FEDERAL COURT OF AUSTRALIA

David Jones Ltd v The Australia Institute Ltd [2007] FCA 962

PRACTICE AND PROCEDURE – Federal Court Rules – application for separate trial of issue – separation of conduct in trade or commerce issue from misleading and deceptive conduct issue – Federal Court Rules  O 29 r 2 – principles applicable to application of rule – case management considerations – overlap of factual foundations and witnesses – potentiality and consequences for issues of credit arising – possibility of appeal creating multiplicity of proceedings

Trade Practices Act 1974 (Cth) ss 52, 75B, 80, 82, 87

Federal Court Rules  O 29 r 2

Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 applied

Olbers Co Ltd v Commonwealth of Australia (No. 3) [2003] FCA 651 applied

Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 cited

Tallglen Pty Ltd & Anor v Pay TV Holdings Pty Ltd & Ors (1996) 22 ACSR 130 cited

Village Building Co Ltd v Canberra International Airport Pty Ltd [2003] FCA 1195 cited

DAVID JONES LIMITED v THE AUSTRALIA INSTITUTE LIMITED AND CLIVE HAMILTON

NSD 2490 OF 2006

EDMONDS J

2 JULY 2007

SYDNEY

THE COURT ORDERS THAT:

1.                  The motion be dismissed.

2.                  The respondents pay the applicant’s costs of the motion.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

INTRODUCTION

1                     This is a motion on notice by the respondents moving the Court for an order under O 29 r 2(a) of the Federal Court Rules that the following question be decided separately from, and in advance of, the hearing of the other issues in the proceedings:

‘Whether the conduct of the first respondent in making the media releases complained of in the statement of claim was in trade or commerce within the meaning of s 52 of the Trade Practices Act 1974 (Cth).’

BACKGROUND

2                     The proceedings were commenced by the applicant (‘David Jones’) filing an application in this Court on 20 December 2006 seeking miscellaneous relief pursuant to ss 80, 82 and 87 of the Trade Practices Act 1974 (Cth) (‘the TPA’) against the first (‘the Institute’) and the second (‘Dr Hamilton’) respondents in respect of their alleged contraventions of the TPA on the grounds set out in a statement of claim filed the same date.

3                     The background to the relief sought is set out in the statement of claim and may be relevantly summarised as follows:

4                     On 9 October 2006 the Institute issued a media release entitled ‘Corporate paedophilia – Sexualising children by advertising and marketing’ (‘the media release’) announcing the launch of a discussion paper entitled ‘Corporate Paedophilia – Sexualisation of children in Australia’ (‘the Discussion Paper’), which the Institute caused to be prepared.  The media release contained the following statements:

‘The sexualisation of Australian children in the interest of corporate profit is increasing and exposes children to a wide range of risks from a very young age… The report, entitled Corporate Paedophilia, by Dr Emma Rush and Andrea La Nauze, examines advertising and marketing directed at young children and their parents.

Launching the report today, Institute Director Dr Clive Hamilton said the report is the first comprehensive record of the extent to which Australian children were being targeted from a very young age to address and appear “sexy”.

“The essential point is that they are increasingly being portrayed in clothing and posed in ways designed to draw attention to adult sexual features that they do not yet possess”, he said, “Children are being eroticised in the interest of the corporate bottom line.

“It is particularly disturbing that this exploitation of young children appears to be becoming accepted or mainstream.

“Major retail chains such as David Jones and Myer have jumped on the bandwagon.  When family department stores show no conscience on these issues, or are inured to the effects of their behaviour, the situation is very unhealthy.”’

5                     In its statement of claim David Jones claims that the media release was prepared and issued by the Institute and Dr Hamilton for purposes which included the purpose of promoting the acquisition of the Discussion Paper from the Institute through the website it maintains, publicising the Discussion Paper and promoting the quality, availability and supply of the Institute’s goods for sale, services for commission and membership services and promoting support for the Institute and its goods and services by donation (para 9).  It claims that the issue of the media release constituted conduct in trade or commerce (para 11), that in the media release the respondents made the representations referred to in [6] below and that the making of each of these representations constituted conduct in trade or commerce (para 12).

6                     David Jones claims that in the media release the respondents made the following representations:

(a)                David Jones eroticises children in order to obtain profits;

(b)               David Jones is responsible for advertising which portrays children in an exploitative way;

(c)                David Jones acts without conscience in sexually exploiting children for profit;

(d)               David Jones knowingly causes the publication of material which can be used by paedophiles for their sexual gratification;

(e)                the Discussion Paper contains conclusions to the effect of each of (a) to (d) above;

(f)                 the Discussion Paper contains academic research and analysis which support each of the conclusions referred to in each of (a) to (d) above (para 10).

7                     In its statement of claim David Jones claims that the Institute and Dr Hamilton issued a further media release (‘the further media release’) in which they refused to withdraw any association between David Jones and the Discussion Paper or the media release (para 14) and in so doing repeated the conduct constituted by the issue of the media release and the conduct constituted by the making of the representations in the media release (para 15).

8                     By reason of these matters, David Jones claims that the issue of the media release and the further media release and the making of the representations by the respondents constituted conduct which was (a) misleading or deceptive; and/or (b) likely to mislead and/or deceive, in contravention of s 52 of the TPA (paras 18 and 19).  Alternatively, it claims that the conduct referred to constituted conduct by the Institute in contravention of s 52 of the TPA and that Dr Hamilton aided, abetted, counselled or procured or was knowingly concerned in, or party to, the contravention, and is thereby a person involved in the contravention within the meaning of s 75B of the TPA (para 20).

9                     The respondents in their further amended defence (an amended defence dated 9 March 2007 was filed in Court pursuant to leave granted on the hearing of the motion and further amended in the circumstances referred to in [20(10)] below):

(1)               Admit that the media release was prepared and issued by them for the purpose of publicising the Discussion Paper but otherwise deny the allegations in para 9 of the statement of claim;

(2)               Admit that in the media release they made the representations in [6](a) and (b) above, deny that in the media release they made the representations in [6](c), (e) and (f) above and admit that in the media release they only made the representation in [6](d) as to the first limb of it;

(3)               Deny paras 11 and 12 of the statement of claim;

(4)               Admit para 14 of the statement of claim;

(5)               Deny para 15 of the statement of claim;

(6)               Deny paras 18, 19 and 20 of the statement of claim.

10                  The respondents moved their motion on two affidavits sworn by Mr Archibald Adrian Howie, the respondents’ solicitor, on 22 February 2007 (Ex. 1) and on 12 March 2007 (Ex. 2).  In opposing the motion, David Jones relied on an affidavit of Kevin Sebastian Lynch sworn 21 March 2007 (Ex. A).

RELEVANT PRINCIPLES

11                  Ordinarily all issues of fact and law in a proceeding will be determined at the one time by the Court following a trial.  As was said (by Giles CJ in Comm Div) in Tallglen Pty Ltd & Anor v Pay TV Holdings Pty Ltd & Ors (1996) 22 ACSR 130 in relation to Part 31 r 2 of the (NSW) Supreme Court Rules (the equivalent of O 29 r 2(a) of this Court’s rules) (at 141 – 142):

‘In the ordinary course all issues in proceedings should be decided at the one time, but separate decision of a question may be appropriate where, for example, the decision of the question is critical to the outcome of the proceedings and (at least if decided in one way) will bring the proceedings to an end.  In particular circumstances the separate decision of a question may be appropriate even if it will not bring the proceedings to an end, such as where there is a strong prospect that the parties will agree upon the result when the core of their dispute is decided or where the decision will obviate unnecessary and expensive hearing of other questions, but such occasions must be carefully controlled lest fragmentation of the proceedings (particularly when the exercise of rights of appeal is borne in mind) brings delay, expenses and hardship greater than that which the making of an order was intended to avoid.  It is often the case that the need to make findings of fact for a decision of the separate question, especially findings which may involve issues of credit, tells strongly against the making of an order because related facts, and renewed issues of credit, will or may arise at a later stage in the proceedings.  Experience teaches that it should be able to be seen with clarity that decision of a separate question will be beneficial in the conduct of the proceedings and the resolution of the parties’ dispute.’

12                  In Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 Branson J observed that the authorities show that O 29 r 2 has been relied on to support the making of orders that have modified the ordinary or general rule in the following way (at [7]):

‘(a)      by requiring that certain questions, formulated by the order, be decided separately from (and presumably, before) any other questions in the proceeding on the basis of a special case stated in accordance with O 50 r 1 (see, for example, Chippendale Printing Co Pty Ltd v Commonwealth(1995) 17 ACSR 328);

(b)       by requiring the determination of a preliminary issue of law in circumstances in which it was unnecessary for any facts to be stated or evidence to be adduced (see, for example, Blurton v Minister for Aboriginal Affairs (1991) 29 FCR 442; 101 ALR 350);

(c)        by requiring the determination of certain preliminary questions of law as to the competence of the case of the applicant on the basis of certain agreed facts (see, for example, Pritchard v Racecage Pty Ltd (1996) 64 FCR 96; 135 ALR 717 and on appeal, (1997) 72 FCR 203; 142 ALR 527; South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301; 157 ALR 443);

(d)       by requiring the separate trial “as a preliminary issue” of certain of the claims made by the applicant (see, for example, ComiteInterprofessionnel des Vins des Cotes de Provence v Bryce (1996) 69 FCR 450);

(e)        by requiring that the question of the respondents’ liability be tried separately, and that any question as to the quantum of any damages to be paid by the respondents, or any of them, to the applicants, or as to the taking of any account of the respondents’ profits, be tried separately and at a dated to be fixed after the determination of the question of liability (see, for example, Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1985) 10 FCR 567; 75 ALR 601).’

13                  Her Honour further observed (at [8]) that the principles that govern the circumstances in which an order will be made under O 29 r 2 are relatively well established and she summarised them in a fashion which I gratefully adopt:

‘(a)      the term “question” in O 29 r 1 includes any question or issue of fact or law in a proceeding.  The distinction in the rule between an “issue” and a “question” is the distinction between that which, when resolved, will result in an adjudication in favour of one party or the other, being an “issue”, and less decisive matters of dispute being “questions” (Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 425; 113 ALR 643 at 647);

(b)       a question can be the subject of an order for a separate decision under O 29 r 2 even though a decision on such a question will not determine any of the parties’ rights (Landsal Pty Ltd (in liq) v REI Building Society at FCR 245; ALR 647);

(c)        however, the judicial determination of a question under O 29 r 2 must involve a conclusive or final decision based on concrete and established or agreed facts for the purpose of quelling a controversy between the parties (Bass v Permanent Trustee Co Ltd(1999) 198 CLR 334; 161 ALR 399; [1999] HCA 9 at [45]);

(d)       where the preliminary question is one of mixed fact and law, it is necessary that the question can be precisely formulated and that all of the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable either as facts assumed to be correct for the purposes of the preliminary determination, or as agreed facts or as facts to be judicially determined (Jacobson v Ross [1995] 1 VR 337 at 341, referring to Nissan v Attorney-General [1970] AC 179 at 242-243 per Lord Pearson; Bass v Perpetual Trustee at [53]);

(e)        care must be taken in utilising the procedure provided for in O 29 r 1 to avoid the determination of issues not “ripe” for separate and preliminary determination.  An issue may not be “ripe” for separate and preliminary determination in this sense where it is simply one of two or more alternative ways in which an applicant frames its case and determination of the issue would leave significant other issues unresolved (CBS Productions Pty Ltd v O’Neill (1985) 1 NSWLR 601 per Kirby P at 606);

(f)        factors which tend to support the making of an order under O 29 r 2 include that the separate determination of the question may –

(i)        contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the action; or

(ii)       contribute to the settlement of the litigation (CBS Productions Pty Ltd v O’Neill per Kirby P at 607);

(g)       factors which tell against the making of an order under O 29 r 2 include that the separate determination of the question may -

(i)                 give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial (GMB Research & Development Pty Ltd v Commonwealth [1997] FCA 934;

(ii)               result in significant overlap between the evidence adduced on the hearing of the separate question and at trial – possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: GMB Research & Development Pty Ltd v Commonwealth; Arnold v Attorney-General (Vic) (unreported, Fed C of A, Sundberg J, Nos VG 629-37 of 1995, 8 September 1995, BC9502745).  This factor will be of particular significance if the Court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or

(iii)             prolong rather than shorten the litigation (GMB Research & Development Pty Ltd v Commonwealth).’

14                  Her Honour concluded (at [9]):

‘Ultimately the issue for the Court to determine when consideration is being given to the making of an order under O 29 r 2 is whether it is “just and convenient” for the order to be made: Arnold v Attorney-General (Vic).’

15                  As French J observed in Olbers Co Ltd v Commonwealth of Australia (No. 3) [2003] FCA 651 at [8]:

‘The overarching consideration informing the discretion to make an order under O 29 r 2 is efficient case management.’

THE PRESENT CASE

16                  The Institute made the following submissions in support of its motion:

(1)               The conduct complained of by David Jones was not, on the Institute’s part, conduct in trade or commerce for various reasons including that the media release and the further media release were not made for any business purposes of the Institute or Dr Hamilton but for the public benefit and to engender, participate in and foster public debate with the ultimate aim of, as suggested in the Discussion Paper, instigating improvements to the regulatory system for marketing and advertising of this kind.

(2)               An answer favourable to the Institute on the issue of whether its conduct is in trade or commerce would be a complete answer to David Jones’ case; and

(3)               The evidence on the threshold issue of whether the conduct of the Institute complained of is in trade or commerce is discrete and totally, or almost totally, quarantined from the merits issues – whether the conduct was misleading or deceptive and whether there was any contravention of the TPA.

17                  In furtherance of the submission in [16](3) above, the Institute submitted that the expert evidence in this case is entirely limited to the merits issues – whether or not the conduct engaged in was misleading or deceptive – and that apart from some accounting evidence, there is no expert evidence that could be called or would be helpful to the issue of whether the Institute or Dr Hamilton engaged in trade or commerce.  This is why, the submission went, there is the potential for such an enormous cost saving and saving of court time – because the contravention issues involve a very wide range of expert evidence, the nature of which is outlined in Ex. 2.

18                  It was submitted on behalf of the Institute that if there was an issue of credit, it might go to, for example, the sort of business the Institute is engaged in and the extent to which the discussion papers were published for a commercial purpose.  Such credit issues would not be significant; they are not expected to overlap with the same issue on the merits part of the case; it is not expected that the same lay witnesses who would be called on the question of the business activities of the Institute would also be giving evidence about the nature of the advertising or the nature of the conduct engaged in by David Jones.

19                  Finally, the Institute submitted that, if there was a separate issue ordered and decided, the fact that it might generate an appeal was not a relevant factor.

20                  David Jones, in opposing the motion, made the following submissions:

(1)               In summary, it submitted that none of the criteria for making an order for the determination of a separate question are satisfied – there will be overlap of both witnesses and issues.  Senior Counsel for David Jones submitted that the only case of which he was aware in which the trade or commerce issue had been separately ‘hived off’ is Village Building Co Ltd v Canberra International Airport Pty Ltd [2003] FCA 1195 and he observed that there were two critical factors in that case: first, his Honour had already determined to hive off the question as to whether or not one of the parties was carrying on business; and second, Village, ostensibly the opposing party, did not, his Honour recorded, positively oppose the application; moreover, he submitted, nobody suggested there would be significant overlap of witnesses or issues.  So that case is no guide to the present case.

(2)               Turning to the pleadings, the allegation in para 4 that the Institute carries on a business – that is denied – in the course of which it conducts research and analysis for the purpose of reward – that is admitted albeit with an additional qualification.  It is clear that the Institute makes available its research and paper provision services for reward to non-government and private enterprises.  Additionally, its recent accounts show it earned some $35,000 of income from that activity.

(3)               There is no attack by David Jones on the publication of the Discussion Paper.  These proceedings do not seek to restrain the publication of discussion papers but, fundamentally, the allegation is that the media release, having regard to its terms and the context in which it was issued, was issued for the purpose of, or for purposes which include, promoting the sale of the very paper which it publicised and promoting the Institute generally, including its services which are available for reward and promoting donations and sales of other books.

(4)               If the Institute is selling the Discussion Paper and makes a media release for the purpose of publicising that Discussion Paper, the proposition that a statement made in that media release is beyond all notions of trade or commerce is one with which David Jones cannot agree.  There is a plain trading transaction which takes place when the Institute sells the Discussion Paper.  The nature of the conduct engaged in is something which is critical in considering whether or not the conduct is in trade or commerce.

(5)               A company which has charitable objects may still engage in trade or commerce.  For example, that company may lease premises; in the leasing transaction it may make a representation that it can afford to pay rent of ‘x’ dollars.  If that is a misleading representation, it cannot be said that that conduct is not in trade or commerce.

(6)               David Jones disputes the Institute’s pleading that the media release was issued in the course of addressing issues with a view to promoting an ultimate change in the law, by informing the community of these issues and to promote public debate amongst law makers and legislators.  David Jones submits that the purpose of the inclusion of the David Jones name in the media release was to give the media release ‘legs’ and attract publicity.  Effectively accusing David Jones of being a corporate paedophile, without even the explanation of what that means, which appears in the Discussion Paper but not in the media release, causes all the sting and all the connotations of that combination of words to be associated with the name David Jones.  On the other hand, in the Discussion Paper, which contains the explanation and the serious allegations about various companies, David Jones is not mentioned.  Only in the annexures are there references, with respect to two photographs, to David Jones, in the context of ‘possible mild’ sexualisation or ‘implicit alleged sexualisation’.  This is not within a ‘bull’s roar’ of the content of the allegations made in the media release.

(7)               In distinguishing between conduct in trade or commerce and fair, genuine, academic debate about a serious issue, it is important to know whether the representations David Jones allegedly made are true or false.  If they are false, then the conclusion that the media release was a ‘publicity stunt’ for the purpose of promoting the Institute can be more easily reached – a conclusion which tends to foreclose a finding that the relevant conduct was fair, genuine academic debate.

(8)               The analysis which the Institute says should be confined to the liability issue is the very matter David Jones wants to rely upon, among other matters, in relation to the threshold issue sought to be separated.  That the statements in the media release were made in academic debate is open to challenge.  When the gravity of the representations in the media release are compared to the absence of any statement in the Discussion Paper referencing the conduct of David Jones, the contrast is ‘breath-taking’.  That is a very good guide – it does not have to be determinative, but a good guide – to support David Jones’ position that this is all about publicity.  If it is all about publicity it is hardly about engaging in active debate and more likely to be regarded as an attempt to use the media to promote the goods and services which the Institute is offering.

(9)               David Jones’ first proposition is encapsulated this way: that one cannot determine whether conduct was in trade or commerce without determining whether the relevant conduct includes the making of the representations alleged.  In other words, the separate question is sought to be dealt with in a vacuum so far as the representations are concerned, and David Jones submits that is inappropriate. 

(10)           Second, the order sought on the motion is that the question, to be decided separately from and in advance of the hearing of the other issues in the proceedings, is whether the conduct of the first respondent in making the media releases complained of was conduct in trade or commerce.  That is language which attracts the claim in para 11 of the statement of claim (see [5] above); it does not deal with para 12 thereof (see [5] above) and hence will not resolve all the issues in the proceedings anyway.  Senior Counsel for the Institute subsequently sought leave to amend the terms of the separate question for decision in the notice of motion to include the words ‘or any representation that may be conveyed by either release’ after the words “statement of claim’ and to amend para 18 of the Institute’s amended defence by the inclusion of the words ‘nor any representation that may be conveyed by either release’, after the words ‘Further Media Release’.  I granted such leave.

(11)           Third, even if the separate question was to address para 12 of the statement of claim,  David Jones submits that the threshold issue sought to be separated cannot be determined without resolving the dispute as to the content of the representations.  David Jones submits that the very character of the representations informs the question of whether or not they constituted conduct with a commercial or trading end or were simply or merely fair and open debate about a serious issue; and that interrelation which David Jones wants to pray in aid is prayed in aid by the respondents themselves in para 18 of the further amended defence.

(12)           Fourth, and again this draws on arguments already outlined, the truth or falsity of the representations will inform the question as to whether the representations which were made were conduct in trade or commerce; demonstrating the absence of support in the Discussion Paper for the content of the representations pleaded will support the conclusion that the representations were for publicity purposes and not part of rational debate. 

(13)           Dr Hamilton is the second respondent; he is also the Executive Director of the Institute.  It is probable that he will give evidence on the trade and commerce issue.  It is probable that his evidence would also be relevant to the question of whether or not the statements he made were mere expressions of opinion.  He will be cross-examined if he gives evidence to say they were not; in David Jones’ submissions nobody could have those opinions having regard to the relevant material, that is, the Discussion Paper.  If he says to the contrary, it will be suggested to him that he is not telling the truth and there will be a credit issue.  If he is giving evidence on the trade and commerce issue, it will be suggested to him, contrary to any evidence he may give to the case being put, that the media release and representations are not part of a serious discussion, that no rational person could say there is any support for them in the Discussion Paper.  He will be cross-examined about that and if he does not agree with that proposition, his evidence will be contested.

(14)           The Institute’s submission that expert evidence is likely to be called as to whether anyone is likely to be misled by the representations, or whether they are recognised as part of a public debate, itself recognises the inevitable overlap even on the expert evidence; the public debate point is the Institute’s trade or commerce point.  The Howie evidence (Exs. 1 and 2) indicates that there is going to be a lay witness on trade or commerce.  One cannot exclude the possibility it will be the same witness, or other lay witnesses, dealing with the questions relating to liability, and that is likely, and the likely candidate, one would imagine, would be Dr Hamilton.  For the reasons already indicated his credit will be called into question on both issues.  His evidence is relevant to both, and there is an interrelationship between the evidence on which he can be cross-examined, whether he gives the evidence in chief or not, it cannot be disentangled.

(15)           David Jones will be relying on the heading ‘Corporate Paedophilia’ as part of the context in which the representation should be found.  The Institute will wish to diffuse that by saying that would be understood in the scientific way in which it is discussed in the Discussion Paper.  The Discussion Paper is not part of the media release.  If that was sought to be made out, there would have to be evidence about that. 

(16)           Other difficulties in relation to the separate question, by reason of the issues, arise.  If somebody called on the trade or commerce issue is cross-examined in the way suggested, and your Honour takes a view of that person’s credit and David Jones wins the trade or commerce issue, the likelihood is your Honour will not be able to hear the rest of the case.  That is inefficient.  That is one of the key considerations, the cases say, that should be taken into account. 

(17)           David Jones also says it is a factor to be taken into account that this bifurcation process can result in appeals.  So the decision can go either way.  One party appeals.  And if there is a successful appeal it has to come back to your Honour.  Or if your Honour is permitted to do the rest of it – subject to the credit findings – and if it was a case, for example, that the rest of the case has to be heard, the whole process is delayed.  That is just one of the examples as to why there are general warnings against splitting of cases.

(18)           One should add that obviously David Jones is not here to debate the question as to whether the Institute’s conduct was in trade or commerce.  But the proposition that a company has altruistic motives is not determinative of whether or not its conduct is in trade or commerce. 

ANALYSIS

21                  Although some of the arguments from both sides went to the merits or otherwise of the issue reflected in the question posed in the notice of motion, evident from the submission referred to in [20](18) above, this is not the occasion on which to elaborate on that issue.  The issue now before the Court is whether the question identified in the motion, as amended with the leave of the Court, if resolved one way, would dispose of the proceedings or significantly shorten them with an attendant saving in time and money.

22                  Having said that, based on the material that was before me, I am impelled to the view that the answer to the issue reflected in the question posed in the notice of motion is attended with sufficient doubt that, if it were the subject of separate decision prior to the determination of other issues, the strong likelihood is that the unsuccessful party would appeal.  Contrary to the submission of the Institute referred to in [19] above, that is a factor which I am entitled to take into account.  The 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 …’

was certainly a factor taken into account by Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7(5)(c)].

23                  As to the possibility that the resolution of the question posed in a particular way would dispose of the proceedings or significantly shorten them with an attendant saving in time and money, one is reminded of what French J said in Olbers at [31]:

‘… any prophesied economies are to be balanced against the fragmentation of the trial of the issue.  Experience in the courts over many years has demonstrated that fragmentation of proceedings rarely result in any saving of time in the long run and that projections as to costs savings are likely at best to be speculative.’

24                  The experience of French J is echoed in the observations of Einstein J in Idoport at [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 …’

25                  In my view, the proposition embodied in the last sentence of the extract from his Honour’s reasons should be the guiding criterion, namely, that ‘… it must be possible to clearly see that [the separate determination of an issue] will facilitate the quicker and cheaper resolution of the proceedings …’ (emphasis added), before one departs from the usual course of determining all issues at the one time.

26                  Adopting that criterion, for the reasons that follow, I am not satisfied that there should be separate determination of the issue reflected in the question posed in the notice of motion, as amended with leave on the hearing of the motion.

27                  In my view, it is far from clear that there will not be an overlap of issues and witnesses as between the threshold issue sought to be separated – whether the conduct of the respondents in making the media releases or any representation that may be conveyed by either release is conduct in trade or commerce – and what has been described as the merits issue – whether such conduct was misleading or deceptive and/or be likely to mislead and/or deceive in contravention of s 52 of the TPA.

28                  Resolution of these issues is infected with questions of fact as well as questions of law.  That, in itself, would not be decisive against separation of the kind sought, but the very nature of the questions of fact, in particular the truth or falsity of the representations actually conveyed by the media releases (as distinct from those pleaded) suggests that there will be overlap between the two issues.

29                  Moreover, the fact that the truth or falsity of such representations is relevant to both issues would suggest that there will have to be some commonality of lay witnesses on both issues and, in those circumstances, the separation of the issues only holds potential to prolong the proceedings rather than shorten them; there is, in such circumstances, a real prospect of adverse findings of credit against witnesses giving evidence on the first issue to effectively disqualify them, or myself as the docket judge, on the second issue, assuming the first issue is decided in favour of David Jones.

30                  The motion must be dismissed with costs.

Associate:

Dated:         2 July 2007