Pharmacy Care Systems Limited v Attorney-General HC Auckland Cp96-Im00

Pharmacy Care Systems Limited took legal action against the Attorney-General on behalf of the former Health Funding Authority, seeking the return of $80,000 withheld by the Authority, damages for harm to its business, exemplary damages, interest, and costs. This case has already been heard by the Master and Robertson J., who upheld an application to strike out the claim, a decision later overturned by the Court of Appeal. The Attorney-General now seeks to have a preliminary question determined under Rule 418 of the High Court Rules, specifically whether the settlement deed dated 6 September 1996, signed by both parties, is valid. This application is based on the premise that the question can be easily separated from other issues and that determining it before trial would expedite proceedings.

The key legal issues in this case revolve around the validity of the settlement deed and whether determining its validity should be done before the trial of the other substantive claims. The Attorney-General argues that severing this issue would shorten the trial, save inconvenience and expense, and serve justice. Pharmacy Care Systems Limited opposes the application, asserting that the evidence on the settlement deed is not entirely separable from other claims, and deciding this preliminary issue would not necessarily expedite the proceedings. They also contend that all matters should be heard together to avoid further delay and ensure justice.

Morris J. examines the principles applicable to such applications, noting that while the decision on a preliminary issue need not finally dispose of the overall proceedings, the primary purpose of such procedures is to shorten trials. The judge concludes that determining the validity of the settlement deed would indeed expedite the case and potentially lead to a settlement. Given the potential for shortening the proceedings and the likelihood of achieving a sensible settlement if the deed is found invalid, Morris J. decides in favour of the Attorney-General's application. The court's ruling is made in the interests of justice, with costs reserved for later determination.