UCPR: separate trial of preliminary issues

Byrne v People Resourcing (Qld) Pty Ltd & Ors [2014] QSC 39

 

His Honour reviewed the relevant authorities and affirmed the reluctance of courts to determine indemnity issues prior to trial, when there remained contingent and hypothetical questions to be answered.

 

Applegarth J

[3] The principles that govern the circumstances in which an order will be made for the separate trial of preliminary issues have been discussed in a number of recent authorities. The decision of Branson J in Reading Australia Pty Ltd v Australian Mutual Provident Society[1] has been influential. Judges of this Court have applied that decision[2]. Decisions affirm the utility of such orders in appropriate cases[3]. Sometimes such an order is appropriate to avoid the necessity for a lengthy trial or at least to reduce a trial’s length. However, care must be taken in making such an order because it sometimes happens that separate trials of different issues may turn out to be productive of delay, additional expense, appeals and uncertainty[4].

 

[4] TJH cited in support of its application Jacobson v Ross[5]. The reference in that case to a preliminary trial where relevant facts “are merely to be taken as assumed for the purposes of the determination of the preliminary question” must be treated with some reserve, since the decision pre-dates the decision of the High Court in Bass v Perpetual Trustee Co Ltd[6]. In applying Bass, Branson J observed in Reading[7] that the judicial determination of a preliminary question 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”. With some qualifications, which are not presently relevant, a court will not answer hypothetical questions.

 

[5] These principles, derived from Bass, were discussed by Holmes J (as her Honour then was) in King’s College v Allianz Insurance[8], and more recently by Jackson J in BOQ Ltd v Chartis Australia Insurance Ltd[9]. I respectfully adopt their Honours’ analysis. A declaration or other order which is “not based on facts, found or agreed, will be purely hypothetical and at best … do no more than declare that the law dictates a particular result when certain facts in the material pleadings are established”[10]. If the assumed facts are in dispute, then the answers may be of no use at all to the parties.[11] It may be no part of judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence in the case.[12] It has been said that “judicial decisions based on assumed facts are suitable only for questions of law and then only if the facts as pleaded exhaust the universe of relevant factual material”.[13]

 

[6] Ultimately, the appropriateness of determining questions at a preliminary trial depends upon the facts that are agreed or determined at it, whether the question depends upon an assumption about the happening of a future event, whether answering what may be described as hypothetical questions has utility and where the interests of justice lie.

 

[7] Before turning to the facts which are agreed, and identifying the hypothetical nature of the five questions which are posed for preliminary determination, it is appropriate to observe that, historically, and for good reason, there has been a marked reluctance to determine questions of indemnity in advance of the liability of a party claiming indemnity from an insurer against that liability. King’s College and BOQ Ltd are illustrative of that reluctance.

[35] Where most parties contend that neither PRQ nor TJH will be found liable to Mr Byrne, I do not consider it is in the interests of justice to have a trial of all issues which may last seven to ten days, including questions which are hypothetical. The interests of justice are best served by at least the question of whether both PRQ and TJH are liable to Mr Byrne being determined without unnecessary delay and expense.

 

[36] I will consider orders that the parties have formulated for a separate determination of the liability of the first defendant and the liability of the second defendant to Mr Byrne, the quantum of his claim and apportionment between defendants in respect of any damages so assessed to be the subject of a separate trial.

 

[37] As indicated, I intend to dismiss TJH’s application for an order pursuant to r 483 and its alternative application for an order pursuant to r 171.

 

[38] The fact that I will make directions for the trial of Mr Byrne’s claim does not mean that it necessarily should be tried. If the parties, properly advised, have formed an assessment about his prospects of succeeding against each defendant, the quantum of his damages and appropriate apportionment of liability (leaving aside questions of indemnity) then it should be possible for an agreed resolution of those issues to be reached. If that resolution results in each defendant being held liable to pay damages to Mr Byrne then the contingent nature of Question 1 will be removed. TJH and WorkCover will be one step closer to having a question which is important to them resolved without the delay associated with waiting for Mr Byrne’s case to be tried. So I encourage the parties to at least resolve Mr Byrne’s claim without the necessity for a trial.

 

 

Brisbane Barrister – David Cormack                                               

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