POS Media Online Ltd v Queensland Investment Corporation

REASONS FOR JUDGMENT 1 The applicants seek, by motion, an order under o 29 r 2 of the Federal Court Rules to the effect that the issue of liability and the applicants' claims for specific performance be determined separately from, and in advance of, the issue of quantum of damages. 2 The motion has been vigorously opposed by counsel for the respondents, who has drawn my attention to a number of the relevant authorities. It is unnecessary to say anything now about the nature of the proceedings or about the general factual background or circumstances. Those matters have already been dealt with, sufficiently for present purposes, in an earlier judgment in which I dealt with a claim by the applicants for interlocutory relief and in which I also set out the nature of the various relief which the applicants seek in these proceedings. 3 The basis on which the applicants seek the order, as it became clear during the course of submissions, is that, although there is no particular evidence from either side on this aspect of the matter, the claim for specific performance or analogous relief is likely to decrease progressively in value with the passage of time, given the absence of any interlocutory restraint upon the respondents. 4 It is also said that this is a case in which it would be convenient and in the interests of justice, and would promote a saving of expense, if issues of liability were separately determined from issues of quantum of loss or damage, that the degree of overlap of evidence would be slight and that, to the extent that there may be common witnesses in relation to both liability and quantum, that is unlikely to give rise to any serious embarrassment in dealing, should it be necessary, with the assessment of damages. It is said also, and I think correctly, that the nature of the claim for damages will depend very much upon the precise conclusions to which the Court comes in relation to liability. 5 There are obvious difficulties with the course proposed and counsel for the respondents has drawn my attention to them. In a general sense, it is undoubtedly true that courts are now less willing than they once were to order the separate determination of questions of liability. That is true, as the decided cases demonstrate, in the Commercial List of the Supreme Court. It is true also in this Court. The increasing caution is not to be dismissed merely as a matter of changing fashion. It is a considered reaction to a number of real problems that have emerged in cases where separate determination has been ordered. Several of them may be mentioned briefly. 6 First, an expected saving of expense frequently has turned out in fact to be an increase in both time spent in Court and expenditure. Secondly - and it is unnecessary to refer to particular authorities: they are well known - difficulties have arisen where a judge has formed views and expressed them, particularly strong views, on questions of credit, and has then been in the position where he or she has had to consider evidence of the same witness in relation to questions of damages. There is also a possibility of the fragmentation of appeals. 7 The issues have been summarised by Branson J in Reading Australia Pty Limited v Australian Mutual Provident Society (BC 9902875), a decision which has been referred to with approval in numerous later cases: see, for example, the decision of Sackville J in Clarkel Holdings Pty Limited (in liq) v Kelly (BC 9905792). 8 One of the main considerations requiring a cautious approach is that the Court is called upon to make a discretionary judgment at an early stage in proceedings: a stage at which a number of matters which may be highly relevant are to a large extent a matter of speculation. That is so particularly in relation to projected savings of time and expense and in relation to the possibility of embarrassment arising from findings as to credit made, in reasons for judgment on liability, in relation to potential witnesses on the quantum of damages. Nevertheless, despite those considerations, orders for the separate and prior determination of questions of liability are still made, not infrequently, in this Court. Certainly that is so in intellectual property cases, where it is convenient that an election between kinds of pecuniary relief be made once issues of liability have been decided. Similar orders are made from time to time in other cases. In Clarkel, for example, while Sackville J declined to make the particular order sought under O 29 r 2, his Honour was prepared (the parties having consented to that course) to make an order for the separate trial of questions of liability and of damages or an account of profits. And in Reading, on which counsel for the respondents placed considerable reliance, while an order for specific performance was initially claimed, by the time the question under O 29 r 2 came to be considered by Branson J, that claim was no longer pressed: that is, it had been abandoned. 9 That leads me to what is, in my view, the particularly significant aspect of the present case. The applicants press claims for specific performance and for analogous relief based upon the Trade Practices Act 1974 (Cth) and upon estoppel. It is, I think, commonplace in specific performance cases for the question of entitlement to specific relief to be decided in advance of the ascertainment of the quantum of damages. Whether damages are to be awarded in addition or in substitution (and thus their amount) will, of course, depend on whether specific relief is granted. 10 Thus, as here, the nature of the claim for pecuniary relief, and even more so its precise quantum, will depend very much upon the outcome of the claim for specific performance. Additionally, however, it is undesirable that the trial of claims for specific relief be unduly delayed. It may, I think, be asserted as a general proposition that a claim for specific relief depreciates the longer its determination is delayed. 11 Undoubtedly there remain difficulties. Undoubtedly it will be necessary for the applicants to establish, if a determination on liability is to be made in their favour (at least in relation to their claims under the Trade Practices Act), that they have suffered some damage as a result of the conduct of which they complain. Equally there are considerations, particularly as to the adequacy of damages, that affect the grant of specific relief. The applicants will need, if issues of liability and specific relief are determined before the question of damages, to satisfy the Court of the propriety of an exercise of discretion in their favour. 12 I accept, as counsel for the respondents submitted, that those matters are not only a concern of the applicants: the respondents will need to consider for themselves what evidence they should lead and what submissions they should make in relation to them. 13 I appreciate, also, that there are other potential difficulties. One may be the possibility of split appeals; but that, I think, is a matter which can be left for a Full Court to deal with if it arrives. Another, which would arise particularly if there were a long delay between two hearings, is the difficulty and expense involved in preparing a case twice. That, I think, can probably be mitigated by arranging for a relatively early hearing of any questions of quantum. 14 There remains inevitably the possibility that embarrassment may arise because of evidence to be given, particularly by Mr Ainsley, on questions of liability. Mr Ainsley is also a likely witness on some aspects of the damages claim. Plainly, as the cases indicate, that is a matter which requires, at least, hesitation. I would not for myself go so far, in a case such as the present, as to say that the mere fact that a witness will be called on both aspects of the proceedings will almost always require that an order for separate trial not be made. The decision to be made is, after all, a discretionary one and the discretion is to be exercised having regard to, and weighing, all the relevant considerations. In this case, it seems to me, that among the most important relevant considerations are the desirability of, first, an early determination of the question whether there is indeed a contract between the parties and, secondly and particularly, of an early decision on the question whether the applicants are entitled to specific relief. 15 The order will be that all issues other than the quantum of damages be determined separately from and prior to the question of the quantum of damages. I shall set down the trial of the issues so to be determined separately for hearing commencing at 10.15am on 13 November 2000, on the basis that the trial of those issues is estimated to require no more than two weeks. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane J.