Case: Zee Sweet Pty Ltd v Magnom Orchards Pty Ltd [2003] VSC 486
Outcome: referred to
Mr Hannaford also filed written submissions, which he developed at the hearing. Mr Hannaford contends that: 1. The bases for the claims against him for delivery up and/or destruction of the trees are the terms of the Non-Propagation Agreements pleaded in subpars (c)(ii) of pars 11, 14, 17, 20 23 and 26 of the applicants' Further Amended Statement of Claim. As Mr Hannaford observes, he pleads that these are unenforceable since they are penalties and/or seeks relief against forfeiture. Mr Hannaford further submits that this claim, which will have to be determined before the applicants' entitlement to relief in the nature of delivery up or destruction is granted, "will require a determination of the factors which may have led to the subject clauses being inserted into the agreements and whether ... the rights sought to be granted by the clauses were extravagant or oppressive at the time of entry into the agreements". He added that "[t]he question of relief against forfeiture will require a consideration of the circumstances as at the date of the breach and will require a consideration of the effect of the proposed delivery up or destruction orders on [him]". Counsel for Mr Hannaford submits that these matters "sit ill" with a trial as to liability only since the witnesses in relation to these matters may also be witnesses in connection with damages issues. Findings regarding their credit may need to be made prior to the damages hearing if a split trial is ordered. In an amendment to his written submissions filed prior to the hearing, Mr Hannaford noted that his defence "rests significantly on his credit" and that, if unsuccessful, he would also be a likely witness in relation to assessment of damages or account of profits. He argued that, therefore, an order for a split trial would have the potential to cause embarrassment and the need for the judge hearing the trial on liability to disqualify herself from hearing the latter part of the proceeding. 2. Zee Sweet Pty Ltd v Magnom Orchards Pty Ltd [2003] VSC 486 (" Zee Sweet ") is distinguishable. 3. If there is an enquiry as to profits at the trial on liability, as suggested by the Notice of Motion, then issues will plainly overlap. (I note that the applicants disavowed this suggestion at the hearing.) 4. The relief sought by the applicants includes discretionary relief such as declarations and injunctions, which ordinarily weigh against the splitting of a trial. 26 The parties did not rely at the hearing on Zee Sweet and I do not consider much turns on its conduct. It is, plainly enough, a different case from the present, although involving a similar subject matter. 27 Mr Hannaford raises the possibility that, after the trial on liability, it may be necessary to make adverse credit findings against some witnesses, who may later be required for the trial on pecuniary relief. Mr Hannaford claims and, for present purposes, I accept that his credit will be in issue on liability. Mr Hannaford places particular reliance on the evidence that he foreshadows in connection with his penalty and/or relief against forfeiture claim, which, according to him, would overlap with evidence he is likely to give at a trial on monetary relief. His counsel points out that he is a sole trader and, as such, is the person most familiar with all aspects of his business. 28 I accept that there is a risk that I might take an adverse view of Mr Hannaford's credit at the trial on liability. Whether or not Mr Hannaford will need to give evidence at a trial on monetary relief is uncertain, although I accept that he may. I accept that if I were to make adverse credit findings against him, he might perceive that he was at some disadvantage at the second stage of the proceeding. Whether or not this possibility is realised remains to be seen. I doubt, however, that any real disadvantage is likely to arise for him. The possibility of disadvantage is limited because at this second stage it is likely that much would turn on documentary business and other records and expert accountants' evidence. Notwithstanding this, I accept that the possibility that I may take an adverse view of Mr Hannaford's credit at the trial on liability, which will impact on him if he is needed to give evidence at the trial on monetary relief, is a factor tending against a split trial.