FEDERAL COURT OF AUSTRALIA

Australian Equity Investors, An Arizona Limited Partnership v Colliers International (NSW) Pty Limited [2010] FCA 254

THE COURT ORDERS THAT:

1.                  The Notice of Motion be dismissed.

2.                  Costs be reserved.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1                     By Notice of Motion dated 10 February 2010 the applicants, pursuant to O 29 r 2 of the Federal Court Rules (‘the Rules’), seek an order that questions referred to in the schedule attached to the Notice of Motion (‘the identified issues’) be determined separately and before any other issue in the proceedings.

2                     The Notice of Motion is supported by an affidavit of Scott Maurice Freidman, solicitor of the applicants, sworn on 10 February 2010.

3                     The application is opposed by the respondents.

4                     The applicants in the proceedings allege contraventions by the first respondent (‘Colliers’) of ss 52 and/or 53A of the Trade Practices Act 1974 (Cth) (‘the TPA’) and contraventions by the second respondent (‘Mr Markopoulos’) of s 45 of the TPA and ss 42 or 45 of the Fair Trading Act 1987 (NSW). The alleged conduct relates to a property valuation forwarded in a facsimile letter by Colliers to the first applicant (‘AEI’) on 8 July 2004. The letter was signed by Mr Markopoulos who was in the apparent employ of Colliers. The property valuation related to a commercial development known as ‘The 258 Nest’.

5                     The questions for which separate determination is sought are as follows:

1. Whether as alleged in paragraph 16 of the statement of claim a facsimile letter headed “Proposed Residential Development 258 Pacific Highway, Crows Nest” was sent by the first respondent to the first applicant by facsimile on 8 July 2004?

2. Whether as alleged in paragraphs 18 and 19 of the statement of claim any or all of:

a)    The Express Representation; and/or

b)    The First Implied Representation; and/or

c)    The Second Implied Representation; and/or

d)    The Third Implied Representation,

was conveyed by either of:

(i)    The first respondent; and/or

(ii)   The second respondent?

3. Whether by making any of the representations found to be conveyed, the first respondent and/or second respondent engaged in conduct that was:

a)    in the case of the first respondent, contrary to section 52 and/or section 53A of the Trade Practices Act 1974;

b)    in the case of the second respondent , contrary to section 42 and/or section 45 of the Fair Trading Act 1987 (NSW)?

Submissions of the Moving Party

6                     The applicants submit that the identified issues should be heard before and separately from the remainder of the hearing. The application is made on the basis that the issues regarding the making of the representation are pivotal to the success of the applicants’ claim.

7                     It is submitted by the applicants that such initial hearing will be decisive of the issue as to whether the applicants can succeed and as such whether the hearing should continue. The applicants further submit that if the initial questions they propose to be heard are decided adversely to their claim, their claim must fail.

8                     Section 37M of the Federal Court of Australia Act 1976 (Cth) (‘the Court Act’) states the following:

The overarching purpose of civil practice and procedure provisions

(1)     The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:

         (a)     according to law; and

         (b)     as quickly, inexpensively and efficiently as possible.

(2)     Without limiting the generality of subsection, the overarching purpose includes the following objectives:

         (a)     the just determination of all proceedings before the Court;

         (b)     the efficient use of the judicial and administrative resources available for the purposes of the Court;

         (c)     the efficient disposal of the Court's overall caseload;

         (d)     the disposal of all proceedings in a timely manner;

         (e)     the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

(3)     The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.

(4)     The civil practice and procedure provisions are the following, so far as they apply in relation to civil proceedings:

         (a)     the Rules of Court made under this Act;

         (b)     any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Court.

9                     Section 37M was incorporated into the Court Act by the Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth). The Second Reading Speech which introduced the related Bill makes clear that the amendments which include s 37M are intended to promote the efficient determination of matters brought before the Court. The Second Reading Speech states inter alia that ‘The court and parties will be encouraged to narrow the issues in dispute and resolve them in the simplest manner possible’.

The Relevant Rule

10                  The applicants claim the order for the separate determination of the issues pursuant to O 29 r 2 of the Rules which provides:

Order for decision

The Court may make orders for:

(a)  the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings; and

(b)  the statement of a case and the question for decision.

11                  The applicants refer the Court to the decision of the High Court of Australia in Aon Risk Services Australia Limited v Australian National University 239 CLR 175 in which the High Court emphasised the need for proper case management to ensure that unnecessary delays in the preparation for a trial are avoided.

Finding

12                  The Court is usually reluctant to fragment a hearing. In Tallglen Pty Ltd and Another v Pay TV Holdings Pty Ltd and Others (1996) 22 ACSR 130, Giles CJ in Comm D of the Supreme Court of New South Wales held at 141 that:

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.

13                  The Court may determine the issue of liability separately from the issue of quantum, particularly where the parties agree that such a course is appropriate: see Rhone-Poulenc Agrochimie SA and May and Baker Australia Pty Ltd v UIM Chemical Services Pty Ltd and Another (1985) 10 FCR 567.

14                  The Court is mindful that the early resolution of a pivotal issue may result in a saving of cost especially when the hearing will necessarily involve a claim for damages which may be separated from liability. However where there are claims of misleading and deceptive conduct under the TPA and relief is sought under s 82, it is not possible to separate liability and damages completely. This circumstance tends against the making of an order under O 29 r 2: see Reading Australia Pty Ltd v Australian Mutual Provident Society and Another 217 ALR 495 at [12] per Branson J; Energy Australia v Australian Energy Ltd [2001] FCA 1049 at [7] per Stone J.

15                  The Court observes that there is the real prospect that the determination of the identified issues would not resolve the proceedings. Such result would only be achieved if the Court determined the questions asked of it adversely to the applicants. Even if it did so, the applicants could appeal that decision. If however the Court decided the questions for separate determination in favour of the applicants, a further hearing would be required for the purposes of determining the remaining issues in the proceedings which could include issues of the applicability of the TPA, of defences that might be available, in addition to issues relating to damages. In that event the Court would face the prospect of having witnesses testifying on separate occasions, a practice which the Court would disfavour.

16                  There is also the prospect of an appeal being instituted against the interlocutory decision of this Court by the respondents if the identified issues were determined adversely to them.

17                  In these circumstances, the Court is satisfied that the interests of justice for all parties would be better served if the Court heard the entirety of the proceedings at the one time. An early hearing would serve the best interests of all parties.

18                  In fulfilment of that objective, the Court has offered the parties hearing dates as early as April or June 2010. As the Court has been told by the parties that the earlier date will not allow sufficient time for preparation and is not sought by the applicants, the Court will allocate a hearing date commencing 28 June 2010. In such circumstances no considerations will arise as discussed in Aon.

19                  A prompt hearing on all issues will avoid the potential difficulties arising out of a fragmented hearing and also ensure that the matter is resolved efficiently. For the above reasons the Notice of Motion is dismissed.

Associate:

Dated:         22 March 2010