Lake Maintenance (NSW) Pty Limited v Todd Hadley Pty Limited & Ors

The Notice of Motion

1. The Notice of Motion, filed by the defendants on 20 November 2018, seeks orders pursuant to rule 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR").
2. The Motion asks the Court to answer the following questions: 1. Did the plaintiff suffer loss and damage on or before 1 May 2012? 2. Did the plaintiff suffer loss and damage on or before 23 May 2012? 3. Did the plaintiff suffer loss and damage on or before 13 June 2012? 4. Are the proceedings against the defendants not maintainable by reason of s 14 of the Limitation Act 1969 (NSW), s 262 of the Australian Consumer Law, s 82 of the Trade Practices Act 1974 (Cth) or s 68 of the Fair Trading Act 1987 (NSW)?
3. The Background to the Motion
4. On 12 February 2010, the defendants valued property at 137 High Street Wallalong ("the land" or "the property") in the sum of $7,450,000.00 (excluding GST) ("the $7.45M valuation"). The property was owned by Mr David Bone and it was Mr Bone who commissioned the valuation.
5. In assessing the value of the property the defendants took into account the "likely future rezoning" of the land.
6. Subsequently, Mr Bone provided the $7.45M valuation to the plaintiff, in support of a loan agreement he sought. The plaintiff's claim is that it relied upon the valuation in advancing $3,073,000.00 to Mr Bone as borrower under a loan agreement on 23 June 2010. The loan monies were repayable with interest on 23 December 2011.
7. Interest under the loan agreement was secured by way of a mortgage over the property on or about 21 June 2010. Under this mortgage, the plaintiff was given powers to enter into possession of the property if Mr Bone defaulted on the loan agreement.
8. Mr Bone did default on the loan, being unable to pay the sum of $5,038,000.00 that was due on 23 December 2011. Default interest accrued thereafter at the daily rate of $7,557.
9. Between 22 December 2011 and 10 January 2012 Mr Bone was in email correspondence with the plaintiff endeavouring to make arrangements to settle his debt and retain ownership of the land. By 2 February 2012 he had advised the plaintiff that the debt would be discharged "100 cents in the dollar".
10. Despite that assurance the debt to the plaintiff remained unpaid and, after providing notice to Mr Bone to remedy the default, the plaintiff entered into possession of the property pursuant to the powers conferred on it by the mortgage. On 25 February 2012 receivers were appointed, and a real estate agency, Raine & Horne Commercial ("Raine & Horne"), was engaged to sell the property.
11. On 26 April 2012 the plaintiff received an offer by way of tender for the purchase of the land, in an amount of $910,000. A second offer was received on 27 April 2012 from another prospective purchaser, in an amount of $1,005,000 ("the Lidbury offer").
12. In 1 May 2012 Mark Yazbeck, having been instructed to do so by the receiver, prepared a valuation of the property in the sum of $900,000 ("the Yazbeck valuation").
13. On 9 May 2012 the Lidbury offer was increased, to $1,105,000 for the land.
14. At about that time Raine & Horne estimated the market value of the property as "circa" $1 million - $1.5 million.
15. On or around 14 May 2012 the sole director of the plaintiff made an offer to the receiver to purchase the land for $1.25 million. A Contract for Sale of the land was signed by an entity related to the plaintiff, Wallalong Land Developments P/L, as purchaser, for the purchase price of $1.25 million. The plaintiff entered into the Contract for Sale on 23 May 2012, accepting the price of $1.25 million from Wallalong Land Developments P/L.
16. Just prior to the settlement of the Contract for Sale Mr Bone was still seeking to refinance with a view to paying the debt to the plaintiff. Whilst the plaintiff was not prepared to delay settlement of the Contract as Mr Bone requested, it did for a time agree to delay the registration of the transfer of Title to enable Mr Bone to continue in his attempts to repay the loan.
17. The settlement of the sale of the land occurred on 15 June 2012. After payment of various fees and charges, the sum of $1,017,561.70 was realised, and applied to monies due by Mr Bone under the loan agreement. There was a multi-million dollar shortfall.
18. On 29 June 2012 the plaintiff commenced proceedings against Mr Bone for recovery of the remaining debt owed pursuant to the loan agreement, although Mr Bone was still endeavouring to discharge the debt through refinancing.
19. On 22 August 2012, having delayed registration of the transfer of the Title to the land pending any payment by Mr Bone of outstanding loan monies, the plaintiff took steps to transfer the Title to Wallalong Land Developments P/L, its related entity. The transfer was ultimately registered on 8 November 2012.
20. On 20 February 2015 the plaintiff and Mr Bone attended formal mediation of the claim against Mr Bone, the parties entering into a Deed of Settlement providing for the payment of $5 million by Mr Bone to the plaintiff. The settlement date was delayed until 20 February 2017 due to an expectation that Mr Bone would settle the debt by that time. He did not in fact discharge the debt as agreed in the Deed of Settlement, and Lake Maintenance entered judgment against Mr Bone for $5 million on 20 February 2017.
21. Mr Bone sought an injunction on 23 May 2017 to stop the enforcement of Lake Maintenance's consent judgment. This application for an injunction was dismissed on 21 June 2017.
22. In September 2017 the plaintiff served a Creditor's Petition on Mr Bone, with the Federal Circuit Court ordering on 28 September that Mr Bone be sequestrated under the Bankruptcy Act 1966.
23. On 17 November 2017 Mr Bone's trustee in bankruptcy reported to creditors (including the plaintiff) that no dividend to creditors could be expected. A further report to the same effect was made by the trustee on 21 February 2018 and, on 29 March 2018, the trustee finalised that report.
24. During the period of negotiations between the plaintiff and Mr Bone, and the subsequent period of litigation and mediation, Mr Bone appeared to have substantial assets. In December 2011 Mr Bone declared that he had $30,350,000.00 in assets, encumbered in the sum of $17,632,500.00, placing his declared net worth at that time at $12,717,500.00. In 2012, Mr Bone owned 4 properties and was a judgment creditor for the sum of $1.271 million.
25. From 2012 until 2017, Mr Bone was the holder of 29,999 of a total 30,000 ordinary shares in Gelrol Pty Limited, a company of which he was the sole office holder. Gelrol owned a property in Eleebana, from March 2003 until its sale by the mortgagee in April 2012; property at Clarence Town from 2006 until its sale by receivers in October 2012; another Clarence Town property, from 2007 until its sale by the mortgagee, also in October 2012; and a third property in Clarence Town from acquisition in 2011 until its sale by receivers in August 2014. Gelrol owned a property at Warners Bay, which it had acquired in 2001. The company transferred this property to Mr Bone and his wife in September 2017 for consideration of $1.
26. Mr Bone transferred his 29,999 shares in Gelrol to his wife in September 2017 for "no consideration".
27. Another company of which Mr Bone was the sole office holder and shareholder was Bushsalt Investments P/L. That company also had assets, including a quarter interest in property at Redgum Drive Clarence Town (which was sold in December 2013); and shares in a company known as Redgum Clarence Town P/L (the director of which was Mr Bone's wife).
28. Mr Bone personally or with his wife also owned a number of properties in the period 2012 to 2016: property at Clarence Street Wallalong (sold by receivers in September 2012); jointly with his wife, property at Merewether (sold in a mortgagee sale in December 2013); property at Boomerang Beach (sold in a mortgagee sale in October 2015); and another property at Clarence Street Wallalong (sold in a mortgagee sale in June 2016).
29. The plaintiff has been unable to recover any monies from Mr Bone, beyond the net proceeds of the sale of the land.
30. On 14 June 2018 the plaintiff filed its Statement of Claim against the defendants, pleading professional negligence in the preparation of the $7.45M valuation, and related statutory breaches. In a defence filed on 21 September 2018, the defendants pleaded a number of defences, including that no duty of care was owed to the plaintiff; that the valuation it provided was arrived at in a manner accepted as competent within the meaning of s 5O of the Civil Liability Act 2002 (NSW); and, relevantly for present purposes, that the plaintiff's cause of action is statute barred. The defence refers to s 14 of the Limitation Act 1969 (NSW), s 236 of the Australian Consumer Law, s 82 of the Trade Practices Act 1974 (Cth), and s 68 of the Fair Trading Act 1987 (NSW).

The Competing Arguments as to Separate Questions

1. The defendants argue that the determination of the issue of the limitation defence by separate questions will be dispositive of the litigation, and thus would expeditiously deal with the claim, with a significant saving of costs.
2. They contend that, by 23 May 2012 at the latest, that being the date upon which a Contract for the Sale of the land at a purchase price of $1.25 million was entered into by the plaintiff, it was aware that the property was worth substantially less than the $7.45M valuation, and that its sale would not recoup the monies owed by Mr Bone. That event confirmed information earlier available to the plaintiff from the Yazbeck valuation, and the Raine & Horne estimate of a sale price for the land.
3. The prospect of the plaintiff recovering its loss was hopeless or remote, and that was clear by May 2012. The defendant argues that the latest date upon which the plaintiff incurred loss, and the tort alleged by it was complete, was 23 May 2012. It is submitted by the defendants that this proposition can be readily established with limited documentary evidence, perhaps even by a statement of facts pursuant to s 191 of the Evidence Act 1995 (NSW), and without the need to call testimony from witnesses, or place the credit of any witness in issue. The defendants argue that the "limitation defence is clear cut, on facts which are undisputable".
4. It is submitted that the cost of conducting a hearing to determine the separate questions relevant to the limitation defence would be (relatively) low, and would result in a significant overall saving to both the parties and the resources of the Court. Reliance is placed on the affidavit of the plaintiff's solicitor of 25 January 2019, as to the limited time and costs involved in resolving the matter in this way.
5. The plaintiff argues that, for the limitation defence to be successful, the defendants must establish that it was reasonably ascertainable by May 2012 that recoupment of the monies advanced to Mr Bone in reliance on the $7.45M valuation was impossible, and this they cannot do. It is submitted that the relevant date from which the limitation period runs is not the date on which it was clear to the plaintiff that the sale of land would be insufficient to recoup its loss, but rather the date on which it was known that it was not possible to recoup the monies personally from Mr Bone pursuant to the personal covenant in the mortgage. This occurred much later, well after May 2012, with the consequence that the limitation defence relied upon by the defendants must fail.
6. The plaintiff relied upon an estimate from its solicitor of the costs and time required to conduct a hearing concerning separate question overall. It is contended that costs would be significant, and there would be no saving of time because it would be necessary to call a significant part of its case to deal with the questions, including witness testimony, in circumstances where the same evidence would be called at trial. The plaintiff was firm in its rejection of any possibility that separate questions could be determined on the basis of documentary evidence alone and, particularly, that there was no prospect of agreement as to a statement of agreed facts being submitted to the Court.
7. Further, the plaintiff argued that splitting the issues with a separate questions hearing would create two avenues for appeal that would cause delay and inefficiency, in circumstances where an appeal by the party discontented with the determination of the questions by the Court was inevitable.

The Law

1. Rule 28.2 falls within Division 2 of Part 28 of the UCPR and provides: 28.2 Order for decision 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.
2. Rule 28.1 defines a "question" as follows: In this Part, question includes any question or issue in any proceedings, whether of fact or law or partly of fact and partly of law, and whether raised by pleadings, agreement of parties or otherwise.
3. There is a considerable amount of authority on the making of such an order, and the circumstances in which it should be made. Both parties referred the Court to authorities which, each contended, fully supported their respective, and wholly opposed, positions.
4. A summary of the principles to be applied to the question of whether separate questions should be determined was given by Hallen ASJ in Southwell v Bennett [2010] NSWSC 1372, at [15] as: (a) The rule speaks of "questions" and not "issues" and does not differentiate between questions of fact, or law, or partly of fact and partly of law. (b) The judicial determination of a "question" must involve a conclusive, or final, decision based on concrete and established, or agreed, facts, for the purpose of quelling a controversy between the parties: Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334, at [45] and [51]. (c) The rule permits the Court to hear and determine the separate question at any point before, at, or after, any trial or further trial in the proceedings, rather than only as a preliminary question. (d) Whether such an order should be made is a matter for the court's discretion, which discretion must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 669, at 670; Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7]. (e) As a general rule, the discretionary power to order separate determination of a question should be approached with caution: Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at [436], per Callinan J; Tepko Pty Limited v The Water Board [2001] HCA 19; (2001) 206 CLR 1, at [168]-[170] per Kirby and Callinan JJ: Commonwealth Bank v Clune [2008] NSWSC 1125 at [6], per Johnson J; Bailey and Bailey v Director-General Department of Energy Climate Change and Water and Ors [2010] NSWSC 979 at [4] per Studdert AJ. (f) In exercising its discretion, the overriding purpose of the Civil Procedure Act 2005, namely the just, quick and cheap resolution of the real issues in the proceedings (s 56) must be given effect. (g) Generally, all questions of fact and law should be determined at the one time: Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141-42; SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd [2006] FCA 14. If the Court is to depart from that position, the party seeking the separate determination of a question must satisfy the Court that it would be 'just and convenient' for that order to be made: Reading Australia Pty Ltd v Australian Mutual Provident Society [1999] FCA 718 at [8]-[9], see also Energy Australia v Australian Energy Limited [2001] FCA 1049. (h) While it may appear attractive, superficially, to order the trial of a separate question, experience often shows that it will not be so, for example, because of the complications that can arise in relation to appeals, or to overlapping factual issues, or to questions of credit, if the same witnesses have to give evidence in relation to a question that is separated and those questions that are not: Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7(6)] per Einstein J.; Owners Corporation Sp 70672 v Trustees of Roman Catholic Church [2010] NSWSC 946 at [16] per Ball J. (i) The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings, but often has the reverse effect. It sometimes happens that it turns out to be productive of the disadvantages of delay, extra expense, appeals and uncertainty of outcome which it is intended to avoid: Idoport Pty Ltd v National Australia Bank Ltd; Tepko Pty Limited v The Water Board at [168]. (j) Before a question is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd at 142, per Giles CJ in Comm D; Parramatta Stadium Trust v Civil and Civic Pty Ltd; Century Medical v THLD (NSWSC, 27 August 1996, unreported). (k) Where findings as to the credit of a witness is, or of witnesses are, or may be, involved in the consideration of the evidence relevant to the question, it is inappropriate to order a separate trial: ABB v Freight Rail [1999] NSWSC 1037. (l) Often, a separate question is heard on the basis of: (i) agreed statements of fact; (ii) a narrow point to be determined; and (iii) a hearing that is able to be conducted within a short time (or a short time relative to the total length if the hearing of the separate question were not to be dealt with). (m) Factors that tend to support the making of an order, include that the separate determination of the question may: (i) contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the proceedings: Tallglen v Pay TV Holdings; (ii) contribute to the settlement of the litigation (CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 602 per Kirby P at 607). (n) It may be appropriate to determine a separate question, even if it will not resolve all the issues, provided that there is a strong prospect that the parties will agree upon the result when the core of the dispute has been decided, or if the decision will obviate unnecessary and expensive hearings of other questions: City of Swan v Lehman Brothers Australia Ltd [2009] FCA 784; (2009) 73 ACSR 86 at [27] per Rares J. The determination of the one question should enable a sensible reassessment of litigation risks, which is generally likely to encourage some form of settlement discussions. (o) Relevantly, one factor that may tell against the making of an order would be where there is likely to be a significant overlap between the evidence adduced on the hearing of the separate question and at trial - possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: Reading Australia Pty Ltd v Australian Mutual Provident Society at [8]. There is always a risk of inconsistent findings arising from determination of separate questions. (p) Whilst the decision is ultimately one for the court to determine, it will have regard to the attitude of the parties: TVW Enterprises Limited v Duffy (Federal Court of Australia, 28 March 1985, unreported) Toohey J. (q) It is a relevant consideration to weigh the time likely to be taken in the hearing of a separate question and the availability of hearing dates for that purpose, against the time and expense of a substantive hearing and the length of time likely to elapse before such a hearing will take place: TVW Enterprises Limited v Duffy at pp 4-5. (r) Each case will have its own dynamics that dictate the relative importance of various factors to be considered in exercising the discretion conferred. (s) It is necessary that there be precision, both in formulating the question, and in specifying the facts upon which it is to be decided: Jacobson v Ross [1995] 1 VR 337 at 341
5. His Honour's summation has been cited in a number of decisions, including Commissioner of the Australian Federal Police v Pharmacy Depot Hurstville Pty Ltd [2018] NSWSC 1284 at [11], per Davies J; and Crawley v Vero Insurance Ltd & Ors [2012] NSWSC 593 at [15], per Beech-Jones J. In the latter decision, Beech-Jones J added five further points at [16] - [20]: First it is trite to observe that the power conferred by rule 28.2 is to be exercised by reference to the overriding purpose of the Civil Procedure Act 2005 "to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings" (s 56). One aspect of that command which my analysis below seeks to emphasise is the desirability of the proceedings being "cheap". I am under no illusion that these proceedings will be anything other than expensive for the parties, but that is not an excuse to let considerations of cost fall away. The system of litigation in this State expects that counsel appearing will be across all issues in the case and that the legal representatives will marshall all relevant evidence concerning those issues. Experience demonstrates that those steps in turn require a much larger body of material to be considered. All of this effort involves cost. Sometimes it is rendered futile because the focus of all this attention is rendered otiose by the Courts' determination of some other issue. Second, an interlocutory order for the separate determination of issues is an exceptional measure, distinct from the ordinary course taken of determining the issues in their totality: Street v Luna Park Sydney Pty Ltd [2007] NSWSC 697 at [5]. Consequently, the applicant bears the burden of demonstrating the appropriateness of the order, but it may be appropriate for the judge to take a more "interventionist role" in crafting the precise scope of the question: Intergral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 per Brereton J at [6]; Commonwealth Bank of Australia v Clune [2008] NSWSC 1125. The counter to the observations in [16] is that sometimes issues are separated in the expectation that their resolution will determine the balance of the proceedings but that proves illusory. On other occasions a matter determinative of, and fatal to, the proceedings is decided but then appealed and overturned with the outcome that the parties find themselves back in the same position they were prior to a trial but with years having passed. Kirby and Callinan JJ noted in Tepko Pty Ltd v The Water Board [2001] HCA 19; (2001) 206 CLR 1 at [168] that the benefits of a separate question order "are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory..." . Third, one real problem with ordering separate hearings is the potential for credibility findings to be made in one hearing in respect of a witness who may have to give evidence at the second hearing. This can create significant difficulties including, but not restricted to, the potential for the trial judge to disqualify themselves (see Warragamba Winery Pty Ltd v New South Wales [2010] NSWSC 66 at [10] to [14] per Harrison J). Fourth, the power conferred by rule 28.2 is not one that enables the severing of "issues" but instead the isolation of "questions". The question needs to be identified with precision. One advantage of doing that in advance of hearing a motion such as this one is that the various considerations for and against exercising the power can be considered against the precise question that is proposed to be determined separately. Many of the cases involving applications of this kind involve attempts to undertake a Solomon style severing of all issues of liability and quantum without any precise identification of what the "question" to be determined separately is. For the reasons discussed below I reject that approach here although I consider it appropriate to sever a relatively narrow question of quantum which might occupy a disproportionately large portion of the litigation battlefield. Fifth, one aspect of rule 28.2 that is not discussed in many of the cases is that it includes the power to order a question be decided after all other issues in the proceedings. Many of the cases where severance is sought involve an attempt to isolate some preliminary question which one of the parties hopes will give them a Hail Mary pass to the end zone of success. This approach runs the risk of promoting delay because of the potential for appeals from any adverse preliminary determination and the difficulties in isolating some discrete facts that enable the preliminary question to be resolved without overlapping with the balance of the proceedings. These adverse consequences are less likely where the separate question is relatively narrow and will be decided after all other issues in the proceedings. In addition it is always to be borne in mind that an order under rule 28.2 can be revoked if appropriate (see Warragamba). Thus if it appears to a trial judge who is completely cognisant of all the issues and the material that a hearing of the separate question is not warranted they may revoke it or, if appropriate, hear and determine it immediately. There is far less scope to change course for a trial judge who embarks upon a hearing of a question posed prior to the hearing of all other issues in the proceedings.
6. A further collation of principles may be found in Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103, where Ward JA (as she then was) said at [89] - [92]: […] it was not suggested in the above cases that it is necessary (for the power to state a separate question to be exercised) that the determination of the separate question be finally dispositive of the litigation or of one or more issues in the litigation; rather, it was contemplated that it might be sufficient if it would substantially narrow the field of litigious controversy (requiring a quantitative assessment to be made). Disposition of a step necessary for the determination of one or more issues in the proceedings might well have the effect in a particular case of substantially narrowing the field of litigious controversy. Thus, while it is submitted for Allandale that, at most, the separate question would resolve a potential step in the determination of the relevant issue in the compensation proceedings, that of itself does not preclude the exercise of the power under Rule 28.2.) Einstein J also set out various circumstances in which he considered that the separate determination of an issue would rarely be seen to be an appropriate procedure (to some of which reference was made by Mr Lancaster SC, Senior Counsel for Allandale), those including where there are intertwined issues of fact or law (such that the determination of the separate question would not have any substantial effect on the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation) and where there is a possibility that the resolution of the separate issue will not finally determine the issue but merely result in an appeal from that decision in relation to that separate issue creating what his Honour referred to as a multiplicity of proceedings, interruptions to the court and undesirable fragmentation of the proceedings. In various authorities, caution has been advocated in the exercise of such a power (such as Perre v Appand Pty Ltd (1999) 198 CLR 180 at [436] per Callinan J; Allstate Explorations NL v Beaconsfield Gold NL [1999] NSWSC 832 at [24] per Santow J, as his Honour then was; Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at [168] per Kirby and Callinan JJ; Strathfield Municipal Council v Poynting (2001) 116 LGERA 319 at [112] - [113] per Young CJ in Eq, as his Honour then was). In Idoport, Einstein J noted the reason for such caution in the following passage: The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings [his Honour there citingTallglen v Pay TV Holdings Pty Limited; Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J) and Century Medical v THLD [2000] NSWSC 5 (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J)]. (my emphasis) However, it has also been recognised that if the separate determination of particular discrete issues may achieve economies in time and expense in the resolution of the proceedings or obviate the necessity for a trial on all issues then it may be both appropriate and desirable for there to be such an order (Flore v NSW Department of Education and Training [2006] NSWSC 1227 at [32]; Street & 7 ors v Luna Park Sydney Pty Limited & 3 ors [2007] NSWSC 697 at [6]; Stewart v Ronalds [2009] NSWSC 455; Hubertus Schuetzenverein Liverpool Rifle Club Limited v Commonwealth of Australia (1994) 51 FCR 213, (1994) 85 LGERA 37 - though in the last case the order for separate determination was by consent).
7. A nutshell summary that might be taken from those and other authorities is that separate questions should only be posed for the determination of the court where the questions can be formulated with precision, determined on the basis of clear facts, and in circumstances where the procedure would plainly save time and costs. The task of persuading the court that the procedure should be adopted falls on the party seeking that outcome, and it is no slight burden.

Determination

1. The defendant relied upon Kenny & Good v MGICA (1992) Ltd (1999) 199 CLR 413; [1999] HCA 25, at 424 - 425 [16], where Gaudron J said, The interest that a mortgage lender seeks to protect by obtaining a valuation of the proposed security is not simply an interest in having a margin of security over and above the mortgage debt. Rather, it is that, in the event of default, it should be able to recoup, by sale of the property, the amount owing under the mortgage. And that is also the interest of a mortgage insurer. It is the risk that recoupment might not be possible that calls the valuer's duty of care into existence. And it is the interest in recoupment that is infringed by breach of that duty. Moreover, the time that loss occurs (and hence the time when the tort is complete) is when recoupment is rendered impossible. In the case of a mortgage transaction, that will occur when it is reasonably ascertainable that sale will result in a loss. At the earliest it will be when default occurs and, at the latest, when the property is sold. [Footnote omitted]
2. It is the last sentence, "At the earliest it will be when default occurs and, at the latest, when the property is sold", that the defendants place emphasis on in support of their claim as to the May 2012 timing of the completion of the tort, and thus the ready and straightforward resolution of questions directed to the availability of the limitation defences.
3. The defendants submit that the questions posed for determination can be resolved discretely, with resolution of a discrete question of law, by agreed facts, on the basis of written submissions, in a day, at very low costs.
4. If all of that was clearly the case, this would be an appropriate matter in which to direct that separate questions be determined. However, I am not persuaded that the matter is as clear as the defendants contend.
5. Both parties directed the Court to Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55, a decision concerning the timing at which a cause of action accrued under s 82 of the Trade Practices Act 1974 (Cth). Since "loss or damage is the gist of the statutory cause of action for which s 82(1) provides" the decision is apposite. At 532, Mason CJ, Dawson, Gaudron and McHugh JJ said, The conclusion which we have reached with respect to the time when the plaintiff first suffers loss in respect of contingent loss or liability accords with the comment of Gaudron J. in Hawkins v Clayton: [I]f the interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual of the cause of action when recoupment becomes impossible rather than at the time when the antecedent right to recoup should have come into existence, for the actual loss is sustained only when recoupment becomes impossible. (Emphasis added.) Gaudron J. went on to point out: It would be too simplistic to restrict analysis of economic loss merely to a consideration of reduced value or increased liability. The conclusion which we have reached is reinforced by the general considerations to which we referred earlier. It is unjust and unreasonable to expect the plaintiff to commence proceedings before the contingency is fulfilled.
6. The plurality warned, at 533, We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question. […] In view of the construction which we have placed upon the indemnity, namely, that it generates an executory and contingent liability upon the part of the respondent, the respondent suffered no loss until that contingency was fulfilled and time did not begin to run until that event.
7. The plaintiff submits that this is a case of contingent loss, as in Wardley, and time did not begin to run until the relevant contingency, the possibility of recouping the losses from Mr Bone personally pursuant to the personal covenant, was at an end. The plaintiff argues that it was only after it had pursued all possible avenues to recoup its loss from Mr Bone without success, that it became clear that recoupment was impossible, and loss was suffered. Only at that point did time begin to run.
8. The plaintiff relies upon Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Limited (2012) 247 CLR 613, where French CJ, Hayne and Kiefel JJ said, at [32]: In general terms, in a case involving a loan of monies, damage will be sustained and the cause of action will accrue only when recovery can be said, with some certainty, to be impossible. There are good reasons for a principled analysis of actual damage. One reason is that it would be unjust to compel a plaintiff to commence proceedings before the existence of his or her loss is ascertainable [footnotes omitted].
9. Here, the plaintiff had the benefit of Mr Bone's personal covenant pursuant to which it could seek to recover its losses from him. It was not confined to recovery from the sale of the land only. In those circumstances, I do not think it could necessarily be said that it was apparent recoupment was impossible at the time of default, or at the time when the Contract for the Sale of land was exchanged.
10. That fact muddies the clarity of the position asserted by the defendants as to when the plaintiff's loss was occasioned. Whilst it is tempting to conclude that it should be a straightforward exercise to ascertain when a cause of action arose, in practice it is likely that determination of that issue will depend upon the impact of complex findings of detailed facts, upon principles of law the interpretation of which is flexible or, at least, arguably so. The variables are many, and an easily determined answer to a preliminary and dispositive question is almost certainly illusory.
11. That conclusion is reinforced to a degree by the attitude of the parties which, although not determinative, is a relevant feature. As I have already observed, the defendants argue that separate questions can be answered quickly, efficiently, and cheaply on the basis of documentary material only. The plaintiff puts quite a contrary position, arguing that any hearing of separate questions would take at least two weeks, and require it to call much of its factual case, at great expense and with likely duplication. A likely appeal by the dissatisfied party will only add to the costs needlessly incurred.
12. With such starkly differing approaches, there can be no realistic prospect that separate questions could be answered on the basis of a statement of agreed facts, since agreement is highly unlikely. If a two week hearing with considerable oral testimony resulted, one cannot be sanguine as to the procedure ensuring or at least facilitating the quick and cheap disposition of part or all of the claim.
13. In such circumstances the usual procedure of determining all disputed facts and legal principles at a single hearing should prevail.

Costs

1. Given the conclusion I have reached I propose to make an order for costs to be in the cause, subject to any application from the plaintiff for a different order. It is likely that only time and the ultimate resolution of the litigation will make clear the justice of the respective positions adopted by the parties.

orders

1. The following orders are made: 1. The Notice of Motion filed on 20 November 2018 is dismissed. 2. Subject to order (3), costs are costs in the cause. 3. If the plaintiff seeks a different order to order (2), it is to file and serve any evidence and written submissions in support of the application by close of business on 29 March 2019. The defendants are to file and serve any evidence and submissions in reply by close of business on 5 April 2019. Any application will be dealt with on the papers. 4. Adjourned to the Registrar's call-over at 9am on 23 April 2019 for directions.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 April 2019