The plaintiffs, Cape Byron Power I Pty Limited and Cape Byron Power II Pty Limited (together "Cape Byron Power"), allege that at their power station in the fuel handling plant "the roof rail beam carrying the Stacker/Reclaimer became disconnected from the roof structure, resulting in the Stacker/Reclaimer and the roof rail beam collapsing into the Begasse [sic] bin". The defendant, Tenova SEMF Pty Limited ("Tenova"), constructed the fuel handling plant pursuant to a subcontract with the contractor of Cape Byron Power. Cape Byron Power sues Tenova in negligence.
Tenova applied for a separate trial of the issue of whether it owed a duty of care to Cape Byron Power.
The Court's power to hear and determine a question separate from the residue of the trial is found in r 28.2 of the Uniform Civil Procedure Rules 2005, which provides:
"28.2 Order for decision
(cf SCR Part 31, rule 2)
The court may 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."
The exercise of this power is informed by r 28.4, which provides:
"28.4 Disposal of proceedings
(cf SCR Part 31, rule 6)
(1) This rule applies if the decision of a question under this Division:
(a) substantially disposes of the proceedings or of the whole or any part of any claim for relief in the proceedings, or
(b) renders unnecessary any trial or further trial in the proceedings or on the whole or any part of any claim for relief in the proceedings.
(2) In the circumstances referred to in subrule (1), the court may, as the nature of the case requires:
(a) dismiss the proceedings or the whole or any part of any claim for relief in the proceedings, or
(b) give any judgment, or
(c) make any other order."
The separate question proposed by Tenova would dispose of the proceedings if no duty of care was found, but not if the existence of a duty of care was established.
Rule 28.4 applies when the decision on the question, whatever be that decision, substantially disposes of the proceedings or renders unnecessary any further trial on any part of any claim for relief. The existence of a duty question is part of the claim for relief. As it is disposed of by a decision on the proposed separate question, the requirements of r 28.4 are fulfilled.
In exercising the power under r 28.2, the Court must give effect to s 56 of the Civil Procedure Act 2005 and the overriding purpose of facilitating a just, quick and cheap resolution of the real issues in the proceedings. This mandates a more interventionist role in identifying and separating important issues to resolve expeditiously litigation or important parts of litigation (see Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd & Anor [2006] NSWSC 1464 at [6], see generally Ritchie's Uniform Civil Procedure NSW ("Ritchie's") at [28.4.5] and following).
It is common ground that the existence of a duty is a critical element in the plaintiffs' case, that it is a real issue in the proceedings, and that its non-existence is reasonably arguable. It is also self-evident that a trial on duty alone would be shorter, and thus cheaper and quicker, than a trial on all issues. However, if the decision on the separate question found in favour of a duty, it is also self-evident that the duration of the hearing of the separate question, together with the residue of the trial (even leaving aside the possibility of multiple appeals) would take longer than one trial on all issues, and thus not be cheaper and quicker.
A consideration of matters of time and cost thus requires a comparison of the amount of time and costs saved by the trial on the duty question only, as against the additional time and cost found in having two trials in the event that duty is found to exist. This is one way of weighing the competing prejudice to the parties (see Integral Home Loans Pty Ltd at [5]). There are also questions about the justice of either procedure. While courts may now be more inclined to order a separate trial on distinct questions (see Integral Home Loans Pty Ltd at [6]), an order for separate determination remains an exceptional course compared to deciding a case in its totality (Street & 7 Ors v Luna Park Sydney Pty Limited & 3 Ors [2007] NSWSC 697 at [5], Commonwealth Bank of Australia v Clune and Anor [2008] NSWSC 1125 at [6]).
This does not mean that "special circumstances" must be established. Rather, the reluctance of the courts to order a separate determination arises from the common occurrence that evidence in proceedings is relevant to a number of issues such as, potentially in this case, breach of duty and damages as well as duty of care. If that is so, substantial components of the evidence may be traversed twice in the separate trials. This course that would add substantially to the costs in the event of a decision that requires a further hearing on the other issues, without necessarily reducing significantly the costs involved in the trial on the separate question alone compared to a single hearing on all issues.
The duty question, in the present case, is critical to the disposal of the proceedings as a negative answer would necessarily result in a judgment for Tenova. But it is difficult to perceive other advantages.
I am not persuaded that it will measurably assist in settlement of the proceedings. At least prior to the hearing of the separate question, Tenova might be expected to be less likely to engage in productive settlement discussions.
Tenova referred to subpara (f) in [28.4.16] of Ritchie's and submits that determination of duty cannot be affected by the determination of the remaining issues in the dispute. That may be so, but the converse does not follow: the existence and content of the duty may be interrelated and impact on the precise breach and the nature of the damage caused.
It is not apparent that evidence in respect of a duty of care is isolated from the remaining evidence. There was no evidence on this application from the parties about the witnesses to be called on the duty issue compared to the witnesses to be called in the residue of the hearing.
Reliance and vulnerability are important matters on the question of the existence or content of a duty (see Brookfield Multiplex Ltd v Owners Corp Strata Plan 61288 [2014] HCA 36 at [33], [57]-[58], see also [114]). As Spigelman CJ stated in Tyrrell v The Owners Corporation Strata Scheme 40022 [2007] NSWCA 8 at [8] and [9]:
"8 The law of negligence, particularly in the context of liability for economic loss, is not an easy area for purposes of separate determination of an issue. It is regrettable that this is so, but the concepts involved in the law of negligence have a quality of amorphousness that do not allow for the clear delineation of a question of law.
9 The issue of duty, involves mixed questions of law and fact. It also involves considerable overlap with many of the other issues that arise in negligence litigation, including breach, reliance, remoteness and causation. In a context such as this, where what is being asserted is something of a novel duty, it would be desirable, if possible, to decide the question separately to the other issues, if that can be done."
Further, as stated in Gunston v Lawley [2008] VSC 97 at [27]:
"Furthermore, it is not helpful to consider the existence of a duty of care in a vacuum: it will depend upon the relationship between the parties with respect to the negligent activity in question and with respect to the loss which the proprietor has suffered as a consequence."
In addition, if witnesses are common to both the duty question and the residual aspects of the claim, there is a real possibility that credibility findings on the separate question may impact on assessments of credit at the subsequent hearing, a matter which may require a different judge to hear the residue of the proceedings. That consequence would clearly be inefficient and undesirable.
The possibility of findings about the credit of witnesses being relevant to a trial on the residual matters was not excluded by any evidence on the application. It is a matter which militates heavily against an order for separate determination, see Langley v AMP Capital Investors Limited [2007] NSWSC 937 at [27]. There is also the possibility, as mentioned in passing earlier, that the resolution of the separate question will result in an extra appeal "creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings": Ritchie's at subpara (f) of [28.4.17], Story of Sydney Ptd Ltd v Ling (NSWSC, 15 November 1994, Rolfe J, unreported), Neumann Contractors Pty Ltd v Wyong Shire Council [2011] NSWSC 481 at [22] to [26], [30] to [33].
Another matter militating against separate determination is the existence of disputed facts. Almost all of the significant pleaded facts are in dispute, including the nature of the contractual relationship between Tenova and the head contractor and whether Tenova was engaged to design as well as construct the fuel handling plant. That relationship may be relevant to questions of vulnerability and to the issues of duty, breach and causation. The absence of agreed facts seems to militate against separate proceedings (see Tyrrell at [12] to [15]).
If the present case involved no more than applying the established principles in Brookfield Multiplex Ltd, then this would be a matter in favour of a separate determination. The judgment in Brookfield Multiplex Ltd (HC) resulted from a separate trial at first instance ordered by McDougall J (see Owners Corporation Strata Plan 61288 v Brookfield Multiplex [2012] NSWSC 1219 at [19] to [31]). The matters significant to McDougall J included the absence of any overlap of evidence, the evidence on duty being entirely documentary and thus not raising credibility issues and the costs of a one day case for the separate trial as against costs of a million dollars on the full trial, which involved some "41 reports and affidavits" relating to a substantial number of alleged defects (see Owners Corporation Strata Plan 61288 at [21] to [24]). None of these features exist in the current proceedings. Tenova led evidence that the separate question "could be tried in a maximum of 5 hearing days" and the plaintiffs' solicitor did "not expect a trial on all issues in a case of this kind, to take more than 5-7 days".
It was submitted that this case involved pure economic loss but unlike in Brookfield Multiplex Ltd (see at [47] and [67]) this was not common ground. Pure economic loss depends upon ownership of the damaged stacker/reclaimer and the bagasse bin, a matter not clearly asserted in the statement of claim but asserted in submissions. Ownership of these items by Cape Byron Power indicates that they have suffered property damage (although they do not appear to claim it in the current pleadings) a matter suggesting that the case is not, or not necessarily, one of "pure economic loss", unlike Brookfield (see Rail Corporation New South Wales v Fluor Australia Pty Ltd & Anor [2009] NSWCA 344 at [2], [5], [129], compare [6]). This is also not a case where steps can be taken to prevent damage to person or property because defects were discovered before the property damage occurred, as seems to be the case in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16 at [19] to [20].
Even if the question of whether the damage was pure economic loss or property damage is a question of law, as Tenova submitted, and not a matter of mixed fact and law as appears, it nevertheless means that issues concerning damage inform the existence of the duty. Thus, this case may well involve development of or distinguishment from rather than the mere application of the principles set out in Woolcock Street Investments and Brookfield Multiplex Ltd (see Woolcock Street Investments at [7]). This makes it less suitable for a separate determination.
For all these reasons, I am not disposed to make an order for a separate determination. Lest there be any doubt, nothing in my decision should be taken to reflect on the strengths or weaknesses of the argument for liability or on either party's prospects on the claim.
As to costs, Tenova accepts that Cape Byron Power should have an order for costs on the motion in its favour if the separate determination order is not made.
The orders of the Court are:
1. The defendant's notice of motion for a separate determination filed 11 February 2015 is dismissed.
2. The defendant to pay the plaintiffs' costs of the notice of motion.
[2]
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Decision last updated: 23 August 2016