsel my concerns as to how best to address the issue of uncertainty posed by conflicting dicta on the onus issue in light of the obligations imposed by s 56 of the Civil Procedure Act 2005.

91 In particular, I had in mind that, in order to determine the motion, I would necessarily have to consider in some detail the apparently conflicting authorities on the s 51A(2) onus point, in order to determine their precedential status and to form a view as to whether there was sufficient uncertainty (and inconsistency) as to warrant removal of the s 51 issues to the Court of Appeal (assuming I were otherwise of the opinion that this was an issue appropriate for separate determination).

92 I directly raised with Counsel the question whether, if I were not minded to refer this issue to the Court of Appeal but were satisfied that it was a suitable question for separate determination I should not simply proceed to determine it now.

93 I note that no submissions were put to me by Mr Cotman on the hearing of the motion to the effect that the view I had expressed in Rosebanner was incorrect (although this was something I had earlier invited the OMB parties to do); rather the position of the OMB parties seemed to rest largely on the proposition that this is something hypothetical and premature to decide. The position of the OMB parties seemed to be to emphasise that this is something that is not “even worthwhile talking about because it may be simply overwhelmed by other aspects of the case” or it arises in such a peculiar form that the wrong question is stated or it begs other questions (without alluding to the aspects in which the questions presently posed are deficient).

94 For their part, the BOQ parties indicated they would have nothing to say in opposition to the approach I had foreshadowed.

95 I should note that the lateness of the present application is a factor which I take into account in the exercise of my discretion. The existence of issues regarding the interpretation of s 51A was first raised when the matter was before me on 11 September 2009. On that occasion, Mr Moses, referring to a trial then shortly to be conducted before Buchanan J in the Federal Court, said that it raised similar issues “that pertain to the interpretation and application of section 51A of the Trade Practices Act relating to the Federal Court’s approach to that matter at least” (T 2). In relation to the provision of expert evidence, Mr Moses noted that “the economist we hoped would provide a report based on the material that we would show him or her in respect of the section 51A point and express a view”. While there was a passing reference to the need for a view to be formed on the s 51A evidence, there was no indication that the BOQ parties were not intending at that stage to proceed to prepare and serve whatever evidence they sought to rely upon for an affirmative case. It was not until the last week of the court term last year that this application was made.

96 Nevertheless, I do not see that any real prejudice has been occasioned (other than perhaps some delay in the fixing of a hearing date, which would not necessarily have been possible even had this issue been raised earlier) by the lateness of the application, since the BOQ parties had in any event sought until 30 April to file their evidence as a whole (only part of which presumably includes any s 51A evidence) and since they indicated that preparation of the evidence would continue pending my ruling on this application.

Conclusion

97 I am of the view that the issues posed by the BOQ parties in relation to the proper interpretation of s 51A of the Trade Practices Act are questions of law in respect of which there is clear demarcation from all other issues in the case (albeit that the application of the decision in that regard may have certain consequences depending on the ultimate factual findings) and that it cannot be said that a separate determination of the issues at this stage will merely result in further applications or a multiplicity of proceedings. (That does not mean that further interlocutory skirmishes are by any means unlikely – simply that I doubt they will be precipitated solely or necessarily by the separate determination of the questions currently posed before the court.)

98 I accept that, at the end of the day, the question as to whether the BOQ parties bear a persuasive (rather than merely evidential) onus, may not arise from a practical point of view in light of the factual material then before the court and that the issue may to a large extent become academic in light of the s 42 claims and the invocation of a s 41 onus in that regard.

99 However, in circumstances where the issue has been raised, the parties have had an opportunity to make submissions as to the s 51A issues, and it has been necessary for me to consider the issues so for the purposes of this application, I consider that it is in the interests of the expeditious resolution of the real issues in the proceedings to make a determination on those issues at this stage (bearing in mind the submissions from the BOQ parties’ legal representatives that in their considered view there is a real possibility that the determination of the onus issue at this stage may obviate the need for lengthy expert and reply evidence and thus shorten the trial considerably).

100 I do not, however, consider that this question should be removed to the Court of Appeal, for the reason that I do not consider that Digi-Tech binds me to follow any particular construction of s 51A(2) of the Trade Practices Act. I do not read the brief comments in Digi-Tech (on which the BOQ parties’ concerns as to inconsistency are founded) as representing a considered or concluded view of the Court of Appeal in relation to the onus issue. I do not consider that it is in the interests of a just, quick and cheap resolution of the real issues in the proceedings before me to delay the preparation of this matter for trial by referring to the Court of Appeal the separate determination of questions of law which it seems to me to be open to me (without any disrespect to the Court of Appeal) to make (and which may ultimately turn out to be academic.)

101 I have again reviewed the analysis of the onus issue in Pan. I note that the interpretation accorded to s 51A in that case by Allsop J was adopted after a careful review of the history of the legislation and in which Emmett J concurred and has been considered with approval in a number of subsequent cases (ASIC V Cycclone Magnetic Engines Inc & Ors (2009) 224 FLR 50 at [188]; Skiwing Pty Limited t/as Café Tiffany’s v Trust Co of Australia Ltd (Stockland Property Management Ltd) (2009) 255 ALR 339 at [23]-[24]; Readymix Holdings International Pty Limited v Wieland Process Equipment Pty Ltd (No 2) [2008] FCA 1480 at [99]; Fubilan; and North East Equity.) I have also considered the analysis by Professor Gillies of the issue in his article on “Misrepresentations as to Future Matters – Current Issues in Interpretation” (2009) 17 TPLJ 25.

102 I remain of the view, with respect, that the interpretation accorded to s 51A(2) by Allsop and Emmett JJ is correct.

103 Accordingly, I find that the questions of law set out in paragraphs 7(a) and (b) of the affidavit sworn 11 December 2009 of Mr David Gareth Jenkins in support of this application should be heard and determined separately.

104 I answer those questions as follows:

(a) Section 51A of the Trades Practices Act 1974 (Cth) does not reverse the legal or persuasive onus so as to place any such onus on the representor in relation to representations as to future matters;

(b) The proper approach in applying s 51A of the Trade Practices Act 1974 (Cth) is to consider whether the representor has adduced some evidence that there were reasonable grounds for making the representation(s) (the evidential onus) and, if it has, the deeming provision of s 51A then ceases to operate and the persuasive onus rests with the party asserting the representation.

105 I decline the application of the BOQ parties for the matter to be referred to the Court of Appeal in order to determine the said questions.

106 In relation to the directions made in September last year for the filing of any expert evidence on which the BOQ parties wish to rely on the question of whether there were reasonable grounds for the making of any representations as to future matters, I see no reason for there now to be any vacation of those directions. It is a matter for the BOQ parties to determine how they wish to conduct their defence of the Trade Practices Act claims, knowing (as they do) that claims are also brought against them under s 42 of the Fair Trading Act (in respect of which, as to future matters, the onus of proof under s 41 is clear). I will make directions to facilitate that decision being made without further delay.

107 I will hear submissions in relation to the costs of this application.

10 I make orders accordingly.

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25/03/2010	-	Duplicate paragraph deleted - paras 13 and 14 - Paragraph(s) old para 14 deleted.
07/04/2010	-	para 29 s 75B of the Judiciary Act is replaced with 78B(5) of the Judiciary Actpar 45 the word "be" inserted between the words "jury" and "ascertained" in the penultimate sentence of cited passagedpar 49 the work "[the]" inserted between the words "to" and "effect" in the first line of the cited passage. - Paragraph(s) 29; 46; 49