William Adams Pty Limited v Goldamere Pty Limited
[2006] TASSC 77
•11 October 2006
[2006] TASSC 77
CITATION: William Adams Pty Limited v Goldamere Pty Limited [2006] TASSC 77
PARTIES: WILLIAM ADAMS PTY LIMITED (ACN 009 569 493)
v
GOLDAMERE PTY LIMITED
(t/as Australian Bulk Minerals) ACN 073 634 581
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: BDR 42/2006
DELIVERED ON: 11 October 2006
DELIVERED AT: Hobart
HEARING DATES: 6 and 11 October 2006
DECISION OF: Master S J Holt
CATCHWORDS:
Procedure – Supreme Court Procedure – Tasmania – Practice Under Rules of Court – Other matters arising before Trial – Separate decision of questions – When appropriate.
Supreme Court Rules 2000 (Tas), r559.
Aust Dig Procedure [277]
REPRESENTATION:
Counsel:
Plaintiff: J L Dewar
Defendant: T J Williams
Solicitors:
Plaintiff: Crisp Hudson & Mann
Defendant: Gunson Williams
Judgment Number: [2006] TASSC 77
Number of paragraphs: 17
Serial No 77/2006
File No BDR 42/2006
WILLIAM ADAMS PTY LIMITED v GOLDAMERE PTY LIMITED
REASONS FOR DECISION MASTER S J HOLT
11 October 2006
The defendant seeks an order pursuant to the Supreme Court Rules 2000, r559(1)(b), that a particular question be tried before any other. I will set out the question shortly, but in order to understand it, it is necessary for me to first provide a brief outline of the dispute.
The plaintiff claims the return of some mining equipment, or payment of its value asserted to be about $10 million. The claim is that the equipment had been provided by the plaintiff to the defendant, a mine operator, under a supply and maintain contract entered into in 2001. The term of the contract expired on 31 May 2006, and the plaintiff says that the equipment should have been returned to it then. The defendant's case is that it exercised and completed an option under the contract to purchase the equipment for about $6.5 million. The defendant says that it completed the purchase by electronic transfer of the purchase price to the plaintiff's bank account on 31 May 2006. The plaintiff however relies on a condition precedent to completion that the purchaser at the time was not in substantial breach of the contract. The plaintiff alleges that as at 31 May 2006 an invoice issued by it under the supply and maintain contract for about $1.36 million was due for payment and had not been paid.
The defendant claims that the plaintiff's invoice had not become due for payment on 31 May 2006, and in any event at that time the plaintiff was liable to pay to the defendant under the same contract an amount in excess of that claimed on the invoice. The defendant goes on to allege that regardless of all else on 2 June 2006 it paid the plaintiff's invoice for about $1.36 million in full and transferred, once again, into the plaintiff's bank account the option purchase price of about $6.5 million (the plaintiff having returned the purchase price paid on 31 May). The defendant accordingly says that if property in the mining equipment did not pass to it when it first transferred the funds into the plaintiff's bank account on 31 May 2006 that property in the equipment did pass on 2 June 2006 when it once again paid the purchase price following payment of the plaintiff's invoice. The defendant by its counterclaim seeks a declaration that it is the owner of the equipment.
The plaintiff contends that after 31 May 2006 it was too late for the defendant to complete the purchase under the option and hence it maintains its claim for return of the equipment or payment of its value, plus damages for wrongful retention.
On 15 September 2006 an order was made, unopposed: "That the issue of law and fact of whether the option referred to in the pleadings was validly completed by the defendant be tried before any other issue." The defendant now wants that order modified. The question (the contract construction point) which the defendant now puts forward as suitable for early and separate determination is as follows:
"Assuming the Defendant had not previously validly completed the said option, after making payment of the full amount claimed by invoice SR230002921, was the Defendant entitled to complete the said option by tendering payment of the purchase price on the 2nd June 2006 (such issue being articulated in paragraphs 24(b), (c), (d) and (e) of the defence, paragraphs 13 and 14 of the counter claim and paragraph 13 of the defence to counter claim)."
The Supreme Court Rules 2000, r559, is as follows:
"(1) In any proceeding and at any time, the Court or a judge may order that –
(a) different questions, whether of fact or law, be tried at different places or by different modes of trial; or
(b) any question be tried before any other.
(2) On an application for an order under subrule (1), the Court or judge is to have regard to –
(a) the advantage of hearing evidence without undue delay; and
(b) the costs which may be incurred; and
(c) any other relevant matter.
(3) If any issue which has been ordered to be tried or any question or issue of fact which has been ordered to be determined in any manner has been determined, the Court or a judge may give any judgment as is appropriate on the application of –
(a) the plaintiff or applicant; or
(b) if the plaintiff or applicant fails to do so within 10 days, any other party.
(4) If only some of the questions or issues ordered to be determined or tried have been determined or tried and the result renders the determination or trial of the other questions or issues unnecessary or renders it desirable that their determination or trial be postponed, the Court or a judge may give any judgment as may be appropriate, without waiting for that trial or determination."
In deciding whether or not an order will be made for the separate trial of a question there are some well known considerations. I approach this application taking into account the observations of Kirby and Callinan JJ in Tepko Pty Ltd v Water Board (2001) 206 CLR 1 and Giles CJ in Tallglen Pty Ltd v Pay TV Holdings Pty Ltd(1996) 22 ACSR 130.
In Tepko, Kirby and Callinan JJ said at pars168 – 170:
"168 … 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 (1999) 198 CLR 180, 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 all overlap.
169The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties', interests.
170Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question."
As to the relevant principles Giles CJ said in Tallglen at 141 – 142:
"Part 31 r 2 of the Rules 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, and for the statement of a case and the question for decision. In the ordinary course all issues in proceedings should be decided at the one time, but separate decision of a question may be appropriate where, for example, the decision of the question is critical to the outcome of the proceedings and (at least if decided in one way) will bring the proceedings to an end. In particular circumstances the separate decision of a question may be appropriate even if it will not bring the proceedings to an end, such as where there is a strong prospect that the parties will agree upon the result when the core of their dispute is decided or where the decision will obviate unnecessary and expensive hearing of other questions, but such occasions must be carefully controlled lest fragmentation of the proceedings (particularly when the exercise of rights of appeal is borne in mind) brings delay, expense and hardship greater than that which the making of an order was intended to avoid. It is often the case that the need to make findings of fact for a decision of the separate question, especially findings which may involve issues of credit, tells strongly against the making of an order because related facts, and renewed issues of credit, will or may arise at a later stage in the proceedings. Experience teaches that it should be able to be seen with clarity that decision of a separate question will be beneficial in the conduct of the proceedings and the resolution of the parties' dispute."
Where there is a discrete question of law which if resolved in a particular way will determine the outcome of the litigation it will often be appropriate to have the question separately tried. In J Boag & Son Brewing Ltd v Cascade Brewery Co Pty Ltd & Anor Tas U/R 60/1997, Zeeman J said:
"I accept that it is inappropriate to limit the classes of cases in which it is appropriate to make an order as rigidly as might be thought to have been suggested in the older cases. In particular, the operation of the rule is not limited to points of law, which, if decided one way, would be decisive of the litigation without the need to go into the facts. Denning MR, in Carl Zeiss Stiftung v Herbert Smith & Co & Ors [1969] 1 Ch 93 at 98, stated 'the true rule', to be that stated by Romer LJ in Everett v Ribbands [1952] 2 QB 198 at 206:
'... where you have a point of law which, if decided in one way, is going to be decisive of the litigation, then advantage ought to be taken of the facilities afforded by the Rules of Court to have it disposed of at the close of pleadings or very shortly after the close of pleadings.'
Whilst questions or issues which fall within the 'rule' stated by Denning MR often will be appropriate for determination as a preliminary issue, it does not follow that no other question or issue may not be the subject of an order under O39, r8, which expressly refers to questions of law and fact. Rather than defining the categories of cases which may be the subject of an order, the 'rule' stated by Denning MR does no more than identify a type of case in which an order for the trial of a particular question before the trial of any other question often is appropriate."
Counsel for the plaintiff advised me that the plaintiff's claim that the defendant was not entitled to complete the purchase option on 2 June 2006 is based on two propositions both being matters of contract construction. Firstly, that the defendant was not entitled to settle on a day other than 31 May 2006. Secondly, in any case, if the defendant was in substantial breach of the contract on 31 May 2006, the right to settle the purchase of the equipment was thereby irretrievably lost.
Counsel for the plaintiff did not suggest the existence of a possibility that controversial evidence of surrounding circumstances would need to be adduced to assist in the interpretation of the contract. Accordingly, counsel did not persist with a submission, earlier made, that the application should be disallowed for lack of a clear line of demarcation. In the end opposition was confined to the proposition that if the application is granted and the plaintiff is ultimately to succeed there will be three trials. The first on the contract construction point the subject of the application. The second on the balance of the liability issues raised on the pleadings. The third being the assessment of the plaintiff's damages for the defendant's wrongful retention of the equipment.
Although the separate trial proposed by the defendant may save time and money it also carries with it the potential to significantly increase the time and expense to be incurred in the litigation particularly when the possibility of appeals is taken into account.
I begin with the proposition that it is ordinarily appropriate that all issues in a proceeding be disposed of at the same time and so the onus is on the defendant to positively persuade me that in the circumstances it is desirable for the contract construction point to be separately tried.
Counsel for the defendant made a number of assertions which were not disputed in the course of argument. They included the following: The contract construction point is ready to be tried immediately. The other liability point, namely, whether the plaintiff's invoice for about $1.36 million had to be paid by 31 May 2006 will not be ready to be tried for some time. On this aspect pleading points arise, further particulars are required, discovery is yet to be completed and it is likely that the parties will wish to administer interrogatories. The point concerning liability to pay the plaintiff's invoice by 31 May 2006 includes an estoppel claim which will involve the Court being asked to receive evidence about a large number of transactions over the five year period of the supply and maintenance contract. For this reason the trial of this aspect of the claim may take several weeks. If the contract construction point is determined in favour of the defendant that will be decisive of the litigation so that the defendant will be entitled to a declaration that it is the owner of the mining equipment. The chance of a quick resolution of the whole dispute is extremely valuable as until the dispute is resolved neither party has access to the purchase price of about $6.5 million, currently being held in trust, and neither party is in a position to deal with the equipment as owner. These assertions not being disputed, I treat them as being correct.
The question which the defendant wants tried first is a question of law. It appears that it can be heard and determined quickly and without significant further expense. If the question is resolved in favour of the defendant it will be decisive in the litigation. Despite the fact that if the defendant loses the preliminary point the trial will have been fragmented into potentially three parts and the time, expense and resources deployed will be materially increased I am of the view that on balance the utility, economy and fairness of the proposed single issue trial is beyond question.
There will be an order in terms of the application.
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