1. It is common ground that if the answer to question 1 is 'yes' then all of the issues pleaded in the plaintiffs' statement of claim will be determined. However, whether question 2 should be answered 'yes' is subject to question 3. The plaintiffs claim that question 3 will dispose of the issue of whether the defendants have a right to set off the plaintiffs' claims. However, irrespective of whether the answer to question 3 is answered 'yes' or 'no', a separate trial of the questions will not dispose of the defendants' counterclaims.[4]
2. Senior counsel for the plaintiffs made a submission that if (after a trial of the separate issues) the court was to determine that the plaintiffs' claims were made out and that the plaintiffs were entitled to the amount claimed (by answering questions 1 and 2 'yes' and question 3 'no'), the plaintiffs would be amenable to having that sum paid into court, or held in a joint interestbearing account, pending the hearing and determination of the counterclaim.[5]
3. The defendants argue, and I agree, for the reasons that follow, that it will not save any of the parties, or the court, any time or expense by determining the three questions in a separate determination, and if the court did so there is a possible risk that the extra expense of a trial of separate questions will prove an arid exercise.
4. I am of the opinion that the application should be dismissed.

1. Other than the first plaintiff, the plaintiffs are entities domiciled in countries other than Australia.[6]
2. Under the sale and purchase agreement dated 9 April 2015 (Sale Agreement), the first defendant agreed to purchase from the Apache parties, and the Apache parties agreed to sell, the issued shares in the capital of each of the 'companies' and 'subsidiaries' set out in schedule 'A' to the Sale Agreement.
3. The business of Apache Energy Ltd was sold to Quadrant Energy Pty Ltd and Quadrant Energy Australia Ltd (recently renamed by order of the court made on 10 January 2019, Santos WA Asset Holdings Pty Ltd and Santos WA Energy Ltd respectively) for a Base Price of $2.1 billion,[7] adjusted by a 'Net Adjustment Amount' calculated in accordance with article 8 of the Sale Agreement.
4. Through the terms of the Sale Agreement the defendants acquired the plaintiffs' Australian oil and gas extraction business, excluding certain assets, which were sold separately to different purchasers. Relevant assets excluded from the Sale Agreement were:

(a) the WheatstoneBalnaves Assets (Divestment); and

(b) Apache Fertilisers Pty Ltd (Burrup Divestment).

1. By the sale of this business to the defendants, and other assets and operations to others, the plaintiffs exited their involvement in the oil and gas industry in Australia.
2. Under the terms of the Sale Agreement, the 'Closing Time' was 10.00 am in Perth, Western Australia on or before 15 June 2015,[8] and the 'Economic Transfer Date' was 12.01 am, Western Australian time, on 1 October 2014.[9] It was on this date in October 2014 that the economic risk transferred from the plaintiffs to the defendants, because the defendants, in effect, purchased a business based on a state of affairs prior to it taking control. The benefit and burden of the business prior to 1 October 2014 remained with the plaintiffs.[10]
3. The Base Price was determined by reference to the known state of affairs of the business at the time of the Economic Transfer Date. Adjustments were made to the Base Price by the 'Net Adjustment Amount' in respect of adjustments which were said to be agreed by taking into account specified transactions between the Economic Transfer Date and Closing Time.
4. On 3 June 2016, after completion of the Sale Agreement, but before the second defendant received the first tax credit for the 2014 tax year, the first defendant on behalf of the defendants, as purchaser, gave notice to the plaintiffs of certain claims pursuant to s 9.7(b) of the Sale Agreement.[11] The claims were calculated as an amount of $88,357,621.05, together with any related losses, taxes, costs, damages and expenses, including any tax incurred in respect of any payment made to satisfy the claim.[12]
5. Following correspondence between the parties and provision of supporting information by the defendants in support of its claims, the action was commenced by the plaintiffs on 22 September 2017.
6. The plaintiffs' claim concerns money that the Australian Taxation Office credited to the second defendants' income tax account on 17 August 2016, for the year ending 31 December 2014, and subsequent payment of interest thereon.

1. The facts of the plaintiffs' pleaded case are mostly admitted by the defendants.
2. The following facts pleaded in the statement of claim are admitted:[13]

(a) The plaintiffs made monthly PAYG instalment payments prior to the Economic Transfer Date to the Australian Taxation Office towards its 2014 tax year[14] of $80,463,566 being payments for January 2014 to December 2014;

(b) the amounts of the 2014 PAYG instalment payments were based upon the expected income and expected income taxes for the second defendant during the 2013 tax year;

(c) closing under the Sale Agreement occurred on 5 June 2015, on which date the possession and beneficial ownership of the shares were transferred from the plaintiffs to the first defendant;

(d) on 17 August 2016, the second defendant received a credit to its running balance account with the Australian Taxation Office in respect of the 2014 tax year in the amount of $80,463,566;

(e) the credit of the tax refund to the second defendant's running balance account constituted a 'refund of income tax', within the meaning of s 9.16(a) of the Sale Agreement, being an amount the second defendant 'received' within the meaning of s 9.16(a);

(f) the second defendant received a further two credits as interest from the Australian Taxation Office to its running balance account in respect of the 2014 tax year. On 21 October 2016, it received $2,432,217.55 and on 25 October 2016, it received $3,869.29;

(g) the credit of the amount of $2,436,086.84 to the second defendant's running balance account constituted 'a refund of income Tax', within the meaning of s 9.16(a) of the Sale Agreement, being an amount that the second defendant 'received' within the meaning of s 9.16(a) of the Sale Agreement; and

(h) there is not, and has not been, any Relevant Franking Deficit Liability.

1. The plaintiffs claim that the defendants were obliged, but have failed to onpay the Australian Taxation Office tax refund and interest (being a total amount of $82,899,652.84) to them (the Australian Taxation Office monies).
2. The plaintiffs contend that their claims arise out of two clauses in the Sale Agreement, namely s 2.2(k) and s 9.16(a). In summary, the plaintiffs claim that:

(a) under s 2.2(k) and s 9.16(a), the defendants were required, but in breach of those provisions, have failed to onpay to the plaintiffs the amount of the Australian Taxation Office monies (breach of contract claim);

(b) the defendants hold the Australian Taxation Office monies on an express trust, and that in breach of the express trust the defendants failed to pay the Australian Taxation Office monies to the plaintiffs (breach of express trust claim). The express trust is alleged to have been created by virtue of the express words used in s 2.2(k) and s 9.16(a), and the plaintiffs' vulnerability to the defendants in respect of their enjoyment of their rights under these provisions; and

(c) in the alternative to (b), the defendants hold the Australian Taxation Office monies on a constructive trust, or the court should impose such a constructive trust by way of remedy, and that in breach of trust the defendants have failed to pay the Australian Taxation Office monies to the plaintiffs (breach of constructive trust claim). The constructive trust is alleged to arise by virtue of fiduciary duties owed by the defendants to the plaintiffs in respect of the Australian Taxation Office monies. In turn, the fiduciary duties are alleged to arise from:

(i) the plaintiffs' vulnerability to the defendants in respect of the enjoyment of the plaintiffs' rights under s 2.2(k) and s 9.16(a) of the Sale Agreement;

(ii) an undertaking by the defendants (manifested principally by those express terms) to act solely in the plaintiffs' interests in respect of the Australian Taxation Office monies; and

(iii) the defendants' knowledge of those matters at the time of entering the Sale Agreement.

1. The defendants' counterclaims turn upon complex facts that are mostly denied or not admitted. The counterclaims can be divided into three categories, namely:

(a) the Divestment and Burrup Divestment claims (which includes a 2015 tax liability claim);

1. The 2015 Tax Liability Claim is pleaded by the defendants as a counterclaim and also as a defence to the plaintiffs' claims by way of a legal setoff, and alternatively as part of a claim of equitable setoff.
2. The defendants allege that the plaintiffs are liable under s 2.2(k) and s 2.3(c) or s 9.1(a) of the Sale Agreement to indemnify the defendants in respect of the 2015 tax liability.[15] The defendants quantify the 2015 tax liability as a net sum of $57,320,214.[16]
3. The defendants plead the 2015 tax liability claim as a claim of indemnity as follows:

(a) pursuant to s 2.2(k) of the Sale Agreement, the plaintiffs agreed to indemnify the defendants (among others) from and against all costs, duty, taxes, losses and liabilities that may be incurred in respect of, among other things, the Divestment;

(b) pursuant to s 2.3(c), the plaintiffs gave an identical indemnity in respect of the Burrup Divestment; and

(c) the whole amount of the 2015 tax liability is attributable to the Divestment and the Burrup Divestment and accordingly falls for indemnification by the plaintiffs.

1. The 2015 tax liability claim is the only claim, the subject of the defendants' pleaded defence of legal setoff.[17]
2. The defendants also plead in their counterclaim a related rectification claim in respect of s 9.11(a), if the effect of s 9.11(a) as currently drafted has the effect of barring the 2015 tax liability claim.[18]
3. The remaining part of the Divestment and Burrup Divestment claims are claims made by the defendants that under the Sale Agreement the proceeds of the Divestment and Burrup Divestment (less any tax payable in respect of them) were to be excluded from the Sale Agreement.
4. The defendants' counterclaims that are subject to the pleaded defence of equitable setoff are the Divestment and Burrup Divestment claims as a whole.[19] The Divestment and Burrup Divestment claims include not only the 2015 tax liability claim, but also claims that the plaintiffs failed to deduct amounts of tax from amounts paid by way of dividends and the payment of IntraGroup Debt in respect of the Divestment and the Burrup Divestment.
5. In respect of these claims, the defendants plead that the plaintiffs are liable to pay to the defendants the sum of $72,380,932.04 (in respect of the Divestment) and $20,059,626.30 (in respect of the Burrup Divestment), less the amount of $57,320,214 (being the amount of the 2015 tax liability claim).[20]
6. In the alternative, to the claims of setoff at law and in equity, the defendants plead what they characterise as a procedural setoff in diminution or extinction of the plaintiffs' claims. The amount claimed as procedural setoff is the same as the defendants' claim for the setoff in equity. The pleading had its genesis at a time when the plaintiffs had foreshadowed an imminent summary judgment application in relation to the claims they now seek to have determined by way of a trial of a separate issue. At that time it was foreshadowed that the defendants would rely upon O 14 r 1(1) of the Rules of the Supreme Court in support of its plea.
7. However, in light of the fact that the plaintiffs do not seek to make a summary judgment application, the defendants contend that a procedural setoff claim is made in effect as notice that the defendants would have recourse to apply for suspension orders pursuant to s 15 of the Civil Judgments Enforcement Act 2004 (WA).
8. The defendants' setoff claims are not pleaded to extend to the Last Accounts Claims or the Standing of Assets Claims.
9. The Last Accounts Claims relate to the accuracy of the Last Accounts, which were the 30 September 2014 balance sheet for each of the companies and subsidiaries set out in schedule M of the Sale Agreement. The defendants allege that:

(a) the Last Accounts did not include provision for certain stamp duty allegedly payable by one of the companies and subsidiaries (Onyx Acquisition Corporation LDC); underprovisioned for liabilities for income tax and payroll tax; overstated the value of inventory; underprovisioned for foreign exchange losses in relation to the US$ ledger; understated accruals; and overstated the amounts recoverable for rig costs;[21]

(b) by reason of one or more of those matters, the Last Accounts were not prepared in accordance with Generally Accepted Accounting Principles and/or did not fairly present, in all material respects, the financial position of the companies as at 30 September 2014 or 'Closing Time' as defined in the Sale Agreement, being 15 June 2015;[22]

(c) by reason of the matters in (b), the plaintiffs breached s 4(1)(r) and s 4.4 of the Sale Agreement under which, respectively, the plaintiffs warranted to the first defendant that the Last Accounts had been prepared in accordance with the Generally Accepted Accounting Principles and fairly presented the financial position of the companies, as at the date of the Last Accounts and repeated that warranty as at Closing Time;[23] and

(d) the defendants suffered loss by reason of those breaches of s 4(1)(r) and s 4.4 of the Sale Agreement for which they are entitled to be indemnified by the plaintiffs under s 9.1(a) of the Sale Agreement.[24]

1. The quantum of the loss and damage claimed by the defendants in respect of the Last Accounts Claims have yet to be fully particularised.[25]
2. The Standing of Assets Claims relate to the condition and maintenance of various petroleum wells maintained under the petroleum licences. The defendants allege that:

(a) because of an alleged deficient condition of the wells in certain respects, and an alleged failure to properly monitor and maintain those wells, the licensees of certain companies and subsidiaries of the plaintiffs have not complied with certain provisions of the Petroleum (Submerged Lands) (Management of Well Operations) Regulations 2006 (WA) or the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth);[26]

(b) those noncompliances constituted a breach of s 4.1(n)(i)(A) of the Sale Agreement and s 4.4 of the Sale Agreement under which the plaintiffs warranted as at the date of the purchase agreement and Closing Time respectively that no company and subsidiary was in material breach of any of the terms and conditions applicable to any Title or material Title and Operating Document, or any obligation imposed under them;[27] and

(c) the defendants have suffered loss and damage in the form of remediation costs that they have incurred or will incur in respect of the wells, and are entitled to be indemnified by the plaintiffs in respect to that loss and damage under s 9.1(a) of the Sale Agreement.[28]

1. The defendants plead that the loss and damage incurred by them in respect of the Standing of Assets Claims is estimated as $88,577,885.[29]

1. The plaintiffs, in their crossclaims, plead that in giving warranties in s 4.1(n) of the Sale Agreement as to the standing of the well assets that are the subject of the defendants' Standing of Assets Claims, the plaintiffs relied upon a representation made by Brett Darley personally and as Chief Executive Officer of the first defendant.[30]
2. The plaintiffs allege that the representation was to the effect that those warranties given under s 4.1(n) of the Sale Agreement were true and correct. They say that, if the representations alleged to give rise to the Standing of Assets Claims were false (which the plaintiffs deny), then Mr Darley's representation was false and they suffered a loss as a result, principally in the form of any damages, costs or compensation they are ordered to pay in respect of those Standing of Assets Claims.[31]
3. As the plaintiffs' crossclaims are substantially contingent on the defendants' Standing of Assets Claims (which in turn are not to be dealt with in the separate questions) the plaintiffs do not seek to have the crossclaims determined as part of the separate questions.

1. An application for the separation of issues, or bifurcation of issues or hearings, is to be approached with some caution.[32]
2. The starting point is that ordinarily the trial of an action should include all issues arising in the action. This point was made clear in the decision of the Court of Appeal in Landsdale Pty Ltd v Moore.[33]
3. In Landsdale, Newnes JA set out the matters to be considered, and balanced, in determining whether there should be a separate trial of issues. His Honour said:[34]

The starting point is that ordinarily the trial of an action should include all issues arising in the action. The determination of an application for separate trials requires a careful balancing of the prospective advantages and disadvantages involved in separating the issues, bearing in mind the uncertainties inherent in litigation, and that, once embarked upon, it is a course from which it may be difficult and even impossible to retreat. It should only be embarked upon where its utility, economy and fairness to the parties is clearly made out: Tepko (55).

It is impossible to provide a comprehensive description of the circumstances in which it is appropriate for there to be separate trials of liability and damages. The exercise of the discretion to make such an order will depend upon what is in the interests of justice in the particular case. However, the separate trial of issues will generally only be appropriate in cases where there is a clear line of demarcation between those issues, and the determination of one in isolation from the other is likely to result in a substantial saving in time, inconvenience and expense: Allen v Gulf Oil Refining Ltd [1980] UKHL 9; [1981] AC 1001; Smith v Maloney (1998) 19 WAR 209, 223.

1. In St Barbara Ltd v Hockley, Beech J applied the observations of Newnes JA in Landsdale and then went on to observe:[35]

Whether trying issues separately is likely to assist in leading to a settlement is also a relevant consideration.

A party applying for a trial of separate issues should put before the court evidence or other material to enable an informed assessment to be made about the scope and likely length of the trial of the action as a whole, as against the scope and length of the issues the subject of the application for a trial of preliminary issues.

In Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd, McKechnie J gave the following summary of the principles:

• 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 complicated and the legal issues short, otherwise it can be a treacherous shortcut.
• Separate trials may be productive of delay, extra expense and uncertainty of outcome, which they are intended to avoid. Saving some time is often illusory when the parties have the necessity of making full preparation and factual matters relevant to one issue are relevant to others which overlap.
• There is potential for further appeals.

The emphasis is on the possible saving of costs and the speedy resolution of matters. That is most likely to occur where the preliminary issue is relatively simple and is not enmeshed in factual controversy. Ultimately, the question is whether the court is satisfied that it is 'just and convenient' for an order for a separate trial to be made.

...

It is clear, from all of this, that the courts approach an application under O 32 r 4 with considerable caution.

1. Justice Beech then considered whether the same degree of caution applies in an application under O 18 r 5(2). Order 18 r 5(2) empowers the court to make orders for a separate trial of the counterclaim whenever it appears to the court that 'the subject matter of the counterclaim ought for any reason be disposed of by a separate action'. His Honour then went on to consider the relevant authorities as to the principles to be applied in considering whether to make orders for a separate trial of the counterclaim under this order and summarised the position under O 18 r 5 as follows:[36]

The starting point is that an action and a counterclaim in the action will be progressed and tried together. However, a different approach can be taken whenever the court considers that, for any reason, the counterclaim and the action should be separately disposed of. That involves questions of procedural convenience; the procedural advantages and disadvantages of trying the claims together or separately must be weighed. Relevant factors include the relationship of the claims, the extent of overlap of the evidence relevant to the claim and the counterclaim, the extent to which the counterclaim will delay the trial of the plaintiff's claim, and the time involved at trial if the actions are tried separately or together.

1. Where the proper construction of a complex commercial agreement is in issue, an important consideration is whether there is a commonality of background evidence that is likely to be called on the issues in the separate proceedings and in the proceedings proper. To this end the observations of Einstein J in CSR Investments Pty Ltd v Alcan Northern Territory Alumina Pty Ltd should be borne in mind:[37]

Experience in relation to the proper construction of a complex commercial agreement proves that the type of background matters sought to be relied upon on one or other of a number of possible bases require careful attention at a forensic level and, depending upon rulings as to admissibility, may require very careful attention as part and parcel of the determination of the proceedings. That evidence is commonly tendered to establish the commercial matrix in which the subject agreement was entered into. That matrix may have a relevance to allegations that particular terms should be implied into a contract and will often be relevant in other ways. Whilst it may be possible in any given case to have that matrix examined on different occasions and by reference to evidence which may differ, that situation should obviously be avoided where possible.

Should a separate trial be held of the three questions?

1. It is a desirable practice that an applicant seeking a separate trial of an issue provide a draft statement of the facts said to be relevant to the issue.[38]
2. The plaintiffs point out that the pleadings demonstrate that much of the facts relied upon by the plaintiffs in relation to its claims are admitted.[39]
3. The plaintiffs read into evidence a Further Revised Statement of Agreed Facts and Documents, filed by the defendants on 15 February 2018 for the purpose of a trial of the separate issues heard by Chaney J.[40] However, this document does not contain a statement of facts that engages with the facts relied upon by the parties for determination of the plaintiffs' claims, or the defendants' setoff claims, or otherwise raise facts that are relevant to the counterclaim, other than the fact of the Sale Agreement. The plaintiffs do, however, read into evidence an affidavit of Jonathan Eric Wyatt, sworn on 9 November 2018, which annexes documents marked JPW1, JPW2 and JPW3, which the plaintiffs say constitutes the documentary evidence sufficient to establish the facts of its 2014 tax claim and the causes of action they plead.
4. Having read those documents and having regard to the pleadings of the plaintiffs and the defendants, in respect of the matters pleaded as their defence (without regard to the matters pleaded in the third further amended defence and counterclaim as setoffs), I agree that the plaintiffs' pleaded facts of the 2014 tax refund itself involves adjudicating very few facts as their case substantially relies upon documentary evidence.
5. It should be noted that the defendants' 'procedural setoff claim' cannot properly be characterised at law as a 'set off'. The effect of a suspension order of a judgment, made pursuant to s 15 of the Civil Judgments Enforcements Act, does not take effect as a setoff of a judgment but does, if made, (where the court is satisfied that there is a sufficient degree of connection between the claim and the counterclaim),[41] result in the stay of execution of a judgment until the determination of the counterclaim.
6. The defendants argue that it is not open to the court, as proposed by the plaintiffs in question 3, to assume that the plaintiffs are liable to the defendants without assuming the construction of the relevant provisions of the Sale Agreement as pleaded by the defendants.[42] I do not agree. Plainly question 3, as framed, only requires the assumption of the facts pleaded in support of the claim. Yet, it does not follow that to determine questions 1 and 3, no evidential inquiry is necessary. The defendants claim that evidence of at least background facts will be necessary to properly construe the Sale Agreement.[43]
7. The plaintiffs argue that the determination of their claims and breach of contract, alleged breach of express trust and alleged constructive trusts only rely upon two provisions of the Sale Agreement, namely s 2.2(k), and s 9.16(a).[44]
8. However, s 2.2(k) and s 9.16(a) must necessarily be interpreted by reference to their text, context and purpose, which necessarily requires the Sale Agreement to be read and assessed as a whole.[45]
9. The contemporary principles that apply to the task of contractual construction were distilled by the Court of Appeal in Black Box Control Pty Ltd v Terravision Pty Ltd as follows:[46]

The principles relevant to the proper construction of instruments are well known, and were not in dispute in this case. In summary:

(1) The process of construction is objective. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean.

(2) The construction of a contract involves determination of the meaning of the words of the contract by reference to its text, context and purpose.

(3) The commercial purpose or objects sought to be secured by the contract will often be apparent from a consideration of the provisions of the contract read as a whole. Extrinsic evidence may nevertheless assist in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding of the genesis of the transaction, its background, the context and the market in which the parties are operating.

(4) Extrinsic evidence may also assist in determining the proper construction where there is a constructional choice, although it is not necessary in this case to determine the question of whether matters external to a contract can be resorted to in order to identify the existence of the constructional choice.

(5) If an expression in a contract is unambiguous and susceptible of only one meaning, evidence of surrounding circumstances cannot be adduced to contradict its plain meaning.

(6) To the extent that a contract, document or statutory provision is referred to, expressly or impliedly, in an instrument, that contract, document or statutory provision can be considered in construing the instrument, without any need for ambiguity or uncertainty of meaning.

(7) There are important limits on the extent to which evidence of surrounding circumstances (when admissible) can influence the proper construction of an instrument. Reliance on surrounding circumstances must be tempered by loyalty to the text of the instrument. Reference to background facts is not a licence to ignore or rewrite the text. The search is for the meaning of what the parties said in the instrument, not what the parties meant to say.

(8) There are also limits on the kind of evidence which is admissible as background to the construction of a contract, and the purposes for which it is admissible. Insofar as such evidence establishes objective background facts known to the parties or the genesis, purpose or objective of the relevant transaction, it is admissible. Insofar as it consists of statements and actions of the parties reflecting their actual intentions and expectations it is inadmissible. Such statements reveal the terms of the contract which the parties intended or hoped to make, and which are superseded by, or merged into, the contract.

(9) An instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ.

(10) An instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation.

(11) Definitions do not have substantive effect. A definition is not to be construed in isolation from the operative provision(s) in which the defined term is used. Rather, the operative provision is ordinarily to be read by inserting the definition into it.

1. The plaintiffs argue that with one exception (s 2.2(k)) the defendants' counterclaims concern entirely different provisions of the Sale Agreement than those that are the subject and focus of the Apache claims, namely s 2.2(b), s 2.2(k), s 2.3(a), s 2.3(c), s 4.1(n)(i)(A), s 4.1(r), s 4.4, s 6.1(b)(1)(vii) and s 9.1(a) of the Sale Agreement.[47] The plaintiffs also argue that insofar as the parties each rely on s 2.2(k), they do so based on entirely discrete sets of facts.[48]
2. With respect to the plaintiffs' submissions, it is not entirely correct to say that the defendants only rely upon the construction of s 2.2(k) of the Sale Agreement based on an entirely different discrete set of facts. The defendants, in their defence to the plaintiffs' claims in contract and by way of express and constructive trust, plead the construction and thus the effect of s 2.2(k) and s 9.16(a) to have a fundamentally different effect to the construction contended by the plaintiffs.[49]
3. The defendants also plead that the plaintiffs are liable to pay the defendants the amount claimed for the defendants' 2015 tax liability claim, by reason of the effect of s 2.2(k) and s 2.3(c) among other provisions of the Sale Agreement, as a set-off in law.[50] They also plead the effect of the same provisions in respect of their equitable setoff claims.[51]
4. Of importance is a submission made by senior counsel for the defendant that if the plaintiffs are right in their pleaded construction of s 2.2(k), and that s 9.11(a) of the Sale Agreement has the effect of barring the 2015 tax liability claim, the defendants claim that s 9.11(a) ought to be rectified.[52] This claim, they say, should not be separated from a determination of the separate questions as the rectification claim goes to whether the equitable setoff defence is made out.[53]
5. In a rectification claim, two things need to be shown by clear and convincing proof. These are, that the instrument does not correctly record the common intention of the parties; and what the common intention of the parties was at the time of the execution of the instrument.[54]
6. Given that it is common ground that the Sale Agreement is a complex commercial agreement, it is apparent that determination of the rectification claim is likely to not only give rise to contested factual issues, but could be protracted and lengthy.
7. The defendants say that if the separate questions are determined separately from the main proceedings the questions of construction (without determining the rectification issue) will result in a determination of the construction of s 2.2(k) without regard to what the defendants say is its true meaning. The defendants argue that the determination of the meaning of s 2.2(k) will also be determinative of the meaning and effect of s 2.3(c). They point out that that section is cast in near identical terms as s 2.2(k), albeit with the 'Burrup Divestment' taking the place of the references to the specific matters referred to in s 2.2(k) (which include the Divestments).
8. So, the defendants say, in determining the meaning of s 2.2(k) (for the purposes of the plaintiffs' claim) without regard to the defendants' counterclaim, the court may make findings as to the meaning of s 2.2(k) which have unforeseen or unintended consequences for the Divestment and Burrup Divestment claims, and the 2015 tax liability claims.[55] In order to avoid such an outcome, the defendants argue the court will necessarily have to determine the proper interpretation of s 2.2(c) (among other provisions).[56]
9. The defendants also argue that the plaintiffs' claim that an express trust arises from inferences to be drawn from the provisions of the Sale Agreement should not be determined without regard to the whole of the context in which those sections fall to be applied in the broader proceeding. That context, the defendants say, includes:[57]

(a) the underlying commercial framework of risk allocation;

(b) the interaction of the various indemnities (as they apply for the purpose of the defendants' counterclaims); and

(c) the full context of the commercial negotiations leading to the conclusion of the Sale Agreement, which are relevant for the purposes of the defendants' rectification claim and the plaintiffs' express trust claim.

1. When regard is had to the defendants' arguments about the nature and scope of the evidence to determine the questions, I am not convinced by the plaintiffs' submission that the evidence on the separate questions would involve adjudicating very few contested facts.
2. Leaving aside the rectification claim, there is an inherent uncertainty in the extent of the facts upon which questions 1 and 3 are to be determined if the court embarks on an inquiry into the factual background of the Sale Agreement.
3. Senior counsel for the plaintiffs contended that all the evidence (to the extent that such evidence would be admissible) as to the relevant surrounding circumstances would be put before the court in the separate trial of issues.[58] Yet, there is no proposed statement or outline of such facts before the court. To the contrary, senior counsel for the plaintiffs conceded that what those relevant facts would be, and whether they would be in dispute, is not known by the plaintiffs.[59]
4. Although discovery has yet to take place, the parties have recently reached an agreement in respect of the categories of discovery. Senior counsel for the plaintiff submitted to the court that agreed categories 1 and 2 are categories of discovery which are directed to the plaintiffs' claims in the further amended statement of claim. These categories are as follows:[60]

(a) the Sale Agreement, the WheatstoneBalnaves SPA and the agreement or agreements pursuant to which the Burrup Divestment occurred (category 1); and

(b) correspondence relevant to the drafting and execution of the Sale Agreement as to the meaning of s 2.2 and s 2.3 and s 9.1, s 9.9, s 9.11, s 9.12 and s 9.16 of the Sale Agreement (category 2).

1. Whilst categories 1 and 2 of the agreed categories of discovery may only relate to discovery of a relatively small number of documents, it is conceded on behalf of the plaintiffs that it may be necessary for some viva voce evidence to be led at a trial of the preliminary questions.[61]
2. I am not persuaded by the plaintiffs' argument that there will not be any significant overlap between the evidence on the separate questions and the evidence on the balance of the issues in the defendants' counterclaims. In particular, I am not satisfied that the defendants' rectification claim should be determined separately from the defendants' legal and equitable setoff claims pleaded in defence to the plaintiffs' claims.
3. Although the plaintiffs argue that there is substantial prospect that determining the separate questions before the other issues would assist in leading to a settlement of the dispute relating to the other issues,[62] I am not persuaded by this argument. This is because even if the questions are answered in the plaintiffs' favour, the defendants' substantial counterclaims would remain to be litigated together with the rectification claim (in the event that I was so persuaded that the rectification claim should be dealt with separately). In any event, it would be open to the defendants to make an application for a suspension order (as they have foreshadowed).[63]
4. The purpose of the plaintiffs' application for a separate trial of issues appears to be to obtain judgment in their favour and to require the defendants to pay the judgment sum into court, or into an interest bearing account, to stand as security in favour of the defendants' counterclaims, pending determination of those counterclaims.
5. The defendants say that some of the matters that would need to be raised and fall for determination, pursuant to a suspension order application made under s 15 of the Civil Judgments Enforcement Act, are:[64]

(a) whether there is prejudice to the defendants arising by a real risk of dissipation of any judgment debt paid to the plaintiffs by the defendants;

(b) the degree of connection between the defendants' counterclaims and the plaintiffs' claims; and

(c) whether the defendants' counterclaims are sufficiently meritorious, on a preliminary level, to warrant a suspension of the plaintiffs' ability to enforce judgment.

1. The defendants point out that in the event that the plaintiffs are successful in obtaining judgment against the defendants at a trial of the separate questions, almost the full amount of the judgment sum will be payable to entities outside Australia.[65] This is because s 9.16(a) of the Sale Agreement requires the first defendant to pay the monies claimed by the plaintiffs in proportion to their respective entitlement to the purchase price. When the definition of 'Base Price' in s 1.1 of the Sale Agreement is read together with schedule A (which sets out the share capital structures of each of the 'Companies' and 'Subsidiaries'), the first defendant has an entitlement to 0.05913% of the purchase price and the remaining entitlement is to be shared in different proportions to the other plaintiffs.[66]
2. Given that substantial sums are the subject of the defendants' counterclaims, and the fact that all of the plaintiffs (except for the first plaintiff) are overseas companies, it cannot be said that the defendants' prospects of obtaining a suspension order would be remote.
3. I note that the parties have yet to engage in a mediation. The parties, however, are sophisticated commercial entities who, given the substantial amounts of money sought as relief by both parties (who all have significant resources and not unequal bargaining power), should be equally incentivised to engage in settlement negotiations, irrespective of whether the questions are determined separately.
4. I am not satisfied that the separation of the rectification claim would be practicable.
5. Such a course offends against the principle in Bass v Permanent Trustee Co Ltd, wherein the plurality observed:[67]

The purpose of a judicial determination has been described in varying ways. But central to those descriptions is the notion that such a determination includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy.

1. It is notable that no submission was made on behalf of the plaintiffs that if the plaintiffs were to be successful in respect of each of the questions, that the defendants' rectification claim falls away.
2. If the rectification claim is separated, and ultimately if the claim is sought to be pursued during the course of the subsequent hearing an application to reopen the setoff claims could only be open to the defendants if question 2 is not answered conclusively (and judgment has not been entered in favour of the plaintiffs). Alternatively, if judgment is so entered, this course could result in an appeal against the decision to hear the separate questions without determining the rectification claim.
3. I am also concerned that only limited discovery has been undertaken at this particular point in time. There is a risk (albeit not a substantial risk), that should not be ignored, that further amendments to the pleadings (to at least the defendants' case) may be made after discovery is provided by the plaintiffs, which could result in answers to the determination of the questions (or at least question 3) being rendered in whole, or in part, hypothetical or advisory.[68]

1. This is not a case where the utility, economy and fairness of a trial of preliminary issues is beyond question.
2. I am not satisfied that a trial of separate issues would promote the interests of efficient case management.
3. I am of the opinion that the interests of justice will be better served if the trial and determination of all of the issues of fact and law raised in the plaintiffs' claims, the defendants' defence and counterclaims, and the plaintiffs' crossclaims, are determined in a single hearing of the entire proceedings.
4. For these reasons, I dismiss the application. I will hear the parties as to the orders that should be made, including orders as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Apache Finance Pty Ltd v Quadrant Energy Pty Ltd [2018] WASC 68.

[2] Letter to the associate - application for an order under O 32 r 4 or O 18 r 5, filed on 26 September 2018.

[3] Plaintiffs' minute of orders wanted on application, filed 26 September 2018.

[6] Affidavit of Michael Grant Lundberg, sworn 14 December 2018 [61(b)].

[7] Sale and purchase agreement, s 1.1: 'Base Price'.

[8] Sale and purchase agreement, s 1.1: 'Closing Time'.

[9] Sale and purchase agreement, s 1.1: 'Economic Transfer Date'.

[10] Apache Finance Pty Ltd v Quadrant Energy Pty Ltd [2018] WASC 68 [14] (Chaney J).

[11] Affidavit of Michael Grant Lundberg sworn 14 December 2018, attachment MGL1, pages 20 25.

[12] Affidavit of Michael Grant Lundberg sworn 14 December 2018, attachment MGL1, page 25.

[13] Third further amended defence and counterclaim, filed 3 December 2018 [14] [21A]; see also ts 131 133, 7 February 2019.

[14] It is common ground that the tax year in the oil and gas industry runs from 1 January to 31 December each year.

[15] Third further amended defence and counterclaim, filed 3 December 2018 [105], [106] and [107].

[16] Third further amended defence and counterclaim, filed 3 December 2018 [29], [50], [105].

[17] Third further amended defence and counterclaim, filed 3 December 2018 [29], [50], [51] and [105].

[18] Third further amended defence and counterclaim [105A] [105B]. The plaintiffs plead s 9.11(a) as a defence to the indemnification claim in their second further amended reply and defence [105(e)].

[19] Third further amended defence and counterclaim, filed 3 December 2018 [29] [29B], [32] [33] and [105] [107].

[20] Third further amended defence and counterclaim, filed 3 December 2018 [29] [29B], [106] [107].

[21] Third further amended defence and counterclaim, filed 3 December 2018 [52] [58].

[22] Third further amended defence and counterclaim, filed 3 December 2018 [59] [60], [62].

[23] Third further amended defence and counterclaim, filed 3 December 2018 [61] [63].

[24] Third further amended defence and counterclaim, filed 3 December 2018 [108].

[25] Third further amended defence and counterclaim, filed 3 December [108].

[26] Third further amended defence and counterclaim, filed 3 December 2018 [74], [95].

[27] Third further amended defence and counterclaim, filed 3 December 2018 [37(s)].

[28] Third further amended defence and counterclaim, filed 3 December 2018 [109].

[29] Third further amended defence and counterclaim, filed 3 December 2018 [109].

[30] Second further amended reply and defence, filed 10 January 2019 [127] [130].

[31] Second further amended reply and defence, filed 10 January 2019 [131].

[32] Palmer v CITIC Ltd [No 2] [2019] WASC 14 [7] (K Martin J).

[33] Landsdale Pty Ltd v Moore [2009] WASCA 176.

[34] Landsdale Pty Ltd v Moore [2009] WASCA 176 [21] [22] (Buss JA agreeing); see also Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1, 55 (Kirby & Callinan JJ).

[35] St Barbara Ltd v Hockley [2013] WASC 283 [8] [11], [13].

[36] St Barbara Ltd v Hockley [2013] WASC 283 [18].

[37] CSR Investments Pty Ltd v Alcan Northern Territory Alumina Pty Ltd [2003] NSWSC 1137 [8].

[38] Moore v Stockland South Beach Pty Ltd [2011] WASC 337 [37] (Corboy J).

[40] Apache Finance Pty Ltd v Quadrant Energy Pty Ltd [2018] WASC 68.

[41] The State Bank of Victoria v Parry [1989] WAR 240, 246 (Malcolm CJ); Boase v Asica Developments Pty Ltd [2009] WASC 183 [11] (Le Miere J); Habitat 1 Pty Ltd v Formby [No 3] [2018] WASC 66 [26] [27] (Archer J).

[42] Quadrant parties' outline of submissions in opposition to the Apache parties' application for a trial of separate questions, filed 14 December 2018 [19].

[43] Quadrant parties' outline of submissions in opposition to the Apache parties' application for a trial of separate questions, filed 14 December 2018 [28] [29].

[44] Plaintiffs' written submissions on their application for a separate hearing of questions, filed 9 November 2018 [15], [38].

[45] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] (French CJ, Nettle & Gordon JJ).

[46] Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 [42] (Newnes & Murphy JJA & Beech J).

[47] Plaintiffs' written submissions on their application for a separate hearing of questions, filed 9 November 2018 [38].

[48] Plaintiffs' written submissions on their application for a separate hearing of questions, filed 9 November 2018 [38].

[49] Third further amended defence and counterclaim, filed 3 December 2018 [22], [24A], [24F].

[50] Third further amended defence and counterclaim, filed 3 December 2018 [29], [30] [31].

[51] Third further amended defence and counterclaim, filed 3 December 2018 [32] [33].

[54] RCR Tomlinson Ltd v Russell [2017] WASCA 129 [69] (Buss P, Murphy & Beech JJA).

[55] Quadrant parties' outline of submissions in opposition to the Apache parties' application for a trial of separate questions, filed 14 December 2018 [22(b)], [30] [31], [32(b)].

[56] Quadrant parties' outline of submissions in opposition to the Apache parties' application for a trial of separate questions, filed 14 December 2018 [25].

[57] Quadrant parties' outline of submissions in opposition to the Apache parties' application for a trial of separate questions, filed 14 December 2018 [26].

[60] ts 166 167, 7 February 2019; affidavit of Jonathan Eric Wyatt, sworn 5 February 2019, attachment JPW5, page 9.

[62] Plaintiffs' written submissions their application for a separate hearing of questions, filed 9 November 2018 [48].

[63] Quadrant parties' outline of submissions in opposition to the Apache parties' application for a trial of separate questions, filed 14 December 2018 [48].

[64] Quadrant parties' outline of submissions in opposition to the Apache parties' application for a trial of separate questions, filed 14 December 2018 [50].

[65]Quadrant parties' outline of submissions in opposition to the Apache parties' application for a trial of separate questions, filed 14 December 2018 [51]; affidavit of Michael Grant Lundberg, sworn 14 December 2018 [62].

[66] Affidavit of Michael Grant Lundberg, sworn 14 December 2018 [62].

[67] Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 [45] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne & Callinan JJ).

[68] There has only recently been conferral between the parties in relation to categories of discovery, which is expected to be extensive, see affidavit of Jonathan Eric Wyatt, sworn 9 November 2018 [50(b)].