ICT PTY LID v SEA _ CONTAINERS LID; BUQUEBUS INTERNATIONAL LTD v SEA CONTAINERS LTD SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL CLARKE JA, HANDLEY JA and SHELLER JA 19 May 1995 [1995] NSWCA 205 Clarke JA. Miss Needham who appears for Buquebus International Pty Ltd has handed to the Court some draft short minutes of order. Mr Rayment, appearing for Sea Containers, does not dispute that those draft short minutes of order reflect the reasons of this Court, except insofar as in those orders the appellants, Buquebus Ltd and Lopez Mena, have sought that the costs of what could shortly be called the issue of tortious interference with contractual relations be paid on an indemnity basis. The argument that the Court has entertained has been directed solely to that issue as there was no dispute that the other orders flow from the reasons of the Court. In support of the application for indemnity costs Miss Needham made the following points: (1) The allegation against Buquebus was one of tortious interference with contractual relations. (2) Damage is an essential ingredient of that tort. (3) The plaintiff, Sea Containers, did not prove any damage. It is not envisaged that any of the statements to be served will deal with this question and the plaintiff disputes that this is a proper request at that stage and defers responding to it until after the completion of the liability hearing. BBI did not respond to that letter for reasons which were given, and to which I will shortly refer, but more importantly did not, prior to the commencement of the hearing or at an early stage of the hearing, seek clarification of the boundaries within which the hearing would be conducted. It is true that BBI was joined at a late stage of the proceedings, that is on 23 July 1993. The joinder did, however, occur before the order for separate determination of issues, which was made on 20 August 1993, possibly about a month before the hearing commenced in September 1993. I appreciate that in the way in which, and because of the time at which, BBI was joined it was placed in a very difficult position in endeavouring to meet the case that was made against it in time for the hearing which was to commence in September. I would readily accede to Miss Needham's statement that her client's legal advisors were put under enormous pressure and that there is a readily available explanation for the fact that the letter to which I have referred, received no reply. It is also possible to justify the failure of BBI at the start of the trial to seek clarification on the issue of the extent of the hearing. JOBNAME: No Job Name PAGE: 2 SESS: 1 OUTPUT: Mon Feb 25 18:12:40 2008 /reports/caseml]/case/urj/9508076 UNREPORTED JUDGMENTS While trial Judges need to exercise caution in deciding to separate the hearing of issues of liability and damages, it is I think true to say that such separations occur quite regularly in the courts. No doubt there are good reasons for the making of those orders. Further, the separation of issues occurs frequently in cases in which a plaintiff is relying on the tort of negligence, in which damage is an essential ingredient. As a general rule that enquiry does not address issues of damage. It concerns itself exclusively with what might conveniently be called the issue of fault. No doubt there are cases in which it is made clear that the hearing onliability should extend to consider whether any damage was suffered, but that is not an invariable practice. In these circumstances it seems to me that in order to lay the ground for the present application to succeed it was necessary for BBI to secure a definition from the trial Judge at the beginning, or at least at an early stage of the trial, as to the question whether the hearing was to extend beyond what I have called 'fault'. No such definition was sought and the trial on liability proceeded with apparently a divergence of view as to its extent. The Court has been informed that his Honour during the hearing understood that he had to consider damage and that may be so, but it is obvious from the points Miss Needham made at the outset that Sea Containers adhered to its position that it did not consider damages until very late in the piece. In these circumstances I do not think that the essential foundation for the claim for indemnity costs has been made out, nor am I prepared to hold that the claim made against BBI was, because of the absence of any proof of damage, an irresponsible claim. I would be disposed to make an order that costs follow the event and would decline to order that those costs be on an indemnity basis. Handley JA. I agree. Sheller JA. I also agree. 35 Clarke JA. In the matter of Buguebus and Lopez Mena v Sea Containers the Court makes the orders and directions in the short minutes of order signed by counsel for all parties, initialled by me and placed with the papers. Orders accordingly.