Case: Bass v Permanent Trustee Co Ltd [1999] HCA 9 ; (1999) 198 CLR 334
Outcome: discussed
Australia and the administrators argued that questions 1 and 2 were founded on the false assumption that apart from cl 7.1, the plaintiffs had an unqualified right, superior to Lehman Australia itself, to conduct, prosecute or resolve litigation with that company's insurers. It argued that the construction of cl 11.5 was not a matter of controversy and that it related only to claims against Lehman Australia being released. It argued that this construction would defeat the plaintiffs' contention that cl 11.5 was wider than its apparent terms. (As appears above, Lehman Bros disputes this construction.) Lehman Australia also argued that if the impugned provisions could not be supported by Pt 5.3A of the Act, then the deed would still be valid but those clauses would not be an operative part of the deed. Lehman Australia argued that if question 6 were answered "no", it would not follow that the deed would then become ineffective or void. Accordingly it argued that question 6 was of no utility to resolve any issue. Lehman Australia referred to the dangers of separate issues discussed in Tepko Pty Ltd v Water Board [2001] HCA 19 ; (2001) 206 CLR 1 and Bass v Permanent Trustee Co Ltd [1999] HCA 9 ; (1999) 198 CLR 334. In Woolcock Street 216 CLR at 524-525 [7] Gleeson CJ, Gummow, Hayne and Heydon JJ stressed the importance of recognising that there may be difficulties in using procedures for separate issues in cases in which it is necessary to consider developing, as distinct from applying, common law principles and continued: "The dangers of developing common law principle against an artificially constricted body of fact are self-evident. That is why, in some cases, even if the parties join in asking a court to determine a question separate from trial of the facts, it may be prudent for the court to decline to answer the question presented as being one which it is inappropriate to answer ( Bass v Permanent Trustee Co Ltd [1999] HCA 9 ; (1999) 198 CLR 334 at 357-358 [51] - [53] ). Indeed, as Bass v Permanent Trustee Co Ltd illustrates ( Bass [1999] HCA 9 ; (1999) 198 CLR 334 at 359 [56] . See also Malika Holdings Pty Ltd v Stretton [2001] HCA 14 ; (2001) 204 CLR 290 at 308-309 [61] .), in some circumstances to answer a question may be contrary to the judicial process. If the question is answered, it is important to identify any limitations which the procedure adopted may impose on the breadth of any principle that is to be identified as having been established or applied." If some or all of the separate questions can be answered they may prove decisive and, in any event, will clarify the future extent of the controversy so as to facilitate its efficient management. As Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ pointed out in Bass 198 CLR at 356 [48], a crucial difference between an advisory opinion and a declaratory judgment "... is the fact that an advisory opinion is not based on a concrete situation and does not amount to a binding decision raising a res judicata between parties". What the plaintiffs seek will lead to a binding decision on a concrete situation, at least on the issues of construction and, if the questions as to power or any of them are answered in their favour, will be likely further to narrow the controversy considerably.