Mobileworld Operating Pty Ltd v Telstra Corporation Limited

(ii) contribute to the settlement of the litigation ... . (g) factors which tell against the making of an order under O 29 r 2 include that the separate determination of the question may - (i) give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial …; (ii) result in 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 … . This factor will be of particular significance if the Court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or (iii) prolong rather than shorten the litigation …." (Citations omitted) 43 As French observed in Olbers at [8]: "The overarching consideration informing the discretion to make an order under O 29 r 2 is efficient case management. It is subject to the limitation that the Court cannot give an advisory opinion on theoretical or hypothetical facts even if such an opinion were likely to lead to a settlement or resolution of the proceedings." 44 It is almost goes without saying that care is needed in determining whether the separate question procedure ought be used: compare Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at 55 per Kirby and Callinan JJ. It is common enough to find that the separate determination of questions in a proceeding does not result in the expeditious resolution of the proceeding, although all parties thought it would at the time the separate determination was ordered. Indeed, such orders can have the opposite effect and the resulting fragmentation can add to the expense and time involved in the proceeding. As Kirby and Heydon JJ noted in Waterways Authority v Fitzgibbon (2005) 79 ALJR 1816 at [37]: "It is notorious that the course of ordering that a preliminary separate question be tried, and deciding the case on that question, rather than deciding the case on all issues, is a course which can create graver difficulties than those which it is intended to solve." 45 At this stage of the proceeding, I am not satisfied that the order that MWO proposes for separating the trial of the loss and damage alleged under paragraph 41 of the SFASC from the balance of the proceeding would properly provide for the efficient and timely disposition of the proceeding. In part, this is because Telstra has not completed the filing of the affidavit evidence that it intends to rely on by way of defence. This fact alone makes it difficult to assess Telstra's claim that it is necessary for its defence that there is some quantification in determining issues of liability. Moreover, until the scope of Telstra's evidence is ascertained, I cannot properly assess the likelihood that some witnesses will be required at both stages of the trial that MWO's proposal contemplates and whether it may be necessary to make credit findings concerning those witnesses at the first stage. For these reasons too, it is difficult now to evaluate Telstra's claim that it desires to cross examine some of MWO's "first stage" witnesses on matters relating to quantification. These matters plainly bear on the question whether orders of the kind MWO proposed by its motion should be made. 46 Assuming MWO succeeded on its ultimate contractual claims, I am not, moreover, satisfied that, so far as the Court is concerned, the task of quantification need be as daunting as MWO would have it, although I accept that it may well be difficult. The fact that the task is difficult does not, however, relieve MWO from its obligation as applicant to prove its case on the balance of probabilities. As Telstra said, the Court can proceed only as such on the evidence before it. It seemed at times that MWO had in mind a very free ranging inquiry indeed, being one that the Court was unlikely to be able to undertake. 47 For these reasons, I would refuse MWO's application for orders to the effect sought in paragraphs 3 and 4 of its motion, notice of which is dated 8 May 2006. It is open to MWO and Telstra to make another application under O 29 r 2 of the Rules or some similar application to assist in the expeditious trial and resolution of this matter once Telstra has filed its evidence. The matter of the costs of the applicant's motion is considered below. Submissions on application to amend MWO's statement of claim 48 MWO sought leave to amend its statement of claim to limit the number of causes of action that it pursues at trial. The proposed SFASC and amended application was exhibit "NJA 20" to the 8 June 2006 affidavit of Nicholas John Andersen. In particular, it sought leave to delete paragraphs 8 to 12, 15 to 17 ("the pre-2003 agreement claim"), 57 and 58 ("the rolling stones agreement") and 73 to 90 ("the business services claim"). It also sought leave to make partial deletions to paragraphs 55 and 56 (reflecting the deletion of the rolling stones agreement claim). MWO also sought to amend the particulars to paragraphs 29, 32, 34, 34D, with the effect that the relevant loss and damage was said to be Telstra's demands for the repayment of remuneration in excess of the cap and MWO's payment in response under protest. MWO also sought to amend its particulars to paragraphs 40A and 41. Finally, MWO sought to delete Annexures 1, 5 and 11 and to make further consequential amendments to the initiating application by deleting paragraphs 1(a), 1(h), 1(s), 1(t), 1(u), 4(b), 5(a), 5(b), 5(e), 5(f) and 6(c). 49 I note that, at the hearing of MWO's motion, counsel for MWO stated that the information contained in letters dated 13 and 20 April 2006 from its solicitors to Telstra's solicitors were also intended to stand as additional particulars to MWO's claim. The letters formed part of exhibit MLD1 to the affidavit of Melissa Lee Daly sworn on 8 June 2006, which was filed by the respondents. 50 In submissions and in Mr Andersen's 9 May 2006 affidavit, MWO denied that its case was weak with regard to any of the claims that it sought to abandon and stated that it proposed these amendments in the spirit of cooperation and in order that the trial proceed in October this year. On the material before the Court, it is, of course, impossible to assess these inherently self-serving statements. 51 MWO submitted that leave should be granted on the basis that any costs of Telstra occasioned by the amendment be costs in the proceeding. MWO recognized that this was not the costs order usually made upon a grant of leave to amend pleadings, but it contended that the usual "costs thrown away" order would be inappropriate because of what it termed the "unusual" circumstances of the application. These circumstances were stated to be: "(a) the amendments have come about so as to ensure that the trial which is fixed for 2 October 2006 can be completed in the time available; (b) [MWO] should not be penalised by the payment of Telstra's costs thrown away by reason of the amendment as [MWO] is already foregoing what it contends are otherwise causes of action in which [MWO] has a strong case; (c) [MWO] is acting responsible in the spirit of co-operation which [the Court] urged on the parties; (d) [MWO] should not be punished by an award of costs against it in circumstances where it is responding to issues of case management including the time available to hear and determine the proceeding." As already stated, the material before me does not permit a proper assessment of these matters. 52 Telstra did not consent to MWO having leave to file and serve the SFASC generally, although it did consent to the deletion of paragraphs 8-12, 15-17, and 73-90. Telstra's opposition to the proposed amendments flowed from its contention that MWO had failed to provide proper particulars of its allegations that: (1) Telstra has failed to remunerate MWO in accordance with the 2003 agreement (paragraph 37(a)); and (2) Telstra has failed to ensure that MWO received payment in full of the remuneration payable under the 2003 agreement (paragraph 40A). Telstra specifically referred to the statement in the particulars to paragraph 37(a) that "further particulars will be provided after discovery and inspection and prior to the trial of the proceeding herein" and to the statement in the particulars to paragraph 40A that MWO "will not be able to calculate the remuneration due to it under the 2003 Agreement until after the taking of all proper accounts and enquiries". Telstra also referred to the statements in the particulars under paragraph 41, which concerned the loss arising from these alleged breaches, that MWO "has been unable to verify the quantum of the remuneration to which it is entitled under the 2003 Agreement. [MWO] will provide such further particulars after the taking of all proper accounts and enquiries". 53 Telstra argued that MWO should not be given leave to file its proposed pleading without providing particulars that identify: (a) whether MWO alleges that the total amount of remuneration it has been paid under the 2003 agreement is less than what it was entitled to receive, and if so, the best estimate of the amount of such underpayment and how that amount is calculated; (b) whether MWO alleges that it is entitled to be paid more for administration fees, program incentives and cooperative advertising under the 2003 Agreement than it was paid, and, if so, its best estimate of the additional amount of each type of remuneration to which it is entitled and how that amount is calculated; and (c) whether MWO alleges that it is entitled to receive additional payments of trailing commissions under the 2003 agreement, and, if so, its best estimate of the amount of such additional trailing commissions and how that amount is calculated. Telstra noted that by its solicitor's letter of 13 April 2006 that MWO had gone some way to providing the information referred to in (b) above, although it said that this information was deficient in a number of respects. Consideration of MWO's application to amend its statement of claim 54 An application to amend a pleading should be permitted where the justice of the case so demands: see Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 155 per Dawson, Gaudron and McHugh JJ and 167-172 per Kirby J. In the circumstances of this case, save for the matters raised by Telstra, I would have little hesitation in permitting MWO to abandon claims that it no longer wishes to pursue, whether out of a spirit of cooperation or for purely forensic reasons. 55 Whilst paragraph 37(a) is not the subject of MWO's application to amend, paragraphs 40A and 41 are. It is, as Telstra submitted, unclear from the proposed pleading whether MWO is alleging that it has received a total of remuneration that is less than that to which it is entitled under the 2003 agreement, or whether it is alleging that there are specific unpaid items and it does not know if the total amount of remuneration that it was paid was less than its entitlement. The proposed particularisation of the alleged loss and damage by reference to the taking of a proper account and enquiry at a later date fails to state with sufficient clarity the case that Telstra must meet at trial. As Gleeson CJ said in Goldsmith v Sandilands (2002) 76 ALJR 1024 at 1025 [2]: "The facts in issue in a civil action case emerge from the pleadings, which, in turn, are framed in the light of the legal principles governing the case. Facts relevant to the facts in issue emerge from the particulars and the evidence. The function of particulars is not to expand the issues defined by the pleadings, but 'to fill in the picture of the plaintiff's cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial'." (Citation omitted) MWO's particulars under paragraph 41 fail in this regard. Telstra is entitled to have, by way of particulars to MWO's pleading, the details referred to in [53] above as best MWO can provide them and, if it cannot provide such details as fully as it would wish, then Telstra is entitled to have MWO state what MWO requires to complete this task. This obligation cannot be discharged simply by providing some information to Telstra through letters from MWO's solicitors. 56 Accordingly, pursuant to O 13 r 2 of the Rules, I would grant leave to MWO to amend its application and statement of claim in accordance with the SFASC, which is exhibit NJA 20 to the affidavit of Mr Anderson sworn 8 June 2006 and in accordance with these reasons, including further and better particulars of paragraph 41. 57 MWO and Telstra disagreed as to the disposition of the applicant's motion if the applicant were unsuccessful. In all the circumstances, and in particular having regard to the outcome of the principal applications made on the motion, I would dismiss the applicant's motion. I would order that the applicant pay the respondents' costs of the motion. 58 Finally, I would make the order sought in paragraph 2 of the applicant's motion that Mr Ilhan and Mr Hamilton be permitted to inspect the documents that are the subject of the first respondent's Sixth List of Documents dated 7 April 2006 upon the terms proposed. Telstra did not oppose the making of this order. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

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