IN THE FEDERAL COURT OF AUSTRALIA)No. NG 29 of 1991 QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN: GRAHAM DOUGLAS COCKERILL, ARTHUR DAVID THOMAS DINGLE and VALERIE DINGLE Applicants AND: WESTPAC BANKING CORPORATION Respondent MINUTES OF ORDERS JUDGE MAKING ORDER: Drummond J DATE OF ORDER: 28 June, 1995 WHERE MADE: Brisbane UPON the undertaking by the respondent by its senior counsel that the respondent will not object to the Judge who hears and determines the preliminary issue hearing and determining any other issues that may remain for decision thereafter on the ground that that Judge may already have, in the course of determining the preliminary issue, reached conclusions or expressed opinions on the credit of the applicants or any other witnesses who may be called in relation to the determination of the preliminary issue THE COURT ORDERS THAT: 1. Pursuant to O. 29, r. 2 the issue of whether, in consideration of the respondent granting the applicants a loan of Australian dollars with concessional interest rates to pay out the applicants' offshore loan, the applicants agreed in writing, on 5 February, 1988 or, alternatively, on 9 February, 1988, to release the respondent from any claim or cause of action which the applicants had or may have had against it arising out of or in connection with the offshore commercial loan or any foreign currency transaction, which includes the causes of action sued or in proceedings number NG 29 of 1991 be tried separately and before the trial of any of the other issues in the action. 2. The costs of and incidental to the respondent's notice of motion be costs in the proceedings. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA) No. NG 29 of 1991 QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN: GRAHAM DOUGLAS COCKERILL, ARTHUR DAVID THOMAS DINGLE and VALERIE DINGLE Applicants AND: WESTPAC BANKING CORPORATION Respondent Coram: Drummond J Date: 28 June, 1995 Place: Brisbane REASONS FOR JUDGMENT This is an application by the respondent Bank in a complex case, brought by the applicants claiming damages and other relief in respect of a foreign currency loan made quite a long while ago, for an order under O. 29, r. 2 the Federal Court Rules that the question identified in a notice of motion which, in effect, raises for determination whether the applicants' claims were compromised by an agreement in writing dated 5 February, 1988 or, alternatively, by an agreement in writing dated 9 February, 1988, should be dealt with as a preliminary issue. The applicants have belatedly filed a reply dealing with the compromise defence raised by the respondent. It is not a pleading which is characterised by clarity; senior counsel for the Bank submitted that the reply is quite defective insofar as it does not raise any claim for relief which might be of relevance to the rights of the parties. He also foreshadowed an argument that there is no foundation in law for any relief that may be understood as implied in the reply. I should also record that senior counsel for the applicants advances an argument which may have force: that notwithstanding the failure of the reply to expressly claim relief, a proper reading of the reply leads to the conclusion that it is effective to raise a claim for rescission of any compromise agreement that would, but for the issues sought to be raised by the applicants, be binding on them. It is unnecessary to determine those issues today and no one suggests that I should. The compromise issue is quite discrete from the other issues in the action save only in one respect. The applicants submit that there should not be a separate determination of the compromise issue because the credit of the people involved on both sides in the discussions leading up to the compromise agreement will be very much in issue. It is said on behalf of the applicants that it cannot be safely accepted that the main Bank witness who would be called on the compromise issue, Mr. Allen, would not also be involved in the litigation of the other issues in the case. In any event, it is quite plain that the applicants will be key witnesses in both the determination of the compromise issue and many of the other issues in the case and thus at least their credit is very plainly going to be of the highest relevance to the determination of all issues in the action. The Bank in response to a query from me offered an undertaking not to object to the Judge who determines, as a preliminary issue, the question concerning the compromise (if that is ordered to be done) also hearing and determining all other issues that remain alive after determination of the compromise issue on the ground that that Judge may already have expressed views on the credit of the applicants and any other witnesses who may be called in relation to issues other than the compromise issue. The proffering of that undertaking largely, as I understand it, resolved the applicants' concerns of the possibility that, if there was a separate determination of the compromise issue, in the absence of that undertaking, there was the risk that the issue of the credit of the applicants would have to be determined anew with the possibility of a different or inconsistent conclusion in one form or other being reached. It seems to me that this is one of those fairly rare cases in which it is appropriate to separate the issues, given the discrete nature of the compromise dispute and the way that the valid concern of the applicants on the issue of duplication of the investigation of their credit can be dealt with. The applicants do not dispute the estimate of approximately a week made by the respondent's solicitor as the likely duration of a hearing limited to the compromise issue. It is plain that the range of witnesses will be very much narrower than the range of witnesses who will be called if all the issues have to go to final determination. That trial will take many weeks. Discovery has to date been limited to discovery relevant to the compromise issue. The issue is one which quite plainly, if decided one way, will necessarily bring the litigation to an end and it is thus one which it is appropriate, in proper circumstances, to deal with as a preliminary issue. I also take into account that one potentially large area of factual inquiry has been removed from the area of contention, so far as the determination of the preliminary issue as to the compromise is concerned, by the qualified admission by the respondent that it will, for the purposes of the hearing and determination of the separate issue only, admit the facts alleged in the particulars to paragraph 2.6 of the reply. I will therefore make an order in terms of paragraph 1(a) of the notice of motion upon the undertaking by the respondent by its senior counsel that the respondent will not object to the Judge who hears and determines the preliminary issue hearing and determining any other issues that may remain for decision thereafter on the ground that that Judge may already have, in the course of determining the preliminary issue, reached conclusions or expressed opinions on the credit of the applicants or any other witnesses who may be called in relation to the determination of the preliminary issue. I certify that this and the preceding four pages are a true copy of the reasons for judgment herein of the Honourable Justice Drummond. Associate: Date: 28 June, 1995