| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : VAN'T SANT -v- KRAMER [2011] WADC 136 CORAM : WAGER DCJ HEARD : 3 AUGUST 2011 DELIVERED : 30 AUGUST 2011 FILE NO/S : CIV 3405 of 2009 BETWEEN : JAMES VAN'T SANT Plaintiff
AND
STEFAN KRAMER
First Defendant
DIANNE KRAMER
Second Defendant
RAC INSURANCE PTY LTD
Third Party
Catchwords: Applications for separate trial for issues - Principles to be applied - Whether issues contentious Legislation: Rules of the Supreme Court 1971 O 32 r 4
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Result: The liability issues between the plaintiff and the defendants, and between the defendants and the third party be tried as preliminary issues
The third party's application be dismissed Representation: Counsel:
Plaintiff : Mr D J Bayly
First Defendant : Mr D P Price
Second Defendant : Mr D P Price
Third Party : Mr M P Cornes
Solicitors:
Plaintiff : Bradley Bayly Legal
First Defendant : D P Price & Co
Second Defendant : D P Price & Co
Third Party : Minter Ellison
Case(s) referred to in judgment(s):
Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47
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1 WAGER DCJ: The third party applies for orders that the question of the application of the insurance policy exclusion clause raised in the third party proceedings be tried separately from any other question or issue before the trial of the action as a preliminary trial issue.
2 The plaintiff, joined by the defendants, opposes the third party's application and applies for orders that the liability issues between the plaintiff and the defendants, and between the defendants and the third party, be tried as preliminary issues, the plaintiff having the carriage of the preliminary issues in the action between the plaintiff and the defendants, and the defendants having the carriage of the liability issues between the defendants and the third party. The defendants support the plaintiff's application. This application is opposed by the third party. 3 On 26 December 2008, when visiting the defendants' home in South Yunderup, the plaintiff pleads that he slid head first down a water slide that was positioned on the plaintiff's property leading into a canal, on a body board and that the body board struck the sand at the edge of the canal causing him to be propelled head first into the canal. His head struck the sandy bottom of the canal, thereby causing him to suffer pain and significant injury, particularised by the plaintiff as being a C4 complete tetraplegic, C1 converse fracture, C5/6 fracture dislocation and cerebellum infarction. The plaintiff pleads that the accident was caused by the negligence and the breach of statutory duty of the defendants. The defendants deny any negligence and deny breaching any statutory duty owed to the plaintiff. 4 In third party proceedings the defendants plead that they had a policy of house and contents insurance with the third party at the relevant period, entitling the defendants to be indemnified against the plaintiff's claim in the proceedings. The first named defendant, however, pleads in his statement of claim against the third party that the policy between the defendants and the third party contained a clause relevant to the limits of cover. The pleadings set the clause out (as relevant) at par 9(e): … Legal Liability DOES NOT EXTEND to liabilities for injury … as a result of an incident … (c) caused by or connected with the use of … waterborne craft (including sail boards), surfboards, windsurfers, surf skis and the like … 5 The third party admits the existence of the policy and the limit of cover, and says the limit of cover applies to the claim made against the defendants by the plaintiff and, therefore, any liability that the defendants (Page 4)
may have to the plaintiff for the claim is excluded from the cover provided to the defendants by the policy. 6 Order 32 r 4 Rules of the Supreme Court 1971 states: The court may order that any question or issue arising in a cause or matter whether of law or fact or partly of law and partly of fact, and whether raised by the pleadings or by agreement of the parties or otherwise be tried separately from any other question or issue whether before or after the trial or further trial of the proceedings, and may direct that a case and the question or issue for decision be stated. 7 In Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47 McKechnie J distilled the relevant principles in respect of the exercise of discretion to order a trial of an issue. The principles are listed in [4] and I adopt them as being appropriate considerations for the exercise of discretion in this case: A separate trial of issues is only appropriate in clear and simple cases. Separate trials of issues should only be embarked upon when the utility, economy and fairness are beyond question. The fact that the resolution of a separate trial may determine the litigation is relevant. Separate trials of issues may be appropriate where it is likely to save expense and inconvenience. There is a focus in the Rules of the Supreme Court on the expedition of determination of matters before the Court and separate trials of issues may advance the expedition. A possibility that the determination of issues tried separately may lead to settlement should be taken into account even though the issues may not finally dispose of the action. In many cases the formulation of specific questions to be tried separately, from and in advance of other issues, will assist in the resolution of the matters in issue if the questions are capable of final answer in accordance with the judicial process. Separate trials are inappropriate where the result depends on complex issues of fact or when a preliminary question is one of mixed fact and law. The procedure should be confined generally to cases where facts are not complicated and the legal issues short, otherwise it can be a treacherous shortcut. (Page 5)
The third party's application 8 The preliminary issue being sought to be heard by the third party relates to the following question: Does the exclusion relating to accidents involving 'waterborne craft' contained in the defendants' insurance policy with the third party referred to in paragraph 9 of the first named defendant's third party statement of claim dated 19 April 2011 apply to the claim made by the plaintiff against the defendants in this action such that the third party is not liable to indemnify the defendants in respect of their claim? 9 Counsel for the third party submits that the determination of this issue between the defendants and the third party does not require a determination of any facts that may be contentious in the determination of liability between the plaintiff and defendants or otherwise. Counsel for the third party submits that it would only be necessary to hear evidence of matters that are already accepted by the plaintiff as being material facts in light of the pleadings. Specifically, the third party refers to: (a) The nature of the plaintiff's claim against the defendants: (Page 6)
(iii) Each of (A), (B) and (C) is either admitted or not admitted, not denied, by the defendants (paragraphs 3 - 11 of the Defence dated 14 April 2010); (b) The defendants had an insurance policy with the third party that included legal liability insurance that could cover the claim: (i) this is stated by the defendants in their third party notice dated 12 July 2010 and is specifically pleaded by the first named defendant (paragraphs 8 and 9 of the First Named Defendant's Statement of Claim Against Third Party) and admitted by the third party (paragraphs 7 and 8 Defence to the First Named Defendant's Third Party Statement of Claim); (c) Indemnity in respect of the plaintiff's claim was sought by the defendants from the third party: (i) This is stated by the defendants in their third party notice dated 12 July 2010 and is pleaded by the first named defendant (paragraph 13 of the First Named Defendant's Statement of Claim Against Third Party) and admitted by the third party (paragraphs 12 of the Defence to the First Named Defendant's Third Party Statement of Claim; (d) There is an exclusion clause in the defendants' insurance policy with the third party which provides that legal liability cover does not extend to liabilities for injury as a result of an incident caused by or connected with the use of waterborne craft including surfboards and the like (Exclusion): (i) this is specifically pleaded by the first named defendant (paragraph 9 of the First Named Defendant's Statement of Claim Against Third Party) and admitted by the third party (paragraph 8 of the Defence to the First Named Defendant's Third Party Statement of Claim); (d) Indemnity was declined by the third party on the basis that the Exclusion applies to the plaintiff's claim: (i) this is pleaded by the first named defendant (paragraph 14 of the First Named Defendant's Statement of Claim Against Third Party) and admitted by the third party (paragraph 13 of the Defence to First Named Defendant's Third Party Statement of Claim). (Page 7)
10 Counsel for the plaintiff, however, submits that the pleadings, being material facts only, are no substitute for oral testimony. The factual circumstances may still be contentious on a number of issues relevant to the question posed by the third party, including: the nature of the board; whether the board was waterborne at the material time; whether the plaintiff was on the board at the material time; whether at the material time the board was a 'waterborne craft' within the meaning of the exclusion clause; the mechanism involved in the cause of the plaintiff's injuries (that is, how the plaintiff was injured; whether the plaintiff's injuries were the result of an incident 'caused by or connected with the use of a waterborne craft' within the meaning of the exclusion clause. 11 Counsel for the plaintiff submits that it would be artificial and inherently dangerous to separate the trial of the liability issues between the plaintiff and the defendants from the liability issues between the defendants and the third party because the issues could not be resolved by the court hearing evidence only of matters pleaded in the plaintiff's statement of claim. 12 I agree with the submission made on behalf of the plaintiff that some of the material facts may be contentious, requiring oral evidence to be led in order to answer the third party's question. Specifically, I note that there is no pleading in relation to the amount of water (if any) on the water slide at the relevant time, there is no pleading in relation to whether the sand at the end of the water slide, but before the plaintiff reached the canal, was wet or was dry, nor is there any evidence of the size of the body board relative to the size and the weight of the plaintiff at the material time, whether the incident refers to the act of body boarding on the water slide or the act of entering the canal and whether the plaintiff was on the body board at the time of entering the canal. 13 These are the sort of issues that may or may not arise in consideration of the third party's question, however there is a real danger that if the issues do arise, the resultant delay in arranging for oral testimony to be led would be productive of delay, extra expense and uncertainty of outcome. I do not consider that the issue is so clear and (Page 8)
simple that it is appropriate to order a separate trial of issues in relation to it.
The plaintiff's application 14 The plaintiff, joined by the defendants, submits that the liability issues between the plaintiff and the defendants, and between the defendants and the third party should be heard as preliminary issues. 15 It is submitted that given the injuries sustained by the plaintiff, a trial involving quantum issues would be complex, lengthy and the subject of extensive expert evidence resulting in significant costs for all parties. 16 The issue of liability is contentious, however counsel for the plaintiff advises from the bar table, that senior counsel is of the view that the issue of liability would only require the plaintiff, the plaintiff's former girlfriend, the two defendants and the defendants' son to give oral evidence. The preliminary trial would require a listing of two to three days. 17 Counsel for the plaintiff further submits that the hearing should be expedited because, consistent with the report of Ms Jodrell, occupational therapist, dated 27 July 2011 annexed to the affidavit of David John Bayly dated 5 August 2011 the plaintiff requires medical treatment and his condition continues to deteriorate. Although for the purposes of this application I need not make any final findings in relation to the plaintiff's condition, medical needs and future needs, I accept that the plaintiff has required increased care and hospitalisation that is costly and places stress on those who are providing the care. 18 In Seaman Civil Procedures Western Australia at 32.4.2 reference is made to the settlement of preliminary issues in light of the system of case management: (Page 9)
19 It is therefore relevant that the defendants have joined with the plaintiff in making this application. The question of liability, as it relates to the plaintiff and defendants, and defendants and third party can be isolated from the issue of quantum and would, in my view, be likely to save time and expense. Accordingly, I make the following order: 1. The liability issues between the plaintiff and the defendants, and between the defendants and the third party be tried as preliminary issues; 2. Until the determination of the preliminary issues, the proceedings and the action be stayed; 3. The plaintiff have the carriage of the preliminary issues in the action between the plaintiff and the defendants, and the defendants have the carriage of the liability issues between the defendants and the third party; 4. The preliminary issues be entered for trial and be tried by a judge in the court; 5. The parties have liberty to apply. 6. The third party's application to determine the preliminary question of the exclusion clause relevant to the issue of whether the third party is liable to indemnify the defendants in relation to the claim made by the plaintiff against the defendants in this action is dismissed.
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