Moore v C S Brooks Inc. [2005] NSWCA 141

New South Wales Court of Appeal

CITATION: Moore v C S Brooks Inc. [2005] NSWCA 141

HEARING DATE(S): 28/04/22005

JUDGMENT DATE: 28 April 2005

JUDGMENT OF: Beazley JA at 1, 3; Tobias JA at 2; Brownie AJA at 4-19

DECISION: Application for leave to appeal be dismissed with costs.

CATCHWORDS: Practice and Procedure - separate determination of issues - no question of principle.

Employees Liuability Act 1991 LEGISLATION CITED: Fair Trading Act Trade Practices Act

CASES CITED: Tallglen Pty Limited v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130

Andrew Barrington Moore Claimant PARTIES: C S Brooks Inc. Opponent

FILE NUMBER(S): CA 40226/2005

Mr F Douglas QC / Mr K Rees Claimant COUNSEL: Mr G Lindsay SC / Ms A Tibbey Opponent

Henry Davis York Claimant SOLICITORS: Horton Rhodes Opponent

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): 50059/2004

LOWER COURT JUDICIAL OFFICER: Einstein J

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40226/2005

BEAZLEY JA TOBIAS JA BROWNIE AJA

THURSDAY 28 APRIL 2005 ANDREW BARRINGTON MOORE v C. S. BROOKS INC. JUDGMENT

1 BEAZLEY JA: I agree. 2 TOBIAS JA: I also agree. 3 BEAZLEY JA: The order of the Court is as proposed by Brownie AJA. 4 BROWNIE AJA: This is an application for leave to appeal from a decision of Einstein J declining to make an order under Pt 31 of the Supreme Court Rules for the separate determination of certain issues. 5 The claimant Mr Moore is the cross-defendant to the first cross-claim. There are three plaintiffs, companies sometimes collectively referred to as Sheridan. They sue the defendant alleging that they contracted to buy from the defendant certain businesses. The plaintiffs say that the defendant made certain statements which were inaccurate or wrong or incomplete and they sue for damages for breach of contract and for relief under the Trade Practices Act for misleading and deceptive conduct. 6 By the first cross-claim the defendant sues Mr Moore. It says that Mr Moore was an accountant employed by it and that in the course of his employment he formulated certain statements containing financial information which were, in the event, inaccurate or incomplete or wrong. In the first cross-claim the defendant sues Mr Moore for negligence, for breach of contract. It also makes claims for breach of fiduciary duty and for a breach of the provisions of the Fair Trading Act. 7 In his defence to the first cross-claim Mr Moore pleaded relevantly for present purposes that the cross-claim was defeated by the operation of s 3 of the Employees Liability Act 1991. 8 The defendant filed a reply to that defence to the first cross-claim saying, amongst other things that the Employees Liability Act did not operate in the way contended for by Mr Moore because within the meaning of s 5(a) of the Act the tort in question was serious and wilful misconduct. There were other matters pleaded by way of reply that I need not mention. 9 There was a second cross-claim filed by the defendant against a firm of accountants which is not for the moment relevant. 10 Mr Moore filed a notice of motion which in due course became the further amended notice of motion. He sought an order under Pt 31 r 2 for the separate determination of these questions. "(i) Whether the first cross-claim or any part thereof is a claim for indemnity or contribution within the meaning of section 3 of the Employees Liability Act 1991 (NSW) ( "the Act"); (ii) Whether the conduct alleged in the first cross-claim amounts to serious and wilful misconduct within the meaning of the Act. (iii) Whether the conduct alleged in the first cross-claim occurred in the course of, or arose out of, the employment of the cross defendant within the meaning of the Act." 11 Einstein J dismissed both the application under Pt 31 r 2 and the application made under Pt 15 r 26 to strike out the first cross-claim as not disclosing a cause of action. There is no application for leave to appeal from the latter decision. 12 The present application is limited to an application for leave to appeal from the order of his Honour declining to make an order under Pt 31 r2. That was, plainly, a question concerning practice and procedure. The claimant submits that his Honour can be seen to have erred in the first place in that in his reasons for judgment he set out correctly, so it is said, the test to be applied in an application under Pt 31 relying upon the decision of Giles CJ Comm D in Tallglen Pty Limited v Pay TV Holdings Pty Limited (1996) 22 ACSR 130 at 141-142. 13 At a later point his Honour set out the test for the application of the Pt 15 r 26 question, commonly referred to as the General Steel test. It is said that thereafter his Honour blurred the two questions and approached the Pt 31 question by reference to the General Steel test. It is not clear to me that that is so, but even if it is so it seems to me that his Honour's conclusion was correct and that leave to appeal should be refused. 14 At this stage the position is that whilst the pleadings have closed, at least so far as concerns the first cross-claim, the Court has been told that discovery has not taken place and that no witness statements have been exchanged. 15 The claimant invites the Court to proceed now, assuming that the facts are as pleaded, and he takes the point that there are not pleaded facts which constitute wilful misconduct within the meaning of s 5(a) of the Act. The Court was taken to authority which illustrates the sharp distinction to be drawn between "wilful misconduct" and "negligence", accompanied by various epithets. As I see it at the moment it might perhaps be said that para 2 of the reply does not comply with the provisions of the rules concerning the giving of proper particulars of wilful misconduct. However, that is not to the present point. What the claimant seeks now is leave to appeal from the decision not to make an order under Pt 31 of the rules and, in effect, to invite the Court now to decide that question on the assumption the facts are as pleaded by the cross-claimant. 16 It seems to me that it would be premature to decide the matter on that basis. There is a lot to be said, I suspect, in support of the various arguments of law advanced on behalf of the claimant as to why the Act does not operate in the way that the way that the defendant contends for. Nevertheless, what the claimant is seeking to have the Court do is decide an issue now on assumed facts which may very well be facts different to those which are found at trial. 17 One must remember a number of things in this connection. The Court has been told that the defendant does not have most of the relevant records. They were handed over to the plaintiffs upon settlement of the underlying commercial contracts. The Court is also told that Mr Moore has an indemnity from the plaintiffs. As I understand it the facts are, to some extent, simply not known. It may be that the facts that Mr Moore asks the Court to assume for present purposes will be different to the facts alleged by the plaintiffs or different to the facts alleged by the accountants, the cross-defendants to the second cross-claim. 18 It really would be quite wrong to have the Court decide a case on a set of assumed facts knowing that those facts may be proven to be untrue. Fundamentally, however, it seems to me that the present application is premature because one simply cannot tell whether or not the facts now asked to be assumed will be the facts as they will be found to be a little later on. 19 I propose that the application for leave to appeal be dismissed with costs. ***********