Brisbane Cruise Wharf Pty Ltd v Body Corporate for Portside Wharf [2024] QSC 128

SUPREME COURT OF QUEENSLAND CITATION: Brisbane Cruise Wharf Pty Ltd v Body Corporate for Portside Wharf Principal Community Titles Scheme 36407 [2024] QSC 128 PARTIES: BRISBANE CRUISE WHARF PTY LTD ACN 098 923 785 (Plaintiff) v BODY CORPORATE FOR PORTSIDE WHARF PRINCIPAL COMMUNITY TITLES SCHEME 36407 (First Defendant) BODY CORPORATE FOR LOFT AT PORTSIDE COMMUNITY TITLES SCHEME 36241 (Second Defendant) BODY CORPORATE FOR FLARE AT PORTSIDE COMMUNITY TITLES SCHEME 36243 (Third Defendant) BODY CORPORATE FOR LINK AT PORTSIDE COMMUNITY TITLES SCHEME 46906 (Fourth Defendant) BODY CORPORATE FOR 35 HERCULES ST COMMUNITY TITLES SCHEME 50356 (Fifth Defendant) FILE NO/S: BS No 3273 of 2023 DIVISION: Trial Division PROCEEDING: Application for the separate determination of questions under r 483 of the UCPR ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 18 June 2024 DELIVERED AT: Brisbane HEARING DATE: 12 June 2024 JUDGE: Kelly J ORDER: 1. The defendants’ application filed 24 May 2024 is dismissed. 2. I will hear the parties as to costs and further directions. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SEPARATE DECISION OR -- 1 of 19 -- 2 DETERMINATION OF QUESTIONS AND CONSOLIDATION OF PROCEEDINGS – SEPARATE DECISION OR DETERMINATION – GENERALLY – where defendants apply for separate determination of five questions, characterised by the defendants as involving “a separate trial on liability” or “whether the defendants have any obligation to pay” – whether the proposed separate questions are largely questions of law and might be expected to be able to be determined without calling lay or expert witnesses – whether a separate determination of the proposed questions would contribute to a saving of time and cost – whether a separate determination of the proposed questions would be just and convenient Land Title Act 1994 (Qld), s 54A, s 54B, s 54C, s 54D, s 54E, s 54I, s 176 Uniform Civil Procedure Rules 1999 (Qld), r 5, r 483 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; [1999] HCA 9, cited Byrne v People Resourcing (Qld) Pty Ltd [2014] QSC 39, cited Callide Power Management Pty Ltd v Callide Coalfields (Sales) Pty Ltd (No 3) [2015] QSC 295, cited Idoport Pty Ltd v National Australia Bank Ltd (No 15) [2000] NSWSC 1215, cited Jacobson v Ross [1995] 1 VR 337, cited Landsdale Pty Ltd v Moore [2009] WASCA 176, cited Nissan v Attorney-General [1970] AC 179, cited Peros v Blackburn [2024] FCA 177, cited Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36, cited Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 240 FCR 276; [1999] FCA 718, cited Spirits International BV v Federal Treasury Enterprise (FKP) Sojuzplodoimport (2011) 91 IPR 438; [2011] FCAFC 69, cited Talbot v Boyd Legal (A firm) [2020] QSC 185, cited Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19, cited Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 15) [2021] WASC 307, cited COUNSEL: G Handran KC and H Hadgraft for the applicant defendants A Pomerenke KC and E Hoiberg for the respondent plaintiff SOLICITORS: McBride Legal for the applicant defendants Gadens for the respondent plaintiff [1] The defendants applied pursuant to r 483 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) for orders that questions be determined separately before the trial of the proceeding. The defendants variously characterised the proposal for separate -- 2 of 19 -- 3 determination as involving “a separate trial on liability”1 or “whether the defendants have any obligation to pay”.2 Background to the proceeding [2] The Portside Wharf Complex (“the Complex”) is situated on the banks of the Brisbane River in the suburb of Hamilton. The Complex has a mixed use precinct and a residential precinct. [3] The residential precinct includes land that forms part of a layered arrangement of community titles schemes, with the principal scheme known as the Portside Wharf Principal Community Titles Scheme 36407. The first defendant is the body corporate for the principal scheme. The mixed use precinct is comprised of residential apartments, retail areas and a cruise ship terminal. The plaintiff is the owner of the cruise ship terminal (“the terminal”). The second to fifth defendants are bodies corporate for various residential building community titles schemes within the mixed use precinct. [4] A wharf adjacent to the Complex (“the Wharf”) is subleased to the plaintiff by the Body Corporate for the Portside Wharf Commercial Community Titles Scheme (“Portside Commercial”). The Wharf is subject to a registered easement in favour of the Brisbane City Council which provides for public access, on days when there are no vessels docked at the terminal, and access, at all times, to part of the Wharf described as a permanent pedestrian walkway to the Complex. [5] The Land Title Act 1994 (Qld) (“the Act”) contains the following relevant sections: “54A Building management statement may be registered (1) A building management statement may be registered. (2) A building management statement is an instrument that— (a) identifies lots to which it applies; and (b) contains provisions benefiting and burdening the lots to which it applies; and (c) otherwise complies with the requirements of this division for a building management statement. (3) Each lot to which a building management statement applies must be a lot entirely or partly contained in, or entirely or partly containing, 1 or more buildings. (4) … (5) If a lot to which a building management statement applies is the subject of a plan of subdivision, the statement applies to each lot created by the registration of the plan. (6) … 1 Defendant’s Outline, [3]. 2 T 1-4.10. -- 3 of 19 -- 4 54B Circumstances under which building management statement may be registered (1) A building management statement may be registered only if it is signed by the registered owners of all lots to which the statement applies. (2) The lots to which a building management statement applies must comprise— (a) 2 or more volumetric format lots; or (b) 1 or more volumetric format lots, and 1 or more standard format lots. (3) In this section, a reference to standard format lot or volumetric format lot is taken to include a reference to common property, if the common property is created on registration of— (a) a building format plan of subdivision; or (b) a volumetric format plan of subdivision. 54C Content of building management statement (1) A building management statement must contain provisions about the following— (a) the supply of services to lots; (b) rights of access to lots; (c) rights of support and shelter; (d) insurance arrangements. (2) A building management statement may contain provisions about the following— (a) establishment and operation of a management group; (b) imposition and recovery of levies, how levy amounts are to be kept and how levy amounts are to be spent; (c) property maintenance; (d) architectural and landscaping standards; (e) dispute resolution; (f) rules for common services and facilities; (g) administrative arrangements; (h) arrangements for accomplishing the extinguishment of the statement; -- 4 of 19 -- 5 (i) proposed future development. (3) To avoid doubt, it is declared that a right of access, support or shelter, or other right in the nature of an easement, under a building management statement may operate according to its terms, and may be effective, despite the absence of a formal registered easement establishing the right. (4) A dispute resolution provision under a building management statement may operate to require the referral of a dispute arising under the building management statement other than to a court, but the provision is ineffective to the extent that it purports to operate to stop final determination of the dispute in a court of competent jurisdiction. 54D Registration of building management statement (1) When registering a building management statement, the registrar must record a reference to the statement on the indefeasible title for each lot to which the statement relates. (2) However the registrar is not obliged to examine, but may examine, a building management statement for its validity, including, in particular, its consistency with any plan of subdivision, or its compliance with the requirements for a building management statement. (3) A registered building management statement binds the successors in title to the registered owner of each lot to which the statement applies. 54E Amending a building management statement (1) A building management statement may be amended by registering an instrument of amendment of the building management statement. (2) The instrument of amendment must be signed by the registered owners of all lots to which the building management statement applies. (3) The instrument of amendment must not change the lots to which it applies. … 54I Lots constituted by community titles schemes (1) For the operation of this division— (a) a lot could be constituted by the scheme land for a community titles scheme; and -- 5 of 19 -- 6 (b) for the signing of the statement, or an amendment, extinguishment or partial extinguishment of the statement, by the registered owner of the lot, the body corporate for the scheme is taken to be the registered owner. (2) To remove any doubt, it is declared that if a building management statement applies to scheme land for a community titles scheme, the building management statement is binding on the community titles scheme. (3) Also, if the building management statement provides for the establishment and operation of a management group, a decision made by the management group under the building management statement is binding on the community titles scheme. (4) Subsections (2) and (3) have effect despite section 97 of the BCCM Act. (5) To remove any doubt, it is declared that if a building management statement applies to scheme land for a community titles scheme, registration of the building management statement does not, and can not, give the body corporate of the community titles scheme an interest in any particular lot included in the scheme.” [6] On or about 1 December 2006, pursuant to s 54A(1) of the Act, building management statement number 710148022 was registered. On or about 24 April 2012, Amendment no 714430919 was registered in respect of building management statement number 710148022 (the instrument as amended is referred to as “the Building Management Statement”). [7] Clause 6.3(a) of the Building Management Statement provides as follows: “6.3 Maintenance Costs (a) In consideration of the Wharf Lessee agreeing to manage, operate and maintain the Wharf, the Principal Owners must reimburse the Wharf Lessee for the Wharf Costs in proportion to their respective GFA Proportions. (b) To avoid doubt, the RBC is not entitled to reimbursement for the Principal Owners for a Wharf Cost to the extent it is entitled to be reimbursed by the other Wharf Lessee. (c) The Wharf Lessee (or a Manager on behalf of the Wharf Lessee) may issue invoices to the Principal Owners for each Principal Owner’s share of the Wharf Costs. Each Principal Owner must pay the invoice within 30 days of receipt. (d) Any invoice not paid by the due date will attract interest. Interest is calculated on daily balances at a rate of 20% per annum. On the last day of each month, the Wharf -- 6 of 19 -- 7 Lessee may add the interest to the unpaid money and charge interest on the total amount. (e) In the absence of manifest error or fraud, an invoice or account signed by the Wharf Lessee or any officer of the Wharf Lessee will be conclusive evidence of the costs referred to in it.” [8] The Building Management Statement contains a number of definitions. “The Wharf” is a reference to the Wharf. “The Complex” is a reference to the Complex. “RBC” is a reference to “Portside Commercial”. There are other materially relevant definitions as follows: (a) “Owner” means the registered owner of each Lot in the Complex from time to time and each body corporate established in respect of part of the Complex; (b) “Lot” means a registered lot within a Precinct. It includes the common property for any community titles scheme within the Complex; (c) “Precinct” means either the Mixed Use Precinct or the Residential Precinct; (d) “Wharf Lessee” means: (i) the RBC; and (ii) for so long as an Owner other than the RBC is entitled to the exclusive use and occupation of the Wharf (excluding the Retail Areas and subject to the Wharf Access Easement), including the Owner. (e) “Wharf Costs” means all costs reasonably incurred by a Wharf Lessee in connection with the Wharf including without limitation: (i) the cost of inspecting, maintain, servicing and repairing the Wharf; (ii) the cost of operation of the Wharf including lighting, electricity and water; (iii) the cost of providing caretaking and security services; (iv) the cost of providing fire protection systems and services; (v) the cost of landscaping and paving (including replacement where required) the Wharf; (vi) the cost of insurances of the Wharf effected by a Wharf Lessee; (vii) the cost of engaging consultants and contractors in connection with the above; (viii) all rental, outgoings and other amounts payable under the Wharf Lease; (ix) all rates, taxes and charges payable by a Wharf Lessee (whether assessed directly against a Wharf Lessee or which a Wharf Lessee is required to pay by way of reimbursement under its Wharf Lease); (x) reasonable management and administration costs and the wages of staff incurred in connection with the operation of the Wharf (including -- 7 of 19 -- 8 organising quotes for work), payment and collection of any other Wharf Costs; and (xi) contributions to a sinking fund for major expenditure and demolition of the Wharf; but does not include any costs incurred: (xii) in maintaining, operating or insuring Terminal Infrastructure or the Marina; (xiii) in maintaining, operating or insuring any improvements within the Retail Areas for use in connection with adjoining retail premises or in connection with the conduct of any retail activities on the Wharf; or (xiv) solely as a result of additional operational requirements required as a result of the presence of a Vessel berthed at the Wharf (for example, additional security as a result of legal requirements). (f) Principal Owner means an Owner other than: (i) a subsidiary scheme body corporate; and (ii) the owner of a lot in a community title scheme. [9] Between 7 October 2022 and 21 November 2023, the plaintiff issued invoices to the defendants. The plaintiff contends that the invoices were issued by the plaintiff as the Wharf Lessee for Wharf Costs to each of the defendants as Principal Owners. The invoices total approximately $2.8 million dollars. The defendants have not paid the invoices. In these proceedings the plaintiff seeks to recover the amounts of the invoices. The real issues in dispute [10] The pleadings are presently constituted by: (a) an amended statement of claim filed 31 January 2024 (“the statement of claim”); (b) an amended defence and counter claim filed 24 May 2024 (“the defence”); and (c) a reply filed 4 June 2024 (“the reply”). [11] The plaintiff alleges that the Building Management Statement: (a) is binding on the successors in title to the registered owners of each lot to which it applies pursuant to s 54D of the Act; (b) charges any new lots created pursuant to cl 15.1 of the Building Management Statement; (c) is binding on the community title schemes in the residential precinct and the mixed use precinct pursuant to s 54I of the Act; and (d) operates as a deed pursuant to s 176 of the Act. -- 8 of 19 -- 9 [12] The defendants deny each of these allegations.3 Central to these denials are “the matters pleaded in [38]-[40]” of the defence. Those matters are called in aid throughout the defence in support of various denials and in support of the proposition that no costs are recoverable under cl 6.3 of the Building Management Statement.4 Essentially, the defendants allege that cl 6.3 of the Building Management Statement is not authorised by s 54C of the Act and is ultra vires or void or unenforceable as against the defendants.5 [13] Paragraphs 38 to 40 of the defence provide: “[38] Under s 54A(2) of [the Act], at all material times a ‘building management statement’ within Part 4, Division 4, of [the Act] was an instrument that complied with inter alia the requirements of subsections (1) and (2) of s 54C of that Act. [39] Based on [4], the Wharf Costs are, and at all material times were, not costs incurred by a defendant in relation to a facility used by, or of benefit to, that defendant. [40] Clause 6.3 of the [Building Management Statement]: (a) is and was at all material times not a provision about any matter within: (i) s 54C(1); or (ii) s 54C(2); (b) has the effect pleaded in [5]; (c) in the premises of subparagraph (a), and further or alternatively subparagraph (b): (i) was not authorised by s 54C of [the Act]; (ii) is ultra vires or void or unenforceable against the defendants.” [14] Paragraphs 4 and 5 of the defence provide: “[4] The Wharf, being the land adjoining the Complex described as Lot 817 on Plan CP SL3772, where applicable including the wharf structure, gangway and all other fixtured and improvements on or within the wharf at all material times was: (a) defined under the [Building Management Statement] as part of the Brisbane Cruise Terminal or ‘BCT’, which relevantly comprised the Terminal Lot, the Wharf and all other parts of the Complex used by the operator in connection with the operation of the port facility and terminal… ; 3 Defence, [2](b). 4 For example refer to [9(c)] of the defence. 5 Affidavit of Mr Robson, [26](c). -- 9 of 19 -- 10 (b) land which adjoined, but did not form any part of, the ‘Complex’… comprising the land within the Residential Precinct and the Mixed Use Precinct, along with all buildings and other improvements built on or within that land …; (c) was not a lot entirely or partly contained in, or entirely or partly containing, 1 or more ‘buildings’, within the meaning of that expression in [the Act]; (d) … before the [Building Management Statement] was made and apart from it, under Easement No. 708474427 in favour of Brisbane City Council … and the Wharf Lease, burdened by the following personal covenants, at the cost of the Wharf Lessee: (i) to be kept continuously illuminated from dusk until dawn to such a level of lighting as may reasonably be required having regard to similar boardwalk areas within Brisbane CBD; (ii) maintained so that the surface of the Wharf was in a good and substantial state of repair and to the satisfaction of the Council; (iii) kept so that the improvements on the Wharf were in good repair and condition; (e) further, before [the Building Management Statement] was made and apart from it, under the Wharf Access Easement, benefited and burdened, as the case may be, by the following covenants as to its use and access: (i) (clauses 2.2 and 2.3, Wharf Access Easement) for the primary purpose of forming part of the BCT and on any day on which a passenger ship, liner or other like vessel was lawfully berthed and the operator of the BCT required it for the effective and functional operation of the BCT; (ii) (clause 2.1 of the Wharf Access Easement) otherwise: (1) for the purpose of providing the public free and unrestricted access; and (2) to allow for the access and egress of the Council, its officers, employees, agents, servants invitees and licensees who pass by foot, bicycle or wheelchair, over the permanent walkway forming part of the Wharf; (f) under the [Building Management Statement], remained: -- 10 of 19 -- 11 (i) for the exclusive use of the Owner and/or operator of the BCT [which includes the plaintiff] during the period 2 hours before until 2 hours after the departure of any vessel or ship that birthed at, embarked people to or disembarked people from the Wharf with the approval of the Wharf Lessee for the purposes associated with the BCT (clause 7.2); (ii) at all times other than those in sub-subparagraph (i), to provide public access along the river (clause 6.1(b)) with rights of access and use which were no greater for an Owner or visitor than those which were contained in, or derived from, the Wharf Access Easement (clause 6.1(c)); (iii) based on the matters pleaded above in this paragraph: (1) in relation to Owners and visitors of the defendants, a facility in respect of which they had no greater rights or benefits than any member of the public; (2) in relation to the Wharf Lessee, burdened to no great extent than it already was by the Wharf Access Easement and the Wharf Lease; (g) not: (i) common property of any defendant; (ii) the property, or in the possession, of any non-Wharf Lessee Owner of the [Building Management Statement]; (iii) for the exclusive use of any non-Wharf Lessee Owner; … (ix) a facility in respect of which any non-Wharf Lessee Owners had any greater use or benefit than any member of the public; and (x) ‘affected land’ stated in item 2 of the [Building Management Statement]. [5] Clause 6.3 of the [Building Management Statement] has the effect of seeking to impose on the defendants as members of the [Building Management Statement] liabilities incurred: (a) by others with the exclusive right to use and occupy the Wharf; (b) without regard to revenues earned by the Wharf Lessee from, or in relation to, the Wharf; -- 11 of 19 -- 12 (c) for the costs incurred to maintain the Wharf, which is neither the common property of any defendant nor the property, or in the possession, of any non-Wharf Lessee Owner of the [Building Management Statement]; (d) for a facility used for, and of benefit to, the public.” [15] The reply relevantly, at paragraph 1(g), denies paragraph 4(g)(ix) of the defence on the basis that “the Wharf was a facility in respect of which the Owners had greater use and benefit than members of the public, in the following ways: (a) the owners and occupants of the properties in the [Complex] enjoy the use and amenity of the Wharf as a facility in close proximity to their properties; (b) the Wharf provides a means of access (either directly or via other shared access ways under the [Building Management Statement] to the scheme land; (c) the presence and upkeep of the Wharf adjoining the [Complex] increases the value of the properties for the Owners (who include the members of the Defendant bodies corporate); (d) the [Complex], including the properties included in the community titles schemes for which the Defendants are the bodies corporate, could not have been constructed without the Wharf: (i) the State of Queensland granted to Multiplex Portside Wharf Pty Ltd and its related entities a right to construct the Portside Wharf complex as part of a broader Project …; (ii) it was a condition of the Brisbane City Council Development Approval for the first stage of Portside Wharf that a wharf/public boardwalk be constructed and maintained along the river frontage (condition 11), and that an easement for public access be granted in favour of Brisbane City Council over the wharf/public boardwalk (condition 41); (iii) the Brisbane City Council Development Approval for the first stage of Portside Wharf was granted in circumstances where the Wharf structure was part of the ‘approved plans’…”6 The proposed separate questions [16] The defendants applied for the following questions to be determined separately and in advance of the trial: “(a) Do sections 54C(1) and (2) of [the Act] contain an exhaustive list of provisions that are permitted to be contained in a building management statement? (b) Is clause 6.3 of the [Building Management Statement] about a matter in sections 54C(l)(b), (2)(b), (2)(c) and/or (2)(f) of [the Act]? (c) Is clause 6.3 of the [Building Management Statement] void or unenforceable because: 6 Reply, [1(g)]. -- 12 of 19 -- 13 (i) It is not about a matter in sections 54C(l)(b), (2)(b), (2)(c) and/or (2)(f) of [the Act]? or (ii) The ‘Wharf’ as defined in the [Building Management Statement] is not land stated in item 2 of [the Building Management Statement]? (d) By the first, second and third defendants executing Amendment 714430919: (i) Is the [Building Management Statement] enforceable in contract as against the first to third defendants? and (ii) If so, is clause 6.3 enforceable against the first to third defendants as a contractual obligation?” [17] In their written submissions, the defendants proposed a further separate question as follows:7 “Whether, on a proper construction of the [Building Management Statement], an invoice or account signed by the Wharf Lessee or any officer of the Wharf Lessee is conclusive evidence that the costs referred to in that document are ‘Wharf Costs’ within the defined meaning of that term?” An application under rule 483: legal principles [18] The starting point is that, ordinarily, all issues of fact and law in a proceeding should be tried at once. Rule 483(1) provides a discretion to order that a question or questions be determined separately before the trial of the proceeding. That discretion is wide but ultimately must be exercised having regard to what is just and convenient.8 [19] Whether the proposed course is desirable, that is just and convenient having regard to the objects contained in rule 5 of the UCPR, will ordinarily involve a discretionary judgment being made at an early stage of a proceeding. It is for the party propounding the separate question to demonstrate that it is desirable for the Court to embark upon that course.9 In Landsdale Pty Ltd v Moore,10 Newnes JA (with whom Buss JA agreed) observed: “…The determination of an application for separate trials requires a careful balancing of the prospective advantages and disadvantages involved in separating the issues, bearing in mind the uncertainties inherent in litigation, and that, once embarked upon, it is a course from which it may be difficult and even impossible to retreat. It should only be embarked upon where its utility, economy and fairness to the parties is clearly made out.” [20] The last sentence of that quoted observation, reflects a statement made in the joint judgment of Justices Kirby and Callinan in Tepko Pty Ltd v Water Board.11 7 Defendants’ Outline, [66]. 8 Talbot v Boyd Legal (A firm) [2020] QSC 185, [63]. 9 Idoport Pty Ltd v National Australia Bank Ltd (No 15) [2000] NSWSC 1215, [7] (Einstein J). 10 [2009] WASCA 176, [21]. 11 (2001) 206 CLR 1, [170]. -- 13 of 19 -- 14 [21] In Reading Australia Pty Ltd v Australian Mutual Provident Society,12 Branson J, in an often cited judgment, summarised the principles applicable to an application for the determination of a separate question. Her Honour identified the factors which tend to support the making of an order in favour of a separate determination as including that the determination of the question or questions might contribute to the saving of time and costs by substantially narrowing the issues for trial or even lead to disposal of the proceeding or contribute to the settlement of the proceeding. In Peros v Blackburn,13 Derrington J observed that, in the commercial courts, where parties are motivated to have their matter resolved as quickly and as efficiently as possible, the separate trial process “is regularly used to determine pivotal issues which regularly has the consequence of resolving the whole proceedings”. Whether an issue may be regarded as “pivotal” and its determination might be expected to have the consequence of resolving the whole proceeding, will depend upon a careful identification of the real issues in dispute. Those questions may be able to be answered more confidently in a case where the real issues are precisely formulated and there is a clear demarcation between issues pertaining to liability and those pertaining to quantum. [22] It may be observed that the separate trial of issues has in some cases added to the difficulties of courts of appeal and tended to increase the cost and time of legal proceedings.14 Separate trials also usually raise the prospect of separate appeals.15 A question has been considered not “ripe” for separate determination where it is simply one of two or more alternative ways in which a party frames its case and determination of the issue would leave significant other issues unresolved.16 A lack of clarity as to the nature and scope of the issues that would arise in determining a separate question is a factor that may tend to militate against ordering a separate trial.17 There is recognition in the authorities that ordering the trial or determination of separate questions can be productive of delay, additional expense, appeals and uncertainty.18 Hence, the proper exercise of the discretion necessarily requires some recognition of a need for care and caution.19 [23] In Bass v Permanent Trustee Co Ltd,20 the joint judgment observed: “Special problems can arise where the preliminary question is one of mixed fact and law. As Brooking J pointed out in Jacobson v Ross21, it is necessary in that situation that there be precision both in formulating the question and in specifying the facts upon which it is to be decided. His Honour added: 12 (1999) 240 FCR 276, [8]. 13 [2024] FCA 177, [31]. 14 Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 15) [2021] WASC 307, [31] (Le Miere J). 15 Landsdale, [20] (Newnes JA). 16 Reading, [8(e)]. 17 Peros v Blackburn [2024] FCA 177, [37], [78] (Derrington J). 18 Byrne v People Resourcing (Qld) Pty Ltd [2014] QSC 39, [3]. 19 Perre v Apand Pty Ltd (1999) 198 CLR 180, [436]; Callide Power Management Pty Ltd v Callide Coalfields (Sales) Pty Ltd (No 3) [2015] QSC 295, [46]; Byrne, [3]. 20 (1999) 198 CLR 334, [53]. 21 [1995] 1 VR 337, 341, referring to Nissan v Attorney-General [1970] AC 179, 242-243 per Lord Pearson. -- 14 of 19 -- 15 ‘Care must be taken to ensure that, in one way or another, all the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable ... as facts assumed to be correct for the purposes of the preliminary determination, or as facts which both sides accept as correct, or as facts which are to be judicially determined. Failure to do this, and in particular failure to perceive that the facts alleged in a pleading are some only of the facts relevant to the determination of the preliminary question, may make the order for preliminary determination unfruitful.’ Quite apart from rendering the ‘order for preliminary determination unfruitful’, the failure to identify the relevant facts or the means by which they are to be ascertained may result in procedures which do not conform to the judicial process. That is a matter to which it will be necessary to return.” The evidence and the parties’ arguments [24] The proceeding commenced on 15 March 2023. Disclosure has not yet occurred. The proceeding was placed on the Commercial List on 2 April 2024. The defendants proposed separate questions on 1 May 2024. The defendants’ solicitor deposed that the defendants’ proposal was for the hearing of separate questions “to resolve liability only”.22 He deposed that “a determination of liability”23 did not require disclosure, could be conducted by reference to written evidence and be heard in one day or less. The defendants’ costs of preparing for and attending the proposed hearing were estimated as being between $90,000 to $98,000.24 The defendants’ solicitor estimated that “a final hearing on quantum” would take between 4 and 8 days. That estimate allowed for one day for openings, one to two days for the plaintiff’s expert evidence, one to four days for the defendants’ expert evidence and one day for addresses.25 The defendants’ solicitor further estimated that it would take between 12 and 18 months to complete the steps necessary for the final hearing on quantum and that the defendants’ costs to prepare for and appear at the hearing would be in the range of $529,500 to $998,500. During oral submissions, the defendants’ counsel conceded that it was “within the possibilities” that a trial of the proceeding on liability and quantum issues could be heard in five days. That was an appropriate concession borne out of the defendants’ solicitor’s evidence. [25] The defendants’ essential submissions may be outlined as follows. The separate questions were distinct and confined and “largely concerned with matters of law”. There would be no witnesses at the separate trial, which might occur quickly and only occupy one day. There was no significant overlap of the evidence necessary to determine the separate questions and the evidence necessary to decide the remainder of the proceeding. The determination of the separate questions would either dispose of the proceeding completely or promote the prospect of settlement. In that regard, the defendants’ solicitor relevantly deposed, “I believe that the parties would then be more likely to settle the proceeding as a whole. I hold that belief because the only real 22 Affidavit of Mr Robson, [27]. 23 Affidavit of Mr Robson, [31]. 24 Affidavit of Mr Robson, [32]. 25 Affidavit of Mr Robson, [44]. -- 15 of 19 -- 16 issues remaining would then be as to quantum (and because as I have set out above, resolution of the quantum is likely to be time consuming and costly particularly having regard to the quantum in dispute)”.26 [26] The plaintiff’s solicitor deposed to his expectation that the plaintiff at any determination of a separate question would lead evidence along the following lines:27 (a) lay evidence as the how the Wharf is used and costs were incurred by the plaintiff; (b) expert evidence from a valuer about whether the presence and upkeep of the Wharf increased the value of the properties for the owners in the Complex including the defendants; (c) lay evidence about the circumstances surrounding the approval for construction of the Complex and the requirement to construct a publicly accessible wharf as a condition of that approval; (d) expert evidence from a town planner about whether approval to construct the Complex might have been obtained in the absence of a condition to construct a publicly accessible wharf. [27] The plaintiff’s solicitor deposed that a trial of the proceeding, allowing for amendments to the pleadings to enable the defendants to run a positive case as to whether the Wharf Costs were reasonably incurred, might take between three and four days. During oral submissions, counsel for the plaintiff submitted that five days would be “a reasonably safe estimate”.28 [28] The plaintiff’s essential submissions may be outlined as follows. There was a “lack of clarity as to the nature and scope of the issues that would arise” on any trial of the proposed separate questions. The separate trial would involve witnesses and substantive factual issues involving lay and expert evidence. The proposed separate trial would not be a trial of all of the liability issues in dispute. If the plaintiff enjoyed success on the separate trial, other liability issues would remain to be determined. Consideration [29] There was force in the plaintiff’s submission that there was a lack of clarity surrounding the nature and scope of the issues that might arise on the proposed separate trial. Paragraphs 38 to 40 of the defence reference and rely upon, paragraphs 4 and 5 of the defence. I accept the plaintiff’s submission that, on the face of the defence, it is not entirely clear whether paragraph 39 (which is expressed as being “[b]ased on [4]” is relied upon in support of the allegations, ultimately made by paragraph 40, to the effect that clause 6.3 of the Building Management Statement is not authorised by s 54C of the Act, is ultra vires, void or unenforceable against the defendants. [30] In oral submissions, the defendants’ counsel clarified some matters about the defence. First, the defendants advance a case that subsections 54C(1) and (2) of the Act set out the only provisions which might be contained within a building management 26 Affidavit of Mr Robson, [49(d)]. 27 Affidavit of Mr Edgecombe, [16]. 28 T 1-45.11. -- 16 of 19 -- 17 statement.29 The defendants seek to argue that s 54A(2)(b) does not contemplate any provisions being included within a building management statement, other than those contained within subsections 54C(1) and (2). Secondly, the defendants allege that the Wharf is not on a Lot to which the Building Management Statement applies and is not “affected land” within item 2 of the Building Management Statement.30 Thirdly, the defendants allege that the Wharf is not to be regarded as “a facility” within the proper construction of s 54C(2)(f) of the Act. Against the background of those matters, the defendants contend that the Wharf Costs are not able to be characterised as costs incurred in relation to “a facility” within the meaning of s 54C(2)(f). Fourthly, the defendants contend that the Act allows a building management statement to provide for levies but does not allow for the imposition of a cost not able to be described as a cost incurred by a Lot to which the scheme applies in relation to a facility.31 The effect of these oral submissions was to suggest that paragraph 39 of the defence is to be relied upon in support of the defendants’ allegation that clause 6.3 of the Building Management Statement is not authorised by s 54C of the Act, is ultra vires, void or unenforceable against the defendants. Viewed as such, paragraph 39 of the defence was integral to the proposed separate questions. [31] By the reply, the plaintiff alleges that subsections 54C(1) and (2) of the Act do not contain an exhaustive list of matters that may be contained in a building management statement.32 In the alternative, the plaintiff alleges that the Wharf is a facility used for, and of benefit to, the defendants33 and in respect of which the defendants have greater use and benefit than members of the public.34 Relying upon those allegations of fact, the plaintiff alleges that clause 6.3 of the Building Management Statement is a provision about a matter within subsections 54C(1)(b), 54C(2)(b), 54C(2)(c) and/or 54C(2)(f) of the Act. [32] It may be observed that at least one important sub-paragraph of paragraph 4 of the defence, subparagraph (g)(ix), involves an allegation of fact, namely that the Wharf is not “a facility in respect of which any non-Wharf Lessee Owners had any greater use or benefit than any member of the public”. That factual allegation is one of the allegations upon which paragraph 39 of the defence is said to be “based”. That factual allegation is denied, for detailed reasons, by paragraph 1(g) of the reply. The joinder of issue reflected by paragraph 4(g) of the defence and paragraph 1(g) of the reply has significance for the determination of the allegations contained in paragraph 39 of the defence. [33] Having regard to the pleadings, as further explained in the defendants’ oral submissions, and the nature of the joinders of issue which arise by reason of the reply, in my consideration the determination of the proposed separate questions will necessarily involve the determination of a significant factual issue. I accept the plaintiff’s solicitor’s evidence that the plaintiff intends to call lay and expert witnesses in relation to that issue. In my consideration, having regard to the pleadings, whether the Wharf might properly be regarded as a facility for the purposes of the Act is properly characterised as involving a question of mixed fact and law. To the extent 29 T 1-13.36. 30 T 1-24.22. 31 T 1-22.48 - T 1-23.1. 32 Reply, [3(b)]. 33 Reply, [2(d)]. 34 Reply, [1(g)]. -- 17 of 19 -- 18 that the question, at least in part, involves a disputed question of fact, the usual interlocutory processes should apply in relation to the resolution of that fact. I am also not persuaded that a trial in relation to that issue of fact could be heard in one day. [34] The plaintiff emphasised that some liability issues remained outside the scope of the proposed separate trial. One such issue was whether the invoices comprise costs “which were reasonably incurred”. The entitlement of the plaintiff to be reimbursed for Wharf Costs is premised on those costs being “costs reasonably incurred by [the plaintiff]”.35 The defendants have not admitted that the costs were reasonably incurred and explained that non-admission in their written submissions on the basis that “where no disclosure has been made, the defendants cannot possibly ascertain the truth or otherwise of those matters”.36 As I read the defendants’ written submissions, it appeared that the defendants were foreshadowing the realistic prospect of an amendment after disclosure in order to plead a positive case in relation to this issue. In that regard, the defendants’ submissions styled a suggestion by the plaintiff that the defendants would not be able to lead evidence about this issue at trial as “technically correct, but evidently absurd”.37 The further separate question proposed in the defendants’ written submissions related to an issue that was not clearly raised by the pleadings and, in any event, did not bring the issue as to whether the costs were “reasonably incurred” wholly within the purview of the separate trial. [35] I accept the plaintiff’s submission that the issue as to whether the costs the subject of the invoices were reasonably incurred in connection with the Wharf is an issue which bears upon the liability of the defendants to pay the amount of the invoices. In my consideration, whether the costs were reasonably incurred is a material fact which is a substantive or constituent element of the plaintiff’s cause of action. The exclusion of this issue from the proposed separate trial means that the proposed separate trial is not properly characterised as “a separate trial on liability” or as being a trial as to “whether the defendants have any obligation to pay”. Rather, the proposed separate trial is properly characterised as a trial of only some of the liability issues in the proceeding. The proposed separate trial would leave a significant further issue of liability unresolved. In that sense, I do not regard the proposed separate question as being “ripe” for determination. Against that background, from the plaintiff’s perspective, success on the preliminary trial would be of only limited practical benefit in terms of resolving the proceeding. [36] It can be accepted that if the defendants enjoyed success in respect of the questions identified by them at a separate trial, the proceeding would, subject to the prospect of an appeal, come to an end. That is a factor which I have taken into account in the exercise of my discretion. I am conscious of what was observed by Buchanan J in Spirits International BV v Federal Treasury Enterprise (FKP) Sojuzplodoimport,38 namely that, in almost every case where a separate question is posed, it is possible to speculate that the questions might not be answered in a way which disposes of the proceeding as a whole. That the questions may not be answered in favour of the defendants, is not a matter to be ignored in the balancing exercise called for by a proper exercise of the discretion. The Court must be careful to balance prospective 35 Refer to definition of “Wharf Costs”. 36 Defendants’ Outline, [61]. 37 Defendants’ Outline, [59]. 38 [2011] FCAFC 69, [152]. -- 18 of 19 -- 19 advantages and disadvantages involved in separating the issues, bearing in mind the uncertainties inherent in litigation. [37] I am not positively persuaded that the proposed separate trial would contribute to the saving of time and cost. The proceeding is being managed on the Commercial List. With appropriate case management, and having regard to the overriding obligations imposed upon the parties by paragraphs 21 and 22 of Practice Direction 1 of 2023, the proceeding should be ready for trial within six months. Trial dates will be allocated to the proceeding in a timely way, by reason of the flexibility afforded by Practice Direction 1 of 2023, and in recognition of the fact that the resolution of the issues in the proceeding is important to the parties in the further management and administration of the Complex. In my assessment, that approach to the case management of the entire proceeding is preferable to fragmenting the proceeding to pursue the proposed questions because it brings with it minimal risk of undue delay. In the present case, a separate trial would appear to me to involve more than one day given that there is a significant contested factual issue involved. By way of comparison, a trial of all of the issues might reasonably be expected to be heard within five days. The difference in length between the proposed separate trial and the orthodox trial is not overly significant on the facts of this case. [38] I am also conscious that any judgment on the separate trial would carry with it the prospect of an appeal. It also cannot confidently be predicted that the outcome of the trial of the separate question would lead to the disposal of the proceeding or contribute to the settlement of the litigation. The reality is that a very significant issue as to liability is not to be determined from the separate trial. In the event that the separate question were determined in favour of the plaintiff, the defendants would still require disclosure in order to be properly informed about a further liability issue, namely whether the costs the subject of the invoices might be regarded as reasonably incurred. Absent that disclosure, even with the benefit of a decision in the plaintiff’s favour in the preliminary trial, I am not persuaded that the parties would be able to meaningfully mediate with a view to settling the proceeding on a commercial basis. [39] For the reasons I have outlined, the defendants have failed to establish that the proposed separate trial involves utility, economy and fairness to all the parties. It has not been demonstrated to my satisfaction that it is desirable for the Court to embark upon the path of a separate trial. [40] The orders I make are as follows: (a) The defendants’ application filed 24 May 2024 is dismissed. (b) I will hear the parties as to costs and further directions. -- 19 of 19 --