New South Wales Supreme Court CITATION : Admiral 1 Pty Limited & Ors v Leighton Contractors Pty Limited [2006] NSWSC 30 HEARING DATE(S) : 3/02/06 JUDGMENT DATE : 3 February 2006 JURISDICTION : Equity Division Technology and Construction JUDGMENT OF : Einstein J EX TEMPORE JUDGMENT DATE : 02/03/2006 DECISION : Application to set aside separate question orders of Barrett J made on 3 November 2005 dismissed. Allow amendments to amended defence and cross claim on terms. Order that the separate question trial embrace issues raised by amendments to the cross claim. CATCHWORDS : Practice and Procedure - Application to vary interlocutory orders of another Judge - Separate question orders Admiral 1 Pty Limited (First Plaintiff) PARTIES : Admiral 11 Pty Limited (Second Plaintiff) Admiral 111 Pty Limited (Third Plaintiff) Leighton Contractors Pty Limited (Defendant) FILE NUMBER(S) : SC 55061/05 COUNSEL : Mr D Miller (Plaintiffs) Mr M Pembroke SC, Mr S Kerr (Defendant) SOLICITORS : Blake Dawson Waldron (Plaintiffs) Mallesons Stephen Jaques (Defendant) LOWER COURT DATE OF DECISION : 02/03/2006 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST Einstein J Friday 3 February 2006 ex tempore Revised 6 February 2006 55061/05 Admiral 1 Pty Limited and Ors v Leighton Contractors Pty Limited JUDGMENT The Notice of Motion 1 There is before the Court a notice of motion filed by the defendant on 22 December 2005 seeking leave to amend its amended defence and its cross-claim and seeking that there be decided separately from any other question and before further trials in the proceedings a question formulated in the following way: "whether, by the conduct pleaded in paragraph 15 of the plaintiffs' contentions (as particularised in the plaintiffs' solicitor's letter dated 7 December 2005), the defendant breached clause 5.2, 5.3 or 5.4 of the contract or the implied term of the contract pleaded in paragraph 7(1) of the plaintiffs' contentions (if such a term is to be implied)". 2 The notice of motion further seeks an order setting aside the order made by Barrett J on 3 November 2005 that the proceedings on the then amended summons be tried separately from the proceedings on the cross-claim. The Backdrop 3 The critical backdrop to determination of the motion comprises the judgment delivered by Barrett J on 3 November 2005. It is unnecessary to repeat the record and I proceed upon the assumption that those reasons for judgment do not require to be repeated. 4 Notwithstanding that the 3 November judgment was an interlocutory judgment, the Court scrutinises with great care an application to set aside a considered judgment following a contested hearing [which together with a stay motion] apparently took a full day and in which both parties were represented by senior and junior counsel. 5 My own view is that the defendant has produced insufficient in terms of suggested new material to justify the Court at this stage setting aside the 3 November judgment and replacing the orders then made with the suggested new separate question regime. 6 Notwithstanding the amount of time required to be taken to familiarise me with the background detail, ultimately a close reading of the 3 November judgment traverses almost all of the reasons why his Honour's orders were then, and presently remain, pervasive as an appropriate and principled exercise of the discretion. 7 The essential content of the defendant's claim to a change in the now position can only be followed by a careful reading of paragraphs 11 to 15 of the 3 November judgment. The defendant, at the commencement of the hearing of the motion, sought to outflank the potency of that reasoning by indicating that it was prepared: (1) To undertake that the remaining unconditional undertaking would be maintained until further order of the Court; (2) If necessary, to consent to a variation of the existing interlocutory orders to accommodate the undertaking referred to in (1). (3) To consent to the plaintiffs' undertaking as to damages being limited (at first instance) to the expiration of the period referred to in clause 42.6, if the proceedings are delayed beyond that period. 8 In the course of the address today Mr Miller, counsel for the plaintiff, contended that the limit on his clients' ability to call upon the guarantee/undertaking is governed by clause 42.6 of the contract and that the limit may be reached as early as July this year because it is dependent upon directions that might be given between now and that time by the superintendent and steps that might be taken by the defendant to comply with those directions or otherwise. 9 Practical completion occurred in July of 2005. The defect liability period is twelve months. There is an ability for that period to be extended if the superintendent, for example, were to identify certain defects that he required immediate rectification of. However, it may happen that it is as early as July that that date expires. 10 The defendant's first announced "now" position, as indicated by the undertakings and consent arrangements set out above, does not, it seems to me, satisfy the requirement that an interlocutory judgment not be revisited/varied without very special cause and a very real/material alteration in the "now" position of the parties. All that one has, bearing in mind those undertakings and consent suggestions, would be a party proffering a very slightly altered accommodation to the existing interlocutory holding position, at a point in time when that party appears on the evidence to be dismally out of step with the current directions on foot. It has to be remembered that the current date fixed for the hearing of the separate questions ordered by Barrett J is 20 March 2006, some five-odd weeks away. 11 To my mind the plaintiffs have every entitlement to be concerned at the prospect of being exposed to the risk of seeing the security evaporate absent the holding of the current fixture. Notwithstanding the first tranche of proposed undertakings and consent arrangements proffered by the defendants, there remains an urgent practical need for the plaintiffs' rights in respect of the undertaking to be defined shortly and in particular before the clause 42.6 date. The plaintiff is entitled to pursue at the earliest possible time its claimed entitlement that the $4.5 million undertaking be delivered up to it so that it may be in a position to call upon the undertaking to pursue its rights in accordance with the terms of the design and construct contract. It should not, it seems to me, be forced to accept an undertaking by the defendant to maintain the remaining unconditional undertaking until further order of the Court, leaving itself in the position of possible further curial movement of uncertain fabric in terms of that undertaking being further varied or discharged. It should not be forced to accept the proffered limitation of its undertaking as to damages (at first instance) to the expiration of the period referred to in clause 42.6, should the proceedings be delayed beyond that period. No doubt, at least in terms of the first set of proffered undertakings and consent arrangements put forward by the defendant, the plaintiff has not overlooked the significance of the proposed limitation of at least that undertaking as to damages being confined only to the proceedings at first instance. 12 Nor does the later undertaking proffered by the defendant [in terms of preserving the undertaking, so as to ensure that any rights that the plaintiff has to call on the undertaking still exist if the proceedings are heard after the clause 42.6 date], dictate that the defendant's motion seeking a different form of separate question regime must be acceded to. 13 The question remains one of the principled exercise of the relevant discretion, the ambulatory approach of the defendants to proffering now one set of undertakings and now another set of undertakings failing to recognise the plaintiffs' now entitlement to have a curial determination of its relevant rights outside of a court ordered undertaking regime. 14 The principled exercise of the Court's discretion requires to take into account the terms of the new separate question proposed to be ordered. The judgment of Barrett J treated carefully with the established principles underpinning the ordering of separate question hearings. One of those principles requires very special care to be addressed to whether a resolution of the separate issue will fall short of finally determining the issue, but merely result in an appeal from that decision creating a multiplicity of proceedings and an undesirable fragmentation of those proceedings. 15 To my mind, were the Court to accede to the current application for the newly propounded separate question, there would be a very high probability that the losing party would [in the case of the defendant], seek leave to appeal or would [in the case of the plaintiff], appeal. Further for the reasons given by Barrett J, the subject matter of the proceedings very strongly suggests, subject only to one matter, that the template put in place by Barrett J be retained. 16 The proviso concerns the leave which is sought by the defendant to amend its amended defence and its cross-claim. That leave should be allowed on the basis: · That the defendant pay the costs of and occasioned by the amended pleadings. · That the orders of Barrett J be varied so as to provide that the separate hearing now be a separate hearing, not only of the proceedings on the amended summons, but also be a hearing of one part only of the proceedings on the cross-claim [namely the issues raised by the cross-claim amendments presently to be allowed]. 17 For those reasons, subject to hearing from counsel in terms of the proposed short minutes of order which Mr Miller has propounded in terms of the directions, paragraphs 5, 6 and 7, it seems to me that the appropriate orders to be made are orders in terms of paragraphs 1, 2 and 3. Orders 18 I make orders in accordance with: (i) Paragraphs 1 to 7 inclusive of the short minutes of order, which I initial and date 3 February 2006. (ii) The Court directs that within seven days the defendant's solicitors notify to the plaintiffs' solicitors the identity of any witness whom the defendant is able to guarantee will be called as a witness during the hearing fixed for 20 March. (iii) The Court directs that, to the extent that the defendant's solicitors can practicably do so, the defendant's solicitors within seven days, notify the plaintiffs' solicitors of the expected date when a statement of any witness who is to be being called will be served. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.