Result: Order for trial of preliminary issue of liability

Coenen v Payne [1974] 2 All ER 1109

Polskie v Electric Furnace Co Ltd [1956] 2 All ER 306

1. MASTER SANDERSON: This is an application by the plaintiffs for trial of a separate issue. Essentially, they seek to have the question of liability determined first with the question of quantum reserved to be considered if it is found the defendant is liable to them in damages. The application is brought under O32 r4 or r5. The chamber summons does not expressly refer to the rule relied upon but that omission is of no consequence. The issue raised by the chamber summons is quite clear.

2. Although the title of the action as it presently appears does not disclose as much, this is a claim made by 61 individual plaintiffs or groups of plaintiffs. The action relates to damage suffered as a consequence of a fire in the Brookton/Pingelly area of Western Australia which occurred on or about 15 December 1997. It is alleged by the plaintiffs that the fire escaped from a rubbish disposal site run by the defendant and that the escape was occasioned by the negligence of the defendant's servants or agents. Whatever the cause of the fire, it is not in dispute that it ravaged a large area in the Brookton/Pingelly region and caused considerable damage. Two of the plaintiffs are the Water Corporation and Western Power Corporation. Both of these public utilities suffered loss of infrastructure. The discrete issue that the plaintiffs seek to have tried as a preliminary matter is the question of the liability of the defendant for the fire.

3. I understand that there are in fact four actions on foot relating to this same fire. In total, there are over 80 individual plaintiffs. In Basset & Ors v Shire of Brookton (CIV 1904 of 1998) there are 24 individual plaintiffs. There is one other action brought by an individual plaintiff (Glenfield Farm Pty Ltd v Shire of Brookton (CIV 2395 of 1998)) and one action for personal injuries (Briggs v Shire of Brookton (CIV 2305 of 1998)). Each of these actions has reached a different stage in the interlocutory process. I understand that the Basset action is the most advanced but in all three of these actions the plaintiffs have given discovery.

4. The defendant did not dispute that at some stage there should be a separate order for trial of the question of liability as a preliminary issue. That is clearly a proper concession. Counsel for the plaintiffs estimated that a trial on the question of liability alone would take four days. Counsel for the defendant was rather more pessimistic and estimated 10 days. But, either way, both estimates fall well short of the time that would be occupied if 61 separate plaintiffs were required to prove their loss and damage during the course of a trial. Such a hearing would take months. At the end of the day the plaintiffs may not be able to establish that the defendant was liable for the damage suffered and all of the time and expense occasioned by the plaintiffs proving their loss and damage would be wasted. The prospect of such an outcome is unthinkable.

5. So the question then is when should the order be made for trial of a preliminary issue? In essence, the defendant wanted discovery before the order was made. It was submitted that it was appropriate the defendant knew the case that it had to meet in terms of quantum if, for no other reason, than to allow it to consider the question of mediation and possible settlement. As yet there has been no mediation and there has been not a hint from the defendant that it is likely to settle any of the plaintiffs' claims. But it says without discovery it cannot assess what approach should be taken to each individual plaintiff's claim.

6. The plaintiffs, on the other hand, do not wish to go through the process of discovery prior to having the question of liability determined. They submitted that discovery would be a lengthy and costly process involving many documents accumulated over many years. Most of the plaintiffs are farmers whose property suffered as a consequence of the fire. To establish their loss, they will need to establish the profitability of their farms so as to ground any claims. Not only would this involve the discovery of documents such as tax returns and books of account, it could involve discovery of all the source documents going back many years. It would not doubt be possible to undertake discovery in waves - that is to say to begin with tax returns and accounts and then only order the production of source documents if that proved necessary in a particular case. But even if the discovery process is undertaken in stages it will be onerous, time consuming and costly. What is more, it will undoubtedly delay the hearing of the action. It would take months for the one firm acting for 61 plaintiffs to prepare adequate discovery for each of them. In my view such a delay should, if at all possible, be avoided.

7. I appreciate that the defendant is not in a position to assess its attitude to each claim unless it has some idea of the quantum of that claim. But as yet the defendant has made no indication that it is interested in settlement or settlement negotiations. If the lengthy process of discovery is undertaken it may still be the case that the defendant, based upon the evidence it has, takes the view that no settlement offers should be made. Without some evidence of the defendant's intention to seek a settlement of some or all of the plaintiffs' claims, it seems to me that to order discovery on the off chance that settlement negotiations may ensue is at odds with proper case management. Further, counsel for the plaintiffs indicated that if the defendant gave an indication that settlement was possible if some detail as to quantum was provided, then the detail would be provided. I would expect that commitment to be met.

8. It was also submitted on behalf of the defendant that to order trial of the preliminary issue in this matter would throw it out of kilter with the other three actions. That may be so. But frankly I have some difficulty accepting that the Basset action with 24 plaintiffs would be best handled by allowing the question of liability and quantum to be dealt with at the one time. Clearly, the best approach to all four actions is that the question of liability in each action be tried together. If that course is adopted it does not seem to me to matter at all what stage each of the actions has reached.

9. The defendant also raised concerns over the question of expert evidence. The chamber summons, by its terms, anticipates that the action is to proceed on the question of liability only with all other matters stayed pending determination of that issue. That seems to anticipate that the defendant will be precluded from obtaining any orders that it may require in relation to expert evidence. Counsel for the plaintiffs indicated this was not the intention. In any event, the difficulty can be overcome by giving to the parties liberty to apply. This should ensure that if any difficulties arise with respect to access to the plaintiffs' properties by the defendants for the purposes of obtaining evidence for use by experts the matter can be referred back to the court. I appreciate that if the question of degradation of the plaintiffs' land as a consequence of the fire is to be an issue between the parties that sampling from time to time, prior to the determination of the question of liability, may be required. I would expect that the defendant would be provided with access to the plaintiffs' properties as and when reasonably required.

10. In recent times there has been a considerable softening of attitude as to the circumstances in which trial of a separate issue will be ordered. This was alluded to by Malcolm CJ in Smith v Maloney, unreported; FCt SCt of WA; Library No 980266; 18 May 1998. I also dealt with the same question in Stirling Marine Services Pty Ltd v Austral Piling & Constructions Pty Ltd, unreported; SCt of WA; Library No 970620; 21 November 1997. Both of these decisions represent a considerable shift from the previous position as set out in Wilsmore v Court (1993) WAR 190. It is all a question of case management - that is to say, using the resources of the court and conducting the case in such a manner as to provide a timely resolution of the dispute at the least cost to the parties. Measured against that standard, the case for trial of the question of liability alone in this matter is compelling.

11. There is one aspect of this case which did cause me some concern. This is a claim based in tort and on breach of statutory duty. In tort an action lies only if it is established that the plaintiff has suffered damage: for a general discussion of this question see Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1. There is, then, a logical difficulty about dealing with liability as a separate issue to quantum in a claim such as this. Once again, it is a question of adopting a practical approach. As I said at the outset of these reasons, there is no doubt that a fire damaged properties in the Brookton/Pingelly region in December 1997. It may be that on an assessment of each individual plaintiff's claim it is not possible to establish that each and every plaintiff suffered loss. But it is undoubtedly the case that most did. If it is established that the fire was caused by the negligence of the defendant, then judgment would only be entered in favour of a particular plaintiff after an assessment of damages. If it is found that a particular plaintiff did not suffer damage then judgment would not be entered in favour of that plaintiff. That would seem to me to satisfy the principles in relation to liability in tort.

12. I will hear the parties as to the precise form of the orders.