TRIDEN PROPERTIES LTD v CAPITA FINANCIAL GROUP LTD

Clarke JA On 8 November 1993 Capita Financial Group Ltd ("the claimant") applied to the court for orders that the whole of the appeal in this matter be struck out upon the ground that the judgments and orders sought to be appealed from were interlocutory and there had been no grant of leave pursuant to s101 of the Supreme Court Act 1970. Triden Properties Ltd ("the opponent') resisted the application upon the grounds that the substantial judgment against which the appeal was brought was a final one and the other orders were ancillary to that judgment. In addition the opponent applied to the court for leave to appeal from the various judgments and orders upon the basis that the applications for leave would only be proceeded with in the event that the appeal was ruled incompetent.

The Court then decided that the appeal was incompetent and, after hearing submissions in support of the summons for leave to appeal, refused leave. At the time of announcing its decision the court informed the parties that it would publish reasons in support of its order striking out the appeal and those reasons follow. In accordance with its usual practice the court did, and will, not furnish reasons for declining to grant leave.

The proceedings in the Construction List of the Common Law Division were commenced by the claimant by a summons dated 25 November 1991. Pursuant to orders of the Court the matter subsequently proceeded by way of pleadings.

In February 1993 the Court referred the issue whether there were defects in the building the subject of the litigation to Mr Markham pursuant to Pt72 of the Supreme Court Rules. Mr Markham subsequently reported to the Court that he had found that there were significant defects and his report was adopted by the court on 31 March 1993.

There was then a further reference to Mr Markham in May 1993 to determine a specification for the rectification of the defects in the building. Mr Markham's report on these issues was adopted by the Court on | October 1993.

Before that occurred a hearing had taken place before Cole J to determine all issues of liability. His Honour delivered his reasons on 6 September 1993 and judgment on liability and costs was handed down on 24 September 1993. In his

judgment given on 24 September 1993 Cole J confirmed that the separation of the issues of liability and damages was made pursuant to Pt31 of the Supreme Court Rules.

When Cole J decided, on 1 October 1993, to adopt Mr Markham's second report he also made orders for the determination of the issue of damages. These orders involved both a further reference to Mr Markham to determine the costs of rectification of the defects found to exist in the building by way of tender and a further hearing before the court to determine other heads of damages.

The litigation is complex and has required detailed administration by the Court. Indeed there have been more than 30 directions hearings in the Construction List. I should add that one of the orders appealed from was an order made by Cole J on 23 February 1993 ordering the respondent to pay the costs of other parties of particular interlocutory proceedings on an indemnity basis. The opponent in due course appealed from the following orders and judgments:

(b) The order adopting the report dated 26 March 1993 of Mr Markham. This order was made on 31 March 1993;

(c) The judgment in favour of the claimant on the issue of liability; and (d) The costs order made on 24 September 1993.

Although the appeal from the costs order made on 23 February 1993 would dearly appear to be incompetent (see Supreme Court Act, s101(2)(c)) the opponent sought to argue that the order was a decision which was a step in the chain leading to the final judgment. Orders of this nature could, it was submitted, be challenged as of right in association with a challenge to the final judgment (see Crowley v Glissan (1905) 2 CLR 402; Bunning v Cross (1978) 141 CLR 54, at 82 and National Employers Mutual General Insurance Association Ltd v Manufacturers Mutual Insurance Ltd [1988] 17 NSWLR 223, 238). I have some difficulty in understanding upon what basis it could be said that a costs order relating to interlocutory proceedings could be regarded as a step in the chain leading to the final judgment but it is unnecessary to consider that question further as I am of opinion that there has not yet been a final judgment and that leave is necessary to appeal from each of the orders made by Cole J to date.

My reasons for this conclusion can be shortly expressed. On 24 September 1993 the court ordered that all issues of liability be heard separately from those of damage and gave judgment for the claimant on the issue of liability. The question of damages was reserved for further consideration. That issue was the subject of a further order on 1 October when directions were given in relation to the future steps that should be taken and the proceedings were stood over to 25 February 1994. In short judgment was entered in favour of the claimant on the issue of liability on 24 September and the issues of damages remained for determination at a later time.

In my opinion it is settled law in Australia that a judgment determining issues of liability but leaving open the assessment of damages is not a final judgment.

The point has, as it seems to me, been settled by a line of decisions in the High Court. I will refer directly only to two. In Hall v The Nominal Defendant (1966) 117 CLR 423 Taylor J adopted as the correct test for determining whether an order was final a statement by Lord Alverstone CJ in Bozson v Altrincham Urban District Council [1903] 1 KB 547, at 548-9, in which his Lordship said:

URJ TRIDEN PROPERTIES LTD v CAPITA FINANCIAL GROUP LTD (Clarke JA) 3

'It seems to me that the real test for determining this question (whether an order was interlocutory or final) ought to be this: Does the judgment or order, as made, finally dispose of the rights of the parties? If it does, then I think it ought to be treated as a final order but if it does not, it is then, in my opinion, an interlocutory order. " (at 439)

This test was also accepted as the correct test by Windeyer and Owen JJ in Hall.

That this test is still regarded as the one to be applied in Australia is clear from the judgment of Gibbs CJ in Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767. The relevant part reads:

"The test for determining whether a judgment is final, which has been laid down in a number of cases including Carr v Finance Corporation of Australia Ltd (No 1) (1980-81) 147 CLR 246, is whether the judgment finally determines the rights of the parties and the authorities have held that the court in applying the test must have regard to the legal rather than the practical effect of the judgment. So that the question in the present case is whether the whole judgment finally determined, in a legal sense, all the rights of the parties that were at issue in these proceedings. And the answer is, plainly, that it did not, because it left undetermined the question whether concurred)

This statement is directly in point and concludes the application in favour of the claimant.

During the argument senior counsel for the opponent, although mentioning Computer Edge and Carr, glided over the passage in the judgment of Gibbs CJ which I have set out and relied on the decision of Olney J in Tag Pacific Ltd and Anor v McSweeney and Anor (1991) 34 FCR 438 in support of his submission that the judgment of 24 September was a final judgment. It is true that the decision in Tag does support the argument advanced by counsel for the opponent but I regret to say that I am unable to agree with it. In reaching his conclusion Olney J followed the approach of Sir John Donaldson MR in White v Brunton [1984] 1 QB 570 and in particular the passage (on 573) which reads:

"T would therefore hold that where there is a split trial or more accurately, in relation to a non-jury case, a split hearing, any party may appeal without leave against an order made at the end of one part if he could have appealed against such order without leave if both parts had been heard together and the order had been made at the end of the complete hearing."

Olney J considered that the feature which distinguished White and Tag from Computer Edge was that in the former two cases the issues in the litigation had been split whereas in Computer Edge they had not. The difficulty that I have with his reasoning lies in the fact that the High Court has made it clear that what Sir John Donaldson described as the order approach laid down in Bozson is to be applied in this country in determining whether a judgment is interlocutory or final. Upon the application of this approach the Court is required to inquire whether the judgment which is in question finally determines all the rights of the parties that were in issue in the litigation. That approach is fundamentally different from the "application" approach which Sir John Donaldson said should be applied in England. Upon that approach the question whether a judgment is final or interlocutory depends upon the nature of the application or proceedings giving rise to the order and not upon the order itself. In short a test fundamentally different from the test that prevails in Australia was applied by Sir John Donaldson.

In my opinion the distinction sought to be drawn by Olney J is, with respect, without substance. The relevant question which is posed under the order test is whether the judgment finally determines the rights of the parties that were in issue in the litigation and not simply the rights that may have been in issue in a specific application or a split hearing. Insofar as the Court of Appeal in White adopted an approach which has not been accepted in this country that decision cannot stand as authority which should be followed by this Court and once one puts it to one side the question that is posed is simply resolved by an application of the test laid down by the High Court.

I would add that there is a passage in the judgment of the learned Master of the Rolls which indicates that the procedures in England may be significantly different to the procedures followed in New South Wales and that a consideration which led him to his ultimate conclusion would not be a relevant factor in this State in determining whether a judgment was interlocutory or final. His Lordship said (at 573): "If we were to hold that the division of a final hearing into parts deprived the parties of an unfettered right of appeal we should be placing an indirect fetter upon the ability of the Court to order split trials."

In New South Wales the splitting of the issues in a trial does not deprive the unsuccessful party of an unfettered right of appeal. It is true that until a final judgment is given no appeal will lie unless leave is given by the court. But upon final judgment being given the unsuccessful party has an unfettered right to appeal not only against the final judgment but against those interlocutory decisions which were steps in the chain leading to the final judgment (Crowley, supra; Bunning, supra). Indeed this is what occurred in David Syme and Co v Lloyd [1984] 3 NSWLR 346 where a defendant who lost a jury trial was held entitled to appeal, as of right, against rulings made in the course of that trial and, as well, a ruling made many months before in a separate hearing as to the capacity of the published words to convey the imputations pleaded. It follows that once the rights of the parties have been finally determined in the present litigation the respondent will be able to appeal as of right from the judgment on liability as well as the decision on damages. This, in my opinion, is a sensible scheme. It retains the right of a party to appeal against all orders or judgments which are steps in the chain leading to final judgment as of right, while enabling the court to determine whether an appeal from an interlocutory judgment should be entertained prior to that time in the interests of justice.

The decision in this case is governed by an application of the test applied in Computer Edge. The rights of the parties at issue in the litigation were not finally determined by the judgment of 24 September and it was accordingly interlocutory. No leave having been granted the appeals from that judgment and all ancillary decisions were incompetent.

Meagher JA I agree with Clarke JA. Sheller JA I agree with Clarke JA.

Claimant - D COWDROY QC and M A GRACIE Opponent - M JACOBS QC and P TOMASETTI

URJ TRIDEN PROPERTIES LTD v CAPITA FINANCIAL GROUP LTD (Sheller JA) 5

Claimant - FREEHILL HOLLINGDALE and PAGE Opponent - COLIN BIGGERS and PAISLEY