Walker v ANZ

[2001] NSWSC 765

Reported Decision: (2001) 19 ACLC 1584
[2001] NSWSC 765
[2001] ACL Reo 325 NSW 325

New South Wales

Supreme Court

CITATION:	Walker & Anor v ANZ [2001] NSWSC 765
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 3507/01
HEARING DATE(S):	29 August 2001
JUDGMENT DATE:	3 September 2001
PARTIES :	Peter Murray Walker and Steven John Sherman as voluntary liquidators of One-Tel Limited (Administrators Appointed) (P1) One-Tel Limited (Administrators Appointed) (P2) Australian & New Zealand Banking Group Limited (D1)
JUDGMENT OF:	Austin J

COUNSEL :	B Coles QC (P) R J Weber (D)
SOLICITORS:	Clayton Utz (P) Blake Dawson Waldron (D)
CATCHWORDS:	PRACTICE AND PROCEDURE - order for determination of separate questions - determination of liability separately from and before assessment of damages - when appropriate - defendant terminates merchant and direct debit facilities - plaintiffs' loss depends on failure by customers to pay by alternate means - loss not yet known
LEGISLATION CITED:	Supreme Court Rules Pt 31 r 2
CASES CITED:	Chippendale Printing Co Pty Ltd v Commonwealth (1995) 17 ACSR 328 Deeny v Gooda Walker [1995] 4 All ER 289 Hadley v Baxendale (1854) 1 56ER 145 Hawkins v New Mendip Engineering Ltd [1996] 3 All ER 228 Love v Mirror Newspapers Ltd [1980] 2 NSWLR 112 Mann v Capital Territory Health Commission (1982) 148 CLR 97 Nominal Defendant v Gardikiotis (1996) 186 CLR 49 Perre v Apand Pty Ltd (1999) 198 CLR 180 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Stevens v William Nash Ltd [1966] 3 All ER 156 Tepko Pty Ltd v Water Board (2000) 178 ALR 634
DECISION:	Application for orders for separate determination denied

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

MONDAY 3 SEPTEMBER 2001

3507/01 PETER MURRAY WALKER AND STEVEN JOHN SHERMAN AS VOLUNTARY LIQUIDATORS OF ONE-TEL LIMITED (ADMINISTRATORS APPOINTED) AND ANOR V AUSTRALIAN & NEW ZEALAND BANKING GROUP LIMITED

JUDGMENT

HIS HONOUR :

Introductory facts

1   The second plaintiff is the parent company of a group which provided telephone and mobile telephone services to many thousands of customers. The first plaintiffs were appointed joined voluntary administrators of the second plaintiff by resolution of the board of directors of the second plaintiff on 29 May 2001.

2   Prior to that time, the defendant supplied financial services to the second plaintiff, including a one day term deposit account which was linked to facilities including a merchant facility and a direct debit facility. Those facilities enabled customers of the second plaintiff to pay their telephone accounts by credit card or by direct debit to the customer's bank account. Facilities of this kind were very important for the conduct of the second plaintiff's business, because amounts would fall due to be paid by customers on a frequent and recurring basis and the amount of each debt was relatively small, making it important that customers have available to them simple and efficient methods of payment.

3   On 30 May 2001 the first plaintiffs, in their capacity as voluntary administrators, commenced negotiations with the defendant for the provision of similar services notwithstanding the commencement of the administration. On about 1 June 2001, the first plaintiffs and the defendant entered into an agreement for the establishment of two new facilities in the name of the second plaintiff in administration, namely a merchant facility and a direct debit facility, both linked to a one day term deposit account.

4   For the purposes of the present application, the parties have agreed to a statement of facts including the following:
‘The facilities were necessary for the timely and efficient collection of outstanding debtors of the second plaintiff, which in turn were necessary for the orderly and efficient administration of the second plaintiff by the first plaintiffs in that they were critical to the realisation of a major asset of the second plaintiff, namely customer debtors.’

5   The second plaintiff ceased to carry on the business of providing telephonic services to customers on about 12 June 2001. At that time customers owed the second plaintiff millions of dollars. On about 21 June 2001 the defendant purported to suspend the merchant facility, and thereby suspended the processing of a direct debit file that had been provided to it by the first plaintiffs for processing on about 19 June 2001. On about 26 June, without notice, the defendant purported to terminate both the merchant facility and the direct debit facility.

6   The following additional facts are agreed by the parties for the purposes of the present application. The suspension and termination of the facilities by the defendant jeopardised the first plaintiffs' ability to collect customer debts in a timely and efficient manner. The first plaintiffs believe that it is unlikely that they will be able to recover the majority of the direct debit customer payments which have been held in suspension by the defendant, by virtue of its not processing the direct debit file. Further, since 19 June 2001 the first plaintiffs have received in excess of 5,000 requests by customers that their direct debit facilities be cancelled. The cancellation of direct debit facilities by customers means that the first plaintiffs are forced to use other, less efficient collection methods to recover outstanding debts, making some debts uncollectable in a practical sense through effluxion of time.

7   The plaintiffs commenced the present proceedings by summons filed with abridgment of service on 11 July 2001, and then proceeded by statement of claim filed on 20 July 2001. After an interlocutory hearing before me on 13 July 2001, arrangements were made between the parties for reinstatement of the merchant facility, which has been operating in what I shall assume, for present purposes, to be a satisfactory way as from mid-July. The plaintiffs have applied for expedition of the proceedings, on the ground that the first plaintiffs need to determine speedily the defendant's liability to reinstate the facilities and to process the direct debit file.

Interim arrangements


8   On 21 August 2001 the solicitors for the defendant wrote to the solicitors for the plaintiffs saying that their client was prepared to reinstate the direct debit facility on specified conditions, including conditions that the reinstatement would permit direct debits only where the customer's authorisation was given on or after 12 June 2001, and that the first plaintiffs would undertake not to process direct debits that were received by them on or before 11 June 2001.

9   On 28 August 2001 the plaintiffs' solicitors responded to that offer, saying that the offer did not represent a ‘commercially appropriate interim resolution’. The difficulty, they said, was that all direct debit authorities from customers pre-dated 12 June 2001, and to re-contact the customers to refresh their direct debit authorities would not only involve a huge expenditure of time and money, but could well have a detrimental effect on collections of what had become long outstanding debts. They said that in fact, the first plaintiffs had commenced a process of contacting customers who had provided direct debit authorities to see whether they would consent to pay their debts by credit card. Given that many thousands of customers are involved, this process has been expensive and, moreover, the letter alleged that since the customers thought that their debts had been paid by direct debit, the staff of the first plaintiffs had been encountering ‘significant and mounting pressure and criticism from people in this position’.

10   The plaintiffs have applied for a variety of interlocutory orders designed to reinstate the direct debit facility pending the final hearing of the proceedings. The application has yet to be determined.

The plaintiffs' claims


11   The statement of claim, to which the defendant has lodged a defence, alleges that the defendant is liable to the plaintiffs on the following alternative grounds, namely that
· the termination of the merchant and direct debit facilities was in breach of the express or implied terms of the contract (paragraphs 15 and 17);
· the defendant acted unconscionably in purporting to terminate the facilities, contrary to s 51AA and/or ss 51AB and 51AC of the Trade Practices Act 1974 (Cth) and/or s 12CA and/or s 12CB of the Australian Securities and Investments Commission Act 1989 (Cth) (paragraphs 20, 22, 24 and 26).

12   The statement of claim alleges that the defendant was aware of a large number of specified matters, including that the financial facilities were necessary for the efficient collection of the second plaintiff's debts, a matter critical to the realisation of the second plaintiff's major asset, and that if the facilities were terminated, this may cause loss and damage to the second plaintiff and its creditors. It alleges that the defendant was aware that termination of the financial services could prevent collection of debts owing to the second plaintiff in the order of $1.5 million per day (paragraph 19). It claims that the defendant terminated the facilities in the knowledge of these and other specified matters and without notice or just cause, and at the request of the Minister for Financial Services, the Honourable Joe Hockey MP.

13   The statement of claim seeks, by way of relief:
· declarations of breach of contract and breach of statutory provisions concerning unconscionability;
· mandatory and prohibitory injunctions to require the defendant to reinstate the facilities and to restrain it from relying on the purported termination of the facilities, and to restrain it from terminating their provision in the future;
· orders declaring certain provisions of the contract to be void, or refusing to enforce them;
· damages.

14   The claim for damages is obviously an important part of the proceedings. As far as the merchant facility is concerned, it appears to be the principal claim, given that the facility has been reinstated. As far as the direct debit facility is concerned, the claim is comparable to a claim for specific performance and damages in addition to that relief. Damages will be an important ingredient of that claim whether or not the direct debit facility can be reinstated by negotiation. As to the quantum of damages, the statement of claim merely pleads that plaintiff has suffered loss and damage, particulars of which will be provided in due course (paragraphs 16, 18, 21, 23, 25 and 27).

The claim for separate determination

15 By notice of motion filed on 3 August 2001, the plaintiffs have sought orders under Part 31 rule 2 (a) for the determination of the question of damages to be heard separately from and after the determination of the other issues in the proceedings. These reasons for judgment relate to that application.

The plaintiffs' submissions about the uncertainty of their loss and damage


16   The plaintiffs say that the entirety of the their loss and damage arising from the defendant's conduct is not presently known by them, and will not be known by the anticipated date of the expedited hearing or for some time thereafter. They say that the plaintiffs' potential loss and damage includes loss of the first plaintiffs' ability to recover debts from those customers who have, since the suspension and termination of the facilities, cancelled their direct debit authorities and who, through effluxion of time during the enforcement of alternative remedies (such as Local Court proceedings) will be either unable to pay their debts or will not be persuaded to do so, so that the debts will be uncollectable.

17   The plaintiffs give the following hypothetical example to illustrate the present uncertainty as to the extent of their losses:

(a) customer A has authorised a direct debit with the second plaintiff which would have allowed the first plaintiffs to pay customer A's outstanding account on, say, 10 June 2001;
(b) that direct debit was not made because of the defendant's unlawful action in cancelling the direct debit facility;
(c) customer A has in the meantime cancelled his direct debit authority;

(d) consequently, the first plaintiffs must use other remedies available to them, in order to recover the outstanding debt;
(e) assuming customer A does not pay voluntarily, court proceedings may prove necessary;
(f) by the time court proceedings are determined, customer A is no longer in a financial position to meet the debt owing to the second plaintiff;
(g) accordingly the plaintiffs' damages in respect of customer A will include legal fees, the debt itself and lost interest.


18   The plaintiffs say that the first plaintiffs will not be able to quantify the debts that are or will become uncollectable for some time following the anticipated hearing date. It is those debts which will comprise the damages claimed against the defendant. The defendant accepts the proposition that the plaintiffs' loss has not yet crystallised.

19   The plaintiffs say that they now apply for an order that liability be heard separately and in an advance of the issue of damages, by reason of the uncertain nature of the loss and damage which they will suffer as a result of the defendant's conduct. They refer to the following relevant principles for the assessment of damages:
· a lump sum award of damages must, in respect of the same cause of action, compensate the plaintiff once-and-for-all by encompassing all losses which the plaintiff alleges that he or she has suffered and will now suffer, by reason of the defendant's wrong ( Nominal Defendant v Gardikiotis (1996) 186 CLR 49 at 61 per McHugh J);
· the losses which are to form part of an award of damages must be established and assessed with such certainty and precision as the nature of those losses and the general circumstances permit, but where the chance of a loss's occurrence is very small or entirely speculative, the court will ignore it in the assessment of damages ( Sellars v Adelaide Petroleum NL (1994) 179 CLR 332).

20   It follows, say the plaintiffs, that the Court will assess the plaintiffs' claim for damages on a once-and-for-all basis, and for that purpose the plaintiff must first be able to establish both the nature and the quantum of the loss.

21   I find this part of the plaintiffs' submissions somewhat puzzling. The plaintiffs do not appear to say that the hearing of the claim for damages must be deferred until every last debt has been collected or has become uncollectable. They give an account of the evidence that they plan to call to prove their loss and damage. It includes:
(a) expert evidence from a suitably qualified expert going to:
(i) the efficiencies of collection of retail telecommunications debts from customers by direct debit or via merchant facility compared with debt collection through other means;
(ii) the logistics of and means and procedures by which such debts could be collected in the absence of such banking facilities including the rendering of outstanding account letters, the engagement of debt collection agents, commencement of Local Court small claims debt collection proceedings, execution of judgment procedure and bankruptcy proceedings;
(iii) the cost to the first plaintiffs of undertaking debt collection through direct debit or merchant facilities compared with the other processes of the kind described in (ii) above;
(iv) the estimated time frame for collection via the alternative debt collection procedures compared with collection by direct debit or merchant facility;
(v) the prospects of collection of the debts via the alternative procedures compared with the direct debit and merchant facility methods of collection; and
(vi) an estimate of the percentage of recovery of the debts via the alternative procedures compared with the direct debit and merchant facility methods of collection;
(b) evidence from the first plaintiffs going to:
(i) the number of customers in default of payment of their accounts with the second plaintiff (which on present estimates run to multiples of tens of thousands);
(ii) the quantum of each outstanding debt (which on present estimates is approximately in the region of $100);
(iii) the identity and address of each defaulting customer so as to permit collection via the alternative methods; and
(iv) the estimated cost of collection of the debts and prospects of recovery based upon the above expert evidence.

22   While I can understand that the preparation of this evidence will involve a great deal of work, it strikes me that nothing in it depends upon completion of an actual process of collections. It appears that the information needed for the plaintiffs' evidence outlined in paragraph (b) is information available now, though no doubt difficult to extract, and the expert evidence in paragraph (a) is generally not dependent upon the plaintiffs' circumstances, and to the extent that it is, the plaintiffs' circumstances can be ascertained now. Therefore, on the assumption that the proposed method of proof is acceptable, it is a reasonable inference that the delay in quantifying their loss, of which the plaintiffs speak, is delay resulting from the efforts needed to extract and process information currently in their possession, rather than delay caused by any perceived necessity to experience failure to collect debts.

23   I make these observations upon the basis of the plaintiffs' presentation of their case to me. I do not thereby express any view as to whether the legal requirement that a lump sum award of damages must compensate the plaintiffs once-and-for-all will be satisfied if the plaintiffs' evidence is as outlined and does not include evidence of the first plaintiffs' experience in collecting debts, nor as to whether expert evidence such as envisaged by the plaintiffs would be admissible. These matters were not fully argued before me. I note that counsel for the defendant submitted, in oral argument, that the plaintiff must prove, on a case-by-case basis, that each customer did not pay his or her account because of the cessation of facilities, as opposed to some other reason such as the cutting off of the telephone service. Again, I express no view as to whether it would be necessary for the plaintiff to go so far, in order to prove loss and damage.

The law as to orders for determination of separate questions

24   Although orders for the determination of separate questions are made not infrequently and can be a very useful means of limiting the time and expense of litigation, appellate courts have time and again warned of the need for caution in making such orders. A recent example of such a warning is found in the judgment of Kirby and Callinan JJ in Tepko Pty Ltd v Water Board (2000) 178 ALR 634, where their Honours traced to the authorities on the principles applicable to tortious claims for recovery of economic loss, and said (at 672):
‘The passages in all the cases referred to, do, however, reveal how the duty of care may involve, and intersect, with issues relevant to causation and damages. Although, therefore, to avoid duplication and expense it will usually be desirable that all of the issues be tried together, it is still important to appreciate that foreseeability, proximity and the possibility or likelihood of intervening cause may not have an identical relevance and significance to all of these issues.’
25   Having drawn attention, in this way, to the intersection of questions of liability, causation and damages in economic loss cases, there Honours said (at 675):
‘… we should not leave this case without making four comments. Both Mason P and Fitzgerald JA were critical of the course of limiting the issues to be tried that the primary judge adopted. In Perre v Apand Pty Ltd attention was drawn to difficulties that can be caused when that course is adopted. In light of the experience in this case, what was there said should be restated with emphasis. The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they overlap.’ (Gaudron J expressly agreed with these observations (at 647).)
26   A similar point had been made by Callinan J in Perre v ApandPty Ltd (1999) 198 CLR 180 where his Honour said (332):

‘Care does need to be taken in deciding whether to conduct separate trials of different issues. It sometimes happens that they may turn out to be productive of the disadvantages of delay, extra expense, appeals and uncertainty of outcome which they are intended to avoid. In tort cases in which damage is the gist of the action, it will generally be undesirable to accede to requests for them, or to order them, unless all parties accept that compensable damage has been sustained by the plaintiffs or applicants as the case may be.’

27   These observations, and similar ones in earlier cases (see, for example, Chippendale Printing Co Pty Ltd v Commonwealth (1995) 17 ACSR 328; Love v Mirror Newspapers Ltd [1980] 2 NSWLR 112), are not decisions establishing any principle of law to the effect that separate determinations can never be appropriate. They are only warnings, and each case must be considered, in light of those warnings, having regard to its own facts and circumstances. Nevertheless, the warnings are an obstacle to success by the plaintiffs in the present application.

28   The plaintiffs submit that their Honours' observations should be confined to tortious claims for economic loss. But the warnings given by them are cast in more general terms. It is true that the kinds of difficulties identified in their remarks are apt to arise in economic loss cases, where damages are the gist of the action and moreover, principles with respect to foreseeability, proximity and intervening cause are still developing. But questions of liability, causation and quantum of damages may well intersect and overlap outside the field of tortious claims for economic loss. Their Honours' warnings are, in terms, general in their scope.

Separate questions in the present case


29   Here the plaintiffs do not plead the tort of negligence, or any other cause of action in which damage is the gist of the action. They rely on breach of contract and breach of the statutory provisions with respect to unconscionability. Generally speaking, the question whether the defendant has breached a contract is readily distinguishable from the question of assessment of the plaintiff's damages for breach. The test as to whether the plaintiff's damage was caused by the defendant's breach is whether damage complained of was reasonably foreseeable ( Hadley v Baxendale (1854) 1 56ER 145). At least in the present case, this inquiry is unrelated to the inquiry as to whether the defendant breached the contract by termination of the banking facilities. The defendants submitted that evidence of the conduct alleged to constitute the breach of contract would also constitute causation evidence going to the plaintiffs' claim for damages for the alleged breach. I do not believe this would be so in the present case. Here the tasks would be to ascertain the implied as well as the express terms of the contract, and to decide whether the defendant's conduct in terminating the facilities was authorised or prohibited by the contract. That would raise issues about the defendant's motives and interests, but not, as far as I can see, issues about causation and qualification of loss.

30 Therefore, in my view, the question of breach of contract would be capable of separate determination. I am not satisfied, however, that there would be any practical point in making an order for the separate determination of that question. The practical gains that the plaintiff seeks to derive from orders under Part 31 would arise only if all questions of liability, both with respect to breach of contract and unconscionability, were decided separately and before the assessment damages.

31 The statutory causes of action for unconscionable conduct present greater difficulty. The Trade Practices Act and the Australian Securities and Investments Commission Act both segregate, as a matter of drafting, the statutory duties from the remedies flowing from contravention or apprehended contravention. The remedies are not confined to damages, and therefore damages cannot be said to be the gist of the statutory cause of action, except to the extent that ‘unconscionable’ conduct may be said to be inherently harmful. On the face of it, therefore, the question whether a person has engaged in unconscionable conduct should be capable of determination separately from assessment of loss and damage.

32   There are, however, some obvious problems. First, the very fact that remedies are dealt with by the statutes separately from the statutory duties, implies that the court has considerable discretion in selecting appropriate relief, especially when one observes the wide range of statutory remedies. In exercising that discretion, the court will have regard to the nature and seriousness of the contravention, and also the nature and degree of loss and damage suffered by the plaintiff. In other words, proof of loss and damage is highly relevant to the court's decision as to the most appropriate remedy. As the defendant points out, this is not a case where damages are sought as an alternative remedy to mandatory orders, and the question of damages may never have to be determined if the claim for specific relief is successful. In this case damages are sought in addition to mandatory orders, in circumstances where the question of damages will inevitably arise even if mandatory orders are made.

33   Additionally, at least in the present case some of the ingredients of the plaintiffs' case to prove unconscionable conduct are closely related to questions of loss and damage. The plaintiffs say that the defendant purported to terminate the financial services at a time when it knew or ought to have known the matters listed in paragraph 19 of the statement of claim. Actual or constructive knowledge of those matters is an essential ingredient of the plaintiffs' case on unconscionability, as pleaded. The matters pleaded in paragraph 19 include knowledge that ‘should the financial services be terminated this may cause loss and damage to the second plaintiff and its creditors’. Proof that loss and damage in fact flowed from the termination seems to me to be highly relevant to the establishment of the defendant's actual or constructive knowledge that its conduct would be likely to cause loss and damage. Conversely, the defendant may seek to protect itself by demonstrating that no loss or damage flowed from the termination or that such loss or damage was too remote and unforeseeable.

34   At the hearing of the application, counsel for the plaintiffs summarised his submissions on this point by saying that unconscionability is a meal best consumed hot. That may be so, but the argument does not justify consuming the meat and vegetables at separate sittings.

35   The plaintiffs draw attention to circumstances where courts more or less routinely permit a separate hearing on damages following a hearing on liability, giving the following examples:
· in personal injury matters where there is an element of uncertainty about the plaintiff's prognosis, which is best resolved by delaying the damages assessment until the medical condition has stabilised ( Hawkins v New Mendip Engineering Ltd [1996] 3 All ER 228; Stevens v William Nash Ltd [1966] 3 All ER 156);
· where a factual situation creates a continuing cause of action with the consequence that an award of damages can only encompass loss accrued by the date of assessment, with prospective loss being the subject of further action ( Mann v Capital Territory Health Commission (1982) 148 CLR 97 at 100-1);
· where the future losses claimed by a plaintiff are sufficiently unclear to constitute a valid objection to making an overall assessment of damages at the hearing and where the future losses arise in respect of potential third party liability which has not yet been the subject of claims by the third party ( Deeny v Gooda Walker [1995] 4 All ER 289).

36   The plaintiffs place particular reliance on the decision in the Deeny case, where the court held that it had jurisdiction under rules similar to Part 31 rule 2 to order the deferment of the assessment of damages which could not be ascertained at the time of the hearing on liability, because the plaintiff's losses were dependent upon the making of claims by third parties against the plaintiff. In my opinion, while the case confirms that the Court has jurisdiction to make an order to defer the determination of the quantum of damages until after the principal hearing, the facts of that case are too remote to give any real guidance as to the proper exercise of the Court's discretion in the present case.

37 The heart of the plaintiffs' case for separate determination is this. They say that there are good grounds for an expedited hearing to establish the defendant's liability, in circumstances where the first plaintiffs are administering the affairs of the second plaintiff in insolvency for the benefit of creditors. Then they say that, unless liability is determined first, separately from damages, difficulties in the assessment of the plaintiffs' loss and damage will inevitably arise. Those difficulties will mean either that damages will be assessed on an unsatisfactory basis at the hearing, or that the hearing will be delayed for a substantial time (indeed, so long that their victory at the hearing would be a Pyrrhic victory, the plaintiffs say). Such a result would be contrary to Part 1 rule 3 of the Supreme Court Rules, which provides that the overriding purpose of the Rules in their application to civil proceedings is to facilitate just, quick and cheap resolution of the real issues in the proceedings.

38   In my opinion, this case must be rejected. First, as I have said, the questions of liability and assessment of damages cannot be kept separate, and intersect and overlap, with respect to the plaintiffs' claims based on unconscionable conduct. Secondly, given the nature of the evidence that the plaintiffs wish to adduce with respect to loss and damage, it does not seem to be necessary for the plaintiffs to defer the hearing on assessment of damages for so long that their victory, if they achieve one, would be Pyrrhic.

39   Thirdly, there are some other practical concerns arising out of the warnings given so often by appellate courts. In this case it is likely that each of the separate trials on liability and damages, if they were ordered, would be substantial and expensive. There would inevitably be delay from the first to the second trial, and even if the issues could be kept separate, there would be some additional cost flowing from the need for counsel to prepare, to a degree, the matters arising in the second trial prior to the first. There would be some repetition of evidence even if the issues were generally separable, and in my view substantial repetition of evidence because the issues with respect to unconscionability cannot be satisfactorily separated. The potential would arise for separate appeals at each stage of the process of determination, with consequent additional cost and delay. Finally, I am concerned that if I were to order separate trials it may be necessary for an assessment of the credibility of witnesses to be made on two occasions. This problem could arise if, for example, one of the first plaintiffs or their employee were to give evidence both with respect to the negotiation and alleged breach of the contract, and with respect to the matters of quantification referred to in paragraph (b) above.

40   The defendant submitted that I should avoid making orders for separate determination because if I do, it will become harder for the parties to negotiate a settlement. I cannot say whether that would be so, in the present case, and I have not accepted this submission in reaching my conclusion.

41   Submissions were made on both sides as to the adequacy of the interlocutory regime presently in place. The assumption seems to be that if I regard the interlocutory regime as adequate, the plaintiffs' case for orders for the determination of separate questions is a weakened. That seems to me to be an incorrect assumption. If there were deficiencies in the interlocutory regime, from the plaintiffs' point of view, it is by no means certain that the best way of reducing their impact would be to order two trials rather than one. Fundamentally, it seems to me that the adequacy of the interlocutory regime, if it is to be put in question, should be tested by an appropriate application (indeed, the plaintiffs have made an application with respect to failure to re-instate the direct debit facility). The interlocutory arrangements do not seem to me to bear upon the grounds for ordering separate determination of the questions of liability and assessment of damages.

Conclusion

42   My conclusion, in the end a firm one, is that the application for an order that the question of damages be heard separately from and after the determination of other issues in the proceedings, should fail. I shall hear the parties on the question of costs.
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Last Modified: 09/05/2001