CARRIAN INVESTMENTS LTD. v. PRICE WATERHOUSE INTERNATIONAL AND OTHERS

IN THE COURT OF APPEAL

1993, No 128
(Civil)

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J U D G M E N T

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Mortimer, J.A.:

1. Keith J. has been designated to try this action and the interlocutory proceedings are reserved to him. It is a massive action. Several billion dollars are claimed, the pleadings run to 1053 pages and one party estimates the trial will take two years. The action is hotly contested on liability, causation, remoteness and quantum. The events giving rise to it occurred between 1980 and 1982, and the writ was issued on 21st December 1985. The trial has now been fixed for 1st October 1994.

2. Few outside the law can have any conception of the enormous burden on the judge in trying the issues of law and fact and evaluating the claims in a case such as this. The expert evidence on liability is due to be exchanged this day. It will run to about a thousand pages on each side at this initial stage.

3. It is impossible for the judge to do justice in or handle a case of this size without intervening to manage the litigation. This is his duty whether or not the parties agree or acquiesce. In accordance with this duty he has made orders and (inter alia) has laid down a timetable leading up to the trial. Additionally he has asked the parties to consider a number of suggestions for the more timely and efficient trial of these complex issues.

4. He became rightly concerned that to handle all the issues on the pleadings in one huge trial would create an impossible burden for him. On 23rd November 1992 he caused a letter to be written to the parties seeking their views, inter alia, on a split trial. Both parties were opposed on the basis that it would increase the length and costs of the trial and they said it would be difficult to proceed with the balance of the trial on damages without the final resolution of the liability issues.

5. In February 1993 the judge heard an application for amendment to the pleadings over a period of five days. Consequent upon the parties' expressed intention to exchange evidence in accordance with segregated issues he raised the matter again. This time the defendants modified their stance. After a hearing on 16th July 1993 the judge directed that all questions of the defendants' duties owed to the plaintiff and the breach of those duties be determined, including any appeals to the Court of Appeal and Privy Council before any questions of damages arising from such breaches.

6. The plaintiff now appeals seeking to reverse the judge's order to delay trying the damages issues until any appeals against the decision on liability have been exhausted. Mr Field Q.C. for the plaintiff accepts that the issues must be initially segregated to enable the judge to handle the case. He envisages that the judge should hear questions of liability and then adjourn the case to prepare a draft judgement on them which he will provide to the parties only. This would remain a draft which could be varied in the light of further evidence or submissions. Also, it is accepted that one or other party will wish to appeal and that there may be two years delay between the conclusion of the liability issues and the second part of the trial. Mr Field envisages that where there are substantial issues between the parties on liability the judge may be invited to decide the consequential issues on damages on an "if I am wrong" basis.

7. He submits that the envisaged delay for the appeal process to be exhausted is nothing short of disastrous for the creditors of the plaintiff, and that in this regard the judge failed to exercise his discretion properly and was plainly wrong.

8. In summary his submissions are:

(1) That the judge overlooked or paid insufficient regard to the public interest in finalising the liquidation of a notorious company as soon as possible on the basis that the plaintiff will be kept out of any money judgment until 1998. In this regard he submitted also that the judge was wrong in weighing the public interest of the court and comparing the further possible delay of two years with the delay that has already taken place.

(2) He submits that the defendants have misled the judge and have "purchased" a later trial by their opposition to a split trial until June 1993. Mr Field suggests that the trial on liability would now be in progress but for the defendants' contention that the trial had to await their consideration of some half million documents, most of which go to causation, remoteness and quantum. It is suggested that the defendants having caused this delay a further 2-year delay is unacceptable.

(3) He submits that although the issues may be segregated as a matter of trial management they cannot be separated in a split trial because of the shading of issues between liability and damages where the duty is determined by foreseeability. At one stage a point strenuously contended for by the defendants themselves.

(4) That the delay in the final money judgment (if any) is inimical to the prospects of settling the action.

(5) That the judge should have had more regard to the possibility that he will not be available to try the second part of the action; that he took the decision prematurely before he had seen the nature of the evidence; and that he too readily accepted the possibility that the plaintiff would fail.

9. For my part, I can deal briefly with the bulk of these submissions. I do not accept that the trial would now be taking place but for the defendants' attitude. As was pointed out by Mr Riberio Q.C. for the defendants, it would not have been possible for them to go into trial on liability without having considered the 500,000 documents relating to damages. The judge was aware of this matter and considered whether or not to advance the trial by a few months but decided against it.

10. Nor do I accept that there will be any difficulty about the shading of issues. The judge has yet to make his final directions upon the issues to be tried. He will define them to assist the parties. Nor do I, for my part, think the judge readily accepted that the plaintiff might fail. This his judgment demonstrates. As to the prospects of settling the action, although the imminence of a money judgment is undoubtedly a spur so also is a decision on liability.

11. The only matter advanced which causes me to pause is the envisaged delay of two years after the first part of the trial. Obviously such a delay is highly undesirable and the alternatives had to be considered by the judge given that this litigation cannot be dealt with at one complete hearing. It was necessary for him to balance the prospects of an appeal on liability succeeding after trial on all issues so that possibly a second assessment on some issues would be required, with the consequent extra expense and delay, against the certainty of having matters on liability finally determined before the other issues. As can be seen from the judge's careful consideration of these matters he was faced with a delicate balancing exercise and came down in favour of the order he made. He did not specifically consider the public interest in finalising the liquidation of the plaintiff but for my part I do not think this adds anything to the pervading public interest in avoiding delay and finalising litigation.

12. The only question this Court has to consider is whether the judge's decision on the point challenged is plainly wrong (see Ashmore and others v Corporation of Lloyds [1992]1 WLR 446). Where a judge's ruling on case management is challenged (and this is such a ruling) this Court should approach the matter with special caution. The judge assigned will nearly always be in a better position to decide matters of case management than this Court. So it is with this judge. He had a number of applications including a 5-day hearing to amend the pleading. His judgment demonstrates that he balanced the various considerations in giving this direction. He was fully aware of its advantages and disadvantages. For my part, I think it is quite impossible to say that he was plainly wrong in making this direction and I would dismiss this appeal without hesitation.

13. I would add one or two further remarks. This is a wholly exceptional case. It will be rare indeed that judges will allow an opportunity to appeal some issues before others affected by them are tried. Also, as this Court will intervene only where the judge is plainly wrong and justice requires an intervention, it will be rare that decisions on case management are successfully challenged. I mention this last matter because parties should think carefully before challenging such a decision even though there is an appeal as of right in this jurisdiction. Prima facie, a judge managing a case does this in the interests of justice and he has a very wide discretion in fulfilling his duty.

14. For these reasons I would dismiss this appeal.

Sears, J.:

15. The modern role of a Judge trying complex civil litigation is to be a Case Manager. His duty is not only to decide the issues, but also to ensure that the litigation is conducted speedily and without undue cost. Keith J. is the designated judge and the Case Manager for this long and difficult trial and he made the order appealed from as part of his duty to keep the case within acceptable bounds. This Court should support him unless it can be shown that his order is really perverse. He approached his decision with care and with the knowledge that it is he who will ultimately have the personal burden of trying the case. Such a burden is heavy and sometimes not recognised either by the parties, or the public, as such.

16. For the reasons given by my Lord Mortimer J.A. I agree that this appeal should be dismissed.

Penlington, J.A.:

17. I have seen the judgment of Mortimer J.A. in draft. I agree with it for the reasons he gives and am satisfied that this appeal should be dismissed. This Court is reluctant to interfere with a judge's exercise of a discretion. That should be even more so where it is a discretion as to the management of a trial with which the judge is seized.

18. It may be, as was the initial stance of the defendants in this case, not easy to clearly separate the issues of liability with those of remoteness and causation but I am satisfied that this can be done and the advantages of so doing are very substantial indeed.

19. I would, however, only emphasise that as Mortimer J.A. has said this is a totally exceptional case due to the extreme complexity and, sadly, the time it will take to be tried. It is for those reasons only that the issue of remoteness, causation and quantum of damage should await the result of any appeal against the judge's findings on liability. That course should only be taken in rare cases but I am satisfied that this is one such case.

20. The appeal is dismissed with costs to the defendants.