Macquarie Publications Pty Ltd v Coles Supermarkets Australia Pty Ltd

Supreme Court of NSW|2020-07-30|Before: Stevenson J

Solicitors: Thomson Geer (Plaintiff) HWL Ebsworth (Defendant) File Number(s): 2019/342257

Judgment

These proceedings were commenced on 31 October 2019.
There has been some delay as a result of an unsuccessful attempt by the parties to resolve their differences at a mediation held on 6 February 2020.
On 6 May 2020 directions were made for the parties to serve their lay and expert evidence. All lay evidence has now been served. The plaintiff, Macquarie Publications Pty Ltd, has served expert evidence, but only on the question of liability, notwithstanding the fact that the 6 May 2020 order specified "any" expert evidence. The defendant, Coles Supermarkets Australia Pty Limited is due to serve its expert evidence by 14 August 2020.
Now, by notice of motion filed on 30 June 2020, Macquarie seeks an order pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) that "the questions of liability be heard and determined in advance and separately from the question of damages". In effect, Macquarie seeks to defer preparing and serving its expert evidence on quantum until it knows whether it has succeeded against Coles on liability.
I am not persuaded to make the order sought by Macquarie.

Background

Macquarie is the owner of premises in Five Dock within which Coles conducts a supermarket business.
The premises include a basement car park.
Clause 13(b) of the relevant lease [1] provides that: "[Macquarie] may impose a reasonable charge or car parking fee for car park stays of more than 60 minutes in duration (in an amount previously agreed between [Macquarie] and [Coles], both parties acting reasonably), but must not otherwise impose any charge or levy car parking fees for use of, entrance to, or exit from the Car Park."
There is a dispute between Macquarie and Coles as to the amount of a reasonable charge or car parking fee for car park stays of more than 60 minutes in duration.
On 7 August 2018 Macquarie sent Coles a proposal to impose charges for parking beyond 60 minutes ("the August 2018 Proposal").
Coles contends that it is unreasonable to levy any charge or car park fee for car park stays exceeding 60 minutes in duration but less than two hours, and that Macquarie's proposed car parking fee for stays over two hours is excessive.
At present, no charge or car parking fee is levied for car park stays exceeding 60 minutes. The parties have not been able to agree on a reasonable charge or fee.
In those circumstances, in these proceedings Macquarie seeks declarations that: 1. Coles is and remains in breach of cl 13(b) of the Lease in that it has failed to agree to Macquarie imposing a charge or car parking fee for car park stays for more than 60 minutes in duration in accordance with the August 2018 Proposal; 2. the August 2018 Proposal contains a reasonable charge or car parking fee within the meaning of cl 13(b) of the Lease; 3. Macquarie will not be in breach of the Lease if it imposes a charge or car parking fee for car park stays for more than 60 minutes in duration in accordance with the August 2018 proposal, or on such other terms as the Court deems appropriate; and 4. Macquarie has complied with its obligations under cl 13(b) of the Lease.
Macquarie also claims damages for the revenue it would otherwise have received had it been able to impose a charge, to which Coles acting reasonably agreed, for stays beyond 60 minutes.
Macquarie accepts that damages recovered by it for lost revenue to date are likely to be relatively modest. However, as the lease has the potential to run for a further 56 years, the question has obvious significance in the long term.
Macquarie's expert evidence adduced thus far is directed at what a reasonable car parking charge would be at the moment.
It includes evidence to the effect that some 85% of users of the car park stay for less than 60 minutes.
To establish what damage it has suffered by reason of not having received car parking charges for stays over 60 minutes, Macquarie will need to establish what pattern of car parking use would have occurred had car park users been obliged to pay for parking beyond 60 minutes. It seems unlikely that imposition of a charge would have caused more persons to use the car park beyond 60 minutes than has occurred to date when there has been no charge. The effect of imposing a charge will presumably involve consideration of such matters as alternative parking opportunities in the vicinity, both on street and otherwise and the cost of such opportunities. In those circumstances I think the matter is likely to be more complex than simply multiplying current use numbers by whatever figure, if any, as is determined to be the figure to which Coles, acting reasonably, should have agreed. [2]
In substance, Macquarie's position was that the question of damages should be deferred because: 1. both parties will incur expense adducing on damages; 2. in light of the relatively modest amounts likely to be involved, it is likely that, assuming Macquarie succeeds on liability, the parties will agree on quantum; 3. the issues of liability and quantum are distinct.

Applicable legal principles

The applicable legal principles are well known. They were recently summarised by Ball J in Arch Underwriting Agency (Australia) Pty Ltd v Lexon Insurance Pte Ltd [3] as follows: "In the ordinary course, all issues for determination should be determined together. [4] The applicant for an order that one or more questions be determined separately bears the onus of satisfying the Court of the appropriateness of that course of action. [5] Separate determination of an issue may be appropriate where the issue 'is a central issue in contention between the parties, the resolution of which will either obviate the necessity of litigation altogether or substantially narrow the field of controversy'. [6] Separate determination of an issue is not appropriate where factual matters relevant to the issue to be determined separately are relevant to other issues in the case or where the same witnesses are likely to give evidence in relation to the factual issues that are relevant to the questions sought to be determined separately and to other issues in the case. [7] An important factor in ordering a separate question is whether it can be expected that determination of the separate question will or will be likely to bring about a substantial saving in time and costs compared to a hearing of all issues. [8]

This case

I accept that both parties will incur further costs to address Macquarie's damages claim and that the issues of liability and quantum will involve different, albeit related, expert inquiries.
I do not accept Coles' submission that the quantum of damages ultimately recoverable by Macquarie is likely to cast light on whether Coles' refusal to accept Macquarie's August 2018 Proposal was or was not reasonable. The latter question will turn on a number of matters, including the Court's conclusion as to what car parking charge was at the relevant time reasonable for stays over 60 minutes, the course of negotiations between Macquarie and Coles and, possibly, the proper construction of cl 13(b) of the lease.
However, I think it entirely speculative to suppose that acceding to the course proposed by Macquarie ultimately will result in a saving of time or cost.
Of course, if Macquarie loses on liability, questions of quantum will not arise. But that is so in every case where a plaintiff fails.
If Macquarie succeeds, and were quantum severed to be heard later, Macquarie would have to "satisfy Coles in any settlement discussions of the amount claimed". [9] There appears to be a at least a reasonable prospect that this would involve Macquarie having to adduce the expert evidence that it is hoping to avoid by bringing this application.
There has already been unsuccessful mediation. Coles' solicitor has, in his affidavit, expressed doubt that quantum would be agreed. If agreement could not be reached, severing quantum from liability is likely to increase, not save costs.
And Macquarie has left in until very late in the day to bring this application.

Conclusion

Overall, I am not persuaded that Macquarie has sustained the onus of showing that severance of issues in this case is appropriate.
I order that the plaintiff's notice of motion of 30 June 2020 is dismissed with costs.
I note that the matter is currently listed for directions on 21 August 2020.

Endnotes

It was originally made between Coles and a third party, Dosto Pty Limited; Macquarie purchased the property from Dosto in March 2017 and has executed a Purchaser's Deed under which it has agreed to comply with and be bound by the lease.
Assuming that this is the correct question; an issue as to the proper construction of cl 13(b) of the lease may well arise at the final hearing.
[2020] NSWSC 580.
Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141.
Crawley v Vero Insurance Ltd (2012) 17 ANZ Ins Cas 61-946 at [17].
CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 601 at 606 (Kirby P).
Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19 at [168] (Kirby and Callinan JJ); Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7(5)(b)] (Einstein J).
Todd Hadley Pty Ltd v Lake Maintenance (NSW) Pty Ltd [2019] NSWCA 262 at [15] (Bell P).
To adopt the words of Coles' submissions. 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: 30 July 2020

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