MNC Charlick Trading Pty Ltd v Australian National Railways Commission & Anor [1997] FCA 674

Of course this application is not appropriately called simply an application for determination of a preliminary issue. It is an application to have all issues in a trial heard but one, and subsequently to have that issue heard. In considering whether to grant the application or not, two of the number of factors which have been identified in submissions have weighed in my judgment perhaps more than other factors, although I have had regard to the range of factors which counsel addressed me on. The first of the two factors is that there needs to be a clear demarcation of issues. I take that to mean a demarcation both in a legal sense and in a practical sense. Some cases deal with the practical considerations under a separate description, but among the practical considerations are, of course, that those who may give evidence at one stage of the trial, if the application is granted, and have their credibility or their reliability as witnesses assessed at that point, should not be required to give or be expected to give evidence at a later point when a second issue is tried. When I am using the expression "should not" I am, of course, treating it simply as a consideration relevant to how I exercise my discretion in the circumstances. I think it can be said that the issues isolated by reference to the pleadings, and in particular the issue which is identified in the notice of motion, can be isolated in an intellectual sense from the contractual issues. There is some overlap in the pleading, in particular from paras 61.1 to 61.4 of the statement of claim as amended, because part of the basis of the claim based upon breach of s 46 of the Trade Practices Act 1974, and which counsel appropriately called in the submissions predatory price fixing, is said to have occurred by conduct which itself is said to have given rise to breaches of the contractual obligations complained about. On the other hand, although that legal or intellectual demarcation line can be drawn, I should also be satisfied that the evidence to be led at the trial, if the order is granted, involving determination of the contractual issues will not involve evidence from persons who would give evidence at the trial relating to the s 46 issue or if it did so would not be contentious evidence so that the Court would not be called upon to form views as to the extent to which it can rely upon the evidence of any such witness or witnesses to be expressed in reasons for judgment given in the first trial of issues, and then to have to re-address those questions in respect of the same witness or witnesses at the hearing of the second trial or the second issue. One consideration is the extent to which oral evidence on the contractual claims may be admissible in any event. Mr Young QC has identified the appropriate principles upon which oral evidence relevant to the contractual claims may be admissible. However, I think it is a submission which calls for a degree of clinical exactitude in an anticipatory way to know or to be satisfied that the evidence of persons such as Mr Barr and Mr Rowe, who are proposed to be called by the applicant, will not be admissible or admitted at the hearing of the first trial or at the hearing of the contractual claims. I am not satisfied, despite the submission seeking to achieve such satisfaction, that there will not be admissible evidence which could be exposed to challenges to its reliability and so involve the Court in having to pass upon such issues. Similarly although one can, with some degree of precision, express in a technical sense what evidence is or may be admissible in respect of the s 46 case when it is presented, it calls for a degree of exactitude in anticipation of submissions and of the detailed nature of that evidence to be able to be satisfied that there will not be the sort of overlap about which I have expressed concern. I am not so satisfied. I am also influenced in that conclusion by the fact that counsel for the first respondent in submission put that very point. I did not impose upon counsel for either the first or the second respondents the obligation to identify in any detail, or at all, the witnesses whom their clients might call in respect of either of the issues identified or the content of that evidence, but of course it would be entirely surprising if those counsel did not have a fair idea at this point as to what that evidence is or might be. It is therefore, to my mind, significant that the first respondent Australian National, which would or could benefit significantly by the order sought because it would not have to participate in the trial of the s 46 issue, has nevertheless taken the view that because of problems such as those I have identified it cannot support the application because of the potential for a witness or witnesses having to give contentious evidence on both issues at separate trials. There were, as Mr Young QC identified, some categories of evidence which his client may wish to lead on the s 46 case whose evidence could also be relevant to the contractual claims trial. Again without knowing in detail the nature of that evidence, and I am not at all critical of the fact that I do not, it leaves me in the position where I am not satisfied that there is a sufficient demarcation of evidence proposed to be led by the applicant, by the first respondent and possibly by the second respondent which would avoid the Court having to determine the reliability of a witness or witnesses at the end of the first trial and then be confronted with that same reliability issue, admittedly on different facts, for the second trial. So that is one factor which bears heavily in my judgment. The second factor which bears heavily in my judgment is the question of whether the separate trial of issues as sought will, in a practical sense, save money for the parties or for one or more of the parties. That depends upon whether the determination of the contractual claims will, or is likely to, result in either a substantial limiting of the time which would otherwise be spent on the trial of the two issues collectively or is likely to result in there being no need for a trial in respect of the s 46 issues. I am not satisfied that on the first aspect of that question the length of time which the trial would take if both issues were heard together will be any longer than the length of time which the trial would take if the contractual claims were heard at one point, and the s 46 issues were heard at another point. There may be some short saving but I am not satisfied that that is the case. In a practical sense it seems to me it is simply a matter of separating the trial time for one set of issues and the trial time for the other set of issues and adding them together, and if the trials of both issues is heard together it will be not significantly different in length. That is because the determination of the contractual claims will involve, to a degree, some evidence going to the s 46 claim because of the overlap in the pleadings which I have identified but not much beyond that. On the other hand, there is - apart from the concern I have about the Court being confronted with having to address reliability of evidence of witnesses after making a determination in one trial of one set of issues - the inconvenience to those witnesses of having to give evidence on two separate occasions, with the stress which that involves and the possibility of having to re-traverse, to a degree, the evidence which has already been given, simply to put those witnesses back into the flow of evidence which they had previously given. More importantly though, it seems to me the point which Mr Besanko QC made in submissions is a legitimate one. That is that his client's claim based on alleged predatory price behaviour by the second respondent is an independent and by no means a subsidiary part of the claim. In making the comments which I now do, I am not to be taken in any way as expressing a view as to the prospects of any party in succeeding or not succeeding in any of the claims as they are identified in the respective pleadings. But if the applicant does not succeed to the full extent it seeks in its contractual claims, then I am not satisfied that it is unlikely to proceed with its claims based upon s 46 of the Trade Practices Act 1974. I have no reason to think that it would not do so, as its counsel's submissions have identified that its claim is founded on two distinct bases, one being the same conduct as is said to amount to breach of the contractual obligations and the other independently being the predatory price fixing derived from paras 61.5 to 61.7 of the statement of claim. If it does not succeed to the full extent in its contractual claims, then I have no reason to think that that issue will not need to be litigated in any event. If it does succeed in its contractual claims then there is, as Mr Besanko QC pointed out, the prospect that it will succeed not entirely to its satisfaction, and again in that event, because I accept that the claim based upon alleged predatory price fixing is an independent claim brought against the second respondent, that there is no reason to think that that claim will not proceed. It would be quite inappropriate for me, in the circumstances, to grant the application on the basis that I was certain that Charlick would succeed in its contractual claims to its fullest extent, but it would only be upon such a level of satisfaction that I could then be satisfied that as a matter of practical utility and efficiency in the conduct of this litigation that the separation of issues would mean that the s 46 claim might not then be pursued. Such success on the part of Charlick would have to be success against both respondents before I could be so satisfied. Accordingly, at a practical level, I am not satisfied that granting the orders sought is or is likely to result in a substantial saving of cost in the long run, because I am not satisfied that in the absence of Charlick fully succeeding in its claim it would not proceed with the s 46 claim, that is, in the absence of Charlick fully succeeding in its contractual claims, it would not proceed with that claim and I am not satisfied, for obvious reasons, that Charlick will succeed to the fullest extent it seeks in its contractual claims against both respondents. It seems to me therefore that given those two conclusions that I have reached in the light of the submissions, the application may simply result in the s 46 issue being separately heard at some later point and that later point involves the possible injustice and inconvenience and loss of efficiency involved to all parties in the Court having delivered one judgment, having waited to see whether there is an appeal, that appeal (if there is one) having been dealt with perhaps some months down the track, and then having to relist the s 46 part of the case, hearing that, proceeding to judgment and possibly then a further appeal, before the final rights and liabilities are determined. I accept what was put in submissions for the second respondent that a significant sum of money will be expended in preparing the s 46 case for trial, but for the reasons which I have given I am not satisfied that that sum of money will not have to be expended in any event. I am not satisfied therefore that the orders sought will shorten the trial or the collective lengths of the two trials, or that the hearing of the contractual claims first will result in there being no need to hear the s 46 issues, or that the hearing and determination of those issues will be shortened. I am not therefore satisfied that the procedure proposed will result in significant savings in time or money. For those reasons I propose to refuse the application made. There will be a copy of these reasons, as edited simply for grammar and elegance or inelegance of expression, available shortly, but because that may take some time, Mr Young, if you want to take that matter further I will entertain an application to extend the time to do so from the time when those reasons become available. On the second respondent's notice of motion dated 20 June 1997 I decline to make the order sought in para 1 of the application. I order that the second respondent pay the costs of the applicant and of the first respondent to be taxed. I give the following further directions: 1. That the applicant do provide to the second respondent within fourteen days of this date the particulars requested: (a) in paras 1 to 14 of the letter from Deacons Graham and James dated 1 May 1997, and (b) in paras 1 to 3, 11 to 16 and 20 to 27 of the letter from Deacons Graham and James dated 11 June 1997, but so that the applicant may provide any such particulars by reference to and adoption of specified sections of the experts reports now filed and served by it. 2. That paras 2 and 5 of the direction given on 22 May 1997 be varied by adding the following: (a) the word "first" before "respondents", and (b) at the end of para 2 the words "and the second respondents affidavits be filed and served by 8 September 1997" and at the end of para 5 the words "and the second respondent's expert reports be filed and served by 8 September 1997". I think there is general liberty to apply.