Bailey & Bailey v Director-General Department of Energy Climate Change and Water & 2 Ors [2010] NSWSC 979 (6 September 2010)

Last Updated: 7 September 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Bailey & Bailey v Director-General Department of Energy Climate Change and Water & 2 Ors [2010] NSWSC 979
This decision has been amended. Please see the end of the judgment for a list of the amendments.

JURISDICTION:


FILE NUMBER(S):
2006/267230

HEARING DATE(S):
30 August 2010

JUDGMENT DATE:
6 September 2010

PARTIES:
Applicants - D1 - Director-General Department of Natural Resources now known as Department of Energy Climate Change and Water
Applicants - D2 - Water Administration Ministerial Corporation
Applicants - D3 - State of New South Wales
Respondents - P1 - Bruce Clyde Bailey
Respondents - P2 - Janet Beatrice Shafik-Bailey

JUDGMENT OF:
Studdert AJ

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Applicants (D1, D2, & D3) - Mr I Harvey
Respondents (P1 & P2) - Mr P King

SOLICITORS:
Applicants (D1, D2, & D3) - Crown Solicitors Office
Respondents (P1 & P2) - Hicksons Lawyers


CATCHWORDS:
Practice and Procedure – Application for hearing limited to the issue of liability – Exercise of discretion – Principles applicable

LEGISLATION CITED:
Civil Procedure Act 2005 (NSW), s 56
Native Vegetation Conservation Act 1997 (NSW), s 21(2)
Supreme Court Rules 1970 (NSW), [Former] Part 31 Rule 2(a)
Supreme Court Rules 1970 (NSW), Part 1, Rule 3 (1), (2)
Uniform Civil Procedure Rules 2005 (NSW), r 28.2

CATEGORY:
Separate question

CASES CITED:
ABB Engineering Construction Pty Limited v Freight Rail Corporation [1999] NSWSC 1037
Atkinson & Ors v State of New South Wales [2006] NSWSC 152
Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 441
CBS Productions Pty Ltd v O’Neil [1985] 1 NSWLR 601
Century Medical v THLD & Ors [2000] NSWSC 5 (unreported, Supreme Court of NSW, 3 February 2000)
Comm D, Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996)
Commonwealth Bank v Clune & Anor [2008] NSWSC 1125
Davis v Gell (1924) 35 CLR 275
Director-General of the Department of Land and Water Conservation v Bailey [2003] NSWLEC 160
Director-General of the Department of Land and Water Conservation v Bailey [2003] NSWCCA 361
D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 214 ALR 92
Dunstan v Simmie & Co Pty Ltd [1978] VR 699
Idoport Pty Limited v National Australia Bank Limited & Ors [2000] NSWSC 1215
Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd & Anor [2006] NSWSC 1464
Law Society of NSW v Bruce (unreported, Supreme Court of NSW, 23 April 1996)
Murphy & Ors v Chow [2003] NSWSC 303
Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996)
Perre v Apand Pty Ltd (1999) 198 CLR 180
Rajski v Carson (1988) 15 NSWLR 84
Story of Sydney Pty Ltd v Ling (unreported, Supreme Court of NSW 15 November 1994)
Street v Luna Park Sydney Pty Limited [2007] NSWSC 697
Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130
Tepko Pty Limted & Ors v The Water Board [2001] HCA 19; (2001) 206 CLR 1
Webb v South Eastern Sydney Area Health Service & Anor [2003] NSWSC 329 Pioneer Park Pty Limited v ANZ Banking Corp Limited [2005] NSWSC 832

TEXTS CITED:


DECISION:
(1) Order that the defendants’ notice of motion is dismissed.
(2) Order that the defendants pay the plaintiffs’ costs of the application.
(3) The matter is to be listed for directions before me on 10 September 2010 at 10am absent agreement prior to that time as to an appropriate timetable addressing the service of evidence.



JUDGMENT:

- 1 -

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

CIVIL LIST

STUDDERT AJ

MONDAY 6 SEPTEMBER 2010

2006/267230 Bruce Clyde Bailey & Janet Beatrice Shafik-Bailey v Director-General Department of Natural Resources now known as Department of Energy Climate Change and Water, Water Administration Ministerial Corporation, & State of New South Wales

JUDGMENT

1 HIS HONOUR: The defendants in this cause have made application by notice of motion for an order:

“That the determination of all issues of liability in the proceedings be determined separately from and before the quantification of any damages payable to the plaintiffs by the defendants pursuant to r 28.2 of the Uniform Civil Procedure Rules (UCPR).”

2 The application is opposed by the plaintiffs.

3 Rule 28.2 is in these terms:

“The Court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings.”

4 The overriding purpose of the Civil Procedure Act 2005 (NSW) as expressed in s 56 of the statute is “to facilitate the just, quick and cheap resolution of the real issues in the proceedings”. Nevertheless the discretionary power to order separate determination of an issue, and an application such as the present one, must be approached with caution and it is generally appropriate that all issues should be determined at the one trial. In Idoport Pty Limited v National Australia Bank Limited & Ors [2000] NSWSC 1215 Einstein J conveniently summarised the relevant principles in the following passage when considering an application under Part 31 Rule 2(a) of the former Supreme Court Rules 1970 (NSW), expressed in the same language as r 28.2 of the UCPR:

“[7] Without examining specific cases in relation to the power conferred on the Court in Part 31, Rule 2, I proceed on the basis of the following principles.

(1) The power of the Court to order the separate determination of an issue is a discretionary power which must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 699 at 670 per Young CJ and Jenkinson J.

(2) In exercising the power under Part 31, Rule 2, the Court is now enjoined to give effect to the overriding purpose of the Supreme Court Rules; namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings and cannot be stated in a more confined way: Part 1, Rule 3 (1), (2) Supreme Court Rules.

(3) The Court begins with the proposition that it is ordinarily appropriate that all issues in a proceeding should be disposed of at the one time: Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141 per Giles CJ in Comm D, Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996 per Rolfe J). Accordingly, it is for the party who wishes to have a question separately determined to show that it is desirable for that to occur.

(4) Without being exhaustive, the separate determination of an issue may prove to be an appropriate procedure in at least the following sets of circumstances:

(a) where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy: CBS Productions Pty Ltd v O’Neil [1985] 1 NSWLR 601 at 606 per Kirby P, Dunstan v Simmie & Co Pty Ltd (supra, at 671 per Young CJ and Jenkinson J);

(b) where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation: Tallglen v Pay TV Holdings (supra, at 141 - 142 per Giles CJ in Comm D);

(c) where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of witnesses: CBS Productions Pty Ltd v O’Neil (supra, at 606 per Kirby P), Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Rajski v Carson (1988) 15 NSWLR 84 at 88 per Kirby P and Hope JA.

(5) Conversely, the separate determination of an issue will rarely be an appropriate procedure where:

(a) there are intertwined issues of fact or law between the separated question and the other questions such that the determination of the separate question will not have any substantial effect upon the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation: Law Society of NSW v Bruce (unreported, Supreme Court of NSW, 23 April 1996, per Rolfe J), Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J).

(b) where there is a commonality of witnesses and issues of credit as between the separate issue and other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witness, thus possibly precluding that same judicial officer from again dealing with the matters going to the credit of the common witness in accordance with the decision of the Court of Appeal in Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 441: Story of Sydney Pty Ltd v Ling (unreported, Supreme Court of NSW 15 November 1994, per Rolfe J), Century Medical v THLD [2000] NSWSC 5; (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J).

(c) there is a possibility that the resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings: Story of Sydney Pty Ltd v Ling (supra), Century Medical v THLD (supra).

(6) The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Parramatta Stadium Trust v Civil and Civic Pty Ltd (supra), Century Medical v THLD (supra).”

5 See also Murphy & Ors v Chow [2003] NSWSC 303; ABB Engineering Construction Pty Limited v Freight Rail Corporation [1999] NSWSC 1037; Century Medical v THLD & Ors [2000] NSWSC 5; Webb v South Eastern Sydney Area Health Service & Anor [2003] NSWSC 329; Pioneer Park Pty Limited v ANZ Banking Corp Limited [2005] NSWSC 832.

6 In their joint judgment in Tepko Pty Limted & Ors v The Water Board [2001] HCA 19; (2001) 206 CLR 1 Kirby and Callinan JJ, having noted the criticism of Mason P and Fitzgerald JA in the Court of Appeal as to the course of the trial judge in limiting the issues to be tried went on to say (at paragraphs [168]-[170]):

“[168] ... In Perre v Apand Pty Ltd attention was drawn to difficulties that can be caused when that course is adopted. In light of the experience in this case, what was there said should be restated with emphasis. The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap.

[169] The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties', interests.

[170] Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided.”

7 Gaudron J expressed her agreement with the above observations in her judgment (at paragraph [52]).

8 What had earlier been said by Callinan J in Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at paragraph [436] was the following:

“Care does need to be taken in deciding whether to conduct separate trials of different issues. It sometimes happens that they may turn out to be productive of the disadvantages of delay, extra expense, appeals and uncertainty of outcome which they are intended to avoid. In tort cases in which damage is the gist of the action, it will generally be undesirable to accede to requests for them, or to order them, unless all parties accept that compensable damage has been sustained by the plaintiffs or applicants as the case may be.”

9 In Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd & Anor [2006] NSWSC 1464 a case in which Brereton J made an order for the determination of separate questions, his Honour said at paragraph [6]:

“While much has been said against the resolution of separate questions in Courts of high authority, nonetheless, since the (NSW) Civil Procedure Act 2005, it is my view that the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously.”

10 Later in Commonwealth Bank v Clune & Anor [2008] NSWSC 1125 Johnson J declined to order separate determination of an issue. His Honour referred to the dicta of Brereton J above set out and went on to say (at paragraph [6]):

“Although trial courts will probably be more disposed nowadays to order separate questions than they might have been in the past, it remains the case that separate determination is an exceptional course to be contrasted with the ordinary course of deciding a case in its totality: Street v Luna Park Sydney Pty Limited [2007] NSWSC 697 at [5].”

11 In Street (supra) Brereton J declined an application for the preliminary determination of an issue and having referred to his earlier remarks in Integral Home Loans went on to say at paragraph [5]:

“That said, the considerations referred to by Kirby and Callinan JJ [in Tepko] remain pertinent matters to be taken into account in determining whether what remains the exceptional course of deciding preliminary issues, rather than the ordinary course of deciding a case in its totality, is to be adopted.”

12 I respectfully agree that it remains the position subsequent to the enactment of the Civil Procedure Act 2005 (NSW) and the Rules under that Act that separate determination of an issue is to be regarded as an exceptional course and whether or not that course should be taken will be governed by due consideration of principles which have been expressed in the decisions to which I have referred.

13 Mr Parker referred to a decision of Associate Justice Harrison in Atkinson & Ors v State of New South Wales [2006] NSWSC 152. Her Honour made an order for the separate determination of other questions arising in that case from the quantification of the plaintiffs’ damages. It was submitted by Mr Parker that I should find that decision persuasive on the present application. Atkinson was a bushfire case and there were 31 named plaintiffs representing nine plaintiff groups or farming enterprises. Her Honour in the circumstances of that case perceived it appropriate for the issue of liability for the escape of the fire from a National Park to be determined before a trial on quantification of damages. The facts of course are dissimilar in the present case. Ultimately when considering whether or not to order a separate trial of a discrete issue or discrete issues close regard must be paid to the particular circumstances of the matter presently before the Court. So it is on the present application.

14 With the above principles in mind I turn to consider the nature of the present cause and the issues for determination in it, together with the submissions of counsel.

The nature of the plaintiffs’ claim

15 By their amended statement of claim the plaintiffs, Bruce Clyde Bailey and Janet Beatrice Shafik-Bailey, seek damages against the first defendant, the Director-General, Department of Natural Resources New South Wales, the second defendant, Water Administration Ministerial Corporation, and the third defendant, State of New South Wales. A number of causes of action have been pleaded:

(1) Malicious prosecution of the first plaintiff in proceedings in the Land and Environment Court and subsequently in the Court of Criminal Appeal (see paragraphs 13-19 of the amended statement of claim).

(2) Action for alleged misrepresentations (paragraphs 20-34 of the amended statement of claim).

(3) Action for misconduct in public office by the first and second defendants, and by individuals for whose misconduct it is alleged that the third defendant is responsible. This action is expressed as arising out of events in 2000 and subsequently (paragraphs 35-37 of the amended statement of claim).

(4) Action for unlawful interference in the plaintiffs’ trade and business as farmers and graziers (paragraphs 38-39 of the amended statement of claim).

(5) Action for misconduct in public office arising out of events in January 2004 and subsequently (paragraphs 40-42 of the amended statement of claim).

The damages claimed

16 The claims for damages as expressed in the statement of claim are indeed substantial.

17 As a consequence of the alleged malicious prosecution it is alleged that the construction of a farm dam on land known as “the Strip” at Hazeldene had to be postponed for seven cotton growing seasons and there was the loss of opportunity to harvest water at Hazeldene and or the Strip. It is further alleged there was a significant loss of cotton yield and an alleged loss of faming profits in the period from 2001 to 2006 of more than $4.6 million net. A further loss of faming profits for the year 2006 to 2007 is claimed. Further the plaintiffs seek recovery of legal costs thrown away by reason of criminal proceedings brought against the first plaintiff. The claim for such costs has been quantified in the pleading as being in excess of $175,000.

18 A not dissimilar claim for damages is pleaded in relation to the claim for alleged misrepresentation.

19 In relation to the claim for misconduct by public officers, a similar claim for damages is presented. The same applies to the claim for unlawful interference in the plaintiffs’ trade and business. Again in relation the second of the actions for misconduct in public office, a similar claim for damages is made.

20 The first plaintiff also claims exemplary damages (paragraph 43 of the amended statement of claim).

21 Because there are five causes of action expressed these will have to be discretely examined. So too will damages appropriate to any established tort have to be discretely examined. As Mr Harvey submitted these are relevant consideration on the present application.

22 A very extensive affidavit sworn by the first defendant on 31 March 2010 formed an annexure to the affidavit of Ms Graham sworn on 27 August 2010. I have for the purposes of this application considered its contents. I do not propose here to attempt to summarise the content of that affidavit and I draw on it briefly in outlining the nature of the plaintiffs’ case.

23 The first plaintiff said in his affidavit that he has been carrying on business as a farmer and grazier at “Hazeldene”, Boomi, New South Wales and on a second property some 60 kilometres distant known as “Rosewood West” at Boggabilla, also in New South Wales. The second plaintiff is his sister and the first plaintiff has deposed that his sister has left all management decisions as to the conduct of Hazeldene to him.

24 For reasons expressed in the affidavit the first plaintiff said that he decided early in 2000 to purchase land known as “the Strip” so as to construct a dam there. The first plaintiff’s expressed intention was to use the dam to provide water in order to increase cotton production from the 2000 to 2001 season onwards. The Strip needed to be cleared of vegetation for the purposes of the construction of the dam. Some clearing work proceeded. The first plaintiff determined he should submit an application to the appropriate authority under Part 8 of the Water Act 1912 (NSW) in relation to the proposed construction. The pending application prompted a visit to the Strip by Mr Gardiner, one of the public officers named in the statement of claim. According to the first plaintiff Mr Gardiner took with him on leaving Hazeldene after the inspection of the Strip a form 8 application, and again according to the first plaintiff Mr Gardiner said he would complete the application form for the first plaintiff and have it processed. In his affidavit the first plaintiff claims that he believed that the part 8 application had been properly lodged and would be processed by the department “under its normal processes and procedures”. It is the plaintiffs’ case that the application form was not duly lodged and processed. The first plaintiff expressed reasons for this in his affidavit (paragraphs 72-75). For reasons the first plaintiff attributed to the defendants, the part 8 application form was not appropriately lodged until January 2004, and approval was not granted until 31 March 2006 by which time, the plaintiffs contend, the opportunity that the construction of the dam would have presented had passed.

25 The first plaintiff referred in the affidavit to a visit to Hazeldene by Mr Gardiner and Mr O’Brien on 31 July 2000 when he was asked why clearing had been undertaken without departmental approval. The first plaintiff responded by referring to some legal advice that he had obtained.

26 It was the clearing, the subject of this visit, which prompted prosecution of the first plaintiff in the Land and Environment Court for the alleged breach of s 21(2) of the Native Vegetation Conservation Act 1997 (NSW). In turn the failed prosecution led to the subsequent case stated in the Court of Criminal Appeal: Director-General of the Department of Land and Water Conservation v Bailey [2003] NSWLEC 160; and [2003] NSWCCA 361. The failure of the prosecution at first instance was followed by a favourable outcome for the first plaintiff on the case stated to the Court of Criminal Appeal.

27 The failed prosecution forms the core of the plaintiffs’ cause for malicious prosecution.

28 In his comprehensive written submissions Mr Harvey analysed the issues that determined the result of the prosecution. Mr Harvey also expressed the reasons for the outcome in the case stated before the Court of Criminal Appeal. Mr Harvey then proceeded to set out the elements necessarily to be proved in order to succeed in a claim for malicious prosecution. Reference was made to Davis v Gell [1924] HCA 56; (1924) 35 CLR 275 and to the dicta of Isaacs ACJ at 282, stating those essential elements. Reference was also made to what was said in D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 214 ALR 92 in the judgment of McHugh J at para [99], where his Honour said:

“Persons who institute prosecutions owe no actionable duty to the defendant to take reasonable care in launching the prosecution. A prosecutor can be sued for the damage to the liberty and reputation of the defendant only when the prosecutor acted maliciously and without reasonable and probable cause.”

29 Absence of reasonable and probable cause and malice are, it was submitted, two distinct ingredients in the tort, and Mr Harvey went on to submit the evidence that has been served by the plaintiff does not establish these elements.

30 Having noted those submissions, I must state that it is not possible on the present application to determine the merits on the issue of liability. This is not an application for summary dismissal of the plaintiffs’ proceedings. The merits on this and the other causes pleaded must be determined at trial.

31 In his written submissions Mr Harvey has also conducted an analysis of the other causes of action pleaded and what he contends to be short comings facing the plaintiffs in seeking to establish the necessary elements of those other causes of action. Yet again Mr Harvey’s submissions may prevail but this can only be determined after all the relevant evidence has been presented and tested at trial, and has been the subject of findings of fact by the trial judge.

The competing submissions

32 I have addressed above certain of the submissions of Mr Harvey which go to the perceived weaknesses of the plaintiffs’ case. It seems to me that those submissions cannot be determinative of the outcome of this application.

33 Mr Harvey went on however to submit that even if the evidence introduced by the plaintiffs at trial provides a basis for cogent argument on matters of fact, the determination of issues as to liability “untrammelled by damages issues is likely to, at the very least, lower the real forensic issues considerably”.

34 In considering this submission and the application brought by the defendant generally it is essential to determine if there can be an effective and appropriate severance of the case on liability and the case on damages.

35 In submitting that there can be an effective and useful severance Mr Harvey argued that the evidence on damages relied upon by the plaintiff is to be found in the report of Mr Cowell, an expert agronomist. That report is in evidence before me as Exhibit JG5 to the affidavit of Ms Graham. It is submitted that Mr Cowell’s report confirms that there is no significant overlap between liability and damages. This submission calls for a close review of Mr Cowell’s report.

36 As to liability, Mr Harvey submitted that the focus is on the defendant’s conduct whereas the focus for the issue of damages is on the practices and economics of cotton growing. There are, he submitted, no readily identifiable intertwined issues of fact and law such as would render a separate trial on the issue of liability inappropriate.

37 Moreover, the issues on damages are complex and can be expected to occupy a considerable period of court sitting time. Mr Harvey referred to an estimate given by Mr King at an earlier point of time in this litigation that damages would take five days of hearing time. (I observe that Mr King was more optimistic on this application, asserting the hearing as to damages would take only 1 day, but this revised estimate seems to me to be unduly optimistic.)

38 A letter from the defendants’ solicitor to the plaintiffs’ solicitor dated 22 June 2010, Exhibit D to the affidavit of Bruce Cantrill sworn 28 June 2010, advanced considerations as to why there ought to be a severance of the liability issue and Mr Harvey adopted the expression of these perceived advantages in his submissions. The advantages as stated were these:

“if the defendants are successful on liability then clearly no damages issues would have to be determined, thus shortening the length of the proceedings by about 50%

substantial savings in relation to costs would thus eventuate for all parties

the resources of the parties would be directed towards the liability part of the case, untrammelled by damages issues

the Court could determine issues of liability in a factually confined case unimpeded by the weight of detail of expert damages evidence. This would substantially lessen the burden of the trial Judge

if it becomes necessary to consider damages issue, these issues could be more clearly and directly considered in the light of the liability findings. Expert evidence could be corrected to take into account the factual evidence findings; the court’s time will be used more efficiently if liability is determined and, in accordance with those findings, the experts on quantum are able to agree on the methodology for the calculation of heads of damages

should the determination on liability favour the plaintiffs, it may be appropriate for the quantum issues to be referred out to a suitable referee.”

39 Mr King submitted that the application for a separate trial of the issue of liability ought not be granted because the defendants by their conduct have put the plaintiffs to considerable costs in preparing for trial on damages. This is because on their application the Registrar made directions on 30 November 2009 requiring that the plaintiffs file and serve their evidence on damages by 26 March 2010 and file and serve their evidentiary statements by that date. The defendants waited for these directions to be addressed before filing the notice of motion presently before the Court on 29 June 2010.

40 The sequence of events to which this submission attracts attention does not persuade me that because the plaintiffs have incurred expense on the issue of damages pursuant to the Court’s directions this ought to bar the present application.

41 Mr King next submitted that when the evidence of the plaintiff and the evidence of Mr Cowell is considered it becomes apparent that there is an interlocking of the evidence on liability and of damages. Further, he submitted, the credit of the plaintiff is going to be very much in issue in this case both as to the issue of liability and as to the issue of damages. The opinions of Mr Cowell as expressed in his report depend on the acceptance of assumptions as to the facts and those assumptions are largely based upon what the plaintiff has told him.

42 Consideration of these submissions advanced by Mr King warrants close attention to the statement of the plaintiff to which I have previously referred and also close attention to the report of Mr Cowell.

43 I am satisfied by, upon reflection on the issues arising under the amended statement of claim and upon reading the plaintiffs’ statement that it is highly likely that the credit of the plaintiff will become an issue on this trial. I consider it likely that the first plaintiff’s credit will be an important consideration not only as to the issue of liability but also as to the issue of damages.

44 As to liability the plaintiff’s evidence will be of central importance to proof of each of the causes of action pleaded.

45 Turning to the issue of damages, it seems to me that the first plaintiff’s evidence will also be of central importance.

46 As asserted in the amended statement of claim and in the first plaintiff’s affidavit, the plaintiffs’ case is that had the dam been constructed at the time the first plaintiff planned for it to be constructed it would have had favourable consequences for the growing season 2000 to 2001, and seasons subsequent to that. Because of the time it took for the necessary approval to be obtained, and by the time it would have been open to him to construct the dam, the circumstances had changed. It was no longer economically sound to go ahead and his evidence was that even if he had been able to have the dam built prior to January 2004 he could have harvested 4,000 mega-litres of water in January 2004 when there was a flood in the Moree Shire Plains area (paragraph 153). In paragraphs 168 to 173 of his affidavit the first plaintiff set out the reasons for his decision to build the dam which reasons underlie the claim for economic loss. The first plaintiff’s affidavit addresses construction costs of the contemplated dam and his financial capacity to build it. The plaintiff’s evidence would be directed to rainfall for the period 2000 to 2006. It is to be acknowledged that public records only go so far and that rainfall can vary significantly from one property to another. Evidence that the first plaintiff could give as to rainfall would be very important to his case.

47 As paragraph 187 to 201 of the affidavit disclose, the first plaintiff would expect to give evidence of much importance to his case as to the opportunities for cotton production which on his case were lost and his evidence would be important to quantify the cotton production claimed to be lost.

48 The first plaintiff could also be expected to give the relevant evidence as to the legal costs incurred in the proceedings brought against him, although his costs could probably be established other than through the evidence of the plaintiff and I do not consider it likely that any evidence he could give on this issue would be of central importance.

49 Turning to the evidence that Mr Cowell might be expected to give, as indicated by his report, Exhibit BRC1, it is evident that the report and the opinions expressed in it are based upon assumptions. Those assumptions are set out in section 2 to the report: 2.1 to 2.12. These are assumptions; the factual basis for them will depend to a significant extent upon evidence the first plaintiff could be expected to give.

50 Mr Cowell deals in paragraphs 2.13 to 2.15 with the construction costs for the dam and the matters set out as to construction costs are dependant upon the first plaintiff to establish the facts.

51 Mr Cowell deals with the rainfall from 2000 to 2006 in his report at 2.16 to 2.23 and as to this the evidence that Mr Cowell can give is to be married to the evidence that the first plaintiff can give.

52 Mr Cowell’s report deals with cotton production and the infrastructure of costs at 2.24 to 2.38. A reading of this section of Mr Cowell’s report again discloses that the first plaintiff’s evidence will assume importance on this topic.

53 When one considers the matters addressed under the heading “Background of claim” in paragraphs 3.1 to 3.19 once again the first plaintiff’s evidence will assume importance in complementing the evidence Mr Cowell may be expected to give.

54 Mr Cowell’s report gives details concerning the properties Hazeldene and Rosewood West at section 6 of the report. The first plaintiff would have relevant evidence to give directed to the proof of the matters in this section. Similarly as to section 7 of the report headed “Water pumping opportunities”.

55 In section 8 “Details of actual and potential Tarpaulin Creek pumping events”, the first plaintiff’s diary notes are identified as a source of matters set out and it is to be anticipated that the first plaintiff would be in a position to give relevant evidence as to the matters raised in this section of the expert’s evidence.

56 Section 9 of the report is headed “Irrigation water allocations”. I do not perceive this to be a section of the report which would depend to any real extent on evidence that the first plaintiff could give.

57 Section 10 of the report deals with “Actual cotton planting 2000 to 2001 – 2006 to 2007 seasons”. It is to be expected that the first plaintiff would be in a position to give relevant evidence as to the matters here addressed in section 10.2.4. Mr Cowell expressly acknowledges reliance on information supplied by the first plaintiff that there was additional water left over at the time indicated.

58 Section 11 of the report addresses “Water supplementation” data, and “yield data incrementation” for the growing seasons 2000 to 2001, through to 2006 to 2007. The first plaintiff could be expected to give relevant evidence here although there are other sources disclosed as underpinning the expert’s assumptions.

59 Mr Cowell’s report in section 13 addresses “Determination of input costs” and section 14 addresses “Calculation of loss”. I do not anticipate that the plaintiff would be required to give central evidence to the matters addressed in these sections.

60 It is to be noted that in his conclusions, Mr Cowell calculated a net potential loss of profit for the years addressed because of the lack of the contemplated dam in a figure in excess of $5 million dollars inclusive of interest.

61 Having considered the way the plaintiffs’ claim has been pleaded, and having considered the affidavit of the first plaintiff and the report of Mr Cowell, I have come to the conclusion as indicated above that the first plaintiff is likely to give evidence of very real importance both as to liability and as to damages. This being so it would in my opinion be most undesirable for a trial limited to the issue of liability to take place.

62 In Pioneer Park Pty Limited (supra), the circumstance that a witness was to give evidence critical to both the issue of liability and the issue of damages resulted on the refusal of the application for a limited trial. In that case Einstein J said at para [7]:

“Having closely examined the respective submissions on the Pioneer Parties applications for separate determination I have come to the clear conclusion that in these sets of proceedings the proper and principled exercise of the relevant discretion is to reject the application for a Part 28 separate order regime. By far and away the most significant factor justifying the propriety of taking this approach is the fact that the evidence of Mr Carpenter is likely to be critical both as to liability and as to damages/quantum in a number of ways. For the same reason the application for initial determination (outside of a Part 28 regime) of issues on liability is rejected. A Judge may in such a scenario be faced with having accepted the credit of witness A on tranche 1, yet be forced on tranche 2 to hold that the witness was unreliable, casting grave doubt on the liability finding. The hearing would abort.”

Similar considerations arise in the present case.

63 I add that on my analysis of the central importance of the evidence of the first plaintiff both as to liability and damages the remarks in Tepko and in particular in paragraphs [169] and [170] of the judgment of Kirby and Callinan JJ are very much in point.

64 For the reasons stated I do not consider that a trial limited to liability would be appropriate in this case and I therefore conclude the orders sought by the defendants should be refused and the notice of motion should be dismissed.

65 Costs should follow the event.

66 When the matter was argued before me on 30 August 2010 I indicated that I saw no reason why there should not be put in place a timetable addressing evidence to be presented by the defendants. I invited the parties to try to reach an agreement as to a timetable. Communications received by my Associate since the matter was heard indicate that agreement has not been reached.

67 What is now required, having regard to the decision reached on this application is a timetable that addresses both liability and damages. I will list the matter for directions before me on Friday 10 September 2010 at 10am. In the event that agreement can be reached as to a timetable before that date, short minutes may be presented to my Associate and I will make the appropriate orders in Chambers. Failing agreement, I will hear submissions on the date I have appointed.

Formal orders

(1) Order that the defendants’ notice of motion is dismissed.

(2) Order that the defendants pay the plaintiffs’ costs of the application.

(3) The matter is to be listed for directions before me on 10 September 2010 at 10am absent agreement prior to that time as to an appropriate timetable addressing the service of evidence.

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AMENDMENTS:


06/09/2010 - Added Judgment date to cover page - Paragraph(s) Cover page


LAST UPDATED:
6 September 2010