SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO: | |
Trial Division | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 15 December 2010 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 9 December 2010 |
JUDGE: | Applegarth J |
ORDERS: | 1.Pursuant to r 203, the issues between the defendants and the third parties be tried separately and after the trial of the proceeding between the plaintiff and the defendants. 2.Pursuant to r 468 the trial of the proceeding between the plaintiff and the defendants be expedited, placed on the list of matters awaiting allocation of trial dates and given priority in the allocation of trial dates. 3.The legal representatives for the parties confer with a view to submitting draft directions for the trial of the proceeding between the plaintiff and the defendant, including directions to the effect that the third parties will be bound by findings made in the determination of that proceeding. 4.The matter be listed for review on a date to be fixed. |
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – Trial – Other matters – Separate trials – where the plaintiff seeks payment for the sale of its interest in a joint venture – where there are protracted third party proceedings which involve a joint-venture dispute – where the plaintiff’s sole director and principal witness has a life-threatening illness and is likely to suffer a recurrence of a brain tumour, resulting in his being incapacitated to give evidence – where the proceeding between the plaintiff and the defendants and the third party proceedings are estimated to require 27 days to be heard together – whether the third party proceedings should be tried separately to the proceeding between the plaintiff and the defendants – whether the trial between the plaintiff and the defendants should be expedited – alternatively, whether the evidence and cross-examination of the plaintiff’s principal witness should be taken in advance of the trial |
CASES | Barclays Bank v Tom [1923] 1 KB 221, cited Godfrey v Nominal Defendant [1964] NSWR 214, considered New World Oil and Developments Pty Ltd v 163 Clarence Street Pty Ltd, unreported, 6 March 1993, cited Port Pirie City and District Council v Leenders & Partners Pty Ltd [2001] SASC 208, applied |
LEGISLATION | Uniform Civil Procedure Rules 1999 (Qld), rr 5, 203(2), 468 |
COUNSEL: | C J Fitzpatrick for the applicant/plaintiff P L O'Shea SC for the respondent/first and second defendants R C Schulte for the respondent/third parties |
SOLICITORS: | Broadley Rees Hogan for the applicant/plaintiff Frews Solicitors for the respondent/ first and second defendants Clayton Utz for the respondent/third parties |
Introduction
[1] The plaintiff seeks payment for the sale of its interest in a joint venture. Its proceeding against the purchaser (the first defendant) and three guarantors (the second defendants) is relatively simple.
[2] The defendants brought a third party claim. They claim that the 2002 sale agreement was induced by misleading and deceptive conduct on the part of the second third party (Williams). They do not allege that the representations were made on behalf of the plaintiff. Instead, they allege that Williams made these representations on behalf of the other party to the original joint venture, the second third party (Moonbrook). The first defendant (Great Northern) claims substantial damages against Moonbrook and Williams, including alleged capital losses of almost $3 million. The defendants also claim to be indemnified against any liability which they may have to the plaintiff. In addition, they seek contribution from Moonbrook.
[3] The third party proceedings have been protracted and involve numerous issues. The third parties deny any misleading conduct that induced Great Northern to enter into the joint venture agreement or the sale agreement. The third parties counter-claim for various substantial sums. These include unpaid contributions to the joint venture, unpaid sales and marketing costs, a claim for breach of sale obligations under the joint venture, damages for breach of other obligations and compensation for breach of fiduciary duty. The joint venture vehicle, the third defendant (Discovery Beach), has been involved in a number of disputes with the builder of the units at the site, Northbuild Construction Pty Ltd. A substantial part of the third party’s counter-claim relates to legal costs associated in dealing with the Northbuild disputes. The first and second defendants allege that the third parties have mismanaged the Northbuild disputes. Long-running disputes over disclosure between the defendants and the third parties continue.
[4] In short, the third party proceedings involve a full-blown joint-venture dispute, the litigation of which has delayed the relatively simple claim of the plaintiff to be paid by the defendants.
[5] The plaintiff’s sole director and principal witness, Mr Jaffe, has an incurable and inevitably terminal condition. He was diagnosed in December 2006 with an aggressive brain tumour in the frontal lobe. It was removed by surgery in December 2006, following which he underwent radiotherapy. His condition is currently managed by regular surveillance by medical specialists and there is no current evidence of a recurrence of the tumour. However, the expert evidence is that the tumour will recur and the average time to recurrence is five to seven years from the date of diagnosis. This is the median survival duration. As time passes, the prospects of a recurrence increase, and there are two possible scenarios:
(a)provided the recurrence is detected early, further surgery and chemotherapy are options. However, Mr Jaffe is likely to succumb to the recurrent tumour within 6 to 12 months;
(b)if the tumour recurs aggressively, and it is not possible to undertake further surgery and administer chemotherapy, Mr Jaffe is likely to succumb to the recurrent tumour within 1 to 2 months.
[6] By reason of its position within the frontal lobe region, any new tumour and necessary therapeutic intervention is very likely to adversely affect Mr Jaffe’s cognitive functioning. Naturally, the quality of Mr Jaffe’s life will be greatly enhanced by an early resolution of his company’s claim against the defendants. Based on the second scenario postulated by Mr Jaffe’s oncologist, the plaintiff could be confronted, on very short notice, with either the loss of, or the incapacity of, its chief witness.
[7] The plaintiff applies for an order that the third party proceedings be tried separately to the proceeding between the plaintiff and the defendants. It also applies pursuant to r 468 of the Uniform Civil Procedure Rules 1999 that the trial of this proceeding be expedited.
[8] In the alternative it seeks an order that the evidence and cross-examination of Mr Jaffe be taken in advance of the trial of this proceeding. The respondents to the application consent to such an order. However, for reasons given by the plaintiff, which I accept, this alternative course has a number of unsatisfactory aspects. The plaintiff submits that such a course:
(a)requires the allocation of one judge to take Mr Jaffe’s testimony and also to conduct the residual proceeding;
(b)denies the plaintiff of the prospect of final relief until determination of the residual trial with a probable loss of control of the proceeding with the plaintiff being “sidelined” by the scale and complexity of the joint venture fight; and
(c)will, undoubtedly, occasion the plaintiff, and probably the other parties, added expense;
(d)may result in a forensic advantage to the defendants in hearing the plaintiff’s case in advance.
[9] The respondents oppose an order that the principal proceeding be tried in advance of the third party proceedings.
[10] The third parties have not sought leave to defend the plaintiff’s claim against the defendants. They remain content for the defendants to resist the plaintiff’s claim. Their direct interest is in the litigation of the numerous separate issues that arise in the third party proceedings. At the hearing of this application counsel for the third party indicated that if an order was made for a separate trial of the proceeding between the plaintiff and the defendants then the third parties would not seek to participate in the litigation of those issues and would agree to be bound by findings made in that proceeding. This addresses a significant issue, since one of the purposes of third party proceedings is to avoid the possibility of conflicting findings and conflicting verdicts.[1]
The parties’ submissions
[11] Before addressing the proceedings in greater detail and authorities about the circumstances in which an order will be made for the separate trial of third party proceedings, I will identify the principal submissions of the parties on this application.
[12] The plaintiff submits that the state of health of Mr Jaffe is an exceptional circumstance that makes it in the interests of justice to order separate trials. In addition, it submits that the objects which underlie third party procedures are in this case either non-existent, or so tenuous in their extent, as to justify an order for separate trials. The circumstances that are submitted to justify a separate trial include:
(a)no common questions arise in the principal proceeding and the third party proceeding;
(b)although it is true that, in the event of a separation, multiple proceedings will ensue, those proceedings are so vastly different in nature that they should not, arguably, have been joined in the first place;
(c)the delay, expense and injustice to the plaintiff as well as the deleterious impact on Mr Jaffe’s residual quality of life through their continued involvement in the third party proceedings are not outweighed by the expense involved in independent actions.
[13] The defendants submit that a common issue in the principal proceeding and the third party proceeding is the construction cost of the project. The plaintiff submits that upon proper consideration of the issues raised in the pleadings, including the terms of the sale agreement, the actual construction costs are not a real issue in the proceedings between the plaintiff and the defendants. It submits, in any event, that the issue can and should be relatively simple to litigate, and estimates that it would only need to cross-examine the defendants’ expert about construction costs for 20 minutes.
[14] The defendants also submit that an issue in the case between the plaintiff and the defendants is the authority of Mr Williams to act as agent for the first and second defendants. This raises the fact that Mr Williams would need to be called as a witness in the plaintiff’s case and called again at the later, separate trial of the third party proceedings. The defendants also submit that it would be necessary to call evidence from the second defendants. The defendants and the third parties raise concerns that if the proceedings are separately tried these witnesses will need to be recalled, and this is unsatisfactory, particularly where issues of credit are involved. The third parties submit that:
(a)if the judge hearing the plaintiff’s claim makes adverse findings in relation to the credibility of a witness this has the potential to create problems in relation to the judge continuing to hear the third party claims;
(b)if a different judge is allocated then that may not be the most economical use of the Court’s resources;
(c)there is a real risk that a fragmented trial could result in a situation where the Court is denied the opportunity to perceive the full picture relevant to determination of all issues before coming to rule upon them.
[15] A principal basis for the defendants’ opposition to an order for separate trials is that they are exposed to the possibility that if they are found liable to the plaintiff, the separate trial of the principal proceedings will result in an hiatus when they are subject to a judgment for which they seek indemnity from the third parties.
The principal proceedings
[16] In August 2002 the plaintiff (Portland) entered into a joint venture agreement with Moonbrook relating to the acquisition and development of land at Marcoola on the Sunshine Coast (“the Surfair project”). Portland and Moonbrook each had a 50 per cent interest in the joint venture. Discovery Beach owned the land on which the joint venture redevelopment was constructed and was, and still is, the agent of the joint venturers to hold the joint venture assets.
[17] Great Northern entered a sale contract dated 27 September 2002 by which it purchased Portland’s 50 per cent interest in the joint venture for a consideration known as the Portland Units. The second defendants guaranteed Great Northern’s payment obligations under the sale contract. Under the sale contract Great Northern was to pay to Portland the “purchase consideration”, namely two units (units 12 and 6) on level 5 of the proposed North Tower at Surfair. The sale contract provided that, on practical completion of the North Tower, Great Northern was to cause Discovery Beach to transfer the two units to Portland. If practical completion of the North Tower did not occur within two years of the sale contract (which also made provision for Portland to extend the date for practical completion of the Portland units) Great Northern was to pay Portland $700,000 by bank cheque.
[18] Clause 2.3(b) of the sale contract provided that the delivery of the Portland units or the purchase price was subject to Great Northern or any company of which Great Northern was a shareholder “successfully negotiating with the builder to construct the project for a total sum of $26,000,000 or less.” Clause 2.3(c) provided that if the building contract for the project exceeded $26 million then Great Northern had the choice of continuing with the development or:
(a)withdrawing from the project and selling its share to Moonbrook; or
(b)selling its share to a third party, provided that the purchase price was paid to Portland.
Great Northern did not pursue either of these alternatives, and chose to continue with the development.
[19] Portland contends that practical completion occurred on 5 November 2004 and that between 27 September 2004 (two years after the sale contract) and practical completion, it extended the date for practical completion of the Portland units. In essence, Portland contends that Great Northern was obliged to complete on and from 5 November 2004 and that the guarantors are liable to Portland for $1,565,000 (being the value of the Portland units in November 2004) plus interest at 15 per cent per annum, as provided for in the sale contract.
[20] The defendants defend Portland’s claim principally on the grounds that:
(a)because Portland undertook and paid for improvements totalling $150,000.00 to the Portland Units, those Units are no longer as described in the Sale Contract which is, thereby, “frustrated and terminated automatically”;
(b)as Great Northern and Discovery Beach did not succeed in negotiating the Building Contract for $26 million or less, Great Northern has no obligation to transfer the Portland Units or pay monies in lieu; and
(c)because practical completion of the North Tower was not achieved by
22 September 2004, and since Portland did not give written notice of extension of practical completion of the Portland Units, Great Northern is not obliged to transfer the Units.
The third party proceedings
[21] The defendants alleged that the sale agreement was entered into in reliance upon misleading and deceptive conduct on the part of Mr Williams as agent for Moonbrook. They claim that by reason of Moonbrook’s contravention of s 52 of the Trade Practices Act they have suffered loss and damage including:
(a)liability to Portland, should it be established at trial the defendants are liable to Portland; and
(b)amounts contributed to the project in the amount of approximately $3 million in respect of which there is little prospect of any return.
They also claim for a loss of opportunity to utilise time, funds and expertise expended during the past five years on the project on other income-earning opportunities. Great Northern also invokes a clause of the deed entered into between it and Moonbrook to claim contribution from Moonbrook.
[22] As earlier noted, the third parties deny any contravention of the Trade Practices Act and have filed a counter-claim in which they claim for:
(a)$2,193,577.12 in unpaid contributions due to the joint venture from the first defendant (paragraph 6);
(b)$313,053.10 in unpaid sales and marketing costs (paragraphs 9 and 10);
(c)$1,241,336.40 for breach by the first defendant of its sale obligations under the joint venture (paragraph 19);
(d)further damages of $326,514.09 for breach of Great Northern’s obligations to sell the south east beach houses (paragraph 21);
(e)$561,721.70 for breach of Great Northern’s obligations to sell the north east beach houses (paragraph 23);
(f)$160,203.85 for costs thrown away in the joint venture (paragraph 28);
(g)compensation of $2,193,577.12 and $160,203.85 for breach of fiduciary duty.
[23] The defendants allege that the third parties have mismanaged the Northbuild disputes, such that Great Northern does not have to contribute funds to Discovery Beach to pay the legal costs of dealing with the Northbuild disputes.
Summary of issues in dispute
[24] In a joint report made pursuant to an order made by me in the Supervised Case List the parties identified issues in dispute as between the plaintiff and the defendants, and as between the defendants and the third parties. The issues in dispute between the plaintiff and the defendants were said to be:
An issue of interpretation of the sale agreement will need to be determined. Clause 2.3(b) made Great Northern’s obligations to deliver the Portland Units or the purchase price conditional upon the successful negotiation with the builder to construct the project for a total sum of $26 million or less. Great Northern apparently urges an interpretation of clause 2.3 which is said to depend upon the admission of extrinsic evidence. In any event, the defendants contend that construction costs have in fact exceeded $26 million. Portland pleads that if this is the case then pursuant to clauses 2.3(c) and (d) Great Northern chose to continue with the development and remains bound to pay.
[25] The issues in dispute between the defendants and the third parties are more complex. The joint report submitted by the parties summarise them as follows:
The length of the trial of the proceedings
[26] On 19 November 2010 at a review in the Supervised Case List and prior to the filing of the present application, I directed the parties to confer with a view to estimating the duration of the trial, and the witnesses who would be called at it. The resulting document is a Schedule of Witnesses (Exhibit 1) which lists witnesses and the expected duration of their evidence in chief and cross-examination. It also estimates opening submissions and closing addresses. It was prepared on the basis of the proceeding between the plaintiff and the defendants and the third party proceedings being heard at the same time. The grand total of openings, evidence and submissions is 121 hours or almost 27 hearing days.
[27] There is little hope of a trial of this duration being listed in 2011. Trial dates for the first half of 2011 have mostly been allocated, including a number of long trials from the Supervised Case List. The allocation of long trials in the second half of the year is dependent upon available judicial resources. I understand that substantial judicial time will be required in the second half of 2011 for lengthy Commonwealth criminal trials as well as the Court’s usual workload. A number of long trials from the Supervised Case List that are ready for trial or presently are almost ready for trial will compete for available judicial resources in the second half of 2011. As presently advised, it is most unlikely that a trial of these proceedings, lasting possibly 27 days, will be able to be accommodated in 2011.
[28] There is a much better prospect that a trial of more limited duration will be able to be accommodated in 2011, especially if it has an order for expedition.
[29] It is impossible to be precise about the likely length of the trial of the principal proceeding between the plaintiff and the defendants. It is possible to conclude that a large part of the expected evidence in chief and cross-examination of the second defendants and Mr Williams that is included in Exhibit 1 would not occur, since it is acknowledged that most of their evidence relates to issues that arise only in the third party proceedings. The early determination of a question of law concerning the construction of the sale contract may further reduce the length of the evidence of Mr Jaffe and the second defendants in the principal proceeding. However, even assuming that the trial judge permits evidence to be given of matters extrinsic to the contract that are alleged to be admissible as an aid to its interpretation, there is a reasonable prospect that the trial between the plaintiff and the defendants will be concluded in about five days.
The alternative of having Mr Jaffe give his evidence in isolation
[30] The course of having the evidence and cross-examination of Mr Jaffe taken in advance of the trial of both proceedings is unsatisfactory for the reasons given by the plaintiff. After his evidence was given, the parties and Mr Jaffe would be required to await the resumption of the hearing and the determination of the combined proceedings. A substantial gap between the evidence given by Mr Jaffe and other evidence relating to the issues that his evidence addresses is unsatisfactory. It may be to the forensic disadvantage of a party. The judge who heard Mr Jaffe’s testimony would be required to await the resumption of the trial and this is not an unsatisfactory way in which to resolve issues between the plaintiffs and the defendants. The litigation between the plaintiff and the defendants would remain unresolved, possibly for a substantial time. Such a delay is unsatisfactory, given the objective of civil procedure, namely facilitating the “just and expeditious resolution” of the real issues in civil proceedings at a minimum of expense.[2] The delayed resolution of the plaintiff’s claim against the defendants would be highly unsatisfactory to the plaintiff and the quality of Mr Jaffe’s life.
Principles in relation to a separate trial of the principal proceeding
[31] The objectives of third party procedure have been stated on many occasions. The essential objective is that the same tribunal should, at one and the same time, determine the rights and liabilities of all the parties concerned.[3] The procedure aims:
(a)to prevent the same question being twice tried with possibly different results;
(b)to prevent multiplicity of actions and to enable the Court to settle disputes between all parties to them in one action;
(c)to save the expense involved in independent actions.
The plaintiff may not be concerned with the question of whether the defendant has a remedy against a third party. The defendant, however, has an interest in avoiding the disadvantage that may arise if, having fought the case against the plaintiff and lost, it then has to fight the case against the third party, possibly on different materials, and with the risk that a different result might be arrived at. As Scrutton LJ observed in Barclays Bank v Tom:[4]
“The object of the third party procedure is then in the first place to get the third party bound by the decision between the plaintiff and the defendant. In the next place it is directed to getting the question between the defendant and the third party decided as soon as possible after the decision between the plaintiff and the defendant, so that the defendant may not be in a position as having to wait a considerable time before he establishes his right of indemnity against the third party, while all the time the plaintiff is enforcing his judgment against the defendant.”
[32] These policies are reflected in r 203(2), which provides:
“At the trial, the issues between the defendant who included the third party and the third party must be tried concurrently with the issues between the plaintiff and the defendant, unless the court otherwise orders.”
The reasons for such a rule were summarised by Lander J in Port Pirie City & District Council v Leenders & Partners Pty Ltd:[5]
“First, a trial which involves all parties simultaneously is the most cost effective way of deciding competing rights. Secondly, all parties obtain a decision at the same time. There is no hiatus when one party is subject to a judgment but cannot prosecute a claim for contribution or indemnity. The plaintiff in this very case is an example of a party prejudiced by a claim proceeding without all parties, who might be called upon to contribute, being present. Thirdly, it avoids the possibility of conflicting findings and conflicting verdicts. It is inimical to the administration of justice for the Court to be called upon to consider the same factual circumstances twice. One court may be presented with different material to another or reach different views on the credibility or reliability of witnesses with the result that different findings of fact are made, and different and inconsistent verdicts reached.”
[33] It is sometimes said that exceptional circumstances must be shown before separate trials will be ordered.[6] In Godfrey v Nominal Defendant the New South Wales Court of Appeal stated:
“[T]here may be, in particular cases, countervailing considerations sufficiently compelling to outweigh the advantages of third party procedure to which Scrutton LJ [in Barclays Bank v Tom] referred.”[7]
In Port Pirie Lander J did not conclude that a rule existed that required a party to establish “exceptional circumstances” before an order for the separate trial of third party proceedings is made, and stated:
“[45]Generally, for the reasons I have given, third party proceedings will be held at the same time as the primary proceedings. However, there will be some cases where it is inappropriate for the third party proceedings to be heard at the same time as the primary proceedings. It is not possible to say that those circumstances will always have to be exceptional. Those circumstances will give rise to separate trials when it is in the interests of justice so to do.
[46] In my opinion, the test in all matters of procedure is whether the procedure provided for in the rule is appropriate for the particular matter then before the court. Usually the procedure provided for in the rules will be appropriate for all matters. There will, however, be times when the procedure provided for in the rules is not appropriate. That is because the procedure, if enforced rigorously, will give rise to an injustice. The rules are not to be applied so as to create an injustice. The purpose of the rules is to provide a procedure whereby parties can obtain justice: Jackamurra v Krakauer (1998) 72 ALJR 819 at 825. They cannot be used as an instrument of oppression.
[47] The sole test, in an application of this kind, in my opinion, is whether it would be just in the circumstances before the court to order separate trials.”
[34] I respectfully adopt that view. I also respectfully adopt the views expressed by Black CJ (with whom Jenkinson and Gummow JJ agreed) who stated that it would be an error to simply say that “normally” claims and cross-claims arising out of the same matter will be heard together, and that the authorities put the position higher than that.[8]
[35] The plaintiff in this matter is prepared to have the application decided on the basis that the power to order third party proceedings to be heard and determined separately should be exercised only in exceptional circumstances. I am prepared to apply that test. However, I consider that the governing test is whether the interests of justice require such an order and that, given the objective of third party procedure, compelling circumstances are required to outweigh its advantages.
Do exceptional circumstances exist to justify separate trials?
[36] An order for a separate trial exposes the defendants to the possibility of being found liable to the plaintiff but having to await the hearing and determination of its claim for an indemnity. Avoiding such a hiatus is one of the objectives of third party proceedings. If separate trials are ordered it may be possible to ameliorate any injustice to the defendants in this regard if the plaintiff succeeds in its claims against the defendants. The defendants might apply at that stage for a stay on enforcement of the judgment. Whether such a stay was ordered would depend upon the circumstances at the time, including the extent to which the defendants caused or contributed to any unnecessary delay in having the third party proceedings ready for trial. I do not consider that it is appropriate to order as a condition of granting an order for a separate trial that any judgment obtained by the plaintiff be stayed pending the hearing and determination of the third party proceedings. If the plaintiff succeeds against the defendants then the issue of whether it is appropriate to grant a stay, and the terms upon which any stay was granted, would be matters for determination at the time. Presently, I take account of the distinct possibility that a stay, which would have the effect of depriving the plaintiff of the fruits of its judgment, will not be ordered, and that there will be a hiatus between any judgment given to the plaintiff and the hearing and determination of the defendants’ claim to an indemnity.
[37] I take account of the fact that the defendants’ claim to an indemnity in respect of any judgment obtained by the plaintiff is only one part of the third party proceedings.
[38] I accept the submissions made by the defendants and the third parties that it is undesirable to have certain witnesses called in the proceeding between the plaintiff and the defendant and then recalled to give further evidence at the trial of the third party proceedings. It may not be possible to have the same judge hear the trial of both proceedings. However, I do not consider that the risk of some fragmentation, inconvenience and increased costs is sufficient to decline the order sought by the plaintiff.
[39] The third party has indicated that it will be bound by the determination of issues between the plaintiff and the defendants at a separate trial of principal proceedings.
[40] The defendants correctly submit that the fact that the plaintiff has no interest in the litigation of issues between the defendants and the third parties is not a sufficient reason to order separate trials. Often a plaintiff will have no interest in issues in the third party proceedings, yet they are heard at the same time as the principal proceedings.
[41] I am required to consider potential injustice to the defendants and to a lesser extent to the third parties if a separate trial is ordered. I take into account the matters raised by them in written and oral submissions. However, I consider that the interests of justice clearly require the trial of the principal proceedings to be separated from the third party proceedings and heard and determined with expedition.
[42] The potential injustice to the defendants of there being a hiatus of the kind earlier described is a significant matter. However, it does not outweigh the potential injustice to the plaintiff of not being able to litigate its claim against the defendant before any recurrence of Mr Jaffe’s tumour. It would be contrary to the interests of justice that the trial of the plaintiff’s claim be delayed until after Mr Jaffe is unable, by reason of ill health, to give evidence and instructions at it. Such an outcome would be contrary to the interests of justice. Unnecessary delay in the hearing and determination of the principal proceedings puts at risk the just and expeditious resolution of the plaintiff’s claim.
[43] The plaintiff should not be put at unnecessary risk of the loss of, or incapacity of, its chief witness by delays that will be involved in having the third party proceedings ready for trial and allocated trial dates.
[44] On balance, the interests of justice are best served by an order for a separate trial. The potential loss of, or incapacity of, the plaintiff’s chief witness is a compelling, indeed exceptional, circumstance, that outweighs the advantages of third party proceedings in the circumstances of this case. Substantial injustice may be caused to the plaintiff in not being able to effectively litigate its claim to judgment because the determination of its claim has to await the delayed trial of the third party proceeding (in which the plaintiff has no interest). That injustice could not be effectively remedied. By comparison, any prejudice caused to the defendants and the third parties by an order for separate trials can be avoided or ameliorated by orders that will reduce the period between the trials of the two proceedings and by other orders. The early and separate trial of the principal proceedings should encourage the defendants to ready the third party proceedings for trial. If they fail to do so then their grounds to seek a stay on any judgment given in favour of the plaintiff will be weakened.
[45] On any view, the third party proceedings will take much longer to try than the relatively simple principal proceedings. The fair trial of the plaintiff’s claim should not be unnecessarily jeopardised by having to wait until the third party proceedings are ready to be tried, allocated trial dates and tried.
[46] The precarious health of the plaintiff’s sole director and principal witness represents an exceptional circumstance that makes it in the interests of justice to order the separate trial of the principal proceedings in the light of the issues that arise in those proceedings and in the third party proceedings.
[47] The plaintiff has shown exceptional circumstances that justify the separate trial of the principal proceedings.
[48] I order:
1.Pursuant to r 203, the issues between the defendants and the third parties be tried separately and after the trial of the proceeding between the plaintiff and the defendants.
2.Pursuant to r 468 the trial of the proceeding between the plaintiff and the defendants be expedited, placed on the list of matters awaiting allocation of trial dates and given priority in the allocation of trial dates.
3.The legal representatives for the parties confer with a view to submitting draft directions for the trial of the proceeding between the plaintiff and the defendant, including directions to the effect that the third parties will be bound by findings made in the determination of that proceeding.
4.The matter be listed for review on a date to be fixed.
[49] I will hear the parties as to the costs of the application and any further directions.
[1] Port Pirie City and District Council v Leenders & Partners Pty Ltd [2001] SASC 208 at [36].
[2] UCPR 5.
[3] Godfrey v Nominal Defendant [1964] NSWR 214 at 217.
[4] [1923] 1 KB 221 at 224-5.
[5] [2001] SASC 208 at [36].
[6] Godfrey v Nominal Defendant (supra) at 217.
[7] Ibid at 216.
[8] New World Oil and Developments Pty Ltd v 163 Clarence Street Pty Ltd, unreported, 6 March 1993.
