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Principles of civil litigation [Third edition.]
 9780455239071, 045523907X, 9780455239088, 0455239088

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PRINCIPLES OF CIVIL LITIGATION

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PRINCIPLES OF CIVIL LITIGATION

DAVID BAMFORD BA (Hons), LLB, GDLP Professor, Flinders Law School

MARK J RANKIN LLB, GDLP, DSS, LLM Senior Lecturer, Flinders Law School (Chapters 9, 10 and 12)

THIRD EDITION

LAWBOOK CO. 2017

Published in Sydney by Thomson Reuters (Professional) Australia Limited ABN 64 058 914 668 19 Harris Street, Pyrmont, NSW First edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 Second edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 Third edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 National Library of Australia Cataloguing-in-Publication entry Bamford, David Principles of civil litigation / by David Bamford, Mark J Rankin 3rd ed Includes index. ISBN 9780455239071 (pbk) Actions and defences – Australia – Textbooks. Civil procedure – Australia 347.9405 © 2017 Thomson Reuters (Professional) Australia Limited This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Inquiries should be addressed to the publishers. All legislative material herein is reproduced by permission but does not purport to be the official or authorised version. It is subject to Commonwealth of Australia copyright. The Copyright Act 1968 permits certain reproduction and publication of Commonwealth legislation. In particular, s 182A of the Act enables a complete copy to be made by or on behalf of a particular person. For reproduction or publication beyond that permitted by the Act, permission should be sought in writing. Requests should be submitted online at http:// www.ag.gov.au/cca, faxed to (02) 6250 5989 or mailed to Commonwealth Copyright Administration, Attorney-General's Department, Robert Garran Offices, National Circuit, Barton ACT 2600. Product Developer: Elizabeth Gandy Publisher: Robert Wilson Edited and typeset by Newgen KnowledgeWorks Printed by Ligare Pty Ltd, Riverwood, NSW This book has been printed on paper certified by the Programme for the Endorsement of Forest Certification (PEFC). PEFC is committed to sustainable forest management through third party forest certification of responsibly managed forests. For more info: http:// www.pefc.org

PREFACE I must confess to finding this a somewhat strange experience — writing a preface to a book in which I have only written three chapters — but as the lead author, David Bamford, has recently retired from his position at Flinders University, and is presently touring the world having splendid adventures, the task falls upon me. I will keep it brief. First and foremost, I wish to express my gratitude to David Bamford. For many years he has encouraged my research in this area and has been a constant source of inspiration in that respect. For those of us teaching and/or researching in the civil justice field, David’s contribution to the discipline is well-known and highly regarded. For those less familiar with the subject matter, I think it will suffice to say that David Bamford is at the forefront of civil justice and civil litigation scholarship. The contemporary prominence of such scholarship is due in large part to David’s efforts and accomplishments. I know David will continue to research and publish within the discourse, despite his “retirement”, and I look forward to continuing to ride on his coattails. This third edition of Principles of Civil Litigation builds on the foundation of the two previous editions. As with previous editions, the focus remains upon the principles of civil litigation, rather than practical procedure. Where appropriate, comment is made concerning possible future directions of the civil justice system, both in terms of function and purpose. This edition contains one new chapter written by David Bamford (Trials), and I have updated and revised all other chapters, with the exception of Chapter 1 (The Civil Justice System), which was updated by Marie Hadley. We have endeavoured to present the law as it existed in March 2017. MARK J RANKIN Adelaide August 2017

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PREFACE TO THE SECOND EDITION This second edition builds on the foundations of the first. It does so at a time when civil litigation is undergoing an “existentialist” crisis. There is great concern as to whether civil litigation has a future. There are senior jurists who predict the death of civil litigation as we know it — most publicly, the former Chief Justice of South Australia, John Doyle. The procedural reforms outlined in the first chapter have continued a pace and the costs of litigation are leading governments to increasingly divert cases from courts. Personal injury litigation has diminished in many jurisdictions with administrative compensation schemes replacing the adversarial trial process. There is still a need for lawyers, but for advocates in the old tradition, the personal injury briefs have been disappearing. As this book stresses, the problems with civil litigation are not spread evenly across the whole of the justice system. Much of the work of the civil justice system is done in small claims courts where costs remain low and the process relatively speedy. Nevertheless, for those with civil disputes of any significant amount, legal costs remain a major obstacle. Complementing the diversion of cases from courts have been significant increases in the jurisdiction of the inferior courts — based partly on the belief they are cheaper and quicker for litigants. This has been particularly so in the small claims jurisdiction in some States. Here, of course, lawyers, are not able to appear as of right and the whole jurisdiction is based on the goal of minimising the involvement of lawyers. After 25 years of the procedural “revolution” the real problem is not so much courts and their procedures but the amount of work lawyers undertake in litigation and the amounts lawyers charge for that work. The principles of proportionality provide some hope for those concerned about the quantum of legal costs but until there is fundamental change in the approach of courts and government to the way lawyers charge, the problem is likely to remain. Moves away from activity costing to event or fixed costs must become part of the reform agenda. This edition contains three completely new chapters — on litigation costs; appeals and enforcement. Mark Rankin has written the new chapter on appeals. All the other chapters have been updated and in some cases revised substantially. As all those involved in civil litigation know, it is difficult to keep abreast of developments in this continually changing field. I am most grateful to all those who have provided feedback on the first edition and I look forward to corrections, suggestions and other comment on this edition. As with the first edition, I have been assisted by a number of wonderful researchers. Dr Joe McIntyre returned from Cambridge in time to assist with a significant part of the book before taking up an academic post in Canada. I am particularly grateful for his insights, editorial assistance and the interesting discussions that have influenced the writing of the chapter on case management. Marie Hadley has stepped in and been of great assistance in chasing up loose ends and bringing the project to completion. She managed to find obscure data and has helped improve the text.

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Mark Rankin has been a great collaborator. His insight and efficiency were inspirational and it is a delight to work with someone who shares a broad view of procedure and thinks about it deeply. Finally of course there is my family and friends. I hope it was not the stress of completing the book that led both my daughters Claire and Rachel to move out of home in the last six months of its writing! And I cannot repay Sue for all the support and forbearance she has shown — having spent the last 18 months living under the shadow of the new edition. DAVID BAMFORD January 2014

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PREFACE TO THE FIRST EDITION Civil litigation has long had bad press – in the public mind it is associated with long waiting times, high to ruinous costs, a level of unpredictability and unfair outcomes. In the academic world it has not fared much better. While the last 150 years have seen the transformation of legal education from a form of apprenticeship to an academically rigorous intellectual investigation of law and its functions, the study of civil litigation, civil procedure, and more broadly, civil justice, has been perhaps the slowest of all the subjects within the law discipline to make that change. Across much of the common law world, the study of civil litigation has remained practice focused. Until recently, in most Australian law schools, it was often taught by legal practitioners rather than the faculty of the law school. In England, law schools are not required to teach civil procedure at all and most do not, apart from some small coverage in other courses. North America, however, has had a much stronger tradition of civil litigation teaching – it is often a compulsory first-year course – and it enjoys an extensive and rigorous civil litigation scholarship. Thus while civil litigation became the Cinderella of the Anglo-Australian legal academy, the changes in civil procedure over the last 30 years mean that it is about to don its glass slipper. The near-revolution in civil procedure is likely to transform civil litigation, with the continuity that has marked common law civil litigation coming to an end, its foundations eroded. The traditional common law civil litigation paradigm required a procedural system based on the existence of juries, with parties to a case having almost complete control over the issues to be determined, the way in which the case was to be prepared, and how the case was to be run at trial. In the Australian context, most jurisdictions now no longer have juries at all, or if they do, they deal with a tiny fraction of the cases before those courts; the courts have taken on an increased supervisory role in the pre-trial process and are moving to do so at trial as well. Civil procedure is no longer solely focused on enabling parties to prepare cases for trial but now includes a range of alternative dispute resolution options and formal procedures that are intended to promote settlement of cases. All this means that as an academic field, civil litigation is about to blossom. It raises fascinating questions across the complete range of academic inquiries – from legal philosophers to empirical researchers, civil litigation provides a fertile field. Civil litigation teaching is moving away from a narrow rules-based focus to incorporate a rich range of academic sources. As a result, students can now look forward to civil procedure being one of the law school curriculum’s more fascinating subjects, rather than its most boring. After all, civil procedure is often the first exposure students have to the ways in which they can use courts to convert the substantive law they have been learning for the last three or four years into practical outcomes for the public. This book is part of the attempt to move away from a traditional rules-based approach to civil procedure. Australia has been fortunate to have authoritative texts such as Bernard Cairns’s Australian Civil Procedure, which continues to provide an excellent outline of Australian civil procedure. Students also have two first-rate cases and commentary texts: Stephen Colbran et al’s Civil Procedure: Commentary and Materials and Litigation by Jill Hunter, Camille Cameron and Tess Henning. ix

Principles of Civil Litigation

This book begins with an overview of the civil justice system and discusses the increasing complexity of that system. It takes a broader view of what constitutes the civil justice system than is traditional and it analyses how the system’s different components work. One of the conceptual changes that this book notes is the recasting of the civil justice system as a dispute resolution system, rather than simply a court system. The implications for lawyers brought about by this recasting are profound: litigators are now lawyers who are really dispute resolvers working primarily in the court system. Although they also work in the other fora of the civil litigation system, this book is focused on the court system, and the superior courts in particular. It categorises procedural tools by the functions they serve and considers, where possible, alternative means by which those functions might be achieved. One of the many challenges this book has faced has been striking the balance between comprehensiveness – which is particularly difficult with nine jurisdictions to cover – and principle. It focuses on principles, leaving detail to be found in either the books referred to earlier or the excellent looseleaf services that now exist. A further challenge has been created by the distractions that follow from taking on the deanship of a law school. The book has only been completed with the assistance of my colleagues, Mark Rankin and Alan Leaver. Both share my interest in the intellectual developments in the field of civil litigation scholarship. I am most grateful for their willingness to contribute to this book: Mark Rankin’s coverage of the increasing range of dispute resolution options within the court system and the broader questions that arise from promoting settlement within a justice system (Chapters 9 and 10); and Alan Leaver’s more traditional coverage of the important topic of costs, along with the procedural rules governing appeals and enforcement (Chapters 11, 12 and 13). I have been very lucky in having great support from other colleagues and friends. Jane Knowler read and improved some of the earlier chapters of the book and I have had two wonderful research assistants who have kept chasing obscure procedural provisions from different jurisdictions, as well as attempting to keep me somewhat abreast of the changes to procedural rules which seem to be occurring with increasing rapidity. Ray Nickson provided very valuable assistance until the lure of legal practice proved too irresistible, when Sarah John took on the huge task of getting this book to completion. In my defence, they are both former students so they knew what they were letting themselves in for! Work-life balance is one of life’s contemporary challenges. Any major undertaking like this is clearly only possible with the support of family and friends. In my case I am privileged to have a most wonderful family – to Sue, Claire and Rachel the debt is so immense I can never thank you enough for seeing me through. My extended family and community of friends have provided me with great support and some have even suggested they might read the book, or at least parts of it anyway. DAVID BAMFORD Adelaide May 2010

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TABLE OF CONTENTS Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Preface to the Second Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Preface to the First Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Table of Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii Table of Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxix

1 The Civil Justice System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 Commencing Proceedings: Jurisdiction and Parties . . . . . . . . . . . . . . . . . . 27 3 Commencing Proceedings: The Practicalities . . . . . . . . . . . . . . . . . . . . . . . . . 55 4 How Courts Manage Cases and Make Procedural Decisions . . . . . . . . 75 5 Defining the Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 6 Pre-Trial Termination of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 7 Protecting Positions Until Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 8 Gathering Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 9 Court Annexed Alternative Dispute Resolution . . . . . . . . . . . . . . . . . . . . . 215 10 Calderbank Letters and Formal Offers to Settle . . . . . . . . . . . . . . . . . . . . 245 11 Trials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 12 Litigation Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 13 Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 14 Enforcement of Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355

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TABLE OF CASES A ACCC v Cadbury Schweppes Pty Ltd (2004) 61 IPR 270 . . . . . . . . . . . . . . . . . . . . . . . . . . 9.80 ACCC v Lux Pty Ltd [2001] FCA 600 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.80 ACCC v Pauls Ltd (1999) ATPR 41-747 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.70 ACN 076 676 438 Pty Ltd v A-Comms Teledata Pty Ltd [2000] WASC 214 . . . . . . . . . . 6.40 AMEV Finance Ltd v Artes Studios Thoroughbreds Pty Ltd (1998) 13 NSWLR 486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.60 AMP Services v Manning [2006] FCA 256 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.30 ANZ Banking Group Ltd v Actus Australia Pty Ltd [2000] WASC 244 . . . . . . . . . . . . . 8.270 ANZ Banking Group Ltd v Kostovski (Unreported, Supreme Court of Victoria, Chernov J, 2 July 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.40 ASIC v Rich [2005] NSWSC 489 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.80 AT&T Istel Ltd v Tully [1993] AC 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.350 Australian Securities and Investment Commission v Healey (2011) 196 FCR 291 . . . 11.160 Australian Securities and Investments Commission v Matthews [1999] FCA 706 . . 11.50 AWA Ltd v Daniels (1992) 7 ACSR 463 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.60 AWA Ltd v Daniels t/a Deloittes Haskins and Sells (No 2) (Unreported, Supreme Court of New South Wales, Rogers CJ, 27 April 1993) . . . . . . . . . . . . . . . . . . . . . . . 5.160 Abbott v Clark [2006] NSWSC 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.190 Aberdine Pty Ltd v Vineyard Estate Management Pty Ltd [2001] SASC 442 . . . . . . . 4.220 Acohs Pty Ltd v Ucorp Pty Ltd (2006) 155 FCR 181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.185 Active Leisure (Sports) Pty Ltd v Sportsman’s Australia Ltd [1991] 1 Qd R 301 . . . . . 7.80 Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 . . . . . 4.270, 13.140 Adams v Dickeson [1974] VR 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.245 Adelaide Brighton Cement Ltd v South Australia (1999) 75 SASR 209 . . . . . . . . . . . 8.360 Agar v Hyde (2000) 201 CLR 552 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.100 Agtrack (NT) Pty Ltd v Hatfield (2003) 7 VR 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.120 Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.80 Ainsworth v Redd (1990) 19 NSWLR 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.160 Air Canada v Secretary of State for Trade [1983] 2 AC 394 . . . . . . . . . . . . . . . . . . 8.20, 11.20 Air Canada v Secretary of State for Trade (No 2) [1983] 1 All ER 161 . . . . . . . . . . . . . . . 11.20 Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.90 Air Link Pty Ltd v Paterson (2005) 223 CLR 283 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.80 Aitken v Victoria [2013] VSCA 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.170 Alexander v Ajax Insurance Co Ltd [1956] VLR 436 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.35 Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.30 Allesch v Maunz (2000) 203 CLR 172 . . . . . . . . . . . . . . . . . 13.10, 13.80, 13.90, 13.100, 13.120 American Cyanamid Co v Ethicon Ltd [1975] AC 396 . . . . . . . . . . . . . . . . . . . . . . . . 7.40, 7.50 American Flange & Manufacturing Co Inc v Rheem Australia Pty Ltd [1963] NSWR 1121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.65 Ammerlaan v Distillers Co (Bio-chemicals) Ltd (1992) 58 SASR 164 . . . . . . . . . . . . . . . 8.150 Amos v Monsour Legal Costs Pty Ltd [2008] 1 Qd R 304 . . . . . . . . . . . . . . . . . . . . . . . . 12.70 Anderson v Liberty Lobby (1986) 477 US 242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.140 Anderson v Liddell (1968) 117 CLR 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.80 Anderson v Raelene Overall Consultants Pty Ltd [2000] WADC 308 . . . . . . . . . . . . . . 2.70 Anderson Group Pty Ltd v Tynan Motors Pty Ltd [No 2] (2006) 67 NSWLR 706 . . 10.40, 10.50, 10.130 Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55 . . . . . . . . . . . . . . . 3.40, 3.60

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Principles of Civil Litigation

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 . . . . . . 1.90, 4.50, 4.170, 4.230, 4.240, 4.250, 5.125, 5.145, 6.50, 6.120, 6.135, 9.10, 11.220 Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2007] FCA 943 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.230 Arrow International Australia Ltd v Group Konstrukt Pty Ltd [2012] ACTCA 37 . . . 4.240 Asia Pacific International Pty Ltd as Trustee for Pacific Property Resources Group v Peel Valley Mushrooms Ltd (Unreported, Supreme Court of Queensland, MacKenzie J, 13 November 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.180 Associated Confectionery (Aust) Ltd v Mineral and Chemical Traders Pty Ltd (1991) 25 NSWLR 349 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30 Attorney-General v Sillem (1864) 11 ER 1200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.10 Atwell v Atwell (No 2) [2003] TASSC 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.60 Austotel Management Pty Ltd v Jamieson (1995) 57 FCR 411 . . . . . . . . . . . . . . . . . . . . 9.60 Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.150 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.25 Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 . . . . . . 7.30, 7.40, 7.50 Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.140 Australian Conservation Foundation v Commonwealth (1980) 146 CLR 493 . . . . . . 2.130 Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 438 . . . . . . . . . . . . . . . . 14.150 Australian Dairy Corporation v Murray Goulburn Cooperative Ltd [1990] VR 355 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.140 Australian Medic Care Company Ltd v Hamilton Pharmaceutical Pty Ltd [2009] FCA 1494 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20, 10.30 Australian and New Zealand Banking Group Ltd v Rostkier (Unreported, Supreme Court of Victoria, Batt J, 2 June 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.160 Austress Freyssinet Pty Ltd v Joseph [2006] NSWSC 77 . . . . . . . . . . . . . . . . . . . . . . . . . 3.60 Aymban Pty Ltd v Grove Park Pty Ltd [2007] NSWSC 1089 . . . . . . . . . . . . . . . . . . . . . . 7.160 Azzi v Volvo [2006] NSWSC 283 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.275 Azzopardi v Netin [1986] VR 593 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20, 10.40

B BHP Billiton v Schultz (2004) 221 CLR 400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.50, 2.80 BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 4) [2009] FCA 1448 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30 Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 . . . . . . . . . . . . . . . . . . . . . . . 8.275 Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 . . . . . . . . . . . . . . . . . . . 5.65 Bainbridge v Lawton [2003] WASC 199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.230 Baira v RHG Mortgage Corporation Ltd [2012] NSWCA 387 . . . . . . . . . . . . . . . . . . . . . 13.160 Baker v Campbell (1983) 153 CLR 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.330 Baldry v Jackson [1976] 2 NSWLR 415 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.120 Ballard v Brookfield Australia Investments Ltd [2012] NSWCA 434 . . . . . . . . . . . . . . . 13.30 BankInvest AG v Seabrook (1988) 14 NSWLR 711 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.80 Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 . . . . . . . . . 5.30 Barbarian Motorcycle Club Inc v Koithan (1984) 35 SASR 481 . . . . . . . . . . . . . . . . . . . 8.245 Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281 . . 5.160, 5.170 Bare v Small [2013] VSCA 204 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.170 Bartlett v Swan Television and Radio Broadcasting Pty Ltd (1995) ATPR 41-434 . . . . 5.65 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.170 Bateman &Idameneo (No 123) Pty Ltd v Fairfax Media Publications Pty Ltd (2013) ACTSC 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.40 Bates v Nelson (1973) 6 SASR 149 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.60 xiv

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Bates v Nelson [1976] 6 SASR 149 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30 Batistatos v Road & Traffic Authority New South Wales (2006) 226 CLR 256 . . . . . . 6.110 Batiste v State of Queensland [2002] 2 Qd R 119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.110 Battye v Shammall (2005) 91 SASR 315 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.80 Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (Formerly GIO Insurance Limited) [2006] NSWSC 583 . . . . . . . . . . . . . . . . . 10.30, 10.40 Beach Petroleum NL v Johnson (1991) 105 ALR 456 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.65 Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 . . . . . . . . . . . . . . . . . . . . . . . 12.120 Beecham Group Ltd v Bristol-Myers Co [1979] VR 273 . . . . . . . . . . . . . . . . . . . . . . . . . . 8.140 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 . . . . . . . . . . . . 7.40 Bell v Bay-Jespersen [2004] 2 Qd R 235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.30 Bendir v Anson [1936] 3 All ER 326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.160 Betfair Pty Ltd v Racing NSW (2009) 260 ALR 538 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.60 Bhimji v Chatwani [1991] 1 All ER 705 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.140 Bhushan Steel Ltd v Severstal Export GmbH [2012] NSWSC 583 . . . . . . . . . . . . . . . . . 7.160 Bienstein v Bienstein (2003) 195 ALR 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.270, 13.40 Biernacki v Klenka [1988] 80 ACTR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20, 10.50 Biovision v CGU Insurance Ltd [2010] VSC 589 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.60 Birkett v James [1978] AC 297 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.110, 6.120 Birtles v Commonwealth [1960] VR 247 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.160 Bishop v Bridges (1990) 25 FCR 311 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.160 Bishop (Thomas) Ltd v Helmville Ltd [1972] 1 QB 464 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.40 Blackmagic Design Pty Ltd v Overliese [2010] FCA 126 . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40 Blackman v Gant (No 2) (2010) 29 VR 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.130 Blue Wedges Inc v Port of Melbourne Corporation [2005] VSC 305 . . . . . . . . . . . . . . . 7.90 Body Technology Pty Ltd v Babak Moini [2010] NSWSC 1414 . . . . . . . . . . . . . . . . . . . . . 7.80 Borowiak v Hobbs [2006] NSWSC 1089 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 Botany City Council v Rethman Environmental Services Pty Ltd [2004] NSWCA 414 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.220 Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 . . . . 12.60 Bradto Pty Ltd v Victoria (2006) 15 VR 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.80 Branir Pty Ltd v Owston Nominees Pty Ltd (No 2) (2001) 117 FCR 424 . . . . . . . . . . . 13.100 Bridge & Marine Engineering Pty Ltd v Taylor [2004] VSC 534 . . . . . . . . . . . . . . . . . . . 6.120 Bright v Femcare Ltd (2002) 195 ALR 574 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.240 British American Tobacco Australia Services Limited v Cowell (as representing the estate of Rolah Ann McCabe, deceased) [2002] VSCA 197 . . . . . . . . . . . . . . . . . . . 8.200 British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524 . . . . . . . 8.200 British American Tobacco Australia Service Ltd v Cowell (as representing the estate of Rolah Anne McCabe) [2003] VSCA 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.220 Brocx v Hughes (2010) 41 WAR 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.240 Brookfield Multiplex Ltd v International Litigation Funding Partners Pty Ltd [2009] FCAFC 147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.240 Bruce v Odhams Press Pty Ltd [1936] 1 KB 697 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.65 Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 62 ALR 53 . . . . . . 13.160 Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.10, 13.70, 13.80, 13.100, 13.110 Bullock v London General Omnibus Co [1907] 1 KB 264 . . . . . . . . . . . . . . . . . . . 2.220, 12.60 Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.80

C CDJ v VAJ (1998) 197 CLR 172 . . . . . . . . . . . . . . . . . . 13.10, 13.50, 13.60, 13.90, 13.100, 13.160 CGU Insurance Ltd v Corrections Corporations of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.130 CGU Insurance Ltd v Lawless [2008] VSCA 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.90 CSR Ltd v Amaca Pty Ltd (No 2) [2009] NSWCA 426 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.120 xv

Principles of Civil Litigation

CSR Ltd v Della Maddalena (2006) 224 ALR 1 . . . . . . . . . . . . . . . . . . . . . 13.50, 13.150, 13.160 Cadence Asset Management Pty Ltd v Concept Sports Ltd [2006] FCA 944 . . . . . . . 5.65 Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 333 . . 10.20, 10.30, 10.40, 10.50, 10.60, 10.70, 10.120, 10.140 Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33 . . . . . . . . . . . . . . . . . . . 13.60 Cameron v King (Unreported, Supreme Court of Western Australia, 2 March 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386 . . . . . . . . . . 12.240 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 . . . . . . . . . . . . . . . . . . . 3.70, 7.150, 7.160 Carnie v Esanda Finance Corp Ltd (1995) 182 CLR 398 . . . . . . . . . . . . . . . . . . . . . . . . . . 2.250 Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 . . . . . . . 6.35, 13.40 Carson v Legal Services Commissioner [2002] NSWCA 308 . . . . . . . . . . . . . . . . . . . . . 12.100 Cash Converters Pty Ltd v Hila Pty Ltd (1993) 9 WAR 471 . . . . . . . . . . . . . . . . . . . . . . . . 7.80 Cashman v Kinnear [1973] 2 NSWLR 495 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.160 Casley-Smith v Stirling District Council (1989) 51 SASR 447 . . . . . . . . . . . . . . . . . . . . . . 8.180 Cassegrain v Gerard Cassegrain & Co Pty Ltd (in liq) [2012] NSWCA 435 . . . . . . . . . . 13.30 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 . . . . . . . . . 7.30, 7.40, 7.50 Castro v Hillery [2003] 1 Qd R 651 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.120, 10.130 Celotex Corp v Catrett (1986) 477 US 317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.140 Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.240 Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1; [2008] SASC 158 . . . . . . . . . . . . . . . 6.135 Century Drilling Ltd v Gerling Australia Insurance Company Pty Ltd [2004] QSC 120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.230 Chamberlain v Deputy Commissioner of Taxation (NSW) (1991) 28 FCR 21 . . . . . . . . 6.180 Channel Seven Adelaide Pty Ltd v Lane (2004) 234 LSJS 225 . . . . . . . . . . . . . . . . . . . . 8.140 Channel Seven Adelaide Pty Ltd v Manock [2010] SASCFC 59 . . . . . . . . . . . . . . . . . . . 4.240 Chapman v Australian Broadcasting Corporation (2000) 77 SASR 181 . . . . . . . . . . . . 5.140 Chief Constable of Kent v V [1983] QB 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.25 Cirillo v Citicorp [2001] SASC 349 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.220 Citizen Limbo, Re (1989) 92 ALR 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.50 City Hall Wodonga Pty Ltd v Chicago Investments Pty Ltd [2006] QSC 31 . . . . . . . . . 6.80 Clark v State of Tasmania (1999) 9 Tas R 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.130 Clearwater Shipping Corp Inc v Cao [2003] VSC 216 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.190 Clyne v New South Wales (1960) 104 CLR 186 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.220 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 . . . . . 7.80 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 . . . . . . . . . . . . . . . . . 13.70, 13.80, 13.90, 13.120, 13.140 Coffey Information Pty Ltd v Cullen [2015] FCA 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.80 Cohen v McWilliam (1995) 38 NSWLR 476 . . . . . . . . . . . . . . . . . . . . . . . . . . 4.210, 4.250, 6.50 Cokinos v Walker [2007] NSWSC 1040 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.140 Cole Skopov v Kane Constructions Pty Ltd [2009] VSCA 216 . . . . . . . . . . . . . . . . . . . . . 13.30 Coles and Ravenshear, Re [1907] 1 KB 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.190 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 . . . . . . . . . . . . . . . . . . . . . . 12.70 Commonwealth v Albany Port Authority [2006] WASCA 185 . . . . . . . . . . . . . . . . . . . . 8.275 Commonwealth v Gretton [2008] NSWCA 117 . . . . . . . . . 10.10, 10.40, 10.50, 10.70, 10.130 Commonwealth v Northern Land Council (1993) 176 CLR 604 . . . . . . . . . . . . . . . . . . 8.360 Commonwealth v Vance (2005) 158 ACTR 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.320 Commonwealth Bank of Australia v Peto (No 2) (2006) 152 FCR 352; [2006] FCA 516 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.160, 5.90 Community Services, Director-General of v D [2006] NSWSC 827 . . . . . . . . . . . . . . . 8.245 Compagnie Financiere du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 . . . . . . 12.150 Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.140 Computershare Ltd v Perpetual Registrars Ltd [2000] VSC 139 . . . . . . . . . . . . . . . . . . 8.180 Cook v DA Manufacturing Co Pty Ltd [2004] QCA 052 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 Cooper v Hopgood & Gamin (a firm) [1999] 2 Qd R 113 . . . . . . . . . . . . . . . . . . . . . . . . . . 6.110

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Table of Cases

Copper and Gold Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 345 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.60 Coronis v Jilt Pty Ltd [2013] 1 Qd R 104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.80 Coulton v Holcombe (1986) 162 CLR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.100 Council of the City of Liverpool v Turano [2009] NSWCA 176 . . . . . . . . . . . . 10.120, 10.130 Crampton v The Queen (2000) 206 CLR 161 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.80, 13.100 Crayden v Ottaviano [2003] WASCA 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 Cretazzo v Lombardi (1975) 13 SASR 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.130 Cth v Gretton [2008] NSWCA 117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10 Cumper v Pothecary [1941] 2 KB 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.90 Cutts v Head [1984] 1 All ER 597; [1984] Ch 290 . . . . . . . . . . . . . . . . . . . . . 9.10, 10.20, 10.60

D DJL v Central Authority (2000) 201 CLR 226 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.40, 13.10 Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192 . . . . . . . . . . . . . 13.150 Dallas Buyers Club LLC v iiNet Ltd (2015) 327 ALR 670 . . . . . . . . . . . . . . . . . . . . . . . . . . 8.180 Dalton v State of South Australia (2010) 106 SASR 279 . . . . . . . . . . . . . . . . . . . . . . . . . 14.50 Dare v Pulham (1982) 148 CLR 658 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.30 Davey v Herbst [2011] ACTCA 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.30 Davies v Fay [1995] 1 Qd R 509 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.100 Davies v Minister for Urban Development and Planning (2011) 109 SASR 518 . . . . . 6.135 Davies v Pagett (1986) 70 ALR 793 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 Davy v Garrett (1877) 7 Ch D 473 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.70 De Boer v Williams [2004] NSWSC 351 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.90 Dearman v Dearman (1908) 7 CLR 549 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.160 Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 . . . . . . . . 13.40, 13.140 Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.150, 12.170 Devries v Australian National Railways Commission (1993) 177 CLR 472 . . . . . . . . . 13.160 Dey v Victorian Railway Commissioners (1949) 78 CLR 62 . . . . . . . . . . . . . . . . . . . . . . . 6.130 Di Sante v Camando Nominees Pty Ltd [2000] VSC 211 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 Diagnostic X-Ray Services Pty Ltd v Jewel Food Stores Pty Ltd (2001) 4 VR 632; [2001] VSC 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.80 Dobb v Hackett (1993) 10 WAR 532 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20 Dodds v Premier Sports Australia (No 2) [2004] NSWSC 389 . . . . . . . . . . . . . . . . . . . . 10.40 Dodge v Snell [2010] TASSC 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.240 Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 . . . . . . . . . . . . . . . . . . . . 13.100 Donald Campbell & Co v Pollak [1927] AC 732 . . . . . . . . . . . . . . . . . . . . . . 10.10, 10.70, 10.130 Donaldson v Harris (1973) 4 SASR 299 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.140, 12.150 Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30 Duke Group Ltd (in liq), The v Alamain Investments Ltd (2003) 229 LSJS 166 . . . . . 9.100 Duke of Bedford v Ellis [1901] AC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.240 Dunstan v Rickwood (2007) 38 Fam LR 491 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40 Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.70

E E I Du Pont De Nemours & Co v Commissioner of Patents (1987) 16 FCR 423 . . . . . . 4.50 East Districts Azzurri Sports Club Inc v South Australian Soccer Federation Inc (1988) 142 LSJS 121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.140 Eastland Technology Australia Pty Ltd v Whisson (2003) 28 WAR 308 . . . . . . . . . . . . 13.30 Eastman v The Queen (2000) 203 CLR 1 . . . . . . . . . . . . . . . . . . . . . 13.10, 13.70, 13.80, 13.100 Edwards v Noble (1971) 125 CLR 296 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.110, 13.150, 13.160

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Elan Copra Trading Pty Ltd v JK International Pty Ltd [2005] SASC 501 . . . . . . . . . . . . 2.70 Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 . . . . 10.20, 10.30, 10.40, 10.60, 10.70, 10.130 Enterprise Gold Mines NL v Mineral Horizons NL (1988) 91 FLR 403 . . . . . . . . . . . . . . 13.30 Environment East Gippsland Inc v VicForests (No 2) [2009] VSC 421 . . . . . . . . . . . . . . 7.90 Environment Protection Authority v Caltex Refining Co (1993) 178 CLR 477 . . . . . . 8.350 Equuscorp v Wilmouth Field Warne (No 4) [2006] VCS 28 . . . . . . . . . . . . . . . . . . . . . . . 1.140 Equuscorp Pty Ltd v Wilmoth Field Warne (A Firm) (2007) 18 VR 250 . . . . . . . . . . . . 13.40 Errigal Ltd v Equatorial Mining Ltd [2006] NSWSC 953 . . . . . . . . . . . . . . . . . . . . . . . . . 7.160 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 . . . . . 8.20, 8.330, 9.60 Evans v Bartlam [1937] AC 473 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.45, 6.50 Evans v Davies [1893] 2 Ch 216 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.130 Evans Deakin Industries Ltd v Commonwealth [1983] 1 Qd R 40 . . . . . . . . . . . . . . . . 11.170 Examiners, Board of v XY [2006] VSCA 190 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.130 Expectation Pty Ltd v PRD Realty Pty Ltd [1999] FCA 1207 . . . . . . . . . . . . . . . . . . . . . . 8.140 Ezekiel-Hart v Law Society (ACT) [2012] ACTSC 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50

F FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 . 6.90 Fencott v Muller (1983) 152 CLR 570 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.40 Ferguson v Mackaness Produce Pty Ltd [1970] 2 NSWLR 66 . . . . . . . . . . . . . . . . . . . . 8.210 Field v Commissioner for Railways (1957) 99 CLR 285 . . . . . . . . . . . . . . . . . . . . . 8.340, 9.60 Fila Canada Ltd v Jane Doe & John Doe [1996] 3 FC 493 . . . . . . . . . . . . . . . . . . . . . . . . 7.146 Films Rover International Ltd v Canon Film Sales Ltd [1987] 1 WLR 670 . . . . . . . . . . . 7.80 Fingleton v The Queen (2005) 227 CLR 166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.80 Firns v Tzovaras [2006] NSWSC 925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.170 Flaherty v Stone [2007] TASSC 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 Fleming v Advertiser-News Weekend Publishing Pty Ltd (2014) SASC 145 . . . . . . . . 11.160 Flower & Hart v White Industries (Qld) Pty Ltd (1999) 163 ALR 744 . . . . . . . . 3.100, 3.110 Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 . . . . . . . . . . . . . . . 10.40, 10.70 Fox v Olsen [1999] SASC 411 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.230 Fox v Percy (2003) 214 CLR 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.10, 13.60, 13.70, 13.90, 13.100, 13.160, 13.170 Frigo v Culhaci [1998] NSWCA 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.155 Fubilan Catering Services Ltd (Incorporated in Papua New Guinea) v Compass Group (Australia) Pty Ltd [2007] FCA 2111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.30

G GEC Marconi Systems Pty Ltd v BHP Information Technology (2003) 201 ALR 55 . . 10.30 Gemini Property Investments Pty Ltd v Woodards Investments Pty Ltd & Ors [2000] SASC 210 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6 . . . . . . . . . 6.180 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.130 Geneva Finance Ltd v Boys [2001] WASC 269 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.90 Genocanna Nominees Pty Ltd v Thirsty Point Pty Ltd (No 1) [2006] FCA 70 . . . . . . . 5.120 George v Webb [2012] NSWSC 86 . . . . . . . . . . . . . . . . . . . . . . . . . 10.10, 10.50, 10.120, 10.130 Giannarelli v The Queen (1983) 154 CLR 212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.80 Gibson Motorsport Merchandise Pty Ltd v Forbes (2006) 149 FCR 569 . . . . . . . . . . . 13.20 Glendinning v Cuzens [2009] WASCA 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.270 Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 . . . . . . . . . . . . 8.320 Glover v Roche [2003] ACTSC 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.140

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Goldberg v Ng (1995) 185 CLR 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.330 Goldsmith v Sandilands [2002] HCA 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.60 Gosnells, City of v Roberts (1994) 12 WAR 437 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.130 Gould v Vaggelas (1983) 157 CLR 215 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.220 Government Insurance Office v Ali (1992) 59 SASR 124 . . . . . . . . . . . . . . . . . . . . . . . . . 4.200 Grace v McArthur (1959) 170 F Supp 442 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.50 Grant v Downs (1976) 135 CLR 674 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.320, 8.330 Gray v Hopcroft [2000] QCA 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.290 Gray v Morris [2004] 2 Qd R 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.135 Grbavac v Hart [1997] 1 VR 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30, 10.60, 10.120 Great Lakes Shire Council v Dederer (No ) [2006] NSWCA 336 . . . . . . . . . . . . . . . . . . 2.220 Grech v Grech [2016] VSC 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.50 Green v Rozen [1955] 1 WLR 741 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.180 Grey v Mango Pre-Paid Calling Cards Pty Ltd [2004] FCA 1664 . . . . . . . . . . . . . . 6.40, 6.50 Griffiths v Australian Postal Commission (1987) 87 FLR 139 . . . . . . . . . . . . . . . . . . . . . 13.30 Gronow v Gronow (1979) 144 CLR 513 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.140, 13.160 Grovit v Doctor (1997) 1 WLR 640 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.120 Gunns Ltd v Marr [2005] VSC 251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.140 Gunns Ltd v Marr (No 2) [2006] VSC 329 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.30 Gunston v Davies Pty Ltd (2010) TASSC 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.100 Guss v Law Institute of Victoria [2006] VSCA 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.210

H HP Mercantile Pty Ltd v Hartnett (2016) NSWCA 342 . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.170 Hackney Tavern Nominees Pty Ltd v McLeod (1983) 33 SASR 590 . . . . . . . . . . . . . . . 13.30 Hall v Nominal Defendant (1966) 117 CLR 423 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.270 Hamod v New South Wales (2011) NSWCA 375 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.120 Hancock Family Memorial Foundation Pty Ltd, The v Fieldhouse (2005) 30 WAR 398; [2005] WASCA 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.110, 6.120 Hardel Pty Ltd v Burrell & Family Pty Ltd (2009) 103 SASR 408 . . . . . . . . . . . . . . . . . . 13.40 Harman v Secretary of State for the Home Department [1983] 1 AC 280 . . . . . . . . . 8.220 Hawker v Miller (2011) 110 SASR 206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.90, 13.160 Hawkins v Clayton (1988) 164 CLR 539 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10, 10.30, 10.40 Health, Minister of v Brambles Australia Ltd [2006] WASC 86 . . . . . . . . . . . . . . . . . . . 7.110 Helicopter Sales (Australia) Pty Ltd v Rotor-Work Pty Ltd (1974) 132 CLR 1 . . . . . . . . 13.20 Hearne v Street (2008) 235 CLR 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.220 Helou v Shaya [2013] VSC 297 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.220 Henderson v Simon Engineering (Australia) Pty Ltd [1988] VR 867 . . . . . . . . . . . . . 10.100 Henry v News Group Ltd [2013] EWCA Civ 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.180 Hepburn v TCN Channel Nine Pty Ltd [1983] 2 NSWLR 682 . . . . . . . . . . . . . . . . . . . . . . 5.160 Higgins v Higgins [2002] NSWSC 455 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.80 Hillier v Sheather (1995) 36 NSWLR 414 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10, 10.70, 10.140 Hinchcliffe v Carroll [1969] VR 164 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.230 Hobartville Stud v Union Insurance Co (1991) 25 NSWLR 358 . . . . . . . . . . . . . . . . . . . . 10.50 Hooper v Kirella Pty Ltd (1999) 96 FCR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.180 Hopeshore Pty Ltd v Melroad Equipment Pty Ltd (2004) 212 ALR 66 . . . . . . . . . . . . . 9.80 House v The King (1936) 55 CLR 499 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.140 Howard v Power [2013] VSC 198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.140 Huang v University of New South Wales (No 3) (2006) 154 FCR 16 . . . . . . . . . . . . . . . 1.130 Hughes v Janrule Pty Ltd (2011) 252 FLR 397 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.30 Humphries v TWT Ltd (1993) 113 FLR 422 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.130

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I ICM Investments Pty Ltd v San Miguel Corporation (Ruling No 2) [2012] VSC 509 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.240 IOOF Aust Trustees Ltd v SEAS Sapfor Forests Pty Ltd (1999) 78 SASR 151 . . . . . . . . 1.130 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427 . . . . . . . . . . . 9.20, 9.80 Idoport Pty Ltd v National Australia Bank Ltd [2004] NSWSC 695 . . . . . . . . . . . . . . . 8.180 Imperium Projects Pty Limited, In the matter of [2017] NSWSC 141 . . . . . . . . . . . . . . 4.240 Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd (2010) 108 SASR 120 . . . . . . 13.90, 13.100, 13.110, 13.160 Indyk v Wiernik [2006] NSWSC 868 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.120 Issitich v Worrell [2000] FCA 477 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.90

J Jackson v Queensland [2005] QSC 161 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.290 Jackson v Sterling Industries Ltd (1987) 162 CLR 612 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.150 Jadwan Pty Ltd v Porter (2004) 13 Tas R 162 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.140 James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357 . . . . . . . . . . . . . . . . . . . . . . . . 2.80 Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.185 Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 246 ALR 465 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.40 Jeffrey & Kautaskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 . . . . . . . . . 6.100 John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.70 Johnson v Johnson (2000) 201 CLR 488 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.130, 11.220 Johnston v Smith [2002] NSWSC 409 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.130 Joint v Stephens (No 2) [2008] VSC 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30 Jones v Bradley (No 2) [2003] NSWCA 258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40 Joseph v The Pelerman Group Pty Ltd (Unreported, Supreme Court of Queensland, De Jersey J, 22 April 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.175 Jowett v Kelly [2008] NSWSC 1009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.30

K KGL Health Pty Ltd v Mechtler [2007] FCA 1410 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.160 KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 . . . . . . . 7.185, 13.30 Kanakaridis v Westpac Banking Corp [2015] FCA 1146 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.210 Kavia Holdings Pty Ltd v Bevillesta Pty Ltd (No 2) [2006] NSWSC 1160 . . . . . . . . . . . 5.120 Kemp v Ryan [2011] ACTSC 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30 Kenneally v Pouras (2004) 87 SASR 346 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.280 Kennedy v Shire of Campaspe [2015] VSCA 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.20 Keramianakis v Regional Publishers Pty Ltd (2009) 237 CLR 237 . . . . . . . . . . . . . . . . 11.180 Keramianakis v Regional Publishers Pty Ltd (2009) 237 CLR 268 . . . . . . . . . . . . . . . . . 13.80 Kermani v Gaylard (No 2) [2011] VSC 143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.50 King v Commercial Bank of Australia Ltd (1920) 28 CLR 289 . . . . . . . . . . . . . . . . . . . . . 13.30 Kitching v Commissioner of Police [2010] QSC 443 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.60 Kleentex (Thailand) Co Ltd v Corporate Im Pty Ltd [2012] SASC 71 . . . . . . . . . . . . . . . 6.135 Knight v FP Special Assets Ltd (1992) 174 CLR 178 . . . . . . . . . . . . . . . . . . . . . . . . 12.60, 12.110 Krishell Pty Ltd v Nilant (2006) 32 WAR 540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.20 Krix v Citrus Board of SA (2003) 87 SASR 229 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.60 Kyocera Mita Australia Pty Ltd v Mitronics Corporation Pty Ltd [2005] FCA 242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.140

xx

Table of Cases

L Lacey v Attorney-General (Qld) (2011) 242 CLR 573 . . . . . . . . . . . . . . . . . . . . . . . . 13.10, 13.20 Lackovic v Insurance Commission (WA) (2006) 31 WAR 460 . . . . . . . . . . . . . . 13.60, 13.160 Lan v Kaymet Corporation Pty Ltd [2017] NSWCA 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.90 Landini v NSW [2006] NSWSA 1054 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.120 Lane v Lane (2011) 249 FLR 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.160 Larner v Fawcett [1950] 2 All ER 727 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.130 Latoudis v Casey (1990) 170 CLR 534 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.10, 10.130, 12.60 Laurie v Carroll (1958) 98 CLR 310 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.50 Law Society of Singapore v Kurubalan [2013] SGHC 135 . . . . . . . . . . . . . . . . . . . . . . . . 12.240 Lee v ANZ Banking Group Ltd [2013] QCA 236 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.210 Lee v Johnson Taylor [1990] WAR 381 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.160 Legal Practitioners Complaints Committee v A Practitioner (1987) 46 SASR 126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.20, 13.40 Legal Services Commissioner v Dempsey [2007] QSC 270 . . . . . . . . . . . . . . . . . . . . . . . 12.80 Leichhardt Municipal Council v Green [2004] NSWCA 341 . . . . . . 9.10, 10.40, 10.50, 10.70 Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 . . . . . . . . . . . . . . . . . . . . . . . . 12.100 Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388 . . . . . . . . . . . . . . . . . . . . . 6.120 Levy v Victoria (1997) 189 CLR 579 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.140 Levy v Watt (No 2) [2012] VSC 580 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.60 Lewandowski v Lovell (1994) 11 WAR 124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.110 Licul v Corney (1976) 180 CLR 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.40 Lidoframe v NSW [2006] 1262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.80 Life Therapeutics Ltd v Bell Investments Ltd (No 2) (2008) 170 FCR 595 . . . . . . . . . 12.110 Linfa Pty Ltd v Citibank Ltd [1995] 1 VR 643 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.130 Locabail International Finance Ltd v Agroexport (“The Seahawk”) [1986] 1 WLR 657 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.80 Long v Specifier Publications Pty Ltd (1998) 44 NSWLR 545 . . . . . . . . . . . . . . . . . . . . . 7.140 Love v Roads Corporation [2011] VSCA 434 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30 Lovell v Lovell (1950) 81 CLR 513 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.140 Lucas v Yorke (1983) 50 ALR 228 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.30 Luce Optical Pty Ltd v Budget Specs (Franchising) Pty Ltd [2006] FCA 221 . . . . . . . . 5.60 Luck, Re (2003) 203 ALR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.270, 13.40 Lukies v Ripley (No 2) (1994) 35 NSWLR 283 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.60 Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.135

M MGICA (1992) v Kenny & Good Pty Ltd [No 4] (1996) 140 ALR 707; 70 FCR 236 . . . 10.40, 10.60, 10.70, 10.130 MM Constructions (Aust) Pty Ltd v Port Stephens Council (No 7) [2012] NSWSC 250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.50 Maff Investments Pty Ltd (in liq) v Fuller (1991) 3 WAR 546 . . . . . . . . . . . . . . . . . . . . . 8.260 Magellan Petroleum Australia Ltd v Sagasco Amadeus Pty Ltd [1994] 2 Qd R 37 . . 8.230 Maharanee of Baroda v Wildenstein [1972] 2 QB 283 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.50 Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 . . . . . . . . . . . . 9.10, 10.130, 10.140 Managing Director of New South Wales Technical and Further Education Commission v Fines (1993) 32 NSWLR 385 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.20 Mann v Carnell (1999) 201 CLR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.330, 9.60 Mann v Mann (1957) 97 CLR 433 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.150 Mareva Campania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213; [1975] 2 Lloyd’s Rep 509 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.40, 3.70, 6.80, 7.150 Marino v St Bartholomew’s House Inc [2016] WASC 182 . . . . . . . . . . . . . . . . . . . . . . . . . 7.30 Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021 . . . . . . . . . . . . . . . 2.240, 2.250 Maroubra Rugby Football Club Inc v Malo (2007) 69 NSWLR 496 . . . . . . . . . . . . . . . . 11.60 xxi

Principles of Civil Litigation

Martyniuk v King [2000] VSC 319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.170, 7.175 Matsushita Elec Industries Co v Zenith Radio Corp 475 US 574 (1986) . . . . . . . . . . . 6.140 Matthews v SPI Electricity Pty Ltd [2013] VSC 221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.120 Matthews v SPI Electricity Pty Ltd (Ruling No 31) [2013] VSC 575 . . . . . . . . . . . . . . . . 11.220 McCabe v British American Tobacco Australia Services Limited [2002] VSC 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.200, 8.220 McCabe v British American Tobacco Pty Ltd [2002] VSC 73 . . . . . . . . . . . . . . . . . . . . . . 3.100 McCauley v Hamilton Island Enterprises Pty Ltd (1987) 75 ALR 257 . . . . . . . . . . . . . . . 5.80 McDermott v Collien (1953) 87 CLR 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.50 McInerney v Esanda Finance Corp Ltd (Unreported, Full Court of Supreme Court of Western Australia, 17 January 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.35 McIntyre v Perkes (1988) 15 NSWLR 417 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.175 Medford v Nationwide News Pty Ltd [2007] WASC 52 . . . . . . . . . . . . . . . . . . . . . . . . . . 5.160 Mediterranean Olives Financial Pty Ltd v Gita Lederberger (No 2) [2011] VSC 333 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30, 10.50 Melbourne University Publishing Pty Ltd v Williamson [2005] FCA 1910 [4] . . . . . . . . 3.85 Mentyn v Law Society of Tasmania (No 2) [2004] TASSC 127 . . . . . . . . . . . . . . . . . . . . 7.185 Mercantile Mutual Custodians Pty Ltd v Village Nine Network Restaurants & Bars Pty Ltd [2001] Qd R 276 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.140 Mercer v Chief Constable of the Lancashire Constabulary (1991) 2 All ER 504 . . . . 11.200 Messiter v Hutchinson (1987) 10 NSWLR 525 . . . . . . . . . . . . . . . . . . . . . . 10.20, 10.60, 10.70 Metso Minerals (Aust) Ltd v Kalra [2007] FCA 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.60 Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 . . . . . . . . . . . . . . . . . . . 6.110 Mickelberg v The Queen (1989) 167 CLR 259 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.100 Microsoft Corporation v Marks (1996) 69 FCR 117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.150 Mideco Manufacturing Pty Ltd v Tait [1989] VR 50 . . . . . . . . . . . . . . . . . . . . . . . 10.20, 10.40 Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 . . . . . . . . . . . . . . . . . . . . . . . 7.80 Mitropoulos v Hancock Corporation Pty Ltd [2006] SASC 379 . . . . . . . . . . . . . . . . . . . 13.30 Mittiga v Community Corporation 20582 Inc [2012] SASC 202 . . . . . . . . . . . . . . . . . . . 6.135 Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 . . . . . . 10.40, 10.50 Moon v Australian Securities and Investments Commission (2002) 43 ACSR 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.175 Morgan v Banning (1999) 20 WAR 474 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.120 Morgan v Hart [1914] 2 KB 183 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.130 Morris v McEwen (2005) 92 SASR 281 . . . . . . . . . . . . . . . . . . . . . . . 9.10, 10.20, 10.40, 10.60, 10.70, 10.130, 10.140 Morris v Trodden [2015] NSWSC 705 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 Morrison v Hanby Pty Ltd [2000] SASC 135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.290 Moscow Narodny Bank Ltd v Mosbert Finance (Australia) Pty Ltd [1976] WAR 109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.140 Mountain Creek Markets Pty Ltd v Peter Le Compte Developments Pty Ltd [2003] QSC 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 Mt Isa Mines Limited v CMA Assets Pty Ltd & Ors [2016] QSC 260 . . . . . . . . . . . . . . . 4.240 Mulley v Manifold (1959) 103 CLR 341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.170 Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.70 Mundy v Bridge Motors Pty Ltd (1987) 45 SASR 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.250 Murphy v Doman (2003) 58 NSWLR 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.120 Myers v Elman [1940] AC 282 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.210, 12.100

N NA Retail Solutions Pty Ltd v St George Bank Ltd [2010] FCA 290 . . . . . . . . . . . . . . . . 7.80 NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 . . . . . . . . . . . . 6.80 NGW v Swanson [1993] SASC 4257 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 NSW Commissioner of Police v Tuxford [2002] NSWCA 139 . . . . . . . . . . . . . . . . . . . . . 8.275 Nalbandian v Commonwealth of Australia [2017] FCA 45 . . . . . . . . . . . . . . . . . . . . . . 13.160 xxii

Table of Cases

National Australia Bank v Meehan (Unreported, Full Court of the Supreme Court of Victoria, Ormiston & O’Bryan JJ, 24 February 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.40 National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 . . . . . 7.175 National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386 . . 7.170, 7.175, 14.130 National Australia Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8 . . . . . . . . . . . . . . . . . 8.140 National Australia Bank Ltd v KDS Construction Services Pty (In Liq) (1987) 163 CLR 668 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.80 National Employers’ Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 . 8.275 Nationwide News Pty Ltd v Bradshaw (1986) 41 NTR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.70 Neoinvent Pty Ltd v National Broadband Pty Ltd [2005] NSWSC 1162 . . . . . . . . . . . . . 7.80 New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.130 Nike Canada Ltd v Jane Doe (1999) 1 CPR (4th) 289 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.146 Ninemia Maritime Corporation v Trave GmbH & Co KG (The Niedersachsen) [1984] 1 All ER 398 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.160 Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 . . . . . . . . . . . . . . . . . . . . . . . . . 13.30 Norbis v Norbis (1986) 161 CLR 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.90, 13.120, 13.140 Norilya Minerals Pty Ltd: Re Ireland v Ireland [2006] FCA 1235 . . . . . . . . . . . . . . . . . . . 6.35 Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 . . . . . . 8.180 Noyes v Gwilliam [2006] WASC 183 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.145

O Oberdan v Commonwealth Bank of Australia Ltd [1999] SASC 141 . . . . . . . . . . . . . . . 8.130 Oceanic Sun Line Special Shipping Co Ltd v Fay (1988) 165 CLR 197 . . . . . . . . . . . . . . 2.100 Officine Meccaniche Toschi SpA v Cosco Holdings Pty Ltd [1992] 2 Qd R 418 . . . . . 8.140 Orchard v South Eastern Electricity Board [1987] 1QB 565 . . . . . . . . . . . . . . . . . . . . . 12.100 Oriti v Melcross Clothing Pty Ltd [1994] FCA 1248 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.130 Orr v Ford (1989) 167 CLR 316 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 Oshlack v Richmond River Council (1998) 193 CLR 72 . . . . . . . . . . . . . . . 10.10, 10.130, 12.60 Ozibar Pty Ltd (as trustee of Ozibar Unit Trust) v Laroar Holdings Pty Ltd [2015] QSC 345 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.135

P PMT Partners Pty Ltd (In Liq) v Australian National Parks & Wildlife Service (1995) 184 CLR 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.140 PPG Development Pty Ltd v Capitanio [2016] SASC 169 . . . . . . . . . . . . . . . . . . . . . . . . 4.240 Paciocco v ANZ [2016] HCA 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.10 Packer v Meagher [1984] 3 NSWLR 486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.170 Packham Pty Ltd v Teo [2006] WASC 135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.200 Panasonic Australian Pty Ltd v Broadtel Communications Ltd [2007] VSC 273 . . . . . 5.125 Parmalat Australia Pty Ltd v VIP Plastic Packaging Pty Ltd (2013) 210 FCR 1 . . . . . . . . 7.80 Pasini v Vanstone [1999] FCA 1271 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.275 Paterson v Paterson (1953) 89 CLR 212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.10, 13.160 Pearce v Hall (1989) 52 SASR 568 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.240 Pepe v Platypus Asset Management Pty Ltd (No 2) [2011] VSC 21 . . . . . . . . . . . . . . . . 10.40 Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 . . . . . . . . . . . . . 10.40, 10.50, 10.70, 10.120, 10.130 Permanent Trustee Co Ltd v Gulf Import & Export Co (No 1) [2006] VSC 110 . . . . . . 5.150 Permanent Trustee Co Ltd v Gulf Import & Export Co (No 2) [2006] VSC 127 . . . . . . 5.150 Perry v Comcare (2006) 226 ALR 724 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30 Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487 . . . . . . . . . . . . . . . . . . . . . . . 2.240 Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 . . . . . . 2.40 Pioneer Park Pty Ltd (in Liq) v ANZ Banking Group Ltd [2007] NSWCA 344 . . . . . . . 7.185

xxiii

Principles of Civil Litigation

Pirrotta v Citibank Ltd (1998) 72 SASR 259 . . . . . . . . . . . . . . . . . . . 9.10, 10.20, 10.40, 10.60, 10.70, 10.120, 10.130, 10.140 Port Melbourne Authority v Anshun (1981) 147 CLR 589 . . . . . . . . 2.190, 2.200, 2.210, 5.10 Porteous v The Hancock Family Memorial Trust (Unreported, Supreme Court of Western Australia, Parker J, 28 May 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.110 Potter v Dickenson (1905) 2 CLR 668 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.80 Prime Forme Cutting Pty Ltd v Baltica General Insurance Ltd (1989) 8 ACLC 29 . . . 7.185 Primelife Corporation Ltd v Andrejic [2003] VSC 106 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.160 Probiotec Ltd v University of Melbourne [2008] 166 FCR 30 . . . . . . . . . . . . . . . . . . . . 12.60 Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 . . . . . . . . . . . . . . . . . . . . . . . . . 5.130 Protean Holdings Ltd v American Home Assurance Co (1985) VR 187 . . . . . . . . . . . . 11.160 Proude v Visic [2012] SASC 233 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.240 Puttick v Fletcher Challenge Forests Pty Ltd (2007) 18 VR 70 . . . . . . . . . . . . . . . . . . . . 13.40 Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 . . . . . . . . . . . . 8.350 Pyoja Pty Ltd v 284 Bronte Rd Development Pty Ltd [2006] NSWSC 831 . . . . . . . . . 8.275 Pyramid Building Society (in liq) v Farrow Financial Corp Ltd (in liq) [1995] 1 VR 464 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.270

Q Qintex Australia Ltd (in liq) v ANZCAP Nominees Pty Ltd [2000] QSC 394 . . . . . . . . 7.185 Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 . . . 1.90, 5.125, 6.120, 6.135, 11.220

R R v Commonwealth Court of Conciliation and Arbitration [No 1]; Ex parte Brisbane Tramways Co Ltd (1914) 18 CLR 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.20 R v Ireland (1970) 126 CLR 321 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.180 R v Snow (1915) 20 CLR 315 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.180 R v White (2003) 7 VR 442 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.130 Ra v Nationwide News Ltd (2009) 182 FCR 148 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.50 Racing & Wagering Western Australia v Software AG (Australia) Pty Ltd (No 2) (2008) 29 IPR 297 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40 Raguz v Sullivan [2000] NSWCA 240 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.10 Ranger v Suncorp General Insurance Ltd [1999] 2 Qd R 433 . . . . . . . . . . . . . . . . . . . . 8.240 Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [No 7] [2010] WASC 351 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.90 Re Bell Group Ltd (in liq); Ex Parte Geoffrey Frank Totterdell as liquidator of Bell Group Ltd (in liq) [2014] WASC 298 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.10 Re Brazendale v Tasmaid Foods Pty Ltd [1991] FCA 508 . . . . . . . . . . . . . . . . . . . . . . . . . 5.80 Reading Entertainment Australia Pty Ltd v Birch Carroll & Coyle Ltd [2002] FCAFC 109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.140 Red Wagyu Australia Pty Ltd, Re [2003] 1 Qd R 445 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.175 Reebok International Ltd v Sydney Organising Committee for Olympic Games [2000] NSWSC 295 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.230 Reeve v Aqualast Pty Ltd [2012] FCA 697 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.180 Rehn v Australian Football League (2003) 225 LSJS 378 . . . . . . . . . . . . . . . . . . . . . . . . 8.140 Reid v Howard (1995) 184 CLR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.350 Reimer v Health Care Complaints Commission [2013] NSWCA 366 . . . . . . . . . . . . . . . 2.210 Remm Construction (SA) Pty Ltd v Allco Newsteel Pty Ltd (1992) 57 SASR 180 . . . 7.185 Rhein-Flugzeugbau Gmbh v Sea Wing International Pty Ltd [1997] TASSC 135 . . . . . 7.110 Richards v Kadian [2005] NSWCA 328 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.290 Richardson v Trautwein (1942) 65 CLR 585 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.160 Rickard v Swenrick Building & Construction Pty Ltd [2006] VSC 382 . . . . . . . . . . . . . . 3.60 Ridehalgh v Horsfeld [1994] Ch 205 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.110 Ridgeway v The Queen (1995) 184 CLR 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.100

xxiv

Table of Cases

Ridolfi v Rigato Farms Pty Ltd [2001] 2 Qd R 455 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.150 Ritter v Godfrey [1920] 2 KB 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.10, 10.130 Road and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.180 Roberts v Gippsland Agricultural & Earthmoving Contracting Co Pty Ltd [1956] VLR 555 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.180 Roberts v Rodier [2006] NSWSC 1084 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30, 10.40 Robertson v Dogz Online Pty Ltd [2010] QCA 295 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.240 Robmatjus Pty Ltd v Violet Home Loans Australia Pty Ltd [2007] VSC 165 . . . . . . . . 7.160 Rochfort v Trade Practices Commission (1982) 153 CLR 134 . . . . . . . . . . . . . . . . . . . . . 8.275 Roe v Director General, Department of Environment and Conservation [2011] WASCA 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.60 Rogers v Baillieu Bullock Wilkinson Pty Ltd (1981) 28 SASR 594 . . . . . . . . . . . . . . . . . 11.170 Rogers v The Queen (1994) 181 CLR 251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.105 Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd (2001) 53 NSWLR 626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40 Ross v Perpetual Trustees Victoria Ltd & Ors [2017] SASC 61 . . . . . . . . . . . . . . . . . . . . 6.135 Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 . . . . . . . . . . . . . . . . . . 9.10 Rutile Mining Development Pty Ltd v Australian Oil Exploration Ltd [1960] Qd R 480 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.300

S SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 . . . . . . . . 6.130 SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40 SS Hontestroom v SS Sagaporack [1927] AC 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.160 SZAJB v Minister for Immigration and Citizenship (2008) 168 FCR 410 . . . . . . . . . . . 13.40 Sahin v National Australia Bank Ltd [2012] VSCA 317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.210 St George Bank v Rabo Bank (2004) 211 ALR 147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.80 Sanderson v Blyth Theatre Co [1903] 2 KB 533 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.220, 12.60 Sankey v Whitlam (1978) 142 CLR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.360 Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213 . . . . . . . . . 3.140 Schokman v Hogg [2003] QCA 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.185 Seven Network Limited v News Limited (2007) 244 ALR 374 . . . . . . . . . . . . . . . . . . . . 10.40 Seven Network Ltd v News Ltd [2007] FCA 1062 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.10 789Ten Pty Ltd v Westpac Banking Ltd [2004] NSWSC 594 . . . . . . . . . . . . . . . . . . . . . 8.340 Sharpe v Smail (1975) 5 ALR 377 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.245 Shaw v Jarldorn (1999) 76 SASR 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10, 10.40, 10.120, 10.130, 10.140 Sheahan v Hertz (1995) 181 LSJS 147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.60 Sheikholeslami v Brungs [2006] FCA 933 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.105 Sheldon v National Roads and Motorists Association Ltd [2004] FCA 1363 . . . . . . . 5.140 Shield Mercantile v Citigroup [2013] NSWSC 287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.150 Simon Parsons & Co v Barker [2004] TASSC 135 . . . . . . . . . . . . . . . . . . . . . . . . . . 6.140, 6.150 Simpson v Brereton [1964] VR 332 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.140 Singer v Gilchrist Watt and Sanderson Pty Ltd (1950) 67 WN (NSW) 89 . . . . . . . . . . 10.90 Skahill v Kestral Holdings Pty Ltd [2000] WASC 185 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.90 Skorpos v Development Assessment Commission (1995) 64 SASR 51 . . . . . . . . . . . . 13.20 Slater Rex & Co v Ghosh [1971] 2 QB 597 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.270 Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 . . . . 10.30, 10.40, 10.60 Smith v Bank of Western Australia Ltd (2010) 265 ALR 472 . . . . . . . . . . . . . . . . . . . . . . 6.110 Smith v Day (1882) 21 Ch D 421 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.90 Smith v Deputy Commissioner of Taxation (1997) 37 ATR 314 . . . . . . . . . . . . . . . . . . . 10.130 Smith v Peters (1875) LR 20 Eq 511 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.110 Smith v Smith [1987] 2 Qd R 807 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.30, 10.40, 10.60 Soinco SACI v Novokuznetsk Aluminum Plant [1997] 3 All ER 523 . . . . . . . . . . . . . . . 14.130 xxv

Principles of Civil Litigation

Sony Music Entertainment (Australia) Ltd v University of Tasmania (2003) 129 FCR 472; [2003] FCA 532 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.120 South Australia v Peat Marwick Mitchell & Co (1997) 24 ACSR 231 . . . . . . . . . . . . . . . . 5.30 South Australian Land Mortgage and Agency Co Ltd v The King (1922) 30 CLR 523 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.10 South Eastern Sydney Area Health Service v King [2006] NSWCA 2 . . . . . . . . . . . . . . . 9.10 Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (No 5) [2001] SASC 335 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.170 Southern Equities Corp Ltd (in liq) v Bond (No 2) (2000) 209 LSJS 353; [2000] SASC 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.150 Spain v The Union Steamship Company of New Zealand Ltd (1923) 32 CLR 21 . . . . . 6.35 Spann v Stanwell Pty Ltd [1984] 1 Qd R 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.180 Spencer v Commonwealth of Australia (2010) 241 CLR 118 . . . . . . . . . . . . . . . . . . . . . . 6.135 Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 . . . . . . . . . . . . . . . . . . . . 2.100 Spitfire Nominees Pty Ltd v Hall & Thompson (a firm) [2001] VSCA 245 . . . . . . . . . . 6.110 Stanley v Layne Christensen Co [2004] WASCA 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.275 Starr v National Coal Board [1977] 1 All ER 243 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.290 State Bank of South Australia v Smoothdale (No 2) Ltd [1993] SASC 4352 . . . . . . . . 8.180 State of Queensland v Australian Telecommunications Commission (1985) 59 ALR 243 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.80 State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 . . . . . . 4.220, 4.230, 4.240 State of Queensland v Rodd [2004] QSC 312 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.90 State of Western Australia v Ward (2002) 213 CLR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.90 Steffen v ANZ Bank [2009] NSWSC 666 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.80 Steindl Nominess Pty Ltd v Laghaifar (2003) QCA 157; [2003] 2 Qd R 683 . . 3.110, 12.100 Stevenson v Regents Park Sporting and Community Club Ltd [2012] NSWSC 736 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.50 Swain v Hillman [2001] 1 All ER 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.135 Sydney City Council v Chapman [2007] NSWLEC 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.85 Szumylo v Ixia Pty Ltd [2001] SASC 262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.180

T T O’Connor & Sons Pty Ltd v Entact Clough Pty Ltd [2003] WASC 69 . . . . . . . . . . . . 8.170 Talbot v NRMA Ltd (2000) 50 NSWLR 300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.20 Taxation, Deputy Commissioner of v Cheung Kong Infrastructure Ltd (No 2) [2013] FCA 885 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.30 Taxation, Deputy Commissioner of v Salcedo [2005] 2 Qd R 232 . . . . . . . . . . . . . . . . . 6.135 Taylor v Santos Ltd (1998) 71 SASR 434 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.130 Technology Leasing Ltd v Lennmar Pty Ltd (No 2) [2012] FCA 1216 . . . . . . . . . 10.30, 10.40 Telstra Corp Ltd v AAPT Ltd [1999] FCA 1410 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.270 Temwood Holding Pty Ltd v Asean Australian Assets Pty Ltd [2000] WASC 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.80 Terravision Pty Ltd v Black Box Control Pty Ltd (No 4) [2016] WASC 378 . . . . . . . . . 4.240 Territory Sheet Metal Pty Ltd v Australia and New Zealand Banking Group Ltd (2010) 26 NTLR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.240 The Will of Gilbert (dec’d), In re (1946) 46 SR (NSW) 318 . . . . . . . . . . . . . . . . . . . . . . . 13.140 Thorp v Holdsworth (1876) 3 Ch D 637 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.30 Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 . . . . . . . . . . . . . . . . . . . . . 9.10, 10.50, 10.120 Till v National Mutual Life Association of Australasia [2004] ACTCA 26 . . . . . . . . . . . 5.90 Tipperary Developments Pty Ltd v Western Australia [2004] WASC 179 . . . . . . . . . . 8.245 Tony Azzi Automobiles Pty Ltd v Volvo Car Australia Pty Ltd [2006] NSWSC 283 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.105 Toyota Finance Australia Ltd v Easy Dollar Pty Ltd (No 2) [2011] NSWSC 879 . . . . . . 12.70 Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90 . . . . . . . . . . . . . . . . . . . . 8.275 Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.160 xxvi

Table of Cases

Treasury Wine Estates Ltd v Melbourne City Investments Pty Ltd (2014) 45 VR 585 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.105 Treloar Constructions Pty Ltd v McMillan [2016] NSWCA 302 . . . . . . . . . . . . . . . . . . . . 13.30 Trevor Roller Shutter Service Pty Ltd v Crowe (2011) 31 VR 249 . . . . . . . . . . . . 4.240, 11.110 Trippe Investments Pty Ltd v Henderson Investments Pty Ltd (1990) 101 FLR 261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.180 Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.130 Tumminello v TAB Ltd [2011] NSWSC 1639 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.80 Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281 . . . . . . . . . . . . . . . . 13.70 Turner v Davies Energy Recycling Corp Pty Ltd [1981] 2 NSWLR 324 . . . . . . . . . . . . . 8.130

U Ulowski v Miller [1968] SASR 277 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.110 United Motors v Australian Guarantee Corporation (1991) 58 SASR 156 . . . . . . . . . 4.200 Universal Music Australia Pty Ltd v Sharman License Holdings Ltd (2004) 205 ALR 319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.146 University of Western Australia v Gray (No 4) (2006) 59 ACSR 678 . . . . . . . . . . . . . . . 7.175 University of Western Australia v Gray (No 6) [2006] FCA 1656 . . . . . . . . . . . . . . . . . . 7.175 University of Wollongong v Metwally [No 2] (1985) 59 ALJR 481 . . . . . . . . . . . . . . . 13.100

V Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239 . . . . . . . . . . . . . . . . . . . . . . 6.50 Vale v Eggins (No 2) [2007] NSWCA 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40, 10.130 Van Eeden v Henry (2005) 62 NSWLR 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.230 Van Leer Australia Pty Ltd v Palace Shopping KK (1981) 180 CLR 337 . . . . . . . . . . . . . 3.140 Vawdrey Australia Pty Ltd v Krueger Transport Equipment Pty Ltd [2009] FCAFC 156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.130 Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.100 Vitch (No 2), Re (1988) 147 LSJS 279 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.60 Viteous v Tuohill [1964] VR 624 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.180 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 . . . . . . . . . . . . . . . . . . . . . . . . . . 2.100

W Wakim, Re; Ex parte McNally (1999) 198 CLR 511 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.70, 2.70 Walker v Wilsher (1889) 23 QBD 335 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20 Wang v NSW [2013] NSWSC 886 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.120 Warren v Coombes (1979) 142 CLR 531 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.90, 13.100, 13.150, 13.160 Waterford v Commonwealth (1987) 163 CLR 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.320 Waterhouse v Contractor Bonding Ltd [2013] NZSC 89 . . . . . . . . . . . . . . . . . . . . . . . . 12.240 Watson v Anderson (1976) 13 SASR 329 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50 Webster v Lampard (1993) 177 CLR 598 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.130 Weldon v Neal (1887) 19 QBD 394 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.130 Wenzel v Australian Stock Exchange Ltd [2002] FCA 353 . . . . . . . . . . . . . . . . . . . . . . . 10.30 Westpac v Commissioner of State Revenue [2004] QSC 19 . . . . . . . . . . . . . . . . . . . . . 10.120 Westpac Banking Corporation v Garret (2004) 235 LSJS 246; [2004] SASC 265 . . . . 6.40 Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.160 White v Director of Housing [2003] VSC 124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.110 White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169 . . . . . . . . . . . . . 12.100 xxvii

Principles of Civil Litigation

Whitehead v Maas (1991) 56 SASR 362 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.120 Wickstead v Browne (1992) 30 NSWLR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.40 Wilkinson v Perisher Blue Pty Ltd [2012] NSWCA 250 . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.240 Williams v Spautz (1992) 174 CLR 509 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.100, 6.105 Williamson v Nilant [2003] WASC 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.160 Williamson v Schmidt [1998] 2 Qd R 317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.60 Wilson v Manna Hill Mining Co Ltd [2004] FCA 1663 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.140 Windbank v Bradley (1970) 4 ACTR 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.130 Winnote Pty Ltd v Page [2006] NSWCA 287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 Witham v Holloway (1995) 183 CLR 525 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.150 Wong v Silkfield Pty Ltd (1999) 199 CLR 255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.240

Y Ying v Song [2011] NSWSC 618 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.50, 10.60, 10.120

Z Zou v Khousal [2012] VSC 187 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.80

xxviii

TABLE OF LEGISLATION COMMONWEALTH Australian Capital Territory (Self-Government) Act 1988 s 48: 2.30 Bankruptcy Act 1930: 2.40 Bankruptcy Act 1966: 2.120 s 58: 2.120 s 60: 2.120 Civil Aviation (Carriers Liability) Act 1959: 5.80 Civil Dispute Resolution Act 2011: 9.10 s 3: 9.10 ss 4 to 7: 3.90 Commonwealth Conciliation and Arbitration Act 1904: 2.40 Commonwealth of Australia Constitution Act 1901 s 71: 1.70 s 73(ii): 2.80 s 74: 13.20 s 75: 2.40 s 75(i): 13.20 s 75(ii): 13.20 s 75(iv): 13.20 s 76: 2.40 Competition and Consumer Act 2010 s 80: 2.130 s 82(2): 3.20 Corporations Act 2001: 1.20, 2.120, 3.180, 7.150, 7.170, 7.185 s 109X: 3.180 s 471B: 2.120 s 486A: 7.150 s 1323: 7.150 s 1335: 7.185 Pt 5.2: 7.170 Evidence Act 1995: 8.310 s 131(1): 9.60 Family Law Act 1975: 1.70, 5.170 Pt VII, Div 12A: 5.170 Federal Court Rules 2011: 5.70, 6.30, 6.120, 7.130, 7.144 r 2: 7.130

r 2.26: 6.105 r 5.04: 11.220 r 5.22: 6.80, 6.120 rr 5.22 to 5.23: 6.30, 8.260 r 6.17: 2.140 r 7.22: 8.180 r 7.23: 8.180 r 7.32: 7.130, 7.150 r 7.35(4): 7.160 r 7.42: 7.140 r 7.43: 7.144 r 7.46: 7.144 r 8.05: 5.40 r 8.06: 3.140 r 8.01: 3.140 r 9.01: 2.170 r 9.02: 2.150 r 9.05: 2.160 r 9.12: 2.140 r 10.22: 3.160 r 10.23: 3.160 r 10.24: 3.190 r 10.43: 2.100 r 10.72: 6.40 r 14.01: 8.300 r 14.11: 7.130 r 14.13: 7.120 r 14.12: 7.130 r 16.01(c): 5.110 r 16.02: 5.80 r 16.04: 5.70 r 16.06: 5.90 r 16.08: 5.80 r 16.11: 5.40 r 16.21: 5.140, 6.70 r 16.41: 5.65 r 16.43: 5.100 r 16.51: 5.120 r 17.01: 4.270 r 20: 12.150 r 20.03: 8.220 r 20.11: 8.70 r 20.12: 8.80 r 20.13: 8.90 r 20.14(2): 8.140 r 20.20: 8.160 r 20.22: 8.100 r 20.23: 8.180 r 20.31: 8.230 r 21.01: 8.240 r 22.01: 5.150

xxix

Principles of Civil Litigation

Federal Court Rules 2011 — cont r 23.11: 8.280 r 23.13: 8.280 rr 24.17 to 24.20: 8.270 r 25.01(1): 10.100, 10.110 r 25.01(2): 10.100 r 25.03(1): 10.110 r 25.03(2)(b): 10.110 r 25.05(1): 10.100 r 25.05(2): 10.100 r 25.05(3): 10.110 r 25.05(4): 10.120 r 25.06(1): 10.120 r 25.06(2): 10.120 r 25.07(a): 10.110 r 25.07(b): 10.110 r 25.08(3): 10.110 r 25.10(a): 10.110 r 25.10(b): 10.110 r 25.10(c): 10.110 r 25.11(2): 10.110 r 25.14(1): 10.130 r 25.14(2): 10.130 r 25.14(3): 10.120 r 26.01: 6.130, 6.135 r 26.12: 6.170 r 26.15: 6.170 r 28.02: 9.140 r 28.11: 9.140 r 28.22: 9.70 r 28.61: 9.70 r 30.01: 11.170 r 35.01: 13.20 r 36.03(a): 13.20 r 36.08(2): 13.30 r 36.09(1): 13.30 r 36.31(1): 13.20 r 36.31(2): 13.20 r 36.57(1): 13.100 r 39.11: 6.180 r 40: 12.120 r 40.07: 12.100 r 40.51: 12.170 O 25, r 2: 7.130 O 25A: 3.70, 7.130 Ch 1, Pt 5, Div 5.2: 6.20 Ch 1, Pt 36, Div 36.5: 13.10 Div 7.3: 3.80 Div 7.4: 7.130 Div 7.5: 3.60 Div 9.2: 2.250 Div 15.1: 2.180 Div 15.01: 2.190 Pt 5: 4.280 Pt 5, Div 7.4: 3.70 Pt 5, Div 24.2: 8.270 Pt 10, Div 10.1: 3.160 xxx

Pt 16: 5.50 Pt 16, Div 16.5: 5.120 Federal Court and Federal Circuit Court Regulation 2012 Sch 1: 12.50 Federal Court of Australia Act 1976: 1.70, 2.40, 2.240 s 22: 2.150 s 23: 7.25 s 24: 13.20 s 24(1A): 13.20, 13.40 s 25: 13.20 s 27: 13.100 s 28(1): 13.50 s 29: 13.30 s 30(1): 13.50 s 30: 13.50 s 30(2)(b): 13.50 s 31A: 6.135 s 33: 13.20 s 33C: 2.240 ss 33L to 33N: 2.240 s 37M: 9.10 ss 37M to 37P: 4.50 s 37N: 4.50, 12.100 s 37N(3): 12.190 s 39: 11.50 s 43: 10.130, 12.60 s 53: 14.10 s 53A: 9.140 s 53A(1A): 9.70, 9.140 s 57: 7.175 s 59(2B): 5.130 Pt VB: 4.50, 4.280 Pt IVA: 2.240 Federal Magistrates Act 1999: 1.70 ss 39 to 41: 2.40 Federal Magistrates (Consequential Amendments) Act 1999: 2.40 High Court Rules 2004 r 42.09: 13.30 Ch 4, Pt 42: 13.10 Pt 41: 13.20 Judicature Act 1873: 1.50 Judiciary Act 1903: 1.70, 2.40 s 20: 13.50, 13.80 s 21: 13.20 s 27: 13.20 s 30: 2.40, 13.20 ss 34 to 35AA: 13.20 s 34(1): 13.20, 13.80 s 34(2): 13.20 s 35(1): 13.80

Table of Legislation

Judiciary Act 1903 — cont s 35(2): 13.20 s 35A: 13.40 s 35AA(1): 13.80 s 35AA(2): 13.20 s 36: 13.50 s 38: 2.40 s 39B: 2.40 s 40: 13.80 s 56: 13.20 s 73: 13.80 s 75(v): 13.20 s 75(iii): 13.20 s 76(1): 13.20 s 77C(1): 13.50 s 77C: 13.50 s 77S: 13.30 s 77U: 13.30 s 78A: 2.140 Jurisdiction of Courts (Cross-Vesting) Act 1987: 1.70, 2.20, 2.70 s 5: 2.70, 2.80 s 8: 2.80 s 13: 2.80 Legal Profession National Law 2011 s 4.3.6: 3.110 Seat of Government Supreme Court Act 1933: 1.50 Service and Execution of Process Act 1901: 2.70 s 15(1): 2.70 Pt IV: 2.70 Service and Execution of Process Act 1992: 2.20, 2.70, 2.80 s 3(1): 2.70 s 20: 2.70 s 20(4): 2.80 Pt IV: 2.70 Supreme Court Ordinance 1911: 1.50

AUSTRALIAN CAPITAL TERRITORY Civil Law (Wrongs) Act 2002 s 149: 11.40 Sch 3: 11.40 Commercial Arbitration Act 2017: 9.130 Court Procedures Act 2004: 1.130 s 5A: 4.50, 9.10 s 52B: 9.70 s 62: 7.25 s 63: 7.175

Court Procedures Rules 2006 rr 31 to 35: 3.130 r 50: 5.40 r 74: 3.140 r 75: 3.140, 6.120 r 100: 3.210 r 211: 2.150 r 220: 2.160 r 266: 2.250 r 285: 2.130 r 405: 5.110 r 406: 5.80 r 407: 5.100 r 408: 5.100 r 425: 5.140, 6.70 r 442: 5.100 r 443: 5.100 r 480: 5.40 r 482: 5.40 r 491: 5.150 r 503: 5.130 r 607: 8.80 r 608(3): 8.100 r 630: 8.240 rr 650 to 651: 3.80 rr 660 to 663: 8.180 r 670: 8.260 r 671: 8.260 r 707: 7.120 r 708: 7.120 r 716: 7.130 r 732: 7.90 r 741: 3.70, 7.150 r 751: 7.140 rr 751 to 753: 3.60 r 1002(1): 10.100 r 1002(2)(c): 10.110 r 1002(2)(e): 10.110 r 1002(7): 10.120 r 1002(8): 10.100 r 1002(9): 10.110 r 1003(1): 10.110 r 1010(2)(a): 10.120 r 1010(2)(b): 10.120 r 1011(2)(a): 10.130 r 1011(2)(b): 10.130 r 1012: 10.130 r 1110: 6.80 r 1119: 6.30 r 1128: 6.40 r 1146: 6.130 r 1147: 6.130 r 1160: 6.170 r 1176(1): 9.70 r 1176(3): 9.150 r 1176(4): 9.150 r 1177: 9.70

xxxi

Principles of Civil Litigation

Court Procedures Rules 2006 — cont r 1179: 9.70 r 1179(1) to (2): 9.150 r 1180: 9.80 r 1183: 9.150 r 1241: 8.280 r 1508: 11.160 r 1521: 11.170 r 1531: 9.70 r 1611: 6.180 r 1612: 6.180 r 1753: 12.100 r 1900: 7.185 rr 3250 to 3262: 9.140 r 3919(2): 9.140 rr 5050 to 5052: 13.20 r 5301(1): 13.30 r 5310(2): 13.20 r 5405(1)(b): 13.20 r 6006: 4.270 r 6106: 5.110 r 6142: 6.105 r 6405: 3.160 r 6460: 3.190 r 6461: 3.160 r 6464: 3.160 r 6600: 8.270 Pt 2.5: 2.190 Pt 2.6: 5.50 Pt 2.13: 4.280 Pt 2.14: 4.280 Ch 2, Pt 2.7: 5.120 Ch 2, Pt 2.11, Div 2.11.2 to 2.11.3: 6.20 Div 2.4.9: 2.120 Div 2.6.7: 2.180 Div 6.8.9: 2.100 Evidence Act 2011: 8.310 Jurisdiction of Courts (Cross-Vesting) Act 1993: 2.20, 2.70 Limitation Act 1985: 3.20 Supreme Court Act 1933 s 20: 2.30 s 32: 2.150 s 37E: 13.20 s 37E(2): 13.20 s 37E(4): 13.20 s 37N(1): 13.100 s 37N(3): 13.100 s 37O(1): 13.50 s 37P: 13.50

NEW SOUTH WALES Civil Procedure Act 2005: 1.80, 1.130 s 18: 11.60 xxxii

s 22: 2.190 s 25: 9.70 s 26(1): 9.70 s 26(2): 9.70 s 27: 9.80 s 30: 9.70 s 32: 9.70 s 38: 9.140 s 40: 9.140 s 48: 9.140 s 49: 9.140 s 51: 9.140 ss 56 to 58: 4.50 s 56(1): 9.10 s 56(3): 4.50 ss 56 to 58: 4.50 s 60: 1.130, 12.150 s 61: 6.80 s 62: 1.130, 11.220 s 62(2): 11.170 s 64: 5.130 s 65: 5.130 s 98: 10.130, 12.60 s 99(1): 12.100 s 105: 14.180 s 106: 14.80 s 107: 14.90 s 117: 14.100 s 119: 14.110 s 126: 14.120 Pt 6: 4.280 Pt 10: 2.240, 2.250 Civil Procedure Regulation 2012 reg 11: 12.50 Sch 1: 12.50 Commercial Arbitration Act 2010: 9.130 Companies Code: 4.210 Corporations (Commonwealth Powers) Act 2001: 2.70 Credit Act 1984: 2.250 Defamation Act 2005 s 21: 11.60, 11.130 s 21(3): 11.130 Evidence Act 1995: 8.310 Jurisdiction of Courts (Cross-Vesting) Act 1987: 2.20, 2.70 s 5: 2.70 Legal Profession Act 2004 s 374: 12.120 s 385: 12.120

Table of Legislation

Legal Profession Regulations 2005 regs 23 to 31: 1.140 Legal Profession Uniform Law 2014: 1.140 r 172: 12.150 r 174: 3.110, 12.190 r 182(2)(b): 12.220 r 183: 12.220 Limitation Act 1969: 3.20 s 50D: 3.20 s 62A: 3.30 Rules and Orders of the Governor’s Court in New South Wales 1815: 1.50 Sheriff Act 2005 s 15: 14.60 Supreme Court Act 1970 s 23: 2.30 s 42: 13.20 s 63: 2.150 s 66: 7.25 s 67: 7.175 s 85: 11.60 s 85(2)(b): 11.60 s 101(1): 13.20 s 101(2)(e): 13.20, 13.40 s 102(b): 13.20 s 106: 13.50 Supreme Court Rules 1970 r 13: 2.250 Uniform Civil Procedure Rules 2005: 1.80 r 2.1: 9.10 r 5.2: 8.180 r 5.4: 8.180 r 6.2: 5.40 rr 6.2 to 6.4: 3.130 r 6.3: 5.40 r 6.9: 3.210 r 6.18: 2.170 r 6.19: 2.150 r 6.22: 2.170 r 6.24: 2.160 r 7.4: 2.250 r 10.6: 3.160 r 10.13: 3.160 r 10.14: 3.160, 3.190 r 12.8: 6.120 r 13.1: 6.130 r 13.4: 6.70 r 14.3: 5.40 r 14.4: 5.40 r 14.12: 5.100 r 14.15: 5.100 r 14.19: 5.80

r 14.23: 5.110 r 14.27: 5.40 r 14.28: 5.140 r 15.12: 5.70 r 16: 6.20 r 16.2: 6.70 r 16.3: 6.30, 6.70 r 16.3(2)(b): 6.60 r 17.3: 5.150 r 17.4: 5.150 r 18.1: 4.270 r 20.2: 9.70 r 20.14: 9.70 r 20.26(1): 10.100 r 20.26(2)(c): 10.110 r 20.26(2)(d): 10.110 r 20.26(2)(f): 10.110 r 20.26(4): 10.120, 10.130 r 20.26(9): 10.120 r 20.26(10): 10.100 r 20.26(11): 10.110 r 20.27(1): 10.110 r 20.27(3): 10.110 r 20.29(1)(b): 10.110 r 20.29(2)(b): 10.110 r 20.30(1): 10.120 r 20.30(2): 10.120 r 20.30(3)(c): 10.120 r 21.2: 8.80, 8.140 r 21.4: 8.100 r 21.6: 8.160 r 21.7: 8.220 r 21.8: 8.70 r 22.1: 8.240 r 22.3(1): 8.240 r 23.8: 8.300 r 25.3: 7.110 r 25.4: 7.130 r 25.5: 7.120 r 25.6: 7.120 r 25.11: 7.150 r 28.2: 11.170 r 28.5: 2.230 r 29.6: 11.160 r 29.10: 11.160 r 31.28: 8.280 rr 33.6 to 33.9: 8.270 r 36.1A: 6.180 r 36.16: 6.40 r 37.2: 14.90 r 40.2: 14.170 r 40.6: 14.170 r 40.8: 14.160 r 42.1: 12.60 r 42.4: 12.170 r 42.13A(2): 10.110 r 42.14(2): 10.120

xxxiii

Principles of Civil Litigation

Uniform Civil Procedure Rules 2005 — cont r 42.15: 10.130 r 42.15A: 10.130 r 42.17: 10.120 r 42.21: 7.185 r 50.3(1)(a): 13.20 r 50.7: 13.30 r 50.8: 13.30 r 51.4(3): 13.20 r 51.4(4): 13.20 rr 51.16 to 51.44: 13.10 r 51.54(1): 13.20 Pt 2: 4.280 Pt 5: 3.80 Pt 7, Div 4: 2.120 Pt 7, Div 5: 2.130 Pt 9: 2.180, 2.190 Pt 10, Div 3: 3.160 Pt 11: 2.100 Pt 14: 5.50 Pt 19: 5.120 Pt 23, Div 1: 8.290 Pt 25, Div 2: 3.70 Pt 25, Div 3: 3.60, 7.140 Pt 33: 8.270 Pt 39 Div 4: 14.100 Sch 7, [2]: 1.110

NORTHERN TERRITORY Commercial Arbitration (National Uniform Legislation) Act 2011: 9.130 Juries Act 1963 s 7: 11.70 Jurisdiction of Courts (Cross-Vesting) Act 1987: 2.20, 2.70 Limitation Act: 3.20 s 12(1): 3.20 s 33: 3.20 s 48A: 5.130 Supreme Court Act s 14: 2.30 s 19: 2.150 s 51: 13.20 s 51(1): 13.20 s 53(1): 13.20 s 54: 13.100 s 55(1)(b): 13.50 s 56(1): 13.50 s 57: 13.30 s 69: 7.25, 7.175 Supreme Court Rules r 1.06: 10.90

xxxiv

r 1.10: 4.50 r 1.10(1)(a): 9.10 r 2.01: 6.80 r 5.04: 5.40 r 5.12: 3.140 r 6.03: 3.160 r 6.08: 3.160 r 6.09: 3.190 r 6.10: 3.160 r 8.03: 3.210 r 9.01: 2.170 r 9.02: 2.150 r 9.04: 2.170 r 9.06: 2.160 r 13.01: 5.110 r 13.02(2): 5.80 r 13.02(2)(b): 5.80 r 13.07: 5.65 r 13.10: 5.100 r 13.13: 5.40 r 14.02: 5.40 r 14.04: 5.40 r 14.05: 5.40 r 18.02: 2.250 r 21.07: 6.40 r 23.02: 5.140 r 24.02: 6.80 r 25.02: 6.170 r 26.02(1): 10.100 r 26.02(2): 10.100 r 26.02(3): 10.100 r 26.02(3)(b): 10.110 r 26.03(2): 10.100 r 26.03(3): 10.110 r 26.03(4): 10.110 r 26.03(5): 10.110 r 26.04: 10.120 r 26.05(2): 10.120 r 26.07(1)(a): 10.110 r 26.07(1)(b)(i): 10.110 r 26.07(1)(b)(ii): 10.110 r 26.08(2): 10.120 r 26.08(3): 10.130 r 26.08(7): 10.120 r 26.09: 10.110 r 26.11(2): 10.100 r 26.11(3): 10.100 r 26.12: 10.90 r 26.17(1): 10.90 r 26.17(2): 10.90 r 26.20(1): 10.90 r 26.21(2): 10.90 r 26.21(6): 10.90 r 26.22: 10.90 r 26.25: 10.90 r 26.26(5): 10.90 r 26.26(6): 10.90

Table of Legislation

Supreme Court Rules — cont r 29.02: 8.80 r 29.03: 8.100 r 29.03(2): 8.90 r 30.02: 8.240 r 32.07: 8.180 r 35.03: 5.150 r 35.05: 5.150 r 37.01: 7.110, 8.300 r 37.02: 8.300 r 37.06: 7.120 r 37B: 7.140 r 46.02: 4.270 r 47.02: 11.70 r 48.06(2): 4.90 r 48.13: 9.70 r 48.13(8): 9.70 r 59.06: 6.180 r 66.05: 14.170 r 84.14: 13.30 r 85.12(1)(a): 13.20 r 85.13: 13.30 O 4: 3.130 O 7: 2.100 O 10: 2.180 O 11, r 1: 2.190 O 11, r 15: 2.190 O 13: 5.50 O 15: 2.120 O 17: 2.130 O 21: 6.20 O 22: 6.130 O 23.02: 6.70 O 26.03(1): 10.100 O 26.03(7): 10.110 O 26.15: 10.90 O 32: 3.80 O 33: 8.290 O 36: 5.120 O 37A: 3.70, 7.150 O 37B: 3.60 O 42: 8.270 O 44: 8.280 O 48: 4.80, 4.280 O 62: 7.185 O 63: 12.120

QUEENSLAND Civil Liability Act 2001 s 73: 11.80 Civil Proceedings Act 2011: 1.80 s 9: 7.25 s 12: 7.175 s 15: 12.60 s 16: 5.130 s 40: 9.70

s 41(1): 9.160 s 42(1): 9.160 s 43: 9.70, 9.160 s 43(3): 9.160 s 45(1): 9.160 s 45(2): 9.160 s 45(3): 9.160 s 46(2): 9.160 s 49(1): 9.110 s 49(2): 9.160 s 50: 9.110 s 51: 9.160 s 51(1): 9.160 s 100: 14.30 r 37(b): 9.20 Commercial Arbitration Act 2013: 9.130 s 18: 9.140 s 19: 9.140 s 19(1): 9.140 Constitution of Queensland Act 2001 s 58: 2.30 Corporations (Commonwealth Powers) Act 2001: 2.70 Jurisdiction of Courts (Cross-Vesting) Act 1987: 2.20, 2.70 s 5: 2.70 Jury Act 1995 s 65A: 11.80 s 65A(b): 11.80 Legal Profession Act 2007 s 324: 12.220 Limitation of Actions Act 1974: 3.20 ss 30 to 31: 3.30 Motor Accident Insurance Act 1994 s 37: 3.90 Personal Injuries Proceedings Act 2002: 3.90 s 9: 3.90 ss 36 to 42: 3.90 Supreme Court Constitution Amendment Act 1861: 1.50 Supreme Court of Queensland Act 1991 s 28: 13.20 s 62: 13.20 s 62(2): 13.20 Uniform Civil Procedure (Fees) Regulation 2009 regs 10 to 10C: 12.50 Sch 1: 12.50 xxxv

Principles of Civil Litigation

Uniform Civil Procedure Rules 1999: 1.80, 2.100, 8.50 r 5: 4.50, 9.10 rr 8 to 11: 3.130 r 15: 6.105 r 22: 5.40 r 24: 3.140 r 31: 4.270 r 65: 2.150 r 69: 2.160 r 75: 2.250 r 78(b): 2.230 r 83: 2.130 rr 93 to 98: 2.120 r 106: 3.160 r 108: 3.180 r 115: 3.160 r 116: 3.190 r 117: 3.160 r 124: 2.100 r 135: 3.210 r 137: 5.40 r 146: 5.110 r 149: 5.65 r 149(2): 5.80 r 150: 5.100 r 164: 5.40 r 168: 5.40 r 171: 5.140, 6.70 r 174: 5.100 rr 175 to 185: 2.180 r 184: 2.180 r 189: 5.150 rr 191 to 207: 2.190 r 206: 2.190 r 208: 2.190 r 211: 8.80, 8.120, 12.150 r 211(1)(a): 8.100 r 211(1)(b): 8.140 r 212(2): 8.280 r 214: 8.90, 8.100 r 216: 8.230 r 217: 8.230 r 222: 8.230 r 229: 3.80 r 229(2): 8.240 rr 242 to 245: 8.180 r 250: 7.110, 8.300 r 251: 7.130 r 252: 7.110 r 260A: 7.150 rr 261 to 261F: 3.60 r 261A: 7.140 r 264: 7.90 r 290: 6.40 r 292(2): 6.135 rr 292 to 293: 6.130

xxxvi

r 304: 6.170 r 312: 6.170 rr 319 to 320: 9.70 r 320(a): 9.160 r 320(b): 9.160 r 322: 9.80 r 325: 9.80 r 334: 9.160 r 334(1): 9.160 r 335(1): 9.160 r 335(2): 9.160 r 337: 9.160 r 337(2): 9.160 r 339(1): 9.160 r 341(2): 9.160 r 342(2): 9.160 r 343: 9.170 r 343(2): 9.170 r 343(3): 9.170 r 344(1): 9.170 r 344(2): 9.170 r 345(1): 9.170 r 353(1): 10.100 r 353(2): 10.100 r 353(3): 10.100, 10.110 r 354(1): 10.100 r 355(1): 10.110 r 355(2): 10.110 r 356: 10.120 r 357(1): 10.120 r 357(2): 10.100 r 357(3): 10.120 r 358(1): 10.110 r 358(4): 10.110 r 360: 10.120, 10.130 r 360(1)(b): 10.120 r 361: 10.130 r 361(1)(b): 10.120 r 363: 11.220 r 363(2): 10.110, 10.130 r 365(a): 10.110 r 367: 1.130 r 423(b): 8.280 r 429G: 8.280 r 472: 11.80 r 483: 11.170 r 501: 9.70 r 547: 5.70 r 666: 6.180 r 670: 7.185 r 671: 7.185 r 671(b): 7.185 r 671(c): 7.185 r 679: 12.80 r 681: 12.60 r 690: 12.100 r 702: 12.70

Table of Legislation

Uniform Civil Procedure Rules 1999 — cont r 720: 12.120 r 748(a): 13.20 r 749(1): 12.20 r 761: 13.30 r 765(1): 13.90 r 766(1)(a): 13.50 r 766(1)(c): 13.100 r 770: 13.50 r 770(2): 13.60 rr 772 to 774: 13.30 r 855: 14.110 r 856: 14.110 r 899: 14.160 rr 913 to 920: 14.180 r 917: 14.170 Ch 4, Pt 7: 2.100 Ch 6: 5.50 Ch 7: 8.50 Ch 8, Pt 2, Div 2: 3.70 Ch 9, Pt 1: 6.20 Ch 10: 4.280 Ch 10, Pt 3: 5.120 Ch 11, Pt 4: 8.270 Ch 17: 7.185 Workers’ Compensation and Rehabilitation Act 2003 s 275: 3.90

SOUTH AUSTRALIA Australian Solicitors’ Conduct Rules 2015: 12.20 r 7.2: 3.110, 9.10 Commercial Arbitration Act 2011: 9.130 s 34A: 9.140 Corporations (Commonwealth Powers) Act 2001: 2.70 Debt Repayment Act 1978: 14.20 District Court Civil Rules 2006: 1.80 Enforcement of Judgments Act 1978: 14.20 Enforcement of Judgments Act 1991: 14.30 s 5: 14.90 s 6: 14.100 s 6(2): 14.110 s 7(2): 14.80 s 8: 14.120 s 11: 14.180 s 12: 14.150

Evidence Act 1929 s 67C: 9.60 Juries Act 1927 s 5: 11.90, 13.60 Jurisdiction of Courts (Cross-Vesting) Act 1987: 2.20, 2.70 s 5: 2.70 Legal Practitioners Act 1981: 12.20 Sch 3, cl 10: 12.190 Sch 3, cl 26: 12.220 Limitation of Actions Act 1936: 3.20 s 36(1a): 3.20 s 48(3a): 3.30 Motor Vehicles Act 1959 s 127: 8.290 Ordinance No 5 1837: 1.50 Return to Work Act 2014: 2.30 South Australian Employment Tribunal Act 2014: 2.30 Supreme Court Act 1935 s 17: 2.30 s 27: 2.150 s 29: 7.25, 7.175 s 40: 10.130, 12.60 s 48: 13.20 s 48(2)(a)(i): 13.20 s 48(2)(a)(ii): 13.20 s 50(1): 13.20 s 50(5): 13.20 s 50(6)(b): 13.20 ss 59(4) to 59(5): 13.60 s 60: 13.40 s 65: 9.70 s 65(6): 9.70 s 66: 9.140 s 66(4): 9.140 s 67: 9.70 s 71: 9.70 s 72: 1.130 s 130: 12.50 Supreme Court Rules 2006 r 211: 11.170 Supreme Court Civil Rules 2006: 1.80, 2.160, 2.170, 8.50 r 3: 4.50, 9.10, 13.140 r 3(b): 9.10 r 4: 8.120, 9.70 r 12: 6.80 r 27: 2.120 r 30: 2.170 xxxvii

Principles of Civil Litigation

Supreme Court Civil Rules 2006 — cont r 30(4): 2.170 r 31: 2.230 r 32: 3.80, 8.180 r 33: 3.90, 8.280 r 34: 3.140 r 35: 2.180, 2.190 r 39: 3.140 r 53: 6.105 r 54: 5.130 r 54(7): 5.130 r 54: 5.120 r 59: 3.210 r 67(1)(c): 3.160 r 67(2)(b): 3.160 r 69: 3.190 r 73: 2.150 r 73(1)(a): 2.160 r 74: 2.160 rr 78 to 79: 2.120 r 79: 2.120 r 80: 2.250 r 81: 2.240 r 86: 2.130 r 89: 2.140 r 91: 5.40 r 92: 5.40 r 94: 5.40 r 98(1)(b): 5.110 r 98(3): 5.70 r 99: 5.65 r 99(1)(b): 5.80 r 99(3): 5.70 rr 99 to 100: 5.80 r 100: 5.80 r 101: 5.40 r 102: 5.65 r 104: 5.140, 6.70 r 106: 5.70 r 107: 6.170 r 108: 6.170 r 115: 4.95 r 116: 9.10 r 117: 11.220 r 123: 3.140, 6.120 r 130G: 12.180 r 131: 4.270 r 136: 8.80, 12.150 r 136(1)(a): 8.140 r 136(4): 8.90 r 136(8): 8.160 r 140: 8.230 r 145: 8.170 r 146: 8.180 r 147: 8.300 r 148: 3.60, 7.140 r 150: 8.240 r 151(1)(a): 8.240 xxxviii

r 156: 5.150 r 160(1)(b): 8.280 rr 176 to 178: 8.270 r 187(4)(a): 10.110 r 187(5): 10.100 r 187(6)(b): 10.110 r 188(1): 10.110 r 188(3): 10.100 rr 188(4) to 188(5): 10.110 r 188B: 10.120 r 188C(3): 10.110 r 188F(3): 10.120 r 188F(4): 10.130 r 188F(5): 10.130 r 194: 7.185 r 209: 1.130, 11.220 r 220(1): 9.70 r 221(1): 9.140 r 222(1): 9.140 r 224: 2.180 r 227: 6.180 r 228: 6.80, 8.260 rr 228 to 231: 6.20 r 229(1): 6.35 r 230: 6.40 r 232: 6.130, 6.135 r 247: 3.70, 7.150 r 248: 7.110 r 248(3): 7.130 r 248(4): 7.120 r 263(1): 12.60 r 271: 12.120 r 280: 13.20 r 281(1): 13.20 r 283(1): 13.20 r 283(2): 13.20 r 283(3)(b): 13.50 r 286(1): 13.90 r 286(3)(a): 13.100 r 288(1)(a): 13.20 r 295(1)(g): 13.30 r 348: 14.50 Ch 3, Pt 4, Div 2: 2.100 Ch 3, Pt 4, Div 4: 2.100 Ch 5, Div 2: 5.50 Ch 6: 4.280 Ch 7, Div 4: 8.270 Ch 7, Pt 6: 8.240 Ch 7, Pt 7: 8.290 Supreme Court Civil Supplementary Rules 2014 rr 75 to 79: 4.95 r 156: 8.280 Sch 3, Form 29C: 8.100 Supreme Court Rules 1987 r 46A.03: 5.65

Table of Legislation

Supreme Court Rules 1987 — cont r 46A.09: 5.65

TASMANIA Alternative Dispute Resolution Act 2001 s 3(2): 9.70 s 3(3): 9.150 s 3(4): 9.150 s 5(1): 9.70, 9.150 s 6: 9.80 s 10: 9.150 s 10: 9.70 Commercial Arbitration Act 2011: 9.130 Corporations (Commonwealth Powers) Act 2001: 2.70 Debtors Act 1870 s 5: 14.30 Evidence Act 2001: 8.310 s 196C: 8.180 Jurisdiction of Courts (Cross-Vesting) Act 1987: 2.20, 2.70 s 5: 2.70 Motor Accident (Liabilities and Compensation) Act 1973:11.100 s 22: 11.100 Limitation Act 1974: 3.20 s 5A: 3.20, 3.30 s 5A(3): 3.20 Supreme Court Civil Procedure Act 1932 s 10(7): 2.150 s 11(12): 7.25, 7.175 s 12: 10.130 s 37: 9.70 s 37A(1): 9.140 s 37A(3): 9.140 ss 39 to 40: 13.20 s 40(1): 13.20 s 40(2): 13.20 s 42(1)(a): 13.20 s 43: 13.20 s 45: 13.140 s 47(3): 13.100 r 556: 11.100 r 558: 11.100 Supreme Court Rules 2000 r 14: 6.80 r 57(1): 10.90 r 88: 3.130 r 107: 3.140 r 108: 5.40

r 132: 3.160 r 134: 3.160 r 141: 3.190 rr 154 to 157: 3.210 rr 169 to 188: 2.180 r 176: 2.150 r 179: 2.150 r 184: 2.160 r 200: 2.180 rr 201 to 212: 2.190 r 226: 5.110 r 228: 5.40 r 249: 5.80 rr 258 to 259: 5.140 r 258: 6.70 r 259: 6.70 r 265: 5.40 r 266: 5.40 r 267: 5.40 r 268: 10.90 r 268(2): 10.90 r 268(2)(b): 10.90 r 268(4)(a): 10.90 r 268(4)(b): 10.90 r 268(5): 10.90 r 269(1): 10.90 r 269(2): 10.90 r 269(5): 10.90 r 274: 10.90 r 275(1): 10.90 r 275(2): 10.90 r 280(1): 10.100 r 280(2): 10.100 r 280(3)(c): 10.100 r 280(4)(d): 10.100 r 280(5): 10.100 r 280(5)(b): 10.110 r 280(6): 10.100 r 280(7): 10.110 r 280(8): 10.110 r 281: 10.110 r 281(a): 10.100 r 281(b)(iv): 10.110 r 281(c): 10.110 r 281(d): 10.110 r 281(e): 10.110 r 283(1): 10.110 r 283(2): 10.110 r 285: 10.120 r 286(1): 10.120 r 286(2): 10.120 r 288(1)(a): 10.110 r 288(1)(b): 10.110 r 288(1)(c): 10.110 r 289(1): 10.120 r 289(2): 10.130 r 289(3): 10.120

xxxix

Principles of Civil Litigation

Supreme Court Rules 2000 — cont rr 292 to 301: 2.120 r 308: 2.130 rr 335 to 336: 2.250 r 340: 6.180 r 341: 6.180 rr 342 to 355: 6.20 r 355: 6.40 rr 356 to 370: 6.130 rr 371 to 372: 6.80 r 376: 6.170 r 381(e): 8.120 r 383: 8.80 r 383.4: 8.70 r 384(4): 8.100 r 399: 5.150 r 401: 5.150 rr 403A to 403H: 3.80 r 405: 8.240 r 406: 8.245 r 414A: 4.50, 9.10 r 427: 5.130, 8.300 r 438: 7.130 r 441: 7.120 r 445: 7.90 r 516: 8.280 r 519(2): 9.70 r 519(3): 9.70 r 524: 4.270 r 559: 11.170 r 570: 6.20 rr 574 to 582: 9.70 r 659: 13.20 r 828: 7.185 r 859: 12.70 r 874: 14.180 r 877: 14.160 r 883: 14.170 r 937B: 3.70, 3.80, 7.150 rr 937J to 937O: 3.60 r 937J: 7.140 Pt 7, Div 17: 5.50 Pt 10, Div 10: 2.100 Pt 14, Div 1: 4.280 Pt 15: 5.120 Pt 19, Div 3: 8.270

VICTORIA An Act to Make Provision for the Better Administration of Justice in the Colony of Victoria 1851: 1.50 Commercial Arbitration Act 2011 s 24(1): 9.140 Civil Procedure Act 2010: 3.110, 12.190 s 1: 9.10 xl

s 1(1)(c): 9.10 s 3: 9.150 s 7: 4.50, 4.85, 9.10, 13.140 s 7(1): 9.10 s 9: 12.150 s 9(1)(b): 9.10 s 11(b): 13.140 ss 13 to 15: 9.10 ss 16 to 26: 4.50 s 18: 3.110 s 22: 9.10, 9.80 s 42: 3.110 ss 47 to 48: 9.10 s 47: 11.220 s 49: 11.220 ss 61 to 63: 6.135 ss 65A to 65B: 12.190 s 66: 9.140 s 66(2): 9.70 s 67: 9.70 Ch 5: 9.20 Commercial Arbitration Act 2011: 9.130 Constitution Act 1975 s 85(1): 2.30 Corporations (Commonwealth Powers) Act 2001: 2.70 Crimes Act 1958 ss 254 to 255: 8.200 Evidence (Document Unavailability) Act 2006: 8.200 Judgment Debt Recovery Act 1984 s 9: 14.90 s 19: 14.90 Jurisdiction of Courts (Cross-Vesting) Act 1987: 2.20, 2.70 s 5: 2.70 Law Institute of Victoria, Professional Conduct and Practice Rules 2005 rr 12.2 to 12.3: 3.110 Legal Profession Act 2004 Pt 3.4: 3.110 Legal Profession Uniform Law Application Act 2014: 12.20 Sch 1, s 169(b): 12.20, 12.70 Sch 1, s 172: 12.20, 12.70 Sch 1, s 173: 12.20 Sch 1, s 207: 12.20 Limitation of Actions Act 1958: 3.20 s 27F: 3.20 s 27K(2)(b): 3.30

Table of Legislation

Limitation of Actions Act 1958 — cont s 34: 5.130 Supreme Court Act 1986: 2.240 s 10: 13.20 s 10: 13.20 s 14A: 13.170 s 14A(1): 13.20 s 14A(3): 13.20 s 14A(3): 13.20 s 17A: 13.40 s 24: 10.130, 12.60 s 24(1): 12.60, 12.110 s 28: 1.130 s 37: 7.25, 7.175 s 87: 14.30 Pt 4A: 2.240 Supreme Court (General Civil Procedure) 2006 Supreme Court (General Civil Procedure) Rules 2005: 1.140 r 6.03: 3.160 r 6.04: 3.180 r 6.09: 3.160 r 24.02: 6.80 r 35.03: 5.150 r 35.05: 5.150 O 64.23(7): 13.50 Supreme Court (General Civil Procedure) Rules 2015 r 2.01: 6.80 r 5.12: 3.140 r 5.04: 5.40 r 6.10: 3.190 r 6.11: 3.160 r 8.03: 3.210 r 9.02: 2.150 r 9.06: 2.160 r 11.01: 2.190 r 11.15: 2.190 r 13.01: 5.110 r 13.02(2): 5.80 r 13.02(2)(b): 5.80 r 13.07: 5.65 r 13.10: 5.70, 5.100 r 13.13: 5.40 r 14.02: 5.40 r 14.04: 5.40 r 14.05: 5.40 r 22.04: 6.135 r 24.01: 6.120 r 24.01: 6.120 r 24.02: 6.80 r 24.05: 6.80 r 25.02: 6.170 r 25.07: 6.170

r 26.02(1): 10.100 r 26.02(3): 10.100 r 26.03(1): 10.100 r 26.03(2): 10.100 r 26.03(3): 10.110 r 26.03(4): 10.110 r 26.03(5): 10.110 r 26.08: 10.130 r 26.08(2)(a): 10.120 r 26.08(2)(b): 10.120 r 26.08(3): 10.130 r 26.08(4): 10.130 r 26.08(7): 10.120 r 26.08(8): 10.120 r 27.06: 6.105 r 29.02: 8.80, 8.90 r 29.04, Form 29B: 8.100 r 30.02: 8.240 r 32.07: 8.180 r 37.01: 7.110, 8.300 r 37.02: 8.300 r 37.04: 7.130 r 37.06: 7.120 r 37A.02: 7.150 r 46.02: 4.270 r 47.02(1): 11.110 r 47.02(3): 11.110 r 47.04: 11.170 r 49.01: 11.160 r 59.02: 14.50 r 59.06: 6.180 r 62: 7.185 r 62.02(e): 7.185 r 63.01: 12.80 r 63.23: 12.100 r 63.30: 12.70 r 63.74: 12.40 r 64.01: 13.20 r 64.05(1)(a): 13.20 r 66.03: 14.180 r 66.05: 14.150, 14.170 r 66.11: 14.160 r 71.03: 14.100 r 72.01: 14.110 O 2: 6.80 O 4: 3.130 O 7: 2.100 O 10: 2.180 O 13: 5.50 O 15: 2.120 O 17: 2.130 O 18: 2.250 O 21: 6.20 O 21.07: 6.40 O 22: 6.130 r 23.02: 5.140, 6.70 O 32: 3.80

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Supreme Court (General Civil Procedure) Rules 2015 — cont O 34: 4.280 O 36: 5.120 O 37A: 3.70, 7.150 O 37B: 3.60, 7.140 O 42: 8.270 O 44: 8.280 O 50.08: 9.140 O 62: 7.185 O 63: 12.120 O 66.04: 14.180 O 71: 14.100 O 72: 14.110 Appendix A: 12.40

Family Court Act 1997: 1.70

Supreme Court (Intellectual Property) Rules 2006 O 2: 4.85

Supreme Court Act 1935: 2.150 s 16: 2.30 s 24(7): 2.150 s 25(9): 7.25, 7.175 s 37: 10.130, 12.60 s 42: 11.120 s 42(2): 11.120 ss 50 to 51: 9.70 s 51: 9.140 s 56: 9.70 s 57: 13.20 s 58(1)(a): 13.50 s 58(2): 13.20 s 59: 13.50 s 60: 13.40 s 60(1)(f): 13.20 s 60(2): 13.40 s 71: 9.70 s 167(1)(q): 9.70

Supreme Court (Miscellaneous Civil Proceedings) Rules 2008: 4.280 r 2.01: 4.85 r 2.03: 4.85 O 2: 4.85 O 7: 4.85 Transport Accident Act 1986: 2.30 s 71: 8.290 Workers Compensation Act 1958 s 27: 8.290

WESTERN AUSTRALIA An Act for Establishing a Court of Civil Judicature 1832: 1.50 Civil Judgments Enforcement Act 2004 s 33: 14.90 s 35: 14.110 s 64: 14.80 s 76: 14.80 s 69(2): 14.80 s 90: 14.90 s 98: 14.150 s 99: 14.160 Pt 5 Div 1: 14.180 Commercial Arbitration Act 2012: 9.130 s 7: 9.140 s 7(1): 9.140 s 18: 9.140 s 19(2) to (4): 9.140 s 28: 9.140 s 35(1): 9.140 Corporations (Commonwealth Powers) Act 2001: 2.70 xlii

Jurisdiction of Courts (Cross-Vesting) Act 1987: 2.20, 2.70 s 5: 2.70 Legal Profession Act 2008 s 260: 12.190 s 283: 12.220 Limitation Act 2005: 3.20, 3.30 s 39(3): 3.30 s 55: 3.20 Restraint of Debtors Act 1984 s 5: 14.30

Supreme Court (Court of Appeal) Rules 2005 s 47(2): 13.140 r 25: 13.90 r 26(2): 13.20 rr 29 to 41: 13.10 Supreme Court (Fees) Regulations 2002 reg 7: 12.50 Supreme Court Ordinance 1861: 1.50 Supreme Court Rules 1971 r 3: 3.80 r 4A: 13.140 r 4B: 13.140 O 1, r 4: 12.80 O 1, r 4A: 4.50 O 1 r 4A: 9.10 O 1, r 4B: 4.50, 12.150 O 1 r 4B: 9.10 O 1 r 4B(1) : 12.150 O 1 r 4B(1)(d): 9.10

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Supreme Court Rules 1971 — cont O 2: 6.80 O 4: 4.270 O 4, r 1: 3.130 O 4A, rr 2(p) to 2(u): 11.220 O 4A: 4.280 O 4A, rr 18 to 20: 4.110 O 4A, r 22: 6.120 O 4A, r 24: 6.120 O 4A, r 28: 6.120 O 5, r 11: 3.210 O 6, r 3: 5.40 O 7, r 1: 3.140 O 7, r 4: 3.190 O 9, r 1(2): 3.160 O 10, r 1A(1): 2.100 O 12, r 1: 3.210 O 13: 6.20 O 13, r 14: 6.40 O 14, r 1: 6.130 O 14, r 6: 6.130 O 18: 2.170 O 18, r 2(4): 2.180 O 18, r 4: 2.150, 2.160 O 18, r 12: 2.250 O 18, rr 2 to 3: 2.180 O 19, r 1: 2.190 O 19, r 8: 2.190 O 20: 5.50 O 20, r 1: 5.40 O 20, r 4: 5.40 O 20, r 5: 5.40 O 20, r 7: 5.110 O 20, r 12: 5.80 O 20, r 13: 5.100 O 20, r 13A: 5.100 O 20, r 15: 5.40 O 20, r 19: 5.140, 6.70 O 21: 5.120 O 21, r 5: 5.130 O 21, r 5(3): 5.130 O 23, r 2: 6.170 O 23, r 4: 6.170 O 24A, r 2: 10.100 O 24A, r 3(2): 10.100 O 24A, r 3(3): 10.110 O 24A, r 3(5): 10.110 O 24A, r 3(6): 10.110 O 24A, r 3(8): 10.100 O 24A, r 3(9): 10.110 O 24A, r 3A: 10.100 O 24A, r 3A(2)(b): 10.110 O 24A, r 6: 10.120 O 24A, r 7(1): 10.120 O 24A, r 7(2): 10.120 O 24A, r 8(1)(b): 10.110 O 24A, r 9: 10.110

O 24A, r 10(4): 10.120 O 24A, r 10(5): 10.110, 10.130 O 24A, r 10(5A): 10.120, 10.140 O 24A, r 10(7A): 10.130, 10.140 O 25: 7.185 O 25, rr 1 to 2: 7.180 O 26, r 1: 8.80 O 26, r 2: 8.140, 8.160 O 26, r 4(3): 8.100 O 26, r 8: 8.230 O 26, r 16A: 8.100 O 26A: 3.80 O 26A, r 3: 8.180 O 26A, r 5: 8.180 O 27, r 1: 8.240 O 27, r 2: 8.240 O 28: 8.290 O 28, r 2: 8.300 O 30, r 2: 5.150 O 30, r 5: 5.150 O 32, r 3: 11.120 O 32, r 5: 11.170 O 34: 6.20 O 34, r 5: 11.160 O 36A: 8.280 O 36B: 8.270 O 36B, r 6: 8.270 O 42, r 7: 6.180 O 42, r 8: 6.180 O 52, r 2: 7.110 O 52, r 8: 7.120 O 52A: 3.70, 7.150 O 52B: 3.60, 7.140 O 55, r 7.03: 14.170 O 59, r 3: 4.270 O 66: 12.120 O 67, r 5: 6.105 O 70: 2.120 O 71: 2.130 O 72, rr 2 to 3A: 3.160 O 83, r 1: 2.230 Sch 2, Form 17: 8.100 Sch 2, Form 18: 8.100

IMPERIAL AND UNITED KINGDOM Civil Procedure Rules 1999: 1.80 Common Law Procedure Act 1854: 8.20 Judicature Acts 1873-1875: 2.30, 7.20, 12.60 s 25(8): 7.25 Supreme Court Act 1981 s 37: 7.25

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UNITED STATES

TREATIES AND CONVENTIONS

Civil Justice Reform Act 1990: 1.80, 4.160

Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil and Commercial Matters, 1965: 2.100

Federal Rules of Civil Procedure: 3.110 r 8: 5.165 r 8(a): 5.165

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CHAPTER 1 The Civil Justice System The civil justice system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The civil courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 [1.50] State courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 [1.70] Federal courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 [1.80] The courts and procedural reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 [1.90] Case management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 [1.100] Minimising adjudication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 [1.110] Other procedural reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 [1.130] Future directions for procedural reform . . . . . . . . . . . . . . . . . . . . . 13 [1.140] The courts and civil litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 [1.150] The civil litigation data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 [1.190] How are civil cases finalised? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 [1.20] [1.40]

[1.10] The last 30 years have seen dramatic changes to the civil justice system. Indeed, just three decades ago some of those involved in the civil justice system may not have seen themselves as being part of a system. The word “system” suggests a collection of co-ordinated and accountable constituent parts working toward common goals, but judges, court officials and lawyers who worked in courts often saw themselves as being autonomous. They fiercely protected their independence from other participants and institutions in the civil justice system. If a civil justice system could be identified, it was largely limited to the formal court system. This chapter takes a broader view of the civil justice system, arguing that the system has expanded beyond courts and those who work within them. After defining and describing the structure of the civil justice system, the chapter examines some of the work of its different components. The chapter then briefly outlines the major areas of procedural change currently affecting civil litigation before providing a statistical review of the civil justice system. This review suggests that common perceptions of an increasingly litigious society are not soundly based. What the limited empirical data that is available reveals is that for most of the last decade litigation has been declining. The chapter concludes with an examination of some of the explanations for this trend.

THE CIVIL JUSTICE SYSTEM [1.20] For the purposes of this chapter, the “civil justice system” is defined as the combination of institutions and individuals authorised by the state to resolve disputes and, in so doing, set and enforce standards of behaviour for those belonging to the state. Falling within this definition are three categories of dispute resolution mechanisms authorised by the state.

[1.20] 1

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The traditional institutions of the civil justice system, courts and tribunals, form the first category in our definition. These institutions are created and funded by the state to finalise civil disputes. They form an essential arm of the state and have coercive powers. They may assist to resolve disputes through formal adjudicatory processes. The second category is the increasing number of organisations, either wholly or partially funded by the state, that provide dispute resolution services. These organisations are not part of the state, but their existence is often mandated by legislation. Well known examples of services in this second category include: • community mediation or dispute resolution services, which are now found in many Australian jurisdictions;1 • the new family law dispute resolution centres that since 2006 have played a central role in parenting cases; and • the relatively new employment ombudsmen, who play a role in employment disputes in the States and the Commonwealth.2 The third category of dispute resolution mechanism falling within the civil justice system are those private organisations recognised by the state as providing appropriate dispute resolution services but not necessarily created or funded by the state. Falling within this third category are some of the industry ombudsmen schemes who are empowered to resolve many types of consumer disputes. These ombudsmen schemes are owned and run by private companies, but they are authorised by state agencies to provide dispute resolution services. For example, the Financial Ombudsman Service is a private company created and owned by the relevant industries that offer dispute resolution services approved by the Australian Securities and Investments Commission (ASIC), pursuant to the Corporations Act 2001 (Cth).3 Financial providers must, as part of the government approval process, belong to an approved external dispute resolution service. ASIC approval thus bestows some state recognition of the service provider as an appropriate external dispute resolution service. Similar schemes exist across a wide variety of industries. [1.30] What is excluded from this definition of the civil justice system are most of the private dispute resolution services. Within the private sphere there is an increasing variety of dispute resolution mechanisms ranging from internal complaint mechanisms within organisations4 to the use of elders or religious

1 2 3

4

See, eg, the Dispute Settlement Centre (Vic); Community Justice Centres (NSW); and the Dispute Resolution Branch (Qld). For example, the Office of the Employee Ombudsman in South Australia and the Fair Work Ombudsman at the federal level. See Australian Securities and Investments Commission, Regulatory Guide RG 139: Approval of External Complaints Resolution Schemes, http://download.asic.gov.au/media/1240742/rg139published-13-june-2013.pdf (accessed May 2017). See, eg, L Edelman, H Erlanger & J Lande, “Internal Dispute Resolution: The Transformation of Civil Rights in the Workplace” (1993) 27(3) Law and Society Review 497; C Parker & L Haller, “Inside Running: Internal Complaints Management Practice and Regulation in the Legal Profession” (2010) 36(3) Monash University Law Review 217.

2 [1.30]

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leaders to resolve disputes.5 There are also growing numbers of private mediation, conciliation and arbitration providers who are engaged by parties to disputes, independent of any court proceedings.6 While these private mechanisms may overlap with and complement the state authorised civil justice system, when they function solely in the private sphere, they remain outside both the civil justice system and the purview of this book. For the purposes of this chapter, our focus is mainly on the first category, the general civil court component of the civil justice system. Both the size and complexity of the civil justice system and the lack of aggregated data make it very difficult to provide an accurate picture of the civil justice system as a whole. Indeed even with limiting the civil justice system to the courts, the problem of inadequate data remains. Nevertheless, the next section describes the court component of the civil justice system and analyses its function.

THE CIVIL COURTS [1.40] This section describes the major Australian civil courts, both State and federal.7 The civil court structure is relatively standard across Australian State jurisdictions and has been unchanged for many years. Alongside this is the federal court system that is still evolving. Figure 1.1 follows overleaf.

5

6

7

Chief Justice Nicholson of the Family Court noted many more recently arrived migrants “prefer to seek assistance from friends, relatives or community or religious leaders and they can be of great assistance”; A Nicholson, “Cultural Diversity and the Family Court: Taking a Responsive Approach to the Family Law Needs of a Diversified Australia” (Speech delivered at the Managing Diversity Conference, Darebin Arts & Entertainment Centre, 3 October 2003) p 3, http://www.familycourt.gov.au/wps/wcm/connect/fcoaweb/reports-and-publicat ions/speeches-conference-papers/2003/FCOA_pr_Cultural_Diversity (accessed 27 May 2017). See also, S Armstrong Culturally Responsive Family Dispute Resolution in Family Relationship Centres: Access and Practice (CatholicCare & Anglicare, 2010), http://www.catho liccare.org/sites/default/files/Report%20on%20Mediation.pdf (accessed 27 May 2017). B French, “Dispute Resolution in Australia — The Movement from Litigation to Mediation” (2007) 18(4) Australian Dispute Resolution Journal 213; L Street, “Evolution of Commercial ADR in Australia” (2005) 79 Australian Law Journal 765. The jurisdictions of the various courts are examined in Chapter 2. [1.40] 3

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Figure 1.1: Australian court structure High Court of Australia

State Courts

Supreme Court

Federal Courts

Federal Court

Family Court

District Courts

Magistrates Courts

Federal Circuit Court

State courts [1.50] There are generally three levels of State courts making up the civil court system: the lower courts (Magistrates Courts (or Local Court in New South Wales)) which are the busiest courts; the intermediate courts (District Courts (or County Court in Victoria)); and the Supreme Courts. The only significant variation to this is Tasmania, which like the Australian Capital Territory and the Northern Territory, does not have an intermediate court. In each of these jurisdictions there is a Magistrates Court and a Supreme Court. State civil courts were established on settlement of the colonies, with varying levels of sophistication reflecting the point in time when the particular colony was founded. On the founding of the first colony, New South Wales, in 1788 the Letters Patent from the English Crown included provision for civil and criminal courts in which the Judge Advocate sat with six military officers to hear criminal matters (Court of Criminal Jurisdiction) and with two settlers to hear civil matters (Court of Civil Jurisdiction).8 The Court of Civil Jurisdiction was replaced in 1814 by three civil courts: a Governor’s Court, which dealt with civil cases up to £50; the Supreme Court of Civil Judicature exercising civil jurisdiction above £50 at both common law and equity; and a Lieutenant-Governor’s Court that dealt with cases in Van Diemen’s Land (Tasmania, which was at that time still part of the colony of New South Wales).9 The Supreme Court of Civil Judicature was subsumed by the Supreme Court of New South Wales when it was created by Third Charter of

8 9

Warrant for the Charter of Justice (UK) 2 April 1787 (First Charter of Justice). Letters Patent for Courts of Civil Judicature (UK) 4 February 1814 (Second Charter of Justice). See also Rules and Orders of the Governor's Court in New South Wales 1815.

4 [1.50]

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Justice in 1824.10 The Third Charter of Justice also established the Supreme Court of Van Diemen’s Land, which became the Supreme Court of Tasmania in 1856. As subsequent colonies developed, Supreme Courts were created. South Australia established its own Supreme Court in 183711 following settlement, and while Western Australia had the Civil Court of Western Australia from 1832,12 a Supreme Court was not created until 1861.13 The Victorian Supreme Court (in 185214) and the Queensland Supreme Court (in 1861)15 evolved out of the Supreme Court of New South Wales. Prior to the creation in 1911 of the Supreme Court of the Northern Territory,16 civil jurisdiction over the Northern Territory was exercised by the Supreme Court of South Australia. The Australian Capital Territory Supreme Court was established in 1934.17 The nature of colonial conditions on settlement meant that the courts initially operated in fairly rudimentary ways and, unlike the English courts from whom their practice and procedure derived, operated as single courts exercising a range of jurisdictions. By contrast the English court system was, in the period before the Judicature Act 1873, divided into distinctive courts exercising specific and separate jurisdictions: the Court of the King’s or Queen’s Bench; the Court of Common Pleas; the Court of the Exchequer; the Court of Chancery; and the courts exercising probate, family and admiralty jurisdictions. Today, most Australian Supreme Courts remain single courts exercising broad jurisdiction. The Supreme Court of New South Wales comes closest to the historical approach, as it has continued to organise its common law and equity jurisdictions as distinct and separate divisions within the Court. [1.60] While the Supreme Courts generally have full civil jurisdiction over all matters not otherwise falling within the exclusive jurisdiction of the federal courts, they play a special role as the senior appellate State court. In some States, the Supreme Court has been divided into appellate and trial divisions. The appellate division may be a separately constituted court of appeal within the Supreme Court, as in the Courts of Appeal in New South Wales, Queensland, Victoria and Western Australia. Alternatively, all members of the Supreme Court may serve in its appellate division, usually on a rotational basis as determined by the Chief Justice, for example, the Full Court of the Supreme Court of South Australia. The development of intermediate or lower courts also reflects English legal history. In New South Wales, Tasmania and Western Australia, Courts of Requests were created, modelled on the English equivalent that provided a local means for

10 11 12 13 14 15 16 17

Letters Patent pursuant to the New South Wales Act (4 George IV, c 96) 13 October 1823 (Third Charter of Justice). Ordinance No 5 1837 (SA) (also described as “Supreme Court 7 Wm IV 1837”). An Act for Establishing a Court of Civil Judicature 1832 (WA). Supreme Court Ordinance 1861 (WA). An Act to Make Provision for the Better Administration of Justice in the Colony of Victoria 1851 (Vic) (15 Vic No 10). Supreme Court Constitution Amendment Act 1861 (Qld). Supreme Court Ordinance 1911 (Cth). Seat of Government Supreme Court Act 1933 (Cth). [1.60] 5

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determining small civil claims.18 South Australia had a Resident Magistrates Court. Following the development in England of a fully fledged county court system in 1846 most of the colonies established Local or District Courts that form the lower and intermediate courts of the contemporary State civil justice systems. Although not falling within the scope of this book, it is important to note the existence of many specialist courts within State jurisdictions. These have been created to deal with disputes that require special knowledge or address unique issues. For example, the range of courts that exist in addition to the general civil courts in South Australia include: an Environment, Resources and Development Court dealing with planning and environmental matters; an Industrial Relations Court, which hears industrial and employment matters; a Licensing Court dealing with liquor and gaming matters; a Youth Court which, in the civil context, hears child protection and adoption matters; and a Wardens Court dealing with mining matters. While the actual jurisdictional details may vary from State to State, the range and structure of specialist courts in South Australia is not dissimilar to that found in the other Australian court systems.

Federal courts [1.70] The formation of the Australian federation in 1901 gave rise to a further set of structural issues affecting the exercise of civil jurisdiction in Australia. Federation created a national government that co-existed with the various state governments – did this mean a separate system of federal courts dealing with civil matters was needed? Initially, this question was answered in the negative. While s 71 of the Australian Constitution allowed for the establishment of a High Court of Australia, for the first three years after Federation all federal jurisdiction was exercised by State courts. In October 1903 the first federal court, the High Court of Australia, was created. The Act that established the High Court of Australia, the Judiciary Act 1903 (Cth), also set in place a federal/state jurisdictional structure that remains in place to this day. Under the Judiciary Act 1903 (Cth) State courts continue to exercise federal jurisdiction but in the 1970s a separate federal civil court system began to emerge. While federal courts had exercised jurisdictions in industrial and bankruptcy cases, the major expansion of federal courts occurred in the mid 1970s with the passage of legislation providing for a Family Court in 197519 and a Federal Court in 1976.20 The establishment of the Federal Court enabled the High Court of Australia to transfer some of its original jurisdiction to the Federal Court, leaving the High Court to concentrate on its role as the ultimate court of appeal in Australia. The growth in litigation in the Family Court and Federal Court led to the creation of a Federal Magistrates Court in 1999 (renamed Federal Circuit Court in 2013).21 Historical aberrations due to old political dynamics remain, such as the Family Court of Western Australia. While the Family Law Act 1975 (Cth) applies across all

18 19 20 21

Tasmania only changed the name to Magistrates Court in 1987. Western Australia also had a Civil Court. Family Law Act 1975 (Cth). Federal Court of Australia Act 1976 (Cth). Federal Magistrates Act 1999 (Cth).

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of Australia and the Act established the Family Court of Australia, the Court’s jurisdiction is not quite Australia-wide — Western Australia has its own Family Court. In Western Australia, due to political emphasis on States’ rights in 1975, the Family Law Act 1975 (Cth) is applied by the Family Court of Western Australia, comprised of judges appointed by the State Government and administered by the Western Australian Department of Justice.22 The current court structure creates overlapping jurisdictions and also leaves gaps in jurisdictional coverage. Some disputes may contain matters arising under state law and federal law which, theoretically, could necessitate cases in both state and federal jurisdiction. To minimise this, the national and state governments enacted legislation conferring jurisdiction on each other’s courts and enabling cases to be more easily transferred between courts. This legislation, the Jurisdiction of Courts (Cross-Vesting) Act 1987, enacted in each jurisdiction, lost some of its efficacy in 1998 when the High Court held that the part of the scheme that enabled federal courts to exercise State jurisdiction was unconstitutional.23 Under the scheme, States and Territories continue to have vested Supreme Court jurisdiction in each other and they also continue to exercise federal jurisdiction pursuant to the Judiciary Act 1903 (Cth). One solution to the difficulties of a court system made up of federal and State courts is to establish a national or unitary court system. This has been discussed by distinguished jurists including Sir Owen Dixon, Sir Laurence Street and Sir Anthony Mason.24 Former Chief Justice Murray Gleeson reflected on the idea in 2004, noting that calls for a national court system had diminished since the 1970s and 1980s. He noted that throughout legal history common law courts had been in competition with each other and that was not necessarily a disadvantage. Furthermore, it would raise the difficult issue of who would appoint the judges in a national scheme. This could involve radical changes to the appointment process that could reduce the current power of state governments to appoint judges.25 There appears little prospect of a national court system for the time being.

THE COURTS AND PROCEDURAL REFORM [1.80] Courts and civil litigation have been perceived to be in a state of crisis for many years. In Australasia, Chief Justice Brennan of Australia and Chief Justice Eichelbaum of New Zealand called for reform in a joint address saying “the system for administering justice is in crisis … some solutions must be found and

22 23 24

25

Family Court Act 1997 (WA). Re Wakim; Ex parte McNally (1999) 198 CLR 511. O Dixon, Jesting Pilate (The Law Book Company, 1965) 52; O Dixon, “The Law and the Constitution” (1935) 51 Law Quarterly Review 590, 607; L Street, “Towards an Australian Judicial System” (1982) 56 Australian Law Journal 515; A Mason, “The State of the Judicature” (1994) 20 Monash University Law Review 1. See also discussion in R Else-Mitchell, “The Judicial System – The Myth of Perfection and the Need for Utility” (1970) 44 Australian Law Journal 516; R Ellicott, “The Need for a Single All-Australia Court System” (1978) 52(8) Australian Law Journal 509; F Burt, “An Australian Judicature” (1982) 56 Australian Law Journal 509. M Gleeson, “The National Judiciary” (2004) 16(3) Sydney Papers 24. [1.80] 7

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practical solutions are likely to be radical.”26 In response to the perceived crisis, many Australian jurisdictions have held inquiries into the civil justice system and introduced major procedural reforms or completely rewritten their procedural rules: • Queensland set up a Litigation Reform Commission in 1991; • The Western Australian Law Reform Commission held a major inquiry into the criminal and civil justice system, which reported in 1999;27 • The Australian Law Reform Commission conducted a major inquiry into the federal civil justice system, which reported in 2000;28 • The Victorian Law Reform Commission completed a complete review of civil litigation in 2006-2008 leading to the Civil Procedure Act 2010;29 • New uniform procedural rules have been adopted in Queensland (1999),30 the Australian Capital Territory (2005) and New South Wales (2005);31 • New set of procedural rules were introduced for the higher courts in South Australia in 2006;32 • New set of procedural rules introduced for the Federal Court in 2011; and • Enactment of Civil Proceedings Act 2011 in Queensland. In the United Kingdom there have been three major inquiries into the civil justice system in the last 30 years.33 In the most recent, the 1996 Access to Justice report by Lord Woolf MR, he reported: The defects I identified in our present system were that it is too expensive in that the costs often exceed the value of the claim; too slow in bringing cases to a conclusion and too unequal: there is a lack of equality between the powerful, wealthy litigant and the under resourced litigant. It is too uncertain: the difficulty of forecasting what litigation will cost and how long it will last induces the fear of the unknown; and it is incomprehensible to many litigants. Above all it is too fragmented in the way it is organised since there is no one with clear overall responsibility for the administration of civil justice; and too adversarial as cases are run by the parties, not by the courts and the rules of court, all too often, are ignored by the parties and not enforced by the court.34

26

27 28 29 30 31 32 33

34

G Brennan & T Eichelbaum, “Key Issues in Judicial Administration” (15th Annual Conference of the Australian Institute of Judicial Administration, Wellington, New Zealand, 21 September 1996), http://www.hcourt.gov.au/assets/publications/speeches/former-justices/brenna nj/brennanj_aija1.htm (accessed 27 May 2017). Western Australian Law Reform Commission, Review of the Criminal and Civil Justice System in Western Australia (WALRC Project No 92, 1999). Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000). Victorian Law Reform Commission, Civil Justice Review (2008). Uniform Civil Procedure Rules 1999 (Qld). Civil Procedure Act 2005 (NSW); and Uniform Civil Procedure Rules 2005 (NSW). Supreme Court Civil Rules 2006 (SA); District Court Civil Rules 2006 (SA). Lord Chancellor's Department (UK), The Civil Justice Review, (1985); the Joint Working Party of the General Council of the Bar and the Law Society of England and Wales (1993); and Access to Justice report (1996) (see fn 34 below). Lord Woolf MR, Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System of England and Wales (Lord Chancellor's Department, UK, 1996) [1.2].

8 [1.80]

The Civil Justice System

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The Woolf Report led to enormous changes to civil procedure for England and Wales, which came into operation with the Civil Procedure Rules 1999 (UK). The United States has also demonstrated a similar pattern of public concern about the efficacy of the civil justice system, leading to numerous inquiries of varying depth and complexity ultimately resulting in procedural change. More notable examples of these inquiries include the American Bar Association’s Action Commission to Reduce Court Costs and Delays (1984); Senator Joe Biden’s Task Force on Civil Justice Reform (1989); and the Agenda for Civil Justice Reform in America by the Presidential Commission on Competitiveness, which led to the Civil Justice Reform Act 1990 (US). In 2000 the National Centre for State Courts established the Civil Justice Reform Initiative that was intended to foster significant reform in State courts.35 Within the Australian context, there have been two broad directions of procedural reform, leading to many changes to traditional litigation procedures in the last 30 years. The first broad direction of procedural reform has been toward greater court control over the conduct of litigation. This has been achieved by introducing case management procedures into the litigation process. The second broad direction of procedural reform has been to minimise the use of courts and adjudication to finalise cases. Many types of cases have been diverted away from courts and procedural reforms actively encourage the settlement of cases before they reach trial.

Case management [1.90] In the common law court context, systematic case management developed in the United States in the 1960s and 1970s. Underlying case management is the concept that within complex systems, there needs to be some mechanism to ensure appropriate services are provided in an effective and efficient manner and that the individual needs of cases are identified and addressed. This is accomplished by overseeing cases to co-ordinate resources and by reviewing progress. Long established in health and social work systems, it has moved into justice systems. Before case management, parties controlled both the pace of litigation and the issues in the case and the evidence to be adduced. This meant that if one or both of the parties proceeded slowly, there was little that the court could do to speed up proceedings. Delays led to backlogs of cases and clogging of the courts. Delays also led to increased costs of litigation for the parties. Case management was intended to address these issues by giving the court a role in determining the pace of litigation while not interfering with the party control of issues or evidence. Case management ideas rapidly took hold of Australian court reformers in the 1980s. Although Australian jurisdictions have differed in the degree to which they have adopted case management, some, such as South Australia, had extensive case management regimes in operation by the early 1990s. These involved setting timetables for the various steps in the pre-trial process along with reviews of case

35

National Center for State Courts, Civil Justice Reform Initiative: Advancing Civil Justice Reform (2002), http://cdm16501.contentdm.oclc.org/cdm/ref/collection/ctcomm/id/86 (accessed 27 May 2017). [1.90] 9

Principles of Civil Litigation

progress by judges or court officials, often by way of some form of case conference. The difficulty with case management was determining what sanctions courts could apply if a court’s case management orders were not complied with. In some jurisdictions, parties could have their case dismissed. The idea that parties before a court could have their claims finalised without due consideration of their merits has been resisted by many judges and over the course of the 1990s strong but opposing views were expressed within courts. In 1997 the High Court in Queensland v JL Holdings Pty Ltd36 decided that it was of paramount importance that cases should be determined on their merits and that case management considerations should not outweigh this in all but exceptional cases. As we will see in Chapter 4, the court gave an orthodox but narrow interpretation to the concept of “doing justice”. In 2009 the High Court reversed the effect of JL Holdings giving greater weight to the necessity for effective case management in Aon Risk Services Pty Ltd v Australian National University.37 As a result, case management procedures have become an essential feature of contemporary civil litigation.38

Minimising adjudication [1.100] The second major direction for procedural reform has been attempts to minimise the number of cases needing adjudication. Attention has already been drawn to the growth of non-court bodies or organisations that are now part of the civil justice system — the industry ombudsman schemes, quasi-administrative schemes in personal injury cases and the development of tribunals. Many types of cases have been diverted from the civil courts to these bodies and organisations. For those cases that do remain within the civil courts, there has been the growth of procedural mechanisms aimed at promoting settlement of those cases without the need to go to trial. These mechanisms include increasing information exchange between parties early in litigation so that they can make informed decisions about both their case and that of their opponents; introducing other dispute resolution options within the court system, for example, mediation; and using case management conferences to explore settlement. Perhaps the most potent of the procedural mechanisms is the introduction of procedures whereby parties who refuse formal final offers incur significant cost penalties if they do not better the final offer at trial. In some jurisdictions this can mean a party who wins their case is not awarded any costs and may have to pay the other side’s costs if the judgment is less than the final offer filed with the court. There are significant questions associated with the move away from adjudicating cases in open court toward an emphasis on pre-trial settlement. If the common law is developed through court decisions, will reducing the opportunity for 36 37

38

(1997) 189 CLR 146. (2009) 239 CLR 175; see, eg, D Boniface & M Legg, “Cost, Delay and Justice: The High Court of Australia Recognizes the Importance of Case Management in Civil Litigation – Aon Risk Services Australia Limited v Australia National University” (2010) 39(2) Common Law World Review 157; L Arthur, “Does Case Management Undermine the Rule of Law in the Pursuit of Access to Justice?” (2011) 20(4) Journal of Judicial Administration 240. For further discussion of case management see Chapter 4.

10 [1.100]

The Civil Justice System

CH 1

adjudication affect the evolution of the common law? What level of court scrutiny is appropriate over cases that settle? Should cases involving major public interest be settled with confidentiality clauses that prevent the public knowing about the outcome of the case? Should the civil justice system be concerned if outcomes in cases commenced in courts but settled are unfair, unjust or not in accord with the merits of the case? These questions will be more fully explored in Chapter 9.

Other procedural reforms [1.110] Along with these two broad directions of procedural change, wide ranging changes to a number of procedural tools have been proposed and/or adopted. Many commentators have identified discovery procedures as being a major cause of problems in civil litigation.39 The requirement to provide an opponent with lists of relevant documents within your control can involve extensive and expensive searches. The exponential growth in electronic communications has only exacerbated this.40 In the United Kingdom there have been three major inquiries into the civil justice system in the last 30 years.41 Another area of procedural reform is the move to minimise the extent to which oral evidence is used in litigation.42 Traditionally, common law trials have required oral testimony from witnesses and courts have maintained evidentiary rules that restricted the use of documents. Over the last 40 years many courts have introduced rules that enable certain evidence to be given in written form, for example, a witness statement may be tendered as a substitute for oral examination in some courts. Additionally, written experts’ reports have become central to many civil cases. The role of expert witnesses has also been the subject of considerable change. As we discuss in Chapter 8, the traditional common law approach left it to the parties to provide the expert evidence in the case. Parties naturally seek and produce expert witnesses favourable to their case. Furthermore, the fact parties are paying the expert witness has led to concerns about the quality or impartiality of the expert witness. Different strategies have been adopted to address this concern. In England, for example, following Lord Woolf’s Report parties in many cases are required to agree to a joint expert. In recent times in Australia, there has

39

40

41 42

See discussion in L Mullenix, “Discovery in Disarray: The Pervasive Myth of Pervasive Discovery Abuse and the Consequences for Unfounded Rulemaking” (1993) 46 Stanford Law Review 1393; C Yablon, “Stupid Lawyer Tricks: An Essay on Discovery Abuse” (1996) 96 Columbia Law Review 1618; J Beisner, “Discovering a Better Way: The Need for Effective Civil Litigation Reform”, (2010) 60 Duke Law Journal 547. S Jackson, “New Challenges for Litigation in the Electronic Age”, (2007) 12 Deakin Law Review 81; M Legg & N Turner, “When Discovery and Technology Meet: The Pre-Discovery Conference” (2011) 21(1) Journal of Judicial Administration 54. For further discussion see Chapter 8. C Glasser, “Civil Procedure and the Lawyers — The Adversary System and the Decline of the Orality Principle” (1993) 56 Modern Law Review 307; A Emmett, “Towards the Civil Law? The Loss of Orality in Civil Litigation in Australia” (2003) 26(2) University of New South Wales Law Journal 447; P Underwood, “The Trial Process: Does One Size Fit All?” (2006) 15 Journal of Judicial Administration 165. [1.110] 11

Principles of Civil Litigation

been increased interest in the use of court appointed experts.43 Some Australian jurisdictions have introduced protocols emphasising the need for experts to be impartial.44 Other Australian jurisdictions have increased transparency by requiring parties to disclose more information about their communications with and the instructions they give to their expert witnesses. Perhaps one of the most significant changes to Australian civil procedure had already taken place by the first half of the 20th century, but paradoxically its full consequences have yet to be fully incorporated into the civil justice system. This change was the almost complete transferral of fact finding in trials from juries to a single judge. Nowadays, almost all Australian civil cases are heard without a jury. Partially this is because the majority of civil cases are heard in Magistrates Courts, where there have never been juries. However in the superior courts, where in the past juries were extensively utilised in civil trials, the 20th century trend has been to limit their use. South Australia and the Australian Capital Territory have completely abolished juries in civil trials, while other Australian jurisdictions have limited the types of cases in which juries can be employed and civil jury trials have become relatively rare. In New South Wales, for example, juries may be used for certain issues in defamation cases. Jury trials are possible in a narrow range of cases in Western Australia including fraud, false imprisonment and seduction. Similarly, Victoria provides both defendant and plaintiff with the right to seek a jury trial (with six jurors) and is said to be the jurisdiction with the greatest number of civil trials with juries.45 [1.120] The limited role of civil jury trials in the Australian civil justice system presents a great opportunity to revisit trial procedure. One of the major inhibitions to civil procedural reform is the common law requirement for a continuous trial. The common law model of a continuous trial evolved, at least in part, to meet the practical needs that result from having to assemble a jury. At common law, there is an assumption that all the evidence will be heard sequentially without significant temporal gaps in the process. As a consequence, trials cannot commence until both parties have prepared for all the possible issues that may arise at trial, including obtaining all the evidence that might be needed on those issues. The trial, when commenced, proceeds (ideally) in one continuous hearing with the plaintiff completing its case before the defendant begins. 43

44

45

New South Wales Law Reform Commission, Expert Witnesses (NSWLRC Report No 109, 2005); H Hallet, “Experts Witnesses in England & Wales” (2005) 79 Australian Law Journal 288; G Golvan, “Each to Their Own: Addressing the Problem of Expert Witness Partiality” (2006) 80 Law Institute Journal 56; H Stowe, “Preparing Expert Witnesses: A Search for Ethical Boundaries” (2007) 45 Law Society Journal 72; G Blake & P Gray, “Can Counsel Settle Expert Reports?” (2013) (Summer) Bar News: The Journal of the NSW Bar Association 56. See, eg, Uniform Civil Procedure Rules 2005 (NSW) sch 7, [2]; Federal Court of Australia, Expert Evidence Practice Note (25 October 2016), http://www.fedcourt.gov.au/law-and-pract ice/practice-documents/practice-notes/gpn-expt (accessed 27 May 2017) [4.1]. See J Horan, “Perceptions of the Civil Jury System” (2005) 31 Monash University Law Review 120; J Horan, “The Law and Lore of the Australian Civil Jury and the Civil Justice System” (2006) 9 Flinders Journal of Law Reform 29. Even so, the Supreme Court of Victoria's Annual Report 2006 shows that there were 317 writs for jury trial and 4,166 writs for trial by judge alone. More recently, there were 31 jury trials in civil matters held in the Victorian Supreme Court in 2014-15 and 62 in the County Court; Supreme Court of Victoria's Annual Report 2014-15, p 70.

12 [1.120]

The Civil Justice System

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If there is no jury, then a discontinuous trial, as used in the European civil law system, becomes possible. In a discontinuous trial or trial by instalment, the court can deal with issues as they arise, and unexpected or surprise issues at trial are more easily accommodated. In one practical sense, the adoption of a discontinuous trial would not be a significant departure from current practice. The reality of many civil trials is that they are not continuous — due to mistaken estimations of time needed or intervening events, courts are often unable to hear from witnesses when planned. Hence, cases are frequently disrupted or adjourned, often for weeks — if not months — to arrange for witnesses to be heard from at an alternate time. Nevertheless, the formal adoption of a discontinuous trial would represent a significant break with the past. One of the advantages of adopting a discontinuous trial, and utilising separate and discrete hearings during trials, is that the current division of litigation and procedure into pre-trial and trial procedure becomes less important. There would then be a greater possibility for the court and parties to focus their efforts on the key issues in the case. Case management, which involves the court in the litigation from an early stage, could facilitate early identification of the dispute’s live issues. The Family Court of Australia has already trialled one such case management approach – the Family Court’s Children’s Cases Pilot Project (2004-2005) adopted a trial procedure where, in a series of hearings (called “meetings”), the judge met with the parties and their lawyers (if instructed) to determine what the issues were and what evidence would be needed. Evaluation of this program suggests it resulted in faster court cases, greater party satisfaction with the process and increased co-operation between parents over parenting issues.46 Such positive evaluation led to this new trial procedure being adopted by the Family Court in 2006 for child custody cases generally known as the Less Adversarial Trial.47

Future directions for procedural reform [1.130] Before examining future directions for procedural reform it must be noted that the process of court and procedural reform is complex and relatively unstudied. In most Australian jurisdictions, reform is largely a judge driven process and rule changes are often made without great research or public involvement. In some jurisdictions, the statutes establishing the Supreme Courts confer a rule making power on the judges of the Supreme Court.48 The judges have, in some jurisdictions, instituted a Joint Rules Advisory Committee made up of judges, masters and registrars, with representation from the legal profession.49 In other jurisdictions, legislation creates a Rules Committee, such as in New South Wales under the Civil Procedure Act 2005 (NSW). In the Australian Capital Territory, the Court Procedures Act 2004 (ACT) established both a Rules Committee and a Joint Rules Advisory Committee. 46 47 48 49

J McIntosh, Children's Cases Pilot Project: An Exploratory Study of Impacts on Parenting Capacity and Child Well-Being (Final Report to the Family Court of Australia, March 2006). See Family Court of Australia, Less Adversarial Trial Handbook (2009). See Supreme Court Act 1986 (Vic) s 25; Supreme Court Act 1935 (SA) s 72. See Courts Administration Authority (SA), Report of the Judges of the Supreme Court of South Australia to the Attorney-General 2015, p 6; Courts Administration Authority (SA), Annual Report 2015-2016, p 42. [1.130] 13

Principles of Civil Litigation

Over and above these jurisdiction based processes and institutions for procedural rule change, there are increasing attempts to harmonise procedural rules between the Australian jurisdictions. Under the stewardship of the Council of Chief Justices several harmonisation projects have been completed since 2000, covering diverse procedural areas including the process for winding up companies; the procedure for issuing subpoenas; service of court documents outside Australia; and the grounds and process for making asset freezing orders or search orders. Looking to the future more broadly, there are many areas where procedural change will continue. One area procedural reformers are increasingly interested in is the introduction of pre-action procedural obligations, that is, procedural obligations to be met before the commencement of litigation.50 Most commonly this reform requires the exchange of information between prospective parties before proceedings are commenced. The purpose of this reform is to increase the possibility of the dispute being settled without ever needing to go to court. Another area of procedural interest is the attempt to incorporate the concept of “proportionality” to litigation. The concept of proportionality is intended to ensure that the costs of litigation are not disproportionate to the amount in dispute.51 It may also help militate against the effect of unequal resources between parties by preventing a well-resourced party from using procedural steps to exhaust the resources of less well-resourced parties. The role of expert witnesses, which has already undergone significant reform, continues to be the subject of change, with both the use of court appointed experts and the manner in which they give evidence under review.52 Another significant procedural reform has already commenced – the extension of case management from the pre-trial to the trial stage. Some of the more recent revisions of court rules have included explicit powers to manage trials.53 Also, the traditional reluctance to interfere with the manner in which a party conducts its case at trial appears to be lessening. In support, there appears to be an increasing number of appeals arguing that judicial intervention in the trial constitutes bias, or a reasonable apprehension of bias, or prevents a fair trial, reflecting increasing intervention by judges in the management of trials. These judicial interventions include decisions determining the order in which issues will be dealt with, the power to call witnesses, limiting the time for questioning of witnesses and on other case management type issues.54 Looking at the totality of procedural reform over the last 30 years, there does appear to be a level of convergence with European civil law systems. German civil procedure, for example, has been of considerable interest to those interested in

50 51

52 53 54

See [3.85] – [3.90]. S Campbell, “Proportionality in Australian Civil Procedures; a Preliminary Review” (2005) 14 Journal of Judicial Administration 14. See Civil Procedure Act 2005 (NSW) s 60; T Farrow, “Proportionality: A Cultural Revolution” (2012) 1(3) Journal of Civil Litigation and Practice 151. See [8.280]. See, eg, Civil Procedure Act 2005 (NSW) s 62; Uniform Civil Procedure Rules 1999 (Qld) r 367; Supreme Court Civil Rules 2006 (SA) r 209. IOOF Aust Trustees Ltd v SEAS Sapfor Forests Pty Ltd (1999) 78 SASR 151; Johnson v Johnson (2000) 201 CLR 488; Huang v University of New South Wales (No 3) (2006) 154 FCR 16; and R v White (2003) 7 VR 442 (albeit in the context of criminal trials).

14 [1.130]

The Civil Justice System

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developments in civil procedure.55 After all, case management is a core element of German civil procedure; it is also very much based on documentary evidence; it uses court appointed experts; and it does not use juries. On the other hand, the European civil law systems have been considering whether some form of documentary discovery or disclosure as found in common law procedure could be added to their civil procedure and, in the search for increased efficiency, whether increased use of oral testimony should be encouraged. European civil law systems have also been exploring how the number of hearings in a trial could be reduced. This pattern of continual reform, and looking to other jurisdictions for ideas, reflects civil procedure’s never-ending search for improvement. Civil procedure at any point in time is only one possible response to a particular set of societal values, needs and goals; and as these change, civil procedure will change as well.

THE COURTS AND CIVIL LITIGATION [1.140] The above examination of courts and procedural reform has suggested that the dramatic changes of the last 30 years have been caused, in part, by the perceived sense of crisis. Public perception of courts is that they are expensive and slow and not accessible to most Australians. A common analogy used for the existing system is that it is a “Rolls Royce” system and only available to a few. Perhaps, it is suggested, we need a “Holden” model.56 Yet, the veracity of claims that Australian courts are inaccessible to many Australians has never been closely examined. It is generally accepted that most, if not all, civil litigation in the higher courts has become very expensive and prohibitive for most Australian citizens, but this says little about the accessibility of the rest of the civil justice system. If a broad view is taken of Australian civil litigation, the position becomes less clear. Taking South Australia as an example — like other states, the vast bulk of civil litigation is conducted in the Magistrates Court and within the small claims jurisdiction of that court. In the small claims jurisdiction, trials are commenced within months of the case being filed and the hearings take hours rather than days. In South Australia, as in other states, lawyers are not entitled to appear in small claims cases, so legal costs are not great — if there are any legal costs at all. The average length of a defended small claim (and up to 90% of cases are not defended) is probably less than six months and the average costs of the case are measured in

55

56

See, eg, J Langbein, “The German Advantage in Civil Procedure” (1985) 52 University of Chicago Law Review 823; J Beier, “The Woolf Report and German Civil Procedure” (1997) 19 Liverpool Law Review 67; S Kiefel, “Civil Procedures: Some Comparisons” (1999) 18 Australian Bar Review 173; A Cannon, “A Diary of Two German Civil Cases” (2002) 76 Australian Law Journal 186; H Kotz, “Civil Justice Systems in Europe and the United States” (2003) 13 Duke Journal of Comparative and International Law 61; A Marfording & A Eyland, “Civil Litigation in New South Wales: Empirical and Analytical Comparisons with Germany” (July 2010) University of New South Wales Law Research Paper, working paper 28, http://ssrn.com/abstract=16 41554 (accessed 27 May 2017). G Samuel, “The Vehicles of Justice: Rolls Royce or Kingswood?” (1992) 14 University of New South Wales Law Journal 205; D Cooper, “When Rolls Royce and Holden Justice Collide: An Analysis of the Operations of the Federal Magistrates Service in Queensland in the Family Law Arena” (2003) 3(2) QUT Law and Justice Journal 222. [1.140] 15

Principles of Civil Litigation

the hundreds of dollars.57 So for many cases, civil litigation is relatively cheap and efficient. Litigants may still not see it that way — the four months they have to wait for the $5,000 they need to repair their car following an accident can seem a long delay (assuming the defendant pays when judgment is given). Nevertheless, it is clear that for cases of any significant size, civil litigation is extremely expensive. Solicitors in city practices routinely charge hundreds of dollars per hour and barristers cost thousands of dollars per day.58 Such costs make litigating these cases beyond the resources of most Australian citizens. Yet despite the generally held view that litigation is expensive and slow, there is also the somewhat contradictory belief that the community is becoming increasingly litigious — that there is “too much” litigation.59 This of course assumes that a high level of litigation is a bad thing for the community. It could be argued on the other hand that high litigation rates are a measure of a healthy community, reflecting an effective civil justice system that enjoys the community’s confidence. It might also suggest that rights and obligations are easy to enforce. Whether this is correct depends on a range of factors relating to the particular community, which is beyond the scope of this chapter. In the United States, concerns about societal over-litigiousness became a political issue, with popular media highlighting cases like the “spilt hot coffee case” against McDonalds as evidence of over-litigiousness.60 In Australia the concerns about the extent of litigation became a major public issue during the insurance “strike” of the late 1990s. The insurance industry justified a round of major premium increases and refusals to insure a range of public activities on the grounds that there was too much litigation in Australia and/or courts were making increasingly large awards. Some professions, especially some medical

57

There is no data easily available, but this is based on the author’s experience supervising students at a small claims legal advice and assistance clinic at Adelaide Magistrates Court. The Productivity Commission’s data on court timeliness shows that in 2015–2016, 56% of all lodgments were finalised within six months (Productivity Commission (SA) Review of Government Services 2017, Table 7A.21).

58

As an example the Supreme Court (General Civil Procedure) Rules 2005 (Vic) sch C Appendix A provides for solicitor rates of around $393 per hour although many firms charge above that, In Equuscorp v Wilmouth Field Warne (No 4) [2006] VCS 28 the costs agreement included a charge out rate of $400 per hour. Barristers’ daily fees range from $1,200 to $7,500 (for a State Counsel — P Tague, “Guilty Pleas or Trials: Which does the Barrister Prefer?” (2008) 32 Melbourne University Law Review 255) and although this refers to criminal cases, similar fees apply for civil cases. A privately contracted Senior Counsel under the Treasurer’s instruction is entitled to $3,381 per day in South Australia in 2017. See, eg, L Wolff, “Litigiousness in Australia: Lessons From Comparative Law” (2013) 18(2) Deakin Law Review 271; K Burns, “Distorting the Law: Politics, Media and the Litigation Crisis: An Australian Perspective” (2007) 15 Torts Law Journal 195. L Friedman & G Hayden, American Law: An Introduction (Oxford University Press, 3rd ed, 2016) pp 211, 291–295; W Olson, The Litigation Explosion: What Happened when America Unleashed the Law Suit (Plume, 1992); M Rustad & T Koenig, “Taming the Tort Monster: The American Civil Justice System as a Battleground of Social Theory” (2002) 68 Brooklyn Law Review 1; S Taylor & E Thomas, “Civil Wars”, Newsweek, 15 December 2003, p 42; D Rhode, “Frivolous Litigation and Civil Justice Reform: Miscasting the Problem, Recasting the Solution” (2004-2005) 54 Duke Law Journal 447. For an Australian perspective on the American cases and notions of personal responsibility, see D Ipp, “Taking Responsibility” (2004) 48(9) Quadrant 16.

59

60

16 [1.140]

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CH 1

specialists, claimed that the costs of professional indemnity insurance were interfering with their ability to practise. One of Australia’s major general insurers collapsed, as did one of the major medical insurance organisations. The Federal Government responded by establishing a committee of inquiry, chaired by Justice Ipp of the Supreme Court of New South Wales. The Committee was given a very short period of time to recommend solutions, although it was not asked to ascertain the size of the problem nor was it asked to investigate the causes. Its report61 recommended a number of changes to tort law, which have been introduced by various State governments. Some State governments went further than the Ipp Report recommendations. In New South Wales, for example, the Government went so far as to prohibit lawyers from publicly advertising their expertise in personal injury law or encouraging the public to make injury claims.62 The tort liability crisis is revealing of just how little is actually known about the workings of the civil justice system and how it handles civil litigation.

The civil litigation data [1.150] Publishing statistical data on civil litigation has only commenced recently, and in many jurisdictions remains incomplete. Some courts in some jurisdictions now produce annual reports, although the level of qualitative data contained in these reports varies greatly. A more comprehensive data set on the workings of courts is collected by the Federal Government’s Productivity Commission as part of its annual review of government services. Data collection commenced in 1994, and provides an increasing amount of information about the workings of the court system. There have been significant issues around the quality of the data collected and questions have been raised about the usefulness of the data when comparing different jurisdictions. The data are also collected for a specific purpose — to measure efficiencies — and are largely measures of inputs and outputs.63 Nevertheless, some broad patterns emerge, and the data are also useful for tracking developments within jurisdictions. Table 1.1: Total number of civil lodgments by jurisdiction, 1995-1996 to 2015-2016 1995-6

1999-2000

2003-4

2007-8

2011-12

2015-16

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

NSW

267.6

257

221.7

216.2

173.1

140.9

Qld

102.6

108.9

103.3

94

67.5

70

SA

50.9

43.9

38.3

32.8

31.9

30.4

WA

61.8

66.3

61.1

54

61.2

62.1

Tas

16

15.3

13.1

10.9

10

7.3

61 62

63

D Ipp, Review of the Law of Negligence, Final Report of the Review of the Law of Negligence (Commonwealth Department of Treasury, 2002). Legal Profession Regulations 2005 (NSW) regs 23-31. These Regulations have been repealed. The new Legal Profession Uniform Law 2014 (NSW) does not include a prohibition on advertising personal injury legal services. See, eg, J Spigelman, “Judicial Accountability and Performance Indicators” (2002) 21 Civil Justice Quarterly 18. [1.150] 17

Principles of Civil Litigation

1995-6

1999-2000

2003-4

2007-8

2011-12

2015-16

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

203.4

210.9

188.6

123.8

122.2

107.2

13.5

11.4

7.7

6.5

4.5

4.3

Vic ACT NT Fed Crt Fam Crts

7.9

5.2

5.8

6.1

7

7.1

23.8

6.2

6

4.6

5.3

6

125.3

138.2

Fed Mag Productivity Productivity Productivity Productivity

62

34.6

33.1

37

76.8

84.1

92.5

93.6

Commission, Report on Government Services 2017, Table 7A.3; Commission, Review of Government Services 2013, Table 7A.2; Commission, Review of Government Services 2008, Table 7A.2; and Commission, Review of Government Services 2002 Table 9A.2

Table 1.1 disguises the changes that are occurring within courts. Breaking down these data into constituent courts, we find that the Supreme Courts in the largest States have experienced an opposite trend in court lodgments. Figure 1.2 shows that the number of filings in the New South Wales, Victorian and Queensland Supreme Courts generally increased in the 2002-2010 period from their pre-2002 levels. In 2014, the lodgment rates in these states eased. The smaller States show a different pattern — the Supreme Court of Western Australia’s lodgment rise has reached a plateau; lodgments in the Supreme Court of South Australia trended downwards from 2002 and have since plateaued, and Tasmania has had a fairly consistent decline in civil lodgments in its Supreme Court since 1998. The Australian Capital Territory and Northern Territory have exhibited a similar pattern to Tasmania on a smaller scale. Figure 1.2: Supreme & Federal Court civil lodgments, 1997-1998 to 2013-2014

Supreme Court lodgments 14000 12000 1998

10000

2002

8000

2006 6000

2010

4000

2014

2000 0 NSW

Vic

Qld

WA

SA

Tas

ACT

NT

Fed

Productivity Commission, Review of Government Services 2017, Table 7A.3; Productivity Commission, Review of Government Services 2011, Table 7A.2; and Productivity Commission, Review of Government Services 2003, Table 6A.2 18 [1.150]

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[1.160] At the intermediate court level (District or County Courts in Australia), the number of cases lodged is trending downwards (see Figure 1.3 below). The exception to this trend is the District Court in South Australia where lodgments have remained relatively stable. In New South Wales and Queensland the downward trend appears to have happened later and since 2010 in Western Australia there has been a slight increase in lodgments to 2002 levels. Figure 1.3: District/County Court civil lodgments, 1997-1998 to 2013-2014

District/County courts lodgments 25000 20000

1998 2002

15000

2006 10000

2010 2014

5000 0 NSW

Productivity Productivity Productivity Productivity

Vic

Qld

WA

SA

Commission, Review of Government Services 2017, Table 7A.3; Commission, Review of Government Services 2011, Table 7A.2; Commission, Review of Government Services 2005, Table 6A.2; and Commission, Review of Government Services 2003, Table 6A.2

The data also confirms the primacy of the Magistrates Courts when it comes to the delivery of civil justice in the community — they still attract the vast majority of civil lodgments. Table 1.2 Distribution of civil lodgments within jurisdictions, 2015-2016 NSW (000s)

Vic

Qld

WA

SA

Tas

ACT

NT

(000s) (000s) (000s) (000s) (000s) (000s) (000s)

Supreme Court/Federal Court

8.6

6.2

3.3

2.7

1.2

0.8

0.6

0.3

District/County Courts

7.2

6

5.1

4.9

1.7

n/a

n/a

n/a

125.1

94.9

61.6

54.5

27.4

6.4

3.7

6.8

Magistrates/Local Courts

Productivity Commission, Review of Government Services 2017, Table 7A.3 The differing distribution of civil lodgments between courts within jurisdictions is partly determined by the differences in jurisdiction limits between States. [1.160] 19

Principles of Civil Litigation

As an illustration, the Queensland Magistrates Court has jurisdiction to determine claims of up to $150,000, the Magistrates Court in Victoria has jurisdiction to determine claims of up to $100,000 for certain types of cases, whereas the Tasmanian Magistrates Court is limited to claims of up to $50,000 for most cases. Another approach to analysing litigation trends is to look at court lodgments as a proportion of population. In Figure 1.4 we find a trend of generally declining litigation rates which is similar to Table 1.1. Looking at the period 2002 to 2016, in all jurisdictions there is a general decline in the rate at which civil matters have been lodged. While it is tempting to conclude from this data that civil litigators should avoid Queensland and head for the Northern Territory, concerns about the consistency of counting rules across jurisdictions means care must be taken in making such comparisons. Figure 1.4 Civil lodgments per 100,000 population by jurisdiction, 2001-2002 to 2015-2016

Civil lodgments per 100,000 pop 4500 4000 3500

2002

3000

2004

2500

2008

2000

2012

1500

2016

1000 500 0 NSW

Vic

Qld

WA

SA

Tas

ACT

NT

Productivity Commission, Annual Review of Government Services 2017, Productivity Commission, Annual Review of Government Services 2011, Productivity Commission, Annual Review of Government Services 2005, and Productivity Commission, Annual Review of Government Services 6A.3

Table Table Table 2003,

7A.5; 7A.4; 6A.4; Table

So, rather than a litigation explosion, the data instead reveals declining litigation numbers and litigation rates in recent years. Reasons for these developments are not easily established — but a number of explanations can be suggested. One possible explanation is that there is a relationship between litigation rates and economic conditions prevalent over the last decade. Another possible explanation for the decline is that the expense and delay involved in civil litigation is now discouraging litigants from commencing proceedings. An alternative but related explanation is to link the declining lodgments in traditional courts with the rise of other dispute resolution bodies, like tribunals and ombudsman schemes.

20 [1.160]

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[1.170] A quick review suggests these explanations are not adequate or complete. The relationship between economic conditions and litigation rates is well studied but contentious.64 The bulk of civil litigation involves debt claims in the lower courts, and so the health of the economy could affect the number of debtors. However, in crude terms there is no correlation between national economic figures and litigation patterns. Since 1992 Australia has enjoyed continued economic growth and in the period 1997-2006 had an average annual rate of growth in Gross Domestic Product (GDP) of 3.5%.65 There appear to be no obvious correlations between GDP and litigation — since 1990 we have had continued economic growth, yet for the first half of that period civil lodgments increased while for the second half they declined. Furthermore, analysis of lending patterns shows increasing credit growth across the period, particularly of consumer credit. As consumer debts make up the bulk of civil litigation,66 litigation rates might reflect the availability of credit. Between 1996 and 2008 consumer credit grew at double digit rates per annum for most of that period, reaching a high of 16.5 % in December 2007 (the only time consumer credit growth dipped below 10% was between June 2001 and June 2002).67 There appears to be no obvious correlation between credit growth and the general rise in litigation to 1998 and decline thereafter. The discouraged plaintiff explanation is also not entirely satisfactory. As we have seen, the high cost and length of time taken to finalise matters is particularly noticeable in the higher courts, but is less obvious for litigation in the Magistrates Courts, where the bulk of Australian litigation (around 90%) is taking place. Most Magistrates Court cases are “small claims” and so they are less expensive and quicker to litigate than cases heard in courts higher up the judicial hierarchy.68 It is, however, possible that perceptions of high expense and long delay could deter litigants.69 Whatever the reality is, there has been no empirical research to investigate this scenario. The third explanation that could be offered is that potential litigants increasingly prefer to have their disputes resolved outside the courts. Since 1989 there has been a growth in institutions specifically created to resolve disputes in

64

65 66 67 68

69

D Clark, “Civil Litigation Trends in Europe and Latin America since 1945: The Advantage of Intra-country Comparisons” (1990) 24 Law and Society Review 549; W McIntosh, The Appeal of the Civil Law: A Political-Economic Analysis of Litigation (University of Illinois Press, 1990); Z Khan, “Order with Law: Social Capital, Civil Litigation, and Economic Development” (1999) 39 Australian Economic History Review 172. Australian Bureau of Statistics, Australia at a Glance 2008, Cat 1309.0. There were short periods of diminished growth in 1997-1998 and in 2002. A Cannon, “Improving Debt Collecting in Courts” (2007) 17 Journal of Judicial Administration 18. Reserve Bank of Australia, Growth in Selected Financial Aggregates, Statistical Bulletins Table D01. In New South Wales, 95% of small claims (up to $10,000) finalised within 12 months (Local Court of New South Wales, Annual Review 2004). This timeliness is typical. More recently, in 2015, 97% of small claims in New South Wales were finalised within 12 months (Local Court of New South Wales, Annual Review 2015). See, eg, Productivity Commission, Access to Justice Arrangements (Productivity Commission Inquiry Report, vol 1, No 72, 2014) p 11, 127. [1.170] 21

Principles of Civil Litigation

particular industries.70 These schemes commenced with the Banking and Financial Services Ombudsman in 1989, and now ombudsman-like schemes cover significant sectors of the economy including the insurance, telecommunications and energy industries. These industry based schemes are now dealing with a very large number of consumer contracts per year and in 2005 had combined budgets of approximately $25 million per year.71 The schemes continue to grow, with more recent examples being the introduction in Victoria of a Public Transport Ombudsman, and the establishment by the Commonwealth of a Postal Industry Ombudsman and Overseas Students Ombudsman. [1.180] Also providing alternatives to courts are a number of administrative tribunals that have been created over the last 30 years. Some very large tribunals have taken over a substantial part of the lower-level civil litigation workload in some States, such as the New South Wales Civil and Administrative Tribunal and the Victorian Civil and Administrative Tribunal. Other tribunals are industry related or deal with specific types of disputes, for example, the Superannuation Complaints Tribunal. To date, there has been little research into how these alternatives to courts operate and what they do. Most industry schemes are set up as private companies by the major businesses in a particular sector, which limits the amount of public reporting required. However most services do produce annual reports in some form and Table 1.3 sets out the number of complaints received by those services. The number of new complaints to tribunals has remained relatively steady or has declined from 2000 to 2016, except in industries undergoing significant regulatory changes. The exception to the general trend is in utilities industries (energy and water) and the telecommunications industry where there have been rapid rises in complaints. The sharp rise in lodgments in the Administrative Appeals Tribunal in 2015-2016 is attributable to an amalgamation with the Refugee Review Tribunal and Social Security Appeals Tribunal. Table 1.3: Matters in industry tribunals, 2000-2001 to 2015-2016 2000-2001 2004-2005 2008-2009 2011-2012 2015-2016 Administrative Appeals Tribunal (lodgments)

12,835

7,679

6,226

5,682

41,432

Residential Tenancies Authority (Qld) (complaints/requests)

14,899

14,229

19,276

22,077

26,428

70 71

A Stuhmcke, “The Relevance of Industry Ombudsmen” (2002) 40 Law Society Journal 73; S Ellis, “ADR@WA: Industry Based Dispute Resolution Services” (2006) 33 Brief 34. C Neave & J Pinnock, “Setting the Scene: Industry-Based Dispute Resolution Schemes” (Presentation, 2003), http://www.anzoa.com.au/publications.html/NADRAC_1.PDF (accessed 6 November 2013).

22 [1.180]

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2000-2001 2004-2005 2008-2009 2011-2012 2015-2016 Consumer, Trader and Tenancy Tribunal (NSW) (applications)72

N/A

60,114

58,670

64,803

N/A

Telecommunications Industry Ombudsman (issues/complaints)

80,710

78,915

175,946

193,702

112, 518

Banking and Financial Services Ombudsman (cases)73

7,107

6,104

N/A

N/A

N/A

Private Health Insurance Ombudsman (complaints)

3,357

2,571

2,502

2,995

3,839

Energy and Water Ombudsman (Vic) (cases)

6,658

19,158

38,533

63,998

36,152

Energy and Water Ombudsman (NSW) (matters/cases/ complaints)

4,366

8,207

10,928

25,331

23,740

Energy Industry Ombudsman SA (contacts/cases)

N/A

2,540

8,608

14,493

9,813

Superannuation Complaints Tribunal (written complaints)

1,856

1,907

2,546

2,619

2,368

Produce and Grocery Industry Ombudsman (dispute enquiries)74

N/A

140

21

19

N/A

Victorian Civil and Administrative Tribunal (‘applications/cases)

92,446

88,417

85,993

89,470

85,961

These results would suggest that the rise of industry based services is not the explanation for falling litigation rates. Other alternatives to courts — the private mediation and arbitration services — which may be part of an explanation into falling litigation rates, do not publish reliable statistics. Although anecdotally those involved report increasing take up of their services, this increase is from a very low base and does not appear to be close to the volume needed to explain falling litigation numbers. Finally, perhaps litigants are simply negotiating settlements with insurance companies, prompted in part by new court procedures

72 73 74

The function of this tribunal was assumed by the New South Wales Civil and Administrative Tribunal (NACT), along with 22 other tribunals, in 2014. This ombudsman has been merged into the Financial Ombudsman Service. The ACCC now regulates the Food and Grocery Code of Conduct 2015 and handles complaints and disputes. [1.180] 23

Principles of Civil Litigation

that promote settlement prior to commencing proceedings. Here too, the data is unavailable. It is clear, however, that contrary to public perception, litigation has been in decline in recent years. This phenomenon is not limited to Australia. Courts in England and Wales have also experienced similar changes. However, explanations for the patterns of litigation remain elusive. Nevertheless, as the above discussion shows, the civil justice system has become complex and multi-faceted. While this book focuses on one narrow but important component — the superior trial courts exercising civil jurisdiction — a proper understanding of the civil justice system requires a much broader approach.

How are civil cases finalised? [1.190] So far this chapter has only dealt with the “input” side of the civil justice system, but there are some, albeit limited, data available about the outputs of the system. The Australian Government Productivity Commission collects data on finalisations but does not break this down into methods of finalisation. What limited data we have comes from the annual reports now provided by some courts. Here there is even less consistency in the counting rules adopted by the various jurisdictions than exists with the Productivity Commission data. However, looking at a number of individual courts does provide evidence of certain trends. In Magistrates Courts, where the vast bulk of cases are decided, the most common method of case finalisation is default judgment. Finalisation after trial or court hearing is the exception, not the rule. Taking South Australia as an example, there were 20,836 lodgments in 2016 and only 2,550 cases were defended.75 Of these defended matters, a large proportion were settled before or during the course of the hearing. Similar data is available from the Australian Capital Territory and Victoria. The Australian Capital Territory Magistrates Court Data shows that in 2015-2016, 2,006 civil matters were finalised and only seven decisions were handed down.76 In Victoria in 2015, 41,884 complaints were issued or filed in the Magistrates Court, of which 7,570 were defended and 17% finalised by way of a hearing.77 While these statistics are annual activity figures rather than reports based on tracking individual cases, the pattern is clear: only a small proportion of cases commenced in Magistrates Courts get to trial. A similar pattern exists in the Supreme Courts. In Victoria, the Supreme Court in 2006 commenced 6,505 proceedings and of the 500 or so matters that had not finalised before being set down for trial, 299 settled or resolved before trial, 65 were finalised after the trial began and in only 98 cases was the trial completed and judgment given.78 More recently, defamation proceedings in the Victorian Supreme Court Major Torts list provides indicative data; in 2014-2015, 34

75 76

77 78

Courts Administration Authority (SA), Annual Report 2015-2016, p 22. Magistrates Court of the Australian Capital Territory, Annual Review 2015-2016, p 18; Magistrates Court of the Australian Capital Territory, “Decisions”, https://www.courts.act.gov.au/ magistrates/judgment (accessed 29 May 2017). Magistrates Court of Victoria, Annual Report 2014-2015, p 79. Supreme Court of Victoria, Annual Report 2006, p 10.

24 [1.190]

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proceedings in defamation were finalised, of which 31 were settled or discontinued and only three proceedings went to judgment.79 The statistics from those jurisdictions for which statistics are available confirms these general patterns. The number of civil trial judgments in the Queensland Supreme Court is around a hundred judgments per year.80 The South Australian Supreme Court disposed of as few as 22 cases by trial in 2015.81 The above analysis disguises the large number of procedural decisions required of courts in the pre-trial process. In the South Australian Supreme Court, in addition to the 17 cases disposed of after fixing of the trial date in 2015, there were 2,745 hearings in chambers by Masters.82 These hearings are mainly pre-trial procedural hearings. Similar patterns are likely to be true for other courts. Another factor affecting the trial work in Supreme Courts is that, in a number of jurisdictions, the Supreme Courts have increasingly become appellate courts and the District Courts have taken much of the Supreme Courts’ civil trial work as a result of expansions in their jurisdictions. Several striking conclusions can be drawn from this analysis. First, we can conclude that we need good consistent state or national data on what work the courts actually do. Secondly, the snapshots we do have show a pattern of great but diminishing activity by courts leading to very few trials. It does appear that we have designed our civil justice system around the few or exceptional cases that get to trial. Thirdly, the picture of the civil justice system presented in this chapter suggests that recent procedural reforms, which have included alternatives to adjudication and have promoted settlement, have broadened the system. They have also helped to reduce the traditional focus on adjudicatory outcomes as the central feature of the civil justice system. Finally, it is clear the procedural reforms of the last 20 years have made dramatic changes to common law civil litigation. The reform process shows no signs of slowing.

79 80 81 82

Supreme Court of Victoria, Annual Report 2014–2015, p 36. See Supreme Court of Queensland, Annual Report 2015-2016, p 1; Supreme Court of Queensland, Annual Report 2011-2012, p 3. Judges of the Supreme Court (SA), Annual Report 2015, p 16. Judges of the Supreme Court (SA), Annual Report 2015, pp 16-17. [1.190] 25

CHAPTER 2 Commencing Proceedings: Jurisdiction and Parties Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 [2.30] Subject matter jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 [2.30] State and Territory Courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 [2.40] Federal courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 [2.50] Territorial jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 [2.60] Extended jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 [2.100] When can you serve outside Australia? . . . . . . . . . . . . . . . . 38 [2.110] Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 [2.120] Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 [2.140] Interveners and amicus curiae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 [2.150] Multiple parties and causes of action . . . . . . . . . . . . . . . . . . . . . . . . 44 [2.150] Joinder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 [2.190] Third party and contribution notices . . . . . . . . . . . . . . . . . . . 47 [2.200] Other considerations affecting joinder . . . . . . . . . . . . . . . . . . 48 [2.230] Consolidation and joint trials . . . . . . . . . . . . . . . . . . . . . . . . . . 50 [2.240] Representative proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 [2.20]

[2.10] Once the decision is made that a dispute needs to go to a court for resolution, either because a precedent is sought or because the parties to the dispute have been unable to resolve it, then litigators are faced with a series of issues that must be considered before proceedings can be commenced. These issues will be examined in the next two chapters according to the sequence in which, most commonly, a litigator would face them when commencing proceedings. First, the chapter will discuss the decisions litigators must make about the appropriate court in which to commence proceedings. This involves a question about which court or courts have jurisdiction to determine the case and, where the matter could be heard in more than one court, which is the preferable court. Jurisdictional issues can be either about whether the court has power to deal with cases of this type (subject matter issues) or about whether the case falls within the territorial limits of a court’s jurisdiction. This latter issue is particularly complex in a country with a federal system of government. The other issue this chapter will address is the identification of the appropriate parties to the proceedings. Often the parties are obvious; but difficult situations may arise, especially in commercial litigation when the parties legally responsible may not be obvious or may be different from those actively involved. So, for example, the proper party for litigation purposes may be a subsidiary company or the principal in an agency situation. If the party is not correctly identified, fresh proceedings may need to be instituted, along with often having to meet the legal costs incurred by the wrongly identified party. A further complication can arise if [2.10] 27

Principles of Civil Litigation

the period allowed for commencing proceedings has expired in the meantime, as this means persuading a court to give permission for the case to proceed. The need to identify parties correctly also helps deal with some of the issues when the party suffers from some form of legal disability — they may not be capable of suing or being sued in their own right. Procedural issues can arise if one or more parties to the dispute has no legal personality, for example, if they are a partnership or an unincorporated association. Disputes may arise involving more than one party or parties may have more than one dispute, giving rise to questions of whether all the parties or disputes should be joined in the action. As we will see, courts approach this issue with a view to promoting efficiency. Rather than a series of separate cases, courts seek, where possible, to ensure that all matters and issues arising in a case are contained within that one case. If separate cases have been commenced over essentially the same dispute, courts have the power to order consolidation of the cases into the one case or to order joint trials. Chronologically, this occurs after cases have been commenced — sometimes well into the pre-trial process — but it is covered in this chapter as it is closely related to the identification of proper parties and causes of action. Where a dispute involves significant numbers of plaintiffs, courts have long had a practice of enabling one plaintiff to represent and present the case on behalf of all the plaintiffs. Known as “representative actions”, the availability and usefulness of the procedure was severely limited by judicial interpretation in the early 20th century and in Australia some jurisdictions have also adopted a newer and better known procedure — the class action.

JURISDICTION [2.20] A court’s jurisdiction is limited by both subject matter and by territorial reach. In Australia, subject matter jurisdiction is generally conferred by the legislation establishing the court but often additional jurisdiction can be conferred by specific legislation. The State and Territory Supreme Courts have been given a general civil jurisdiction which enables them to determine almost all civil disputes, except for the few matters that fall within exclusive federal jurisdiction. The Federal Court and High Court have a more limited subject matter jurisdiction, based on their particular role as federal courts. Territorial jurisdiction is largely determined by common law principles and supplemented by the various rules of court. The federal nature of the Australian court system creates complexity: disputes may have interstate or federal aspects to them with the result that different States, Territories or the federal courts might possibly be able to exercise jurisdiction over the case. This complexity has led to various attempts to overcome some of the difficulties that arise from not having a unitary legal system, including enacting the Service and Execution of Process Act 1992 (Cth) and cross-vesting legislation.1

1

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth); Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT); Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW); Jurisdiction of Courts (Cross-Vesting) Act 1987 (NT); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld); Jurisdiction

28 [2.20]

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Subject matter jurisdiction State and Territory Courts [2.30] General civil jurisdiction is vested in the State Supreme Courts by legislation. This jurisdiction can be expressed in very broad terms: “The Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales” (s 23 of the Supreme Court Act 1970 (NSW)).2 The alternative approach has been to tie the subject matter jurisdiction of State Supreme Courts to the jurisdiction of various English superior courts prior to the Judicature Acts 1873-1875 (UK). Section 17 of the Supreme Court Act 1935 (SA) provides, for example: (1)

The court shall be a court of law and equity.

(2)

There shall be vested in the court — (a)

the like jurisdiction, in and for the State, as was formerly vested in, or capable of being exercised by, all or any of the courts in England, following: (i)

The High Court of Chancery, both as a common law court and as a court of equity:

(ii)

The Court of Queen’s Bench:

(iii)

The Court of Common Pleas at Westminster:

(iv)

The Court of Exchequer both as a court of revenue and as a court of common law:

(v)

The courts created by commissions of assize:3

The lower courts have their subject matter jurisdiction determined by both the nature of the dispute and the remedy which the court can order. In the intermediate courts in the larger jurisdictions, litigators must make careful judgments to ensure the court in which the case is commenced has power to order the remedy sought. In some jurisdictions, the move over the last 20 years towards enabling the intermediate courts to exercise a general civil jurisdiction almost equivalent to that of the Supreme Courts has made this easier. Most intermediate courts now have, for example, unlimited jurisdiction over personal injury claims. Furthermore, often the District and County Courts can award amounts higher than their monetary limits in certain situations. The power to issue prerogative writs is, however, generally limited to the Supreme Courts. Table 2.1 sets out in general terms the subject matter jurisdiction of the courts in each State and Territory.

2

3

of Courts (Cross-Vesting) Act 1987 (SA); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Tas); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic); Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA). Similar provisions exist in the Australian Capital Territory (Australian Capital Territory (Self-Government) Act 1988 (Cth) s 48A; Supreme Court Act 1933 (ACT) s 20); Queensland (Constitution of Queensland Act 2001 (Qld) s 58); and Victoria (Constitution Act 1975 (Vic) s 85(1)). See similar approach in the Northern Territory (Supreme Court Act (NT) s 14) and Western Australia (Supreme Court Act 1935 (WA) s 16). [2.30] 29

Principles of Civil Litigation

Table 2.1: Subject matter jurisdiction of State and Territory courts Supreme Court

ACT

General civil jurisdiction

District/County Court

Magistrates/Local Court

N/A

Claims between $25,000 and $250,000. Claims below $25,000 are heard in the ACT Civil and Administrative Tribunal

All motor vehicle cases NSW

NT

Qld

General civil jurisdiction

All other claims from $100,001 to a maximum amount of $750,000

All actions up to $100,000. Many disputes are also heard by the NSW Civil and Administrative Tribunal

General civil jurisdiction

N/A

All actions from $25,000 to a maximum of $250,000. Claims below $25,000 are heard in the NT Civil and Administrative Tribunal

General civil jurisdiction

Disputes involving amounts between $150,000 and $750,000

Actions up to $150,000. Many disputes up to $25,000 are heard by the Queensland Civil and Administrative Tribunal

SA

General civil jurisdiction

General civil jurisdiction

Claims up to $100,000. Some matters may be heard by the South Australian Civil and Administrative Tribunal

Tas

General civil jurisdiction

N/A

Claims up to $50,000

Vic

General civil jurisdiction

General civil jurisdiction

Claims up to $100,000. Certain types of disputes must be heard by the Victorian Civil and Administrative Tribunal

WA

General civil jurisdiction

Personal injury unlimited Other claims up to $750,000

Claims up to $75,000. Some matters may be heard by the State Administrative Tribunal

It must be remembered that the higher courts generally have an unlimited civil jurisdiction. They also possess the jurisdiction of the lower courts so, in theory, small claims could be commenced in the Supreme Court. Court rules discourage the commencement of claims that could be brought in lower courts by incorporating costs rules that impose penalties if a successful party recovers less

30 [2.30]

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than prescribed amounts in the higher courts. These prescribed amounts are not jurisdictional limits, and are covered more fully in Chapter 12 (“Litigation Costs”). One area of significant difference in subject matter jurisdictions between States is the degree to which certain types of disputes have been transferred from courts to tribunals or other administrative bodies. Most commonly, jurisdiction has been transferred to tribunals and other bodies for cases involving compensation for different types of accidents. Claims for personal injuries arising from motor vehicle accidents in Victoria, for example, are dealt with through a no-fault compensation scheme administered by the Transport Accident Commission. Applicants can seek review of Transport Accident Commission decisions by the Victorian Civil and Administrative Tribunal.4 Similarly, in South Australia, workers’ compensation disputes are generally heard by the South Australian Employment Tribunal.5 These and similar developments in other jurisdictions have had a major impact on the workload of the civil courts as personal injury litigation constituted a significant proportion of the work of those courts. Related indirectly to subject matter jurisdiction is the existence of an inherent jurisdiction enjoyed by Supreme Courts. This is a jurisdiction that gives a superior court exercising a general or unlimited jurisdiction all powers necessary to control its proceedings, perform its functions and prevent abuses of process.6 Essentially, inherent jurisdiction is a procedural jurisdiction, and judges have relied upon it to support procedural innovations that have often, subsequently, been incorporated in court rules.7

Federal courts [2.40] The High Court is the oldest existing Australian federal court. While the High Court’s primary function is to serve as the ultimate appellate court in Australia, it does have an original jurisdiction. Section 75 of the Australian Constitution provides for the original jurisdiction of the High Court, and includes matters: (i)

4 5

6

7

arising under any treaty;

(ii)

affecting consuls or other representatives of other countries;

(iii)

in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party;

(iv)

between States, or between residents of different States, or between a State and a resident of another State;

(v)

in which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth. See Transport Accident Act 1986 (Vic). See South Australian Employment Tribunal Act 2014 (SA). Indeed, in South Australia the right of employees to sue employers for industrial injuries in other courts has been restricted: see Return to Work Act 2014 (SA). K Mason, “The Inherent Jurisdiction of the Court” (1983) 57 Australian Law Journal 449; W Lacey, “Inherent Jurisdiction, Judicial Power and Implied Guarantees under Chapter III of the Constitution” (2003) 31 Federal Law Review 57. The evolution of Mareva and Anton Piller orders are an example. See B Cairns, “Discovery and Preservation of Evidence under Inherent Jurisdiction” (1985) 4 Civil Justice Quarterly 309. [2.40] 31

Principles of Civil Litigation

These matters, unlike some other matters falling within the original jurisdiction of the High Court, cannot be exercised by State courts.8 Acting pursuant to s 76 of the Constitution, the Commonwealth Parliament has conferred on the High Court additional original jurisdiction over all matters arising under the Constitution and this jurisdiction is also vested in State courts.9 The Federal Court was created in 1976 by the Federal Court of Australia Act 1976 (Cth). Mirroring the history of federal-State relations, its creation marked the beginning of major change in the national civil justice system. Although federal courts have existed in various forms since 1905,10 the State courts were vested with federal jurisdiction by the Judiciary Act 1903 (Cth) and were responsible for handling civil claims which contained a federal element, for example, that arose under federal law. The growth in the power of the Commonwealth government, along with national markets and economic activity, and the desire to have a court take over some of the workload arising in the High Court’s original jurisdiction, led to calls for a new federal court. These developments, as well as the development of a new system of federal administrative law, provided the foundations for the new court’s jurisdiction.11 The Federal Court’s jurisdiction was, at first, limited to those matters where a specific federal statute explicitly gave the court jurisdiction. Initially some 11 federal Acts gave jurisdiction to the Federal Court over matters including social security, bankruptcy, trade practices and taxation. This number grew to over 150 Acts.12 The court’s jurisdiction was significantly extended in 1997 by amendments to s 39B of the Judiciary Act 1903 (Cth) that gave the court power, amongst other things, over matters arising under any laws made by the Commonwealth Parliament (other than criminal matters).13 The Federal Court has developed two related concepts — “accrued jurisdiction” and “associated jurisdiction” — which enlarged the jurisdiction of the court and prevented unnecessary duplication and inefficiency. Disputes often have both a federal and non-federal element and so both State and federal courts might have jurisdiction. To maximise efficiency and prevent cases having to be run in multiple courts, the Federal Court developed the concept of accrued jurisdiction. Accrued jurisdiction enables the court, when faced with a claim in a situation where, for example, the claim contains causes of action arising both under federal law and common law, to provide relief for all causes of action — thus resolving the matter completely. At the core of accrued jurisdiction is the need for the non-federal aspects of a case to be so linked to the federal aspects as to be non-severable —

8 9 10

11 12 13

Judiciary Act 1903 (Cth) s 38 (exclusive jurisdiction of the High Court). Judiciary Act 1903 (Cth) s 30. The Commonwealth Court of Conciliation and Arbitration, which arbitrated industrial disputes, was created by the Commonwealth Conciliation and Arbitration Act 1904 (Cth). In 1930, the Federal Court in Bankruptcy began to hear bankruptcy cases under the Bankruptcy Act 1930 (Cth). S Kiefel, “The Federal Court of Australia and its Contribution to the Federal Civil Justice System” (2006) 9 Flinders Journal of Law Reform 1. S Kiefel, “The Federal Court of Australia and its Contribution to the Federal Civil Justice System” (2006) 9 Flinders Journal of Law Reform 1 at 6. Judiciary Act 1903 (Cth) s 39B.

32 [2.40]

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“the [accrued non-federal] claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts.”14 The Federal Court’s associated jurisdiction allowed the court to hear matters arising under federal laws that did not expressly give the court jurisdiction where they arise in cases that contain matters over which it had express jurisdiction. Associated jurisdiction has been less important since the 1997 amendments to s 39B of the Judiciary Act 1903 (Cth). The limited subject matter jurisdiction possessed by the Federal Court means that, strictly speaking, it does not possess an inherent jurisdiction. However, the Court has found it needs to have the power to achieve the same goals as realised by the inherent jurisdiction (viz powers to control proceedings and to prevent abuse of process). While some High Court judgments do describe federal courts as having inherent jurisdiction, it is preferable to view the Federal Court as having an incidental jurisdiction. An incidental jurisdiction is based on the statutory interpretation principle that requires a body, when performing a statutory function, to have all the necessary and incidental powers needed to enable it to fully perform its statutory function.15 The Federal Circuit Court, the newest federal court, commenced hearing cases in 2000 as the Federal Magistrates Court. Created to assume much of the general workload of the Federal Court and Family Court, it enjoys similar jurisdictions to those courts. There are procedures that enable matters to be transferred between the Federal Magistrates Court and those courts.16 In April 2013 the Federal Magistrates Court was renamed the Federal Circuit Court of Australia and the magistrates renamed judges. The court has grown rapidly to become one of the largest courts in Australia and deals with family law, child support matters, administrative law, admiralty law, consumer law, immigration law, bankruptcy, industrial law, migration law, privacy law, intellectual property law, and human rights law. However, some 91% of its work is family law cases.17

Territorial jurisdiction [2.50] Having determined which court has jurisdiction to hear the subject matter of the dispute or provide the relief sought, parties must consider whether the court has territorial jurisdiction. In other words, how far does the court’s reach extend? The answer to this question lies in the common law principle that territorial jurisdiction rests on the ability to serve the defendant. At common law, it was not possible to serve a defendant beyond the territorial boundaries of the State or

14 15

16 17

Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 512 per Mason J; approved Fencott v Muller (1983) 152 CLR 570. DJL v Central Authority (2000) 201 CLR 226 at 241 (albeit in the context of another federal court, the Family Court). Also see W Lacey, “Inherent Jurisdiction, Judicial Power and Implied Guarantees under Chapter III of the Constitution” (2003) 31 Federal Law Review 57 at 67–70. Federal Magistrates Act 1999 (Cth) ss 39 – 41; Federal Magistrates (Consequential Amendments) Act 1999 (Cth). Federal Circuit Court of Australia, Annual Report 2015-2016, Table 3.1, p 47. [2.50] 33

Principles of Civil Litigation

nation in which the court had jurisdiction. As the High Court stated in 2004 in BHP Billiton Ltd v Schultz: [T]he ordinary basis of jurisdiction of common law courts in personal actions is the presence of the defendant within the court’s territory, and the defendant’s resulting amenability to the court’s process.18

If the defendant is within the territorial boundaries, he or she can be validly served with the documents by which a case is commenced and the court thus has jurisdiction. As was pointed out by the High Court in 1958 in Laurie v Carroll:19 It does not matter why, so long as he has not been enticed there fraudulently for that purpose. It does not matter whether he is a foreigner or a subject of the Crown. It does not matter how temporary his presence may be, how fleeting may be his visit.20

Just how fleeting a visit can be was well illustrated by the English case of Maharanee of Baroda v Wildenstein.21 This case involved a dispute about the sale of a painting in Paris, where both vendor and purchaser lived. The defendant had flown to England to attend the Ascot Races and, while she was there, was served with a writ from an English court. This was held by the Court of Appeal as being valid service, thus giving the English courts jurisdiction over the matter.22 An even more extreme example is Grace v McArthur,23 a United States case in which service of the defendant while flying over Arkansas on a flight from Tennessee to Texas gave courts in Arkansas jurisdiction over the case.

Extended jurisdiction [2.60] In Australia, the ability to serve defendants has been increased by both statute and incorporation of court rules that enable service to be effected outside the territory. A distinction is to be drawn between service ex juris, but within Australia, and service outside Australia. With respect to service in Australia, the enactment of legislation by both the Commonwealth and States has, in effect, created a national jurisdiction. By contrast, service outside Australia remains governed by court rules and the common law.

Within Australia [2.70] Amongst the earliest pieces of legislation enacted by the Commonwealth Parliament following Federation was the Service and Execution of Process Act 1901 (Cth) (re-enacted in amended form in 1992).24 Section 15(1) of this Act provides “An initiating process issued in a State may be served in another State.” “Initiating

18 19 20 21 22

23 24

BHP Billiton Ltd v Schultz (2004) 221 CLR 400 at 422 per Gleeson CJ, McHugh & Heydon JJ. (1958) 98 CLR 310. (1958) 98 CLR 310 at 331 per Dixon CJ, Williams & Webb JJ. [1972] 2 QB 283. According to Edmund Phillips LJ the Maharanee had done nothing wrong “even though it may have ruined [the defendant's] day at the races” (Maharanee of Baroda v Wildenstein [1972] 2 QB 283 at 294). 170 F Supp 442 (1959). See J Martin, “Service and Execution of Process Act 1992 (Cth)” (1993) 23 University of Western Australia Law Review 156.

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process” is defined as “a process by which a proceeding is commenced”25 and a “State” includes a Territory, thus giving this Act application across Australia for all civil proceedings in all courts. “Process” in this context refers to the document that is issued by the court that gives the defendant notice of the case, for example, a summons or a writ. The ability to serve an out-of-State defendant is not limited to courts, but is extended by Pt 4 of the Act to proceedings commenced in tribunals.26 The Act overrides any State based provisions for service ex juris within Australia.27 A defendant who has been served with an initiating process issued by an Australian court (other than a Supreme Court) pursuant to the Service and Execution of Process Act 1992 (Cth) may apply to the court that issued the process for a stay, on the basis that a court in another jurisdiction is the appropriate court to hear the case.28 A defendant who has been served with an initiating process issued by a State or Territory Supreme Court cannot apply for a stay because State or Territory Supreme Courts are able to exercise each other’s jurisdiction pursuant to cross-vesting of jurisdiction legislation in every State and Territory and in the Commonwealth (“cross-vesting legislation”).29 Passed in 1987, the cross-vesting legislation attempted to overcome some of the difficulties of overlapping and competing jurisdictions inherent in a federal system. The initial scheme involved the enactment of legislation that did two things — it cross-vested jurisdiction between courts and created a mechanism for transferring proceedings to an appropriate court. The Commonwealth, States and Territories vested civil jurisdiction in each other’s Supreme Courts and in the Federal Court and the Family Court. Some matters of a federal nature were excluded from the scheme, such as matters arising under federal native title and industrial laws. In 1999, a constitutional challenge to this scheme in Re Wakim30 struck down the conferral of State jurisdiction on the Federal Court. The High Court, however, upheld in that case the inter-State arrangements and the federal jurisdiction vested in State Supreme Courts. The position of the Territories, although not entirely settled, also appears to remain unaffected. Between the passage of the crossvesting legislation in 1987 and the Re Wakim case in 1999, the Federal Court did not need to rely on its accrued jurisdiction to deal with non-federal matters that fell within the ambit of the cross-vesting legislation.31 Re Wakim reinvigorated the Federal Court’s accrued jurisdiction. Since Re Wakim, the court’s accrued jurisdiction has been affected in one major area by the referral in 2001 by the States 25 26 27 28 29

30 31

Service and Execution of Process Act 1992 (Cth) s 3(1). Service and Execution of Process Act 1992 (Cth) Pt IV. Elan Copra Trading Pty Ltd v JK International Pty Ltd [2005] SASC 501 at [28] per White J. Service and Execution of Process Act 1992 (Cth) s 20; see Anderson v Raelene Overall Consultants Pty Ltd [2000] WADC 308. Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth); Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT); Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW); Jurisdiction of Courts (Cross-Vesting) Act 1987 (NT); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld); Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Tas); Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic); Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA). (1999) 198 CLR 511. See above [2.40] for a discussion about accrued jurisdiction. [2.70] 35

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of their power over the incorporation of corporations under the Constitution to the Commonwealth.32 The accrued jurisdiction remains relevant for other areas of non-federal law and even the referral of legislative power over corporations by the States is limited by time and will, if not extended, eventually expire. The cross-vesting scheme does more than simply cross-vest jurisdiction; it also provides a sorting mechanism that attempts to prevent forum shopping. This is achieved by s 5 of the cross-vesting legislation,33 which requires a court to transfer proceedings where the court believes it is more appropriately determined in a Supreme Court in another jurisdiction, and: • the proceeding arises out of, or is related to, another proceeding already commenced in another court; or • the court only has jurisdiction under the cross-vesting legislation and the proceeding involves interpretation or application of another jurisdiction’s law and it is in the interests of justice; or • finally, the general (and common) catch-all in procedural law: it is otherwise in the interests of justice. [2.80] The cross-vesting legislation provides no other guidance for making the assessment about whether proceedings should be transferred. This contrasts with the Service and Execution of Process Act 1992 (Cth), where s 20(4) lists six factors the court should take into account in considering whether a court in another State is the appropriate court to hear the case. The absence of any real guidance in the cross-vesting legislation has led to different jurisdictions taking different approaches when determining whether proceedings should be transferred. These differences can be found, for example, in the weight to be given to the plaintiff’s choice of court (or “forum” as it is called in this area of law) and the related concept of whether it was an inappropriate court (an approach that had been adopted in Western Australia) — a test that applies to transnational cases. The predominant view, first expounded by the New South Wales Court of Appeal in BankInvest AG v Seabrook,34 is that this was not akin to the common law doctrine of forum non conveniens that carries the presumption that a case is to proceed in a jurisdiction unless it is clearly inappropriate. Section 5 of the cross-vesting legislation35 was held to contain a statutory command, requiring the hearing court to transfer the matter to the more appropriate court without giving weight to the plaintiff’s choice of court. Some other Supreme Courts took a different view.

32

33

34 35

Corporations (Commonwealth Powers) Act 2001 (NSW); Corporations (Commonwealth Powers) Act 2001 (Qld); Corporations (Commonwealth Powers) Act 2001 (SA); Corporations (Commonwealth Powers) Act 2001 (Tas); Corporations (Commonwealth Powers) Act 2001 (Vic); Corporations (Commonwealth Powers) Act 2001 (WA). Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 5; Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) s 5; Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld) s 5; Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA) s 5; Jurisdiction of Courts (Cross-Vesting) Act 1987 (Tas) s 5; Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) s 5; Jurisdiction of Courts (CrossVesting) Act 1987 (WA) s 5. (1988) 14 NSWLR 711. See, eg, Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 5.

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Differences also arose over whether the applicant carried the onus of establishing that the case should be transferred.36 In 2004 in BHP Billiton v Schultz,37 the High Court, in an asbestos case that had, on the facts, arisen in South Australia but was commenced in the Dust Diseases Tribunal of New South Wales, held that the matter should be transferred to the South Australian Supreme Court. In so doing the High Court applied the BankInvest reasoning. Justice Gummow stated that the cross-vesting legislation: [R]equires the Supreme Court to determine a transfer application by identifying the more appropriate forum without any specific emphasis in favour of the choice of forum made by the plaintiff.38

There are two points of procedural interest in this case. The first reveals how the case got to the High Court. Under s 13 of the cross-vesting legislation39 a court’s decision on an application to transfer a matter under the legislation cannot be appealed. In BHP Billiton Ltd v Schultz, BHP Billiton circumvented that provision by using s 73(ii) of the Constitution,40 which gives the right to appeal to the High Court from all Supreme Court judgments (unless altered by federal legislation). The second point the case demonstrates is that the Supreme Court may transfer a proceeding commenced in another court or tribunal within the same State to the Supreme Court if there might be grounds for transferring it under the cross-vesting legislation. A Supreme Court is able to remove the case from the other court or tribunal to itself. Section 8 of the cross-vesting legislation41 provides that such a transfer is possible if the proceeding is related to another proceeding pending in the Supreme Court of another jurisdiction (or Federal Court or Family Court) or if the Supreme Court thinks it should consider transferring the case to another Supreme Court. In considering whether to transfer a case to another jurisdiction, the court weighs up the connecting factors between the case and the possible jurisdictions including cost, convenience, and procedural advantages.42 It must also be remembered that even when a court is exercising jurisdiction in a case that arises out of another State, the court may be required to apply the substantive law of the other State depending on the “choice of law” principles developed by private international law. The primary rule for torts cases is the substantive law to be applied is that of the place where the tort occurred (the lex locus delicti) and there

36

37 38 39 40 41 42

See S Miller & O Nicholls, “Cross-Vesting Civil Proceedings — A Practical Analysis of the Interests of Justice in the Determination of Cross-Vesting Applications” (2004) 30 Monash University Law Review 95. (2004) 221 CLR 400. (2004) 221 CLR 400 at 439 per Gummow J. See, eg, Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 13. Commonwealth of Australia Constitution 1901, s 73(ii). Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 8. S Miller & O Nicholls, “Cross-Vesting Civil Proceedings — A Practical Analysis of the Interests of Justice in the Determination of Cross-Vesting Applications” (2004) 30 Monash University Law Review 95. [2.80] 37

Principles of Civil Litigation

is some judicial support for giving that factor determinative weight for torts cases when considering transfer applications under cross-vesting legislation.43

Outside Australia [2.90] In the previous sections, we saw how the common law “presence” principle means that Australian courts can have jurisdiction in cases over matters unrelated to an Australian jurisdiction if the defendant is served within the Australian jurisdiction’s territorial boundaries. Just as there are statutory extensions to jurisdiction within Australia, courts have incorporated in court rules provisions providing for service outside Australia, thereby gaining jurisdiction in those cases. These provisions require some nexus between the case and the jurisdiction. In some jurisdictions, leave of the court must be sought before serving the overseas defendant. Even when valid service outside Australia is permitted, there can be challenges over whether it is inappropriate for the Australian court to hear the case.

When can you serve outside Australia? [2.100] First, the rules of the court in which the plaintiff intends to commence proceedings must allow for a defendant to be served overseas. All Australian courts have rules that permit a plaintiff to serve a defendant outside Australia in specified situations.44 The Federal Court and the Western Australian Supreme Court require a plaintiff to obtain leave of the court before serving outside Australia,45 but other Australian jurisdictions enable a plaintiff to serve originating process outside Australia, although they may require a plaintiff to obtain leave to take any further steps if the defendant does not respond to the proceedings. The situations where service outside Australia is possible are varied and many, but all require some nexus between the case and the jurisdiction. The provisions are relatively consistent across Australia — the Uniform Civil Procedure Rules 1999 (Qld), for example, describe 24 situations in which a defendant to a civil proceeding in Queensland may be served overseas — but the common situations include cases: • where the cause of action arose within the jurisdiction; • relating to property situated in the jurisdiction; • brought against a person domiciled or resident in the jurisdiction; • where there were torts committed or resultant damage suffered within a jurisdiction; and

43 44

45

James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357; BHP Billiton Ltd v Schultz (2004) 221 CLR 400 at 465 per Kirby J. Court Procedures Rules 2006 (ACT) Div 6.8.9; Federal Court Rules 2011 (Cth) Div 10.4; Uniform Civil Procedure Rules 2005 (NSW) Pt 11; Supreme Court Rules (NT) O 7; Uniform Civil Procedure Rules 1999 (Qld) Ch 4, Pt 7; Supreme Court Civil Rules 2006 (SA) Ch 3, Pt 4, Div 2; Supreme Court Rules 2000 (Tas) Pt 7, Div 10; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 7; Rules of the Supreme Court 1971 (WA) O 10. Federal Court: Federal Court Rules 2011 (Cth) r 10.43; WA: Rules of the Supreme Court 1971 (WA) O 10, r 1A(2).

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• where there were contracts made within or governed by the law of the jurisdiction.46 The issue of whether the nexus exists is raised if leave to serve outside Australia is required, or if a defendant who has been served, applies to set aside service on the basis that service was invalid. This usually involves a claim that the case does not fall within any of the specified situations (or nexus) in the rule allowing service outside Australia. The degree to which a court must be satisfied that the nexus exists was considered by the High Court in Agar v Hyde.47 This case involved claims against the International Rugby Football Board for injuries suffered by the plaintiffs, allegedly because the rules of the game unreasonably exposed them to risk of injury. In determining whether a nexus exists, it would be clearly unfair to require a plaintiff to prove their case to any significant degree during the early stages of a case. The High Court held that the court was not required to ascertain the strength of the claim but instead had to be satisfied that the facts alleged by the plaintiffs would fall within one of the specified nexus. The court said the statement of claim or affidavits should suffice to determine whether the nexus, on the allegations, existed.48 In addition to applying to have service set aside, a foreign defendant can ask an Australian court not to exercise a properly invoked jurisdiction on the grounds that the court is an inappropriate court to hear the matter. This principle, the principle of forum non conveniens, is derived from the common law power of a court to refuse to hear cases if they are oppressive, vexatious or frivolous. The English test for determining if a court is an inappropriate court to hear the matter is to simply determine whether there is a more appropriate forum in which the matter could be heard. This meant that the court must identify which court could most conveniently and appropriately hear the matter, and if the more appropriate court was a different court in another jurisdiction then the matter would be stayed.49 In Australia, the High Court departed from the English approach in Oceanic Sun Line Special Shipping Co Ltd v Fay50 and Voth v Manildra Flour Mills Pty Ltd.51 The Australian test requires the defendant seeking a stay of proceedings to demonstrate that the local court is clearly an inappropriate court to hear the matter, and this test is unlikely to change in the near future.52 Under the Australian test, there may be a more convenient court but, unless it can be shown the Australian court is clearly inappropriate, the Australian court 46 47 48

49 50 51 52

Uniform Civil Procedure Rules 1999 (Qld) r 124. (2000) 201 CLR 552. “The application of … [the rule] depends on the nature of the allegations which the plaintiff makes, not on whether those allegations will be made good at trial. Once a claim is seen to be of the requisite kind, the proceeding falls within the relevant paragraph or paragraphs … service outside Australia is permitted, and prima facie the plaintiff should have leave to proceed” (Agar v Hyde (2000) 201 CLR 552 at 574 per Gaudron, McHugh, Gummow & Hayne JJ). Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460. (1988) 165 CLR 197. (1990) 171 CLR 538. In Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 the divergent views of the High Court in Oceanic Shipping were resolved in favour of Deane J's “clearly inappropriate” test. See also A Mason, “Choosing between Laws” (2004) 25 Adelaide Law Review 165 at 174-175. [2.100] 39

Principles of Civil Litigation

will hear the matter despite there being a more appropriate court. The High Court thought that, in practice, situations in which the Australian court was clearly inappropriate would only rarely arise and that its approach would increase certainty. Increased certainty would thus reduce the opportunity for parties to engage in interlocutory skirmishes. This is especially prevalent in contemporary transnational litigation, in which there may be several countries involved and determining the most appropriate jurisdiction becomes difficult.53 In November 2010, after a long and slow process, the Hague Service Convention54 came into force in Australia. Part of the process was obtaining the agreement of all Australian jurisdictions for a common set of rules that implement the Convention.55 Prior to the adoption of the Convention, parties seeking to serve court documents overseas had to be careful to ensure they met all the service requirements of the overseas jurisdiction. These do vary significantly from country to country and the Hague Service Convention provides a simpler and uniform process in those countries that have adopted the Convention.56

PARTIES [2.110] Having determined which jurisdiction and which court the case should be commenced in, litigators must correctly identify the parties and determine whether they are capable of being sued — both in a legal and a practical sense. Working out who to sue is usually fairly easy — substantive law determines the cause of action and against whom the action is taken. But a party may have a cause of action against several other parties or — even when there are just two parties involved — there may be more than one cause of action arising out of the dispute or the parties may have claims against each other. These questions raise the issue of “joinder”, which will be covered later in this section.

Capacity [2.120] There are practical questions about the capacity of the parties to sue and be sued. For example, do the proposed parties have the financial and emotional resources to undertake litigation? Does the proposed defendant have the financial capacity to meet any judgment? These are not legal questions but in reality are often more determinative of whether litigation is commenced or how it is conducted than the questions of legal capacity. Questions of legal capacity are generally capable of easy resolution. What creates difficulty is the failure to refer to them in the first place. The underlying approach is to ensure the party has legal personality and the ability to make decisions about the litigation. Legal personality is most commonly a problem when unincorporated bodies are involved in a dispute and, in response, courts

53 54 55 56

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 558. Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil and Commercial Matters, 1965. See, eg, Supreme Court Civil Rules 2006 (SA) Ch 3, Pt 4, Div 4. See G Elliott and D Hughes, “Australia Joins the Hague Service Convention” (2010) 84 Australian Law Journal 532.

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have derived special rules for those situations. Capacity issues can be examined by determining categories of capacity, or more accurately, categories of incapacity. The most obvious categories of incapacity are minority or mental incapacity. Minors become adults, and gain legal capacity, at age 18. The test for mental capacity is not as clear. The party must be able to understand the nature and consequences of the decisions about the litigation a party is required to make.57 In situations where a party is a minor or suffering mental incapacity, court rules require that an adult be appointed to make decisions on behalf of the person suffering the disability.58 Known in many jurisdictions as a “litigation guardian”, or “next friend” (when a plaintiff) and “guardian ad litem” (when a defendant) in others, these adults are usually a close relative but can be any adult who does not have an adverse interest in the litigation.59 Reflecting the courts’ historic jurisdiction over wards and children, courts have departed from their usual role in the adversarial system and have incorporated procedures to protect the interests of parties who are legally incapacitated. The court, for example, reviews any settlement of a claim to ensure that it is just, usually requiring an opinion from independent counsel on the proposed settlement. Bankruptcy affects a party’s capacity to sue or be sued. The Bankruptcy Act 1966 (Cth) provides that proceedings cannot be commenced against a bankrupt by a creditor without leave of the court. The bankrupt’s affairs, including the right to sue or conduct litigation, are vested in the trustee appointed to handle the bankrupt’s affairs and any existing litigation involving the bankrupt is stayed while the trustee decides whether to continue. However, any claim for unliquidated damages in tort (for example, a personal injury claim arising from an accident) remains within the capacity of the bankrupt.60 Corporations, incorporated under the Corporations Act 2001 (Cth), have legal personality and are capable of being sued, but they must be sued in their correct name. Searches of records at the Australian Securities and Investments Commission (ASIC) are essential to ensure that the right corporate body, in their correct name, is sued, and to ascertain the corporation’s registered address for service. As for bankrupt persons under the Bankruptcy Act 1966 (Cth), provisions exist under the Corporations Act 2001 (Cth) limiting the capacity to sue or continue proceedings against companies in liquidation without leave of the court.61 Corporations can only conduct litigation through a legal practitioner, although in some jurisdictions an officer or director of the company can apply to the court for leave to represent the company.62

57 58

59 60 61 62

Murphy v Doman (2003) 58 NSWLR 51. Court Procedures Rules 2006 (ACT) Div 2.4.9; Federal Court Rules 2011 (Cth) Div 9.6; Uniform Civil Procedure Rules 2005 (NSW) Pt 7, Div 4; Supreme Court Rules (NT) O 15; Uniform Civil Procedure Rules 1999 (Qld) rr 93 – 98; Supreme Court Civil Rules 2006 (SA) rr 78 – 79; Supreme Court Rules 2000 (Tas) rr 292 – 301; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 15; Rules of the Supreme Court 1971 (WA) O 70. In SA the litigation guardian must have no interest in the litigation at all: Supreme Court Civil Rules 2006 (SA) r 79. See Bankruptcy Act 1966 (Cth) ss 58, 60. Corporations Act 2001 (Cth) s 471B. See, eg, Supreme Court Civil Rules 2006 (SA) r 27. [2.120] 41

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[2.130] Unincorporated bodies pose particular problems for litigators. Not having legal personality means that identifying parties could be a difficult issue, both legally and practically. Falling within this category are partnerships, many community groups, sporting clubs and social clubs. Procedural rules now exist aimed at facilitating litigation by and against unincorporated bodies. With partnership, for example, all jurisdictions except New South Wales enable partners to sue and be sued in the firm’s name. In New South Wales partners must sue under their own names but may be sued using the unregistered business name under which the firm operates.63 Strictly speaking, in order to sue other unincorporated groups, including many sporting and social groups, all the members of the group would need to be sued to ensure judgment was enforceable. However, it is often the case that not all members of such groups can be easily identified. In some instances, litigation has involved only officers of the unincorporated group, but even when all members are sued, difficulties still arise. Only those members of the club at the time the potential liability arose might be liable, meaning some members can be sued and not others.64 South Australia and Tasmania have specific rules that enable unincorporated groups to sue and be sued in the group’s name, with judgment being entered against the group. As Cairns notes, the validity of such rules is not without doubt but they remain unchallenged.65 Public interest litigation also raises issues of capacity: that of standing or locus standi. Individual members of the public cannot commence cases on behalf of the public or in the public interest unless the member of the public suffers special damage or has a special interest to protect: It is quite clear that an ordinary member of the public, who has no interest other than that which any other member of the public has in upholding the law, has no standing to sue to prevent the violation of a public right or to enforce the performance of a public duty.66

Nevertheless the “special interest” needed to found public interest litigation has been given a broad interpretation, so that it is not limited to having to suffer some financial loss or damage, or some effect that is unique to that particular member of the public.67 Furthermore, legislation may itself include its own test for standing, for example, s 80 of the Competition and Consumer Act 2010 (Cth) provides that “any person” may bring proceedings for breaches of specified provisions of that Act. If standing does not exist, the Commonwealth Attorney-General, who has general standing to represent the public interest, may be approached for authority to bring relator action in the name of the Attorney-General.68 63

64 65 66 67 68

Court Procedures Rules 2006 (ACT) r 285; Federal Court Rules 2011 (Cth) Div 9.4; Uniform Civil Procedure Rules 2005 (NSW) Pt 7, Div 5; Supreme Court Rules (NT) O 17; Uniform Civil Procedure Rules 1999 (Qld) r 83; Supreme Court Civil Rules 2006 (SA) r 86; Supreme Court Rules 2000 (Tas) r 308; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 17; Rules of the Supreme Court 1971 (WA) O 71. See City of Gosnells v Roberts (1994) 12 WAR 437. B Cairns, Australian Civil Procedure (11th ed, Thomson Reuters, 2016), p 359. Australian Conservation Foundation v Commonwealth (1980) 146 CLR 493 at 527 per Gibbs J. Australian Conservation Foundation v Commonwealth (1980) 146 CLR 493 at 527 per Gibbs J. See Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591.

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Interveners and amicus curiae [2.140] Interveners and amicus curiae are not parties in the strict sense. Interveners are those persons who are not parties to the action but whose legal interests are substantially affected by the outcome of the litigation. As Brennan CJ pointed out in Levy v Victoria,69 the person seeking to intervene must show that there may be aspects of the case that may not be presented by the parties before they will be allowed to intervene.70 The combination of substantial (or more than an indirect) effect on the would-be intervener’s legal interests and their ability to present additional information or arguments acts as an effective filter, limiting the use of interveners to rare cases.71 Public law litigation appears to be where intervention happens most commonly, for example, the Australian States often utilise their statutory right to intervene in constitutional matters.72 Intervention did not exist at common law or equity until recently73 and its jurisdictional basis is not entirely clear, although there is no doubt that it exists. Some jurisdictions have rules that provide for intervention, but they generally do not define their rights and obligations.74 The right to intervene may be limited to certain aspects of the case but interveners generally have the same rights as the parties. However, interveners do not have a right to raise issues not raised by the parties. Amicus curiae, as the name suggests, are persons who act as a friend of the court, assisting by providing information or argument that would not otherwise be presented. Their legal interests are less or not directly affected and, reflecting this, they have fewer rights than an intervener. The distinction between interveners and amicus curiae was demonstrated in Levy v Victoria,75 in which a challenge was made to Victorian legislation prohibiting certain conduct by people opposed to duck hunting. The legislation was said to be an infringement of the implied freedom of political communication contained in the Commonwealth of Australia Constitution and the High Court decided to use the opportunity presented by this case to reconsider the earlier cases that had established the implied freedom. Media proprietors sought to intervene on the grounds that their control over publishing content and their exposure to defamation suits would be affected. The journalists’ association, the Media, Entertainment and Arts Alliance, also sought to intervene. The High Court granted the media proprietors the right to intervene on the condition they met any party-party costs incurred by the parties as a result of the intervention. The Media, Entertainment and Arts Alliance was refused leave to intervene but were allowed to file written submissions as amicus curiae.

69 70 71

72 73 74 75

Levy v Victoria (1997) 189 CLR 579. Levy v Victoria (1997) 189 CLR 579 at 603 per Brennan CJ. Kirby J dissented, arguing for a more generous approach to intervention and amicus curiae more in line with the approach taken in the United States and Canada (Levy v Victoria (1997) 189 CLR 579 at 650-652). Judiciary Act 1903 (Cth) s 78A. Wilson v Manna Hill Mining Co Ltd [2004] FCA 1663 at [92] per Lander J. See, eg, Federal Court Rules 2011 (Cth) r 9.12; Supreme Court Civil Rules 2006 (SA) r 89. Levy v Victoria (1997) 189 CLR 579. [2.140] 43

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There would seem to be little need to maintain a distinction between interveners and amicus curiae. The court, in granting leave to participate, can allow the intervention on any conditions it believes necessary. As the need for intervention must turn on the facts of the case there seems little point in creating a general procedural regime for intervention. If a person’s rights are so affected that the scope of intervention is large it would seem more appropriate for the person to be joined as a party and have its procedural rights and obligations determined on that basis.76

Multiple parties and causes of action Joinder [2.150] Efficiency suggests that, when it comes to designing procedural rules for parties, a proceeding should include all those involved in the dispute and all aspects of the dispute. This avoids the cost of having separate proceedings brought over different aspects of the dispute, with those involved having to participate in more than one case. It also avoids the risk of different courts coming to different conclusions about the same dispute. The command to avoid “all multiplicity of proceedings” and the requirement that all parties necessary for the complete resolution of the dispute be parties to the proceedings exists in all jurisdictions. The Western Australian Supreme Court Act 1935 (WA), for example, provides: The Court, in the exercise of the jurisdiction vested in it by this Act, in every cause or matter pending before it, shall have power to grant, and shall grant, either absolutely or on such reasonable terms and conditions as shall seem just, all such remedies whatsoever as any of the parties thereto may appear to be entitled to in respect of any and every legal or equitable claim properly brought forward by them in such cause or matter; so that, as far as possible, all matters so in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matters avoided.77

Court rules in each jurisdiction enable the bringing of separate causes of action within a proceeding or the joinder of more than one plaintiff or defendant within the proceeding.78 Questions of joinder can arise before and after the commencement of cases. The joinder rules generally enable a plaintiff, when commencing a case, to join any parties it believes are involved in the litigation without needing prior permission from the court if they fall with the criteria for joinder. After the case has

76 77

78

As happened in East Districts Azzurri Sports Club Inc v South Australian Soccer Federation Inc (1988) 142 LSJS 121. Supreme Court Act 1935 (WA) s 24(7). See also Supreme Court Act 1933 (ACT) s 32; Federal Court of Australia Act 1976 (Cth) s 22; Supreme Court Act 1970 (NSW) s 63; Supreme Court Act (NT) s 19; Supreme Court Act 1935 (SA) s 27; Supreme Court Civil Procedure Act 1932 (Tas) s 10(7). Court Procedures Rules 2006 (ACT) r 211; Federal Court Rules 2011 (Cth) r 9.02; Uniform Civil Procedure Rules 2005 (NSW) r 6.19; Supreme Court Rules (NT) r 9.02; Uniform Civil Procedure Rules 1999 (Qld) r 65; Supreme Court Civil Rules 2006 (SA) r 73; Supreme Court Rules (Tas) rr 176, 179; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 9.02; Rules of the Supreme Court 1971 (WA) O 18, r 4.

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commenced, parties will need leave from the court to join (or more accurately, add) parties to the case or the court can, of its own motion, add parties to the case in specified circumstances.

Joinder of parties [2.160] The approach toward the joinder of parties is relatively similar across jurisdictions. In all jurisdictions, joinder of parties depends on a test that involves a link between parties and the litigation giving rise to “common questions of law and fact” and the “same transaction or series of transactions”. The biggest difference is that most jurisdictions require both these criteria to be satisfied; whereas in the Australian Capital Territory, Queensland and South Australia they are alternatives. South Australia has, in its 2006 rewrite of the Supreme Court Civil Rules, departed from well understood terminology and replaced the phrase “same transaction or series of transactions” with “a cause of action arising from the same or similar facts”.79 As the courts have power to disjoin when joinder is inappropriate, the broader test requiring either common question of law or fact or arising out of the same transaction or series of transactions in South Australia, Queensland and the Australian Capital Territory is preferable to the stricter test in the other States. The broader approach is consistent with the statutory command to avoid a “multiplicity of legal proceedings”.80 The term “transaction” has been given wide meaning to include conduct and an accident.81 In addition to the criteria for joinder described above, all jurisdictions provide a general power to the court to allow joinder after the case has commenced.82 While the court seeks to do what is necessary to achieve a just result, the need to contain costs and prevent delay is a powerful consideration in determining whether parties should be added. Parties are not to be joined if joinder would cause unfairness to any party, or if there are practical difficulties that would follow any joinder.83 The cases turn on their particular circumstances, and the court is required to assess whether those aspects that are not common to the parties will add such complexity or inefficiency to the conduct of the litigation that separate proceedings are required.84 There are circumstances where the court rules require (as opposed to allow) joinder of other parties. The most common circumstance arises when different persons are either jointly entitled to the same relief, or jointly liable. If all parties

79 80 81

82

83 84

Supreme Court Civil Rules 2006 (SA) r 73(1)(a). See Richardson v Trautwein (1942) 65 CLR 585. Birtles v Commonwealth [1960] VR 247 (the failure of a solicitor to commence proceedings before the statutory limitation period was a transaction); Bendir v Anson [1936] 3 All ER 326 (the construction of a building that obstructed the sunlight to other buildings was a transaction); Williamson v Nilant [2003] WASC 21. Court Procedures Rules 2006 (ACT) r 220; Federal Court Rules (Cth) r 9.05; Uniform Civil Procedure Rules 2005 (NSW) r 6.24; Supreme Court Rules (NT) r 9.06; Uniform Civil Procedure Rules 1999 (Qld) r 69; Supreme Court Civil Rules 2006 (SA) r 74; Supreme Court Rules 2000 (Tas) r 184; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 9.06; Rules of the Supreme Court 1971 (WA) O 18, r 4. Bishop v Bridges (1990) 25 FCR 311 at 314. See, eg, Commonwealth Bank of Australia v Peto (No 2) (2006) 152 FCR 352. [2.160] 45

Principles of Civil Litigation

are not joined, the court will either add those jointly entitled to relief as plaintiffs or make them defendants if they do not consent to being plaintiffs.

Joinder of causes of action [2.170] We have been discussing joinder of parties but, as noted at the beginning of this section, multiple causes of action can be joined in the one proceeding.85 The court rules generally do not provide a “test” for such joinder. The South Australian Supreme Court Civil Rules 2006 (SA), for example, simply provide in r 30(4): “An action may include claims based on more than one cause of action.” The risk of proceedings being extended or made inefficient is constrained by the same power of disjoinder that exists for parties inappropriately joined.

Counterclaims and set-offs [2.180] Counterclaims and set-offs by a defendant are a form of joinder.86 The counterclaim is a separate claim by the defendant against the plaintiff. A counterclaim might arise out of the existing dispute between the parties but may also be an entirely new dispute. The rules in all jurisdictions provide for counterclaims by a defendant.87 If the counterclaim is not significantly related to the original claim, or would unfairly add to cost and delay, the court can order that it proceed as a separate claim. An order requiring each claim to proceed separately becomes more likely if the counterclaim is brought against the initial plaintiff (who becomes a defendant for the purposes of the counterclaim) and other defendants or third parties. These new parties may have little or nothing to do with the initial claim and, while only in the Northern Territory, Queensland, Victoria and Western Australia do the court rules require some common element with the initial action, in practice, without such common element the counterclaim is likely to be disjoined in all jurisdictions.88 As an independent action, the counterclaim remains alive even if the plaintiff discontinues the initial claim. Counterclaims are common and often are a major tactical response to a claim. Counterclaiming has the effect of distracting the plaintiff and requiring them to react to the defendant, and provides the defendant with a possible advantage in negotiations. A less common form of joinder by defendants is to raise a set-off. A set-off is a defence in which the defendant accepts the plaintiff’s initial claim but alleges the plaintiff is indebted to the defendant. Set-off could either arise under contract, statute or equity. Under early English statutes that were incorporated into 85

86 87

88

See, eg, Federal Court Rules 2011 (Cth) r 9.01; Uniform Civil Procedure Rules 2005 (NSW) rr 6.18, 6.22; Supreme Court Rules (NT) rr 9.01, 9.04; Supreme Court Civil Rules 2006 (SA) r 30; Rules of the Supreme Court 1971 (WA) O 18. In the Federal Court and NSW, counter-claims are called “cross-claims”. In South Australia they are “cross-actions”. Court Procedures Rules 2006 (ACT) Div 2.6.7; Federal Court Rules 2011 (Cth) Div 15.1; Uniform Civil Procedure Rules 2005 (NSW) Pt 9; Supreme Court Rules (NT) O 10; Uniform Civil Procedure Rules 1999 (Qld) rr 175 – 185; Supreme Court Civil Rules 2006 (SA) r 35; Supreme Court Rules 2000 (Tas) rr 169 – 188; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 10; Rules of the Supreme Court 1971 (WA) O 18, rr 2 – 3. See, eg, Asia Pacific International Pty Ltd as Trustee for Pacific Property Resources Group v Peel Valley Mushrooms Ltd (Unreported, Supreme Court of Queensland, MacKenzie J, 13 November 1998).

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Australian law, set-off was limited to enable the set off of one debt against another only where there is an element of mutuality. The debts need not arise from the same transaction but were between the same parties. By contrast, set-off in equity allows a defendant to claim that it would be unjust to allow the plaintiff to recover due to other liabilities owed by the plaintiff to the defendant, including a claim for unliquidated damages. The test was traditionally expressed as requiring the claims to be so closely connected that one claim impeaches the other.89 There is some complexity about what may be set off against a plaintiff’s claim but, procedurally, the set-off is pleaded in the defence and the rules in most jurisdictions allow a defendant to obtain judgment for the balance of any sum by which the set-off exceeds the plaintiff’s claim.90

Third party and contribution notices [2.190] So far our consideration has focused on claims between the main participants in a dispute. However, often a defendant may seek to argue that any default on its part was due to the conduct of other persons, or that its liabilities were to be met by other persons, or that the subject matter of the proceeding was connected with its claims against another person. The key distinction, procedurally, lies in whether the person against whom the defendant is claiming is already a party to the proceeding. If such a person is not already a party, they can be brought into the proceeding by the third party procedure provided in the rules. Called “cross-claims” in the Federal Court and New South Wales, other jurisdictions describe these actions as third party claims or actions.91 The defendant issues a third party notice to the third party, notifying the third party that the defendant is claiming from the third party whatever relief may be ordered against the defendant by a successful plaintiff in the initial action. This claim may be for contribution for a tort where the defendant argues the damage suffered was the result, in total or in part, of another person’s tortious conduct. Alternatively, the defendant may claim that the third party was contractually bound to indemnify the defendant, as appeared to be the case in Port Melbourne Authority v Anshun.92 The third party becomes the defendant, and the original defendant is regarded as being equivalent to a plaintiff in the third party proceeding. The court can, if appropriate, allow the third party to contest the original plaintiff’s claim but, as a matter of principle, the third party’s role is to defend the claim made by the original defendant against it. If the third party claim lacks sufficient nexus with the subject matter of the original claim, or the differences are such that it would

89 90 91

92

See New South Wales Law Reform Commission, Set Off (NSWLRC Report No 4, 2000); R Derham, “Set Off in Victoria” (1999) 73 Australian Law Journal 754. See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 184; Supreme Court Civil Rules 2006 (SA) r 224; Supreme Court Rules 2000 (Tas) r 200; Rules of the Supreme Court 1971 (WA) O 18, r 2(4). Court Procedures Rules 2006 (ACT) Pt 2.5; Federal Court Rules 2011 (Cth) Div 15.01; Civil Procedure Act 2005 (NSW) s 22; and Uniform Civil Procedure Rules 2005 (NSW) Pt 9; Supreme Court Rules (NT) O 11; Uniform Civil Procedure Rules 1999 (Qld) rr 191 – 207; Supreme Court Civil Rules 2006 (SA) r 35; Supreme Court Rules 2000 (Tas) rr 201 – 212; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 11.01; Rules of the Supreme Court 1971 (WA) O 19, r 1. (1981) 147 CLR 589. [2.190] 47

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extend or complicate the initial proceeding unfairly, the court can order a separate trial of the third party proceedings. If the plaintiff fails against the defendant in the original action, the third party action becomes irrelevant even if the reason for the initial action failing is that the third party is solely liable. If there is a likelihood that this situation might arise, the plaintiff should consider joining the third party as a defendant to the initial action. Where an original defendant claims that another original defendant has contributed to the first defendant’s liability to the original plaintiff or has indemnified the first defendant, the rules provide for the issue of a contribution notice.93 A contribution notice operates in the same way as a third party notice. Our discussion has suggested a level of uniformity of approach across Australia. This may be true of the way in which third party actions are implemented but the language of the relevant rules themselves varies considerably.

Other considerations affecting joinder [2.200] Litigators are often faced with difficult decisions in actions that are, or could be, multi-party. We have noted the statutory command to avoid multiplicity of actions, but the courts have developed an additional incentive to ensure that all appropriate parties and causes of action are contained within the one proceeding — the Anshun estoppel. However, costs rules do suggest a cautious approach to joinder. There are significant costs implications for those parties who unnecessarily or inappropriately join parties.

Anshun estoppel [2.210] Anshun estoppel enables a defendant to seek a stay of an action on the grounds that it is so closely connected to an already litigated claim that it should have been litigated in the earlier proceeding. In Port of Melbourne Authority v Anshun Pty Ltd94 the Authority was seeking to recover damages from Anshun under an indemnity entered into when Anshun hired one of the Authority’s cranes. A worker had successfully sued the Authority and Anshun after being injured while the hired crane was in use, with the Authority being found liable for 90% of the damages. The High Court found there was no reason to prevent the indemnity claim being brought in the first proceeding. It held the second action was “so closely connected with the subject matter of that action that it was to be expected that it would be relied upon as a defence to that claim and as a basis for recovery”95 — thus it should not be allowed to proceed. The High Court was concerned that the second action would add to costs. It was also concerned that the action would lead to a separate judgment on the amount the parties were

93

94 95

Court Procedures Rules 2006 (ACT) Pt 2.5; Federal Court Rules 2011 (Cth) Div 15.01; Uniform Civil Procedure Rules 2005 (NSW) Pt 9; Supreme Court Rules (NT) r 11.15; Uniform Civil Procedure Rules 1999 (Qld) rr 206, 208; Supreme Court Civil Rules 2006 (SA) r 35; Rules of the Supreme Court 1971 (WA) O 19, r 8. (1981) 147 CLR 589. Port Melbourne Authority v Anshun (1981) 147 CLR 589 at 604 per Gibbs CJ, Mason & Aickin JJ.

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required to pay each other, a judgment that might be inconsistent with the first action.96

Costs implications [2.220] The cost shifting rule that applies to most Australian litigation requires the losing party in litigation to pay the reasonable legal costs of the successful party. This rule can lead to complex and sometimes unfair outcomes in multi-party claims. The principle that the “losing party pays the successful party’s costs” becomes difficult when a party has joined more than one defendant in an action but only succeeds against one defendant. Should the unsuccessful defendant be required to pay the costs of the successful defendant as well as the successful plaintiff? Usually the successful defendant will seek costs from the plaintiff. However, in some circumstances the court will make a “Bullock order”, an order that allows a successful plaintiff to include the costs of the successful defendant in its claim for costs from the unsuccessful defendant. It is clear that a plaintiff should not be allowed to include the costs of the successful defendant where the plaintiff had unreasonably sued the successful defendant. However, even where the plaintiff had reasonably joined the successful defendant it does not mean that the unsuccessful defendant should pay the successful defendant’s costs. Justice Brennan in Gould v Vaggelas97 noted: A judicial discretion can be exercised to make a Bullock order against an unsuccessful defendant in an action brought against two or more defendants for substantially the same damages only if the conduct of the unsuccessful defendant in relation to the plaintiffs’ claim against him showed that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought.98

In Gould v Vaggelas, the High Court agreed with the trial judge who granted a Bullock order to the Goulds, who had joined their accountants as defendants to a counterclaim they had brought against the plaintiff. The counterclaim succeeded against the plaintiff but not against the accountants. The Bullock order was justified here because the plaintiff, in defending the counterclaim, had argued that the Goulds had relied on their accountants and not the plaintiff, and it was this assertion that had led to the Goulds joining the accountants to the counterclaim. Underlying the Bullock order is an attempt to create a fair outcome with respect to costs. Unfortunately, even with a Bullock order this may not be achieved, especially when the unsuccessful defendant lacks financial resources to meet such costs orders. In this situation the court is faced with trying to determine who should carry the loss — the successful plaintiff or the successful defendant. If a Bullock order is made, the plaintiff will be required to pay the costs of the successful defendant but, due to the unsuccessful defendant’s financial difficulties, it will not be able to execute the costs orders against the unsuccessful defendant. In these situations recourse may be had to a “Sanderson order”. This is an order

96

97 98

For recent examples where Anshun estoppel was argued, see Kanakaridis v Westpac Banking Corp [2015] FCA 1146; Reimer v Health Care Complaints Commission [2013] NSWCA 366; Lee v ANZ Banking Group Ltd [2013] QCA 236; Sahin v National Australia Bank Ltd [2012] VSCA 317. (1983) 157 CLR 215. (1983) 157 CLR 215 at 260 per Brennan J. [2.220] 49

Principles of Civil Litigation

that requires the unsuccessful defendant to pay the successful defendant’s costs separately from payment of the successful plaintiff’s costs — it removes the liability to pay the successful defendant’s costs from the plaintiff. In this situation, the loss will most likely be shared — neither the successful defendant nor the successful plaintiff is likely to recover all or any of their costs. The criteria for a Sanderson order is the same as for a Bullock order. It involves considerations of whether it was reasonable for the plaintiff to have sued the successful defendant and “whether the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant”.99 The original cases after which the orders are named show, in fact, no difference in the orders made. In Sanderson v Blyth Theatre Co100 the English Court of Appeal upheld the order made by the trial judge that the plaintiff pay the successful defendant’s costs and recover them from the unsuccessful defendant. The court said that such an order was in accord with old Chancery practice, but that it should only be exercised in exceptional cases. However, in obiter dictum the Court referred to what was then said to be the “new” practice of ordering an unsuccessful defendant to pay the successful defendant’s costs directly. Bullock v London General Omnibus Co101 involved the same form of order — London General Omnibus Ltd was ordered to pay Bullock’s costs, which included the costs of the successful second defendant that Bullock had been ordered to pay. Therefore it can be strongly argued that the current nomenclature is both confusing and somewhat inaccurate. There is no real need to use the old English case names to describe these orders and there would be no great disadvantage if lawyers and courts were to stop doing so.

Consolidation and joint trials [2.230] As noted at the beginning of this chapter an issue related to joinder in multi-party and multi-cause of action litigation is consolidation. This is a question that does not strictly arise at the commencement of proceedings but it could be considered by litigators when deciding whether joinder is appropriate. Consolidation arises when two or more separate cases with common issues have been commenced in court. As with joinder, the court is keen to minimise a multiplicity of cases and can, in effect, order the merger of the cases so they proceed as one case. Where a party has different legal representatives in each of the cases or there are multiple parties, consolidation becomes more difficult but it is not a bar to consolidation. Clearly, it is preferable to have only one set of lawyers representing each side of the case.102 Where consolidation is ordered, the proceedings are merged and from then on court documents reflect the consolidated action.

99 100 101 102

Gould v Vaggelas (1983) 157 CLR 215 at 230 per Gibbs CJ; Great Lakes Shire Council v Dederer (No ) [2006] NSWCA 336. [1903] 2 KB 533. [1907] 1 KB 264. See Hinchcliffe v Carroll [1969] VR 164 Carroll was allowed to have two lawyers represent him — one in his capacity as defendant in part of the case, and as plaintiff in the other part. More recently, the New South Wales Court of Appeal has held that double representation is to be discouraged (Van Eeden v Henry (2005) 62 NSWLR 301).

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Most Australian jurisdictions provide consolidation and joint trials as alternatives.103 With an order for joint trials, the proceedings proceed separately through the pre-trial stage but are ordered to be heard at the same time, with the evidence of one being taken as evidence in the other proceeding. The criteria for granting consolidation vary. Many jurisdictions, for example, have retained the approach of setting out criteria that reflect the criteria for joinder of parties. To this is added the general catch-all that consolidation may occur if it is desirable to do so. Queensland simply provides that the cases involve the “same or substantially the same question” or that “the decision in one proceeding will decide or affect the other” proceeding(s).104 Western Australia has a simpler requirement, viz “whenever it appears desirable”.105 South Australia provides no criteria at all.106 In practice, the decisions reflect a practical evaluation of the degree of commonality of issues and evidence, costs and delay.107 Zuckerman suggests that in England there is really no difference between consolidation of proceedings and trying different actions together, and that rule makers “should consider removing the reference to this arcane process”.108

Representative proceedings [2.240] Representative proceedings refer to situations where a party takes proceedings not only on its own behalf but on the behalf of others. There are no limits to the numbers of parties to an action, but clearly the greater the number the more difficult the litigation is to manage, and the less efficient to run. Where parties had a common interest the court would allow one party to represent the others.109 However, early in the 20th century English courts circumscribed the ambit of this by requiring the common interest to amount to virtually the same interest. In Markt & Co Ltd v Knight Steamship Co Ltd110 the English Court of Appeal refused to allow an action by different cargo owners, whose cargo was lost when the ship carrying it was sunk, to proceed as a representative action. Each cargo owner had a separate contract with the shipping company and the cargo was going to different ports, requiring different assessments of damage. 103

See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 28.5: If several proceedings are pending in the court and it appears to the court: (a) that they involve a common question, or (b) that the rights to relief claimed in them are in respect of, or arise out of, the same transaction or series of transactions, or

104 105 106 107 108 109 110

(c) that for some other reason it is desirable to make an order under this rule, the court may order those proceedings to be consolidated, or to be tried at the same time or one immediately after another, or may order any of them to be stayed until after the determination of any other of them. Uniform Civil Procedure Rules 1999 (Qld) r 78(b). Rules of the Supreme Court 1971 (WA) O 83, r 1. Supreme Court Civil Rules 2006 (SA) r 31. See Fox v Olsen [1999] SASC 411; Bainbridge v Lawton [2003] WASC 199; Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2007] FCA 943. A Zuckerman, Civil Procedure (Sweet & Maxwell, 2003) p 445. Duke of Bedford v Ellis [1901] AC 1. [1910] 2 KB 1021. [2.240] 51

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This decision stifled the use of representative proceedings in Australia and England for most of the last century. As a result, pressure arose in Australia for a new procedure to enable representative proceedings in a wider range of situations. This was also prompted by awareness of the different approach to representative proceedings in the United States. Following a report by the Australian Law Reform Commission, the Federal Court of Australia Act 1976 (Cth) was amended in 1992 to introduce a procedure that was akin to the United States class action procedure.111 Part IVA of the Federal Court of Australia Act 1976 (Cth) provides a detailed code for the conduct of class actions. Section 33C112 enables a class action to be taken by seven or more persons who have a claim against the same person if the claims arise out of similar or related circumstances and give rise to a substantial common issue of law or fact. There is no need to have a common interest. There is no need to name all the parties, although they must comprise a discernible class. The Federal Court procedure is an opt-out procedure, so that any member of the class that does not want to be bound by the judgment must take steps to be removed from the class action. Although the class action provisions mean that parties may find themselves bound without knowing the action existed, and parties may have only tenuous links with the lawyers conducting the litigation on their behalf, any settlement of a claim requires the approval of the Court, ameliorating these potentially adverse consequences. These provisions have been used by disgruntled shareholders, users of prosthetics and other medical devices, purchasers of unsafe products, tobacco consumers and those affected by particular government decisions with varying degrees of success.113 To date, the Federal Court class actions have often involved significant interlocutory challenges to the right to bring the action in the first place, or to otherwise ensure that pleadings properly set out the basis of the claim.114 Only three State jurisdictions have introduced class action provisions of this type. The Victorian Supreme Court amended its Supreme Court Act 1986 (Vic) in 1999, reproducing the provisions of Pt IVA of the Federal Court of Australia Act 1976 (Cth) in Pt 4A.115 New South Wales followed suit in 2011.116 South Australia, by contrast, has adopted a minimalist position, simply providing in r 81 that the Court may “authorise a plaintiff to bring an action as representative of a group 111

112 113 114

115 116

One major difference between the Federal Court procedure and class action procedures internationally is that there is no prior certification process for representative actions in the Federal Court; applicants do not need permission to bring the proceeding but the Court has extensive powers to order that it not continue as a representative proceeding. See Federal Court of Australia Act 1976 (Cth) ss 33L – 33N. Federal Court of Australia Act 1976 (Cth) s 33C. See S Clark & C Harris, “Class Actions in Australia: (Still) a Work in Progress” (2008) 31 Australian Bar Review 63. See Wong v Silkfield Pty Ltd (1999) 199 CLR 255; Bright v Femcare Ltd (2002) 195 ALR 574; Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487. Also P Cashman, “Consumers and Class Actions” (2001) 5 University of Western Sydney Law Review 9; B Lipp, “Mass Tort Class Actions under the Federal Court of Australia Act: Justice for All or Justice Denied?” (2002) 28 Monash University Law Review 361; V Morabito, “Class Actions in the Federal Court of Australia: The Story So Far” (2004) 10 Canterbury Law Review 229. Supreme Court Act 1986 (Vic) Pt 4A; Victoria had introduced a class action procedure in 1986 but it was an opt-in procedure. Civil Procedure Act 2005 (NSW) Pt 10.

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with a common interest in questions of law or fact to which the action relates”.117 The rule does not provide detail as to how the matter is to proceed, instead leaving it to the court to fashion appropriate procedures. The Rules do not even prescribe an opt-in or opt-out requirement. To overcome any restrictive interpretation, r 81 provides that authority to proceed as a representative action is not to be refused on the grounds that damages might require individual assessments or that the matter arose out of separate contracts or transactions. In practice, class actions in South Australia have tended to proceed in the Federal Court rather than the Supreme Court.118 [2.250] Part of the explanation why class action provisions have not been enacted more widely in Australia also lies in developments in the approach to the traditional representative action procedure found in all jurisdictions. We noted how Markt & Co Ltd v Knight Steamship Co Ltd119 greatly reduced the utility of the traditional representative action procedure which led to moves for new class action procedures in the late 1980s. In 1995 the High Court revisited the traditional representative procedure in Carnie v Esanda Finance Corp Ltd120 and gave it a broader interpretation. In that case the plaintiffs were alleging that the defendant, a finance corporation, had assessed the debtors’ liabilities under a certain form of standard loan arrangements in a manner inconsistent with the Credit Act 1984 (NSW). The plaintiffs were suing on their own behalf and on behalf of all other persons who had entered into the same sort of loan agreement with the defendant, using the then r 13 of the New South Wales Supreme Court Rules 1970.121 Rule 13 then allowed for representative actions where numerous persons had the “same interest”. The High Court interpreted the “same interest” broadly and held that the represented plaintiffs had the same interest in ascertaining whether their liabilities to the defendant had been correctly calculated. In other words there was: [A] significant question common to all members of the class and they stand to be equally affected by the declaratory relief which the [plaintiffs] seek.122

The fact that the amounts each plaintiff owed would be different and owed under different contracts was no barrier to the matter being brought as a representative action. However, as the High Court pointed out, under r 13 the Supreme Court could order that the matter not proceed as a representative action and that would depend on the circumstances in each case and turn on an analysis of how diverse or otherwise were the different interests among the parties. The end result is that, in all jurisdictions, the old form of representative procedure derived from Chancery practice exists,123 enlivened by Carnie v Esanda Finance, and in four jurisdictions — the Federal Court, New South Wales, South

117 118 119 120 121 122 123

Supreme Court Civil Rules 2006 (SA) r 81. For a rare example of a class action in the South Australian Supreme Court see Proude v Visic [2012] SASC 233. Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021. Carnie v Esanda Finance Corp Ltd (1995) 182 CLR 398. Supreme Court Rules 1970 (NSW) r 13. Carnie v Esanda Finance Corp Ltd (1995) 182 CLR 398 at 421 per Toohey & Gaudron JJ. Court Procedures Rules 2006 (ACT) r 266; Federal Court Rules 2011 (Cth) Div 9.2; Civil Procedure Act 2005 (NSW) Pt 10; Supreme Court Rules (NT) r 18.02; Uniform Civil Procedure Rules 1999 [2.250] 53

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Australia and Victoria — two forms of “class action” procedure exist. The role of class actions remains controversial. Class actions provide access to justice for plaintiffs who would otherwise be unable to bring proceedings, either because the amounts involved for each individual were too small or because the cost of litigation was too high. However, some commentators have argued that the courts have taken too restrictive an approach to representative actions when deciding whether they should continue as representative actions and have not intervened sufficiently to protect the interests of the represented plaintiffs.124 Furthermore, the complexities of the representative proceedings lead to considerable costs and plaintiffs’ lawyers have complained that the risks are too high for most firms to engage in representative proceedings.125 Increasingly, class actions are being funded by litigation funders. These commercial funders are, unlike lawyers, able to enter into contingency fee arrangements with their clients whereby they are paid a proportion of the damages recovered.126 Like civil litigation generally, most representative actions (if they continue) are settled. This requires the court to approve the settlement and controversy has arisen around the fees received by the plaintiffs’ lawyers. These can be considerable and the court has to ensure that the interests of the claimants and their lawyers are properly reconciled.127 While the represented plaintiffs are not liable for any costs, they have little control over the litigation (indeed they may not even know the litigation exists) which lies in the hands of the lawyers and the representative party. If, as may be the case, the litigation has been fostered by the lawyers and the representative plaintiff chosen by the lawyers, then the differing interests require the court to evaluate closely the lawyers’ conduct.

124

125

126 127

(Qld) r 75; Supreme Court Civil Rules 2006 (SA) r 80; Supreme Court Rules 2000 (Tas) rr 335 – 336; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 18; Rules of the Supreme Court 1971 (WA) O 18, r 12. B Lipp, “Mass Tort Class Actions under the Federal Court of Australia Act: Justice for All or Justice Denied?” (2002) 28 Monash University Law Review 361; V Morabito, “Judicial Supervision of Individual Settlements with Class Members in Australia, Canada, and United States” (2003) 38 Texas International Law Journal 663; V Morabito, “Federal Court of Australia's Power to Terminate Properly Instituted Class Actions” (2004) 42 Osgoode Hall Law Journal 473; B Murphy & C Cameron, “Access to Justice and the Evolution of Class Action in Australia” (2006) 30 Melbourne University Law Review 399. Senior partner Maurice Stack “said class actions were financially risky, expensive to run and a gamble for most plaintiff firms” (“Lower Fees Threaten Class Actions”, The Australian, 27 October 2006, p 27). See Chapter 12. It was alleged that the plaintiff's senior lawyer in the Dalkon Shield litigation received a bonus from his firm of $1 million — 3,100 claimants received varying amounts up to $120,000 as part of a $32 million settlement (“Law Firm's Brawl over $1m Bonus”, The Australian, 15 September 2006, p 3). The legal costs incurred by the plaintiffs' firm in the vitamin price-fixing class action settled for $30.5 million was $13.2 million (“Firm that Walked Away from $2.7m”, The Australian, 3 November 2006, p 1).

54 [2.250]

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[3.120] [3.130] [3.150]

[3.210]

Preliminary issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 [3.20] Limitation periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 [3.40] Protecting positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 [3.50] Interim injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 [3.60] Search and seizure orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 [3.70] Asset preservation orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 [3.80] Pre-litigation disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 [3.85] Promoting settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 [3.100] Ethics and commencing litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Originating process and appearances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Originating process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 [3.160] Personal service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 [3.170] Proof of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 [3.180] Service on particular parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 [3.190] Substituted service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 [3.200] Ordinary service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Appearance or notice of address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

[3.10] In Chapter 2 we considered the issues surrounding determining the court in which a case ought to be brought and identifying all the proper and necessary parties to the case. In this chapter, we turn to some of the other procedural issues that a litigator may need to consider early in the litigation process. We begin with the question of limitation periods, that is, how long after a cause of action arises can a case be commenced. We then discuss various procedural tools that enable a party to protect its position prior to any final resolution of the case. In many, if not most, cases this issue will not arise. However, there may be cases in which it is alleged the proposed defendant is continuing to engage in unlawful or wrongful conduct, causing ongoing irreparable damage or injury to the plaintiff. In such situations the plaintiff may be able to apply to the court for orders directing the defendant to refrain from such conduct until the case is completed. Similarly, orders may be obtained if there are concerns that the subject matter of the dispute may be disposed of or destroyed before the litigation is finalised. Search and seizure orders may be applied for if there is a real risk that evidence may be destroyed or disposed of by a defendant. Asset preservation orders can also be sought from a court to prevent a defendant from disposing of or dealing with their general assets (that is, assets that are not the subject matter of the dispute) if there are reasonable grounds to suspect the defendant would not be able to meet any judgment awarded against them. [3.10] 55

Principles of Civil Litigation

A third set of preliminary issues involves questions of the collection and provision of information relevant to the case. All Australian civil courts now possess powers that enable a potential plaintiff to search and secure evidence in a case where there is a risk that evidence would be destroyed or otherwise disposed of. Court rules also enable potential plaintiffs to seek pre-action discovery to identify potential defendants and to assist in determining whether a cause of action exists. A further development has been the introduction of pre-action requirements intended to encourage settlement of cases. These range from certifying that genuine steps to settle have taken place before commencing proceedings, to requiring potential parties to exchange information prior to commencing certain types of cases. Introduced to encourage early settlement of disputes and thus avoid having them enter the civil justice system at all, parties are required to provide essential information about the case and, if damages are sought, the amount the party is seeking or willing to pay. The final preliminary issue considered is whether the proposed litigation would breach any ethical or professional responsibility standards. Commencing litigation can cause major collateral damage for those involved. Plaintiffs choose whether they want to be involved in litigation, defendants have no such choice. As a result, courts are keen to minimise the opportunities to use litigation to harass or oppress defendants or where the litigation is not brought for good reasons to resolve genuine disputes. Both court rules and professional conduct rules for lawyers place some responsibility on litigators in this regard. In the ordinary course of litigation, having considered all of the above issues, a party is ready to commence litigation. This chapter then turns to examine the mechanism for commencing proceedings and the very important issue of service. The principle of a fair process requires a party to have notice of the case against it, and within civil procedure, the rules relating to service of documents exist to achieve this. The chapter concludes with a brief examination of the first procedural requirement made of defendants — an indication as to whether the defendant intends to contest the case. In most jurisdictions the defendant is required to indicate whether it intends to dispute the claim by filing a notice of appearance. If no appearance is filed, the plaintiff is able to obtain judgment (known as a default judgment) against the defendant.

PRELIMINARY ISSUES Limitation periods [3.20] Before a party can commence litigation, a litigator must consider whether the time for bringing such proceedings has expired. Limitation statutes exist in each of the States and Territories.1 The Commonwealth Parliament has also enacted limitation periods, but these are incorporated into particular legislation as 1

Limitation Act 1985 (ACT); Limitation Act 1969 (NSW); Limitation Act (NT); Limitation of Actions Act 1974 (Qld); Limitation of Actions Act 1936 (SA); Limitation Act 1974 (Tas); Limitation of Actions Act 1958 (Vic); Limitation Act 2005 (WA).

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needed, for example, s 82(2) of the Competition and Consumer Act 2010 (Cth) provides a six year limitation period for certain claims arising under the Australian Consumer Law. Limitation statutes were passed in order to limit the risk of increasing inaccuracy of outcome that accompanies the passage of time and to provide finality to disputes. In most jurisdictions, the limitation period for general tort and contractual claims is six years.2 The position for personal injury actions is more complicated. As part of the response to the tort litigation “crisis”3 parliaments across Australia have attempted to standardise the limitation period at three years.4 Since 2006, following national agreement, the limitation period for defamation actions has been 12 months in all States and Territories.5 The limitation periods for other sorts of claims can vary greatly across Australia. Actions to recover land, for example, are not caught by limitation periods in the Australian Capital Territory and Northern Territory, have 12 year limitation periods in New South Wales, Queensland, Tasmania and Western Australia, and 15 year limitation periods in South Australia and Victoria. The limitation period for equitable claims is left largely uncovered by the legislation. The limitation periods for some specific equitable claims are prescribed in Limitation Acts — for example, Limitation Acts provide that actions by a beneficiary against a trustee for breach of trust have a limitation period of six years.6 Other equitable doctrines exist that help discourage delay in bringing claims. The most important of these is the equitable doctrine of “laches”, which enables a court to decline granting a remedy where, due to the plaintiff’s delay in bringing an action, the defendant’s, or third parties, position(s) had been detrimentally affected.7 Generally, the limitation period runs from the date the cause of action accrued. In contractual matters this is generally from the date that the breach occurred, whereas for tort, time runs from when the damage occurred.8 However, special rules do exist for some claims. For personal injuries, the trigger for the limitation period varies between jurisdictions — generally it is the date of injury. In Western Australia, it is when the plaintiff becomes aware he or she has experienced a significant injury or when the symptoms of significant personal injury first become apparent.9 In South Australia, if it is a disease or condition that does not become apparent for a lengthy period, time does not run until “the injury first comes to the person’s knowledge”.10 As part of the tort “crisis” law reforms a

2 3 4 5 6 7 8 9 10

The Northern Territory has a three-year limitation period (Limitation Act (NT) s 12(1)). See [1.80]. See P Handford, “Limitations of Action and Tort Reform” (2002) 8 University of New South Wales Law Journal 41, for background to the subsequent amendments to limitation periods. See, eg, M Ashford, “Legislation Note: Defamation Act 2005” (2006) 13 Murdoch University Electronic Journal of Law 14. Except for the Northern Territory where it is three years (Limitation Act (NT) s 33). See Orr v Ford (1989) 167 CLR 316. Hawkins v Clayton (1988) 164 CLR 539; Di Sante v Camando Nominees Pty Ltd [2000] VSC 211; Winnote Pty Ltd v Page [2006] NSWCA 287; Morris v Trodden [2015] NSWSC 705. Limitation Act 2005 (WA) s 55. Limitation of Actions Act 1936 (SA) s 36(1a). [3.20] 57

Principles of Civil Litigation

number of jurisdictions have adopted as the trigger for the limitation period the time that the plaintiff knew or ought to have known the injury had occurred (the date of discoverability).11 The latter approach includes a long-stop provision which requires a person to commence proceedings within 12 years of the acts that led to the damage occurring. Section 5A of the Tasmanian Limitation Act 1974 (Tas) provides an example of the new model: An action for damages for negligence, nuisance or breach of duty (whether that duty exists by virtue of a contract or a provision made by or under an enactment or independently of any contract or any such provision), where the damages claimed by the plaintiff for the negligence, nuisance or breach of duty consist of, or include, damages in respect of personal injuries to any person, must not be brought after the expiration of whichever of the following periods of limitation is the earlier: (a)

3 years commencing on the date of discoverability;

(b)

12 years commencing on the date of the act or omission which it is alleged resulted in the personal injury or death that is the subject of the action.12

The new approach addresses the problem of delay in ascertaining the plaintiff has suffered an injury, where that injury would have been apparent to a reasonable person at an earlier point in time. How much a difference this will make is not clear. With diseases that have a gradual onset, it is difficult to judge at what time the person should have sought medical advice and thus discovered the damage. The time for bringing claims can be extended beyond the limitation period. Two separate situations may lead to this. First, the Limitation Acts in all jurisdictions provide that if a person is suffering a legal disability, then the limitation period is extended beyond the period of disability. There are considerable differences in the provisions between jurisdictions and the Limitation Acts for each jurisdiction must be studied closely.13 However, in general terms, all jurisdictions provide some relief from the limitation period for those under certain forms of legal disability. Thus, a minor or a person with mental incapacity that prevents them from managing legal proceedings may find, depending on which jurisdiction they are in, that the limitation period does not run until they turn 18 or until they become capable of managing their affairs. [3.30] The second means by which a limitation period can be extended is by applying to the court for an extension of time in which to bring the action pursuant to the relevant Limitation Act. Each Act provides the court with the power to extend the limitation period in certain circumstances. The tort “crisis” law reforms have led to considerable differences between jurisdictions as to when extensions of time will be allowed — especially for personal injury cases. In two of those jurisdictions that have adopted the “long stop” (a period of 12 years from when the conduct took place that caused the injury) — New South Wales and Tasmania — it may be possible to extend the long stop period by three years but not the “short stop” period (three years from when the plaintiff discovered or 11 12 13

Limitation Act 1969 (NSW) s 50D; Limitation Act 1974 (Tas) s 5A; Limitation of Action Act 1958 (Vic) s 27F. Limitation Act 1974 (Tas) s 5A(3). Limitation Act 1985 (ACT); Limitation Act 1969 (NSW); Limitation Act (NT); Limitation of Actions Act 1974 (Qld); Limitation of Actions Act 1936 (SA); Limitation Act 1974 (Tas); Limitation of Actions Act 1958 (Vic); Limitation Act 2005 (WA).

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ought to have discovered the injury).14 In Victoria either the short stop or the long stop can be extended if it is “just and reasonable” to do so.15 The Northern Territory and South Australia provide a general power to extend the limitation period on such terms as the courts thinks just. However, to enliven the general power of the court, the plaintiff must either ascertain a new material fact and apply for an extension of time within 12 months of ascertaining the new material fact, or establish that their failure to commence proceedings was due to the conduct of the prospective defendant. Since 2004, the South Australian provisions have been tightened to define what sorts of material facts would support an application for extension of time.16 Queensland uses a similar concept of material facts but requires them to be of a decisive nature.17 With the enactment of the Limitation Act 2005 (WA) extensions of time in Western Australia for personal injuries are available if the plaintiff had not been aware of the physical cause of the injury; or, if they knew of the cause, did not know it was attributable to another person; or had now established the identity of the wrongdoer.18

Protecting positions [3.40] In some disputes time is of critical importance and there is need for urgent action. The subject matter of a dispute may be about to be sold, disposed of, or even destroyed. A plaintiff may become aware that a damaging story, which they believe is defamatory, is about to be published and wish to make an urgent application to a court to restrain publication. Sometimes a participant in a dispute may have good reason to believe that important evidence would be destroyed if the opposing person knew legal proceedings were about to be commenced. Over the last 30 years civil procedure has devised increasingly comprehensive procedures to enable parties to apply for urgent applications before or with the commencement of the main proceeding. These applications may be made without notice to the other side, contrary to one of the fundamental principles of civil procedure. Many of these procedures were developed as part of the court’s inherent jurisdiction but have since been codified in court rules. Three of the most well known of the orders sought are the traditional “interim injunction” and the two more recent orders: the “search and seizure of evidence order” (commonly known as the Anton Piller order); and the “asset preservation order” (commonly called the Mareva order). These procedures are also available after a case commences and are explored in detail in Chapter 7. In this chapter, these procedures are briefly outlined to emphasise their importance when considering litigation or preparing to commence a case. In reality, most cases do not require use of these procedural tools but, when necessary, their use can be critical and can greatly influence the outcome of the case.

14 15 16 17 18

Limitation Act 1969 (NSW) s 62A; Limitation Act 1974 (Tas) s 5A. Limitation of Actions Act 1958 (Vic) s 27K(2)(b). Limitation of Actions Act 1936 (SA) s 48(3a). Limitation of Actions Act 1974 (Qld) ss 30 – 31. Limitation Act 2005 (WA) s 39(3). [3.40] 59

Principles of Civil Litigation

Interim injunction [3.50] An interim injunction is an order restraining a person from engaging in certain conduct, or requiring them to engage in certain conduct. The order is usually made at the commencement of the case (or even, in rare situations, before the case has formally commenced). For example, a plaintiff who is worried that the subject matter of their dispute might be disposed of, or that the defendant’s wrongdoing is ongoing and causing irreparable harm, may apply for an interim injunction ex parte (without the defendant being notified). The court, when granting an interim injunction, will normally order that a further hearing be held (usually in a matter of days), at which time the defendant will attend and be able to argue that the injunction should be lifted. The court may decide, after hearing all the parties, to order that the injunction continue until the matter is resolved. Injunctions ordered after the case has commenced, and that continue until the case is finalised, are commonly known as interlocutory injunctions.19 The criteria for an interim injunction is the same as that for interlocutory injunctions and involves the balancing of the need to protect the plaintiff’s interest with the invasive effect of the injunction on the defendant’s rights, at a time when the court is not usually in a good position to weigh up the merits of the case.

Search and seizure orders [3.60] A search and seizure order requires a person (usually a defendant) to allow the plaintiff to enter premises to search and seize evidentiary material. Often called an Anton Piller order after the first appellate case to uphold its use,20 the invasive nature of the order is such that it is only made in exceptional cases. Those rare cases where search and seizure orders have been made have tended to be intellectual property disputes,21 but they have also been used for breach of trust and breach of confidence cases.22 The interference with the defendant’s rights is substantial. In addition to requiring the defendant to allow specified persons on their property to search and seize specified material or evidence, the defendant may be required to keep confidential the fact that such an order has been executed. Protections for the defendant include the appointment of an independent solicitor to supervise the search, who will take custody of any material that is seized. Once the search team arrives — but before the search commences — the defendant is also usually given the opportunity to seek legal advice. Most jurisdictions have now incorporated search and seizure orders into their court rules and introduced practice directions which set out the criteria for

19 20 21

22

English civil procedure uses the term “interim injunction” to cover all pre-trial injunctions. Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55. S Mitchell, “Fermiscan Lawyers Raid Scientist’s Home”, Australian Financial Review, 18 September 2006, p 16; S Hayes, “Piracy Raids Hit Net Music Provider”, The Weekend Australian, 7 February 2004, p 5. See, eg, Rickard v Swenrick Building & Construction Pty Ltd [2006] VSC 382; Austress Freyssinet Pty Ltd v Joseph [2006] NSWSC 77; Metso Minerals (Aust) Ltd v Kalra [2007] FCA 2093.

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obtaining the order and how they are to be implemented.23 Amongst other things, the party seeking the order needs to establish to a high degree of satisfaction that their case will succeed and that there is real risk the defendant will destroy or dispose of the evidence sought.24 These provisions are now uniform across Australia following the recent “harmonisation” process.

Asset preservation orders [3.70] Asset preservation orders, also known as freezing or Mareva orders, are the second of the invasive orders that may need to be considered before commencing proceedings. Derived from the court’s inherent jurisdiction and named after the leading English case that upheld such orders,25 they have been incorporated into court rules.26 A plaintiff might consider applying for a Mareva order if the prospective defendant is disposing of assets, thereby creating a significant risk that any judgment against the defendant might not be met. Unlike protective orders, freezing orders are not related to property that is the subject of the dispute, but rather to the assets of the prospective defendant. The freezing order has the effect of preventing the defendant from transferring or disposing of their assets until the case has been resolved. Freezing orders can even be made against third parties in some situations, for example, against a defendant’s bank, or where the third party is in possession or control of the defendant’s property.27

Pre-litigation disclosure [3.80] The third set of preliminary issues relates to the collection and provision of information relevant to the case. In some disputes a plaintiff may not have sufficient information to identify the defendant, or even whether a potential cause of action exists. The power to compel another person to provide you with all relevant documents is at the heart of much modern civil litigation, and while disclosure of documents usually takes place well after proceedings have been commenced, the court rules in most Australian jurisdictions do allow for a prospective plaintiff to seek disclosure of documents and information from a prospective defendant (or third party) before commencing the action.28 This disclosure is to enable the plaintiff to correctly identify the defendant or in some

23

24 25 26

27 28

Court Procedures Rules 2006 (ACT) rr 751 – 753; Federal Court Rules 2011 (Cth) Pt 7, Div 7.5; Uniform Civil Procedure Rules 2005 (NSW) Pt 25, Div 3; Supreme Court Rules (NT) O 37B; Uniform Civil Procedure Rules 1999 (Qld) rr 261 – 261F; Supreme Court Civil Rules 2006 (SA) r 148; Supreme Court Rules 2000 (Tas) rr 937J – 937O; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 37B; Rules of the Supreme Court 1971 (WA) O 52B. See [7.140]. Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd’s Rep 509. Court Procedures Rules 2006 (ACT) r 741; Federal Court Rules 2011 (Cth) Pt 7, Div 7.4; Uniform Civil Procedure Rules 2005 (NSW) Pt 25, Div 2; Supreme Court Rules (NT) O 37A; Uniform Civil Procedure Rules 1999 (Qld) Ch 8, Pt 2, Div 2; Supreme Court Civil Rules 2006 (SA) r 247; Supreme Court Rules 2000 (Tas) r 937B; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 37A; Rules of the Supreme Court 1971 (WA) O 52A. Cardile v LED Builders Pty Ltd (1999) 198 CLR 380. Court Procedures Rules 2006 (ACT) rr 650 – 651; Federal Court Rules 2011 (Cth) Div 7.3; Uniform Civil Procedure Rules 2005 (NSW) Pt 5; Supreme Court Rules (NT) O 32; Supreme Court Civil [3.80] 61

Principles of Civil Litigation

cases assess the strength of the potential claim. If the order is made, the potential defendant is required to provide the potential plaintiff with access to relevant documents or information. In Queensland court rules allow a potential plaintiff to issue interrogatories to assist in identifying appropriate parties.29 This is discussed further in Chapter 8 along with the scope for equitable discovery in these circumstances. Again, because this could lead to cost and inconvenience to potential defendants, especially if it turns out that there is no basis to the claim, the criteria for obtaining orders for pre-litigation disclosure require the applicant to have made reasonable inquiries to ascertain the information and there must be some basis for believing the proposed respondent has relevant information.30

Promoting settlement [3.85] While the procedures described above may also assist with promoting the settlement of a dispute, new procedures have been introduced specifically intended to promote settlement, that complement the much older informal requirement of a letter of demand. A letter of demand provides informal notice of the claim and often includes an indication of the amount sought by the potential plaintiff. One of the functions a letter of demand serves is to provide an opportunity for exploring settlement prior to the commencement of proceedings.31 Letters of demand are not used in situations of urgency or where there is a need to make an ex parte application for some form of protective order, for example, an asset preservation order. If the plaintiff neglects to write a letter of demand in circumstances where it should have been written, costs penalties may be imposed.32 The letter of demand may have been superseded in some jurisdictions by a more recent procedural tool — the requirement to exchange information, including formulated claims, prior to commencing proceedings. The best known international examples of the requirement to exchange information are the pre-action protocols introduced as part of Lord Woolf’s reforms of UK procedure in 1999. Pre-action protocols are a set of prescribed letters parties are required to exchange which require the parties to disclose significant information about their case. Pre-action protocols were regarded by Lord Woolf as one of the most significant of the changes he was recommending.33

29 30 31

32 33

Rules 2006 (SA) r 32; Supreme Court Rules 2000 (Tas) rr 403A – 403H; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 32; Rules of the Supreme Court 1971 (WA) O 26A. Uniform Civil Procedure Rules 1999 (Qld) r 229. See St George Bank v Rabo Bank (2004) 211 ALR 147; Steffen v ANZ Bank [2009] NSWSC 666; Coffey Information Pty Ltd v Cullen [2015] FCA 28. “In fact, it is a widespread and salutary practice in all forms of civil litigation for a prospective plaintiff to write a letter of demand, for the very reason that a prospective defendant can take advice and, if there is no defence, save the substantial costs that would be involved even for a brief undefended application like the present one” (Melbourne University Publishing Pty Ltd v Williamson [2005] FCA 1910 [4] per Heerey J). Melbourne University Publishing Pty Ltd v Williamson [2005] FCA 1910; Sydney City Council v Chapman [2007] NSWLEC 146. Lord Woolf, Access to Justice — Final Report (Lord Chancellor’s Department, 1996) Ch 9, para 3.

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[3.90] Two different approaches have been taken in Australia toward pre-action disclosure. South Australia has incorporated pre-action requirements in its rules. Rule 33 provides that, 90 days before commencing proceedings, the plaintiff must: • make the prospective defendant and its insurer, if one has been identified, an offer to settle; • provide sufficient supporting material to enable the defendant to assess the reasonableness of the offer; and • hand over any relevant expert reports. The defendant, or insurer, must reply within 60 days to accept the offer, make a counter-offer, or state the grounds why liability is denied.34 The other approach in jurisdictions where there is prescribed pre-action disclosure has been to incorporate pre-action requirements into legislation dealing with particular types of claims. The Queensland Personal Injuries Proceedings Act 2002 (Qld), and amendments to other legislation, provide for new pre-action procedures for personal injuries. These provisions require a plaintiff to provide prospective defendants with extensive details about their injuries within: • nine months of the incident; or • nine months of the symptoms manifesting; or • one month of consulting a lawyer, whichever is the earlier.35 Similar provisions exist in separate legislation for injury claims arising from motor vehicle or work-related accidents with minor differences.36 In addition to providing notice of their claim and information about their injuries, the plaintiff is required to grant the prospective defendant authority to obtain information about the claim and the plaintiff from a wide variety of sources. The parties are required to attend a compulsory conference, which may be a mediation, to attempt to resolve the matter. If the matter is not settled, parties must file final offers.37 An alternative strategy for promoting settlement has been to require the parties to attempt to settle the dispute before commencing proceedings. Applicants in the Federal Court or Federal Circuit Court have, since 2011, been required to certify when commencing proceedings that they have made “a sincere and genuine attempt to resolve the dispute”.38 The procedures for exchanging information prior to commencing cases have had a significant impact on civil litigation. Cairns suggests that the effect of the Queensland pre-action procedures has been that “[m]ost personal injury litigation has disappeared.”39 Increasingly, personal injury cases are being settled before 34 35 36 37 38

39

Supreme Court Civil Rules 2006 (SA) r 33. Personal Injuries Proceedings Act 2002 (Qld) s 9. Motor Accident Insurance Act 1994 (Qld) s 37; Workers’ Compensation and Rehabilitation Act 2003 (Qld) s 275. Personal Injuries Proceedings Act 2002 (Qld) ss 36 – 42. Civil Dispute Resolution Act 2011 (Cth) ss 4 – 7. See H Orr Hobbs, “The Dispute Resolution Act 2011 (Cth) and the Meaning of ‘Genuine Steps’: Formalising the Common Law Requirements of ‘Good Faith’” (2012) 23 Australasian Dispute Resolution Journal 249. B Cairns, “A Review of Some Innovations in Queensland Civil Procedure” (2005) 26 Australian Bar Review 158 at 184. [3.90] 63

Principles of Civil Litigation

cases are commenced.40 Cannon reported in 2000 that the introduction of pre-action disclosure in South Australia had a dramatic effect on litigation. The number of personal injury claims commenced fell by 75%, which was not accompanied by any significant fall in accident rates. The sole insurer for personal injuries arising from motor vehicle accidents indicated that its medico-legal costs fell from $44 million to $26 million in the three years following the introduction of the pre-action procedure in 1992.41 Cannon suggests that the introduction of quasi-mandatory pre-action disclosure was also accompanied by a change in culture on the part of insurers, who aggressively attempted to settle claims, and that the changes in litigation may have resulted more from the culture change than simply the rule changes.42

Ethics and commencing litigation [3.100] By commencing litigation, a party is seeking to use the coercive power of the state to obtain the remedy or relief it seeks. Despite the increasing number of self-represented litigants, lawyers play an important role as gatekeepers to the civil justice system. In the higher courts it is difficult to conduct litigation without a lawyer and, as noted earlier, some litigants (for example, corporations) must be represented by a lawyer.43 This role means that litigators have special responsibilities to ensure that litigation is not commenced for improper purposes. Over the last 30 years there have been some concerns that ethical considerations were being neglected by lawyers. Complicating the picture is the fact that the ethical rules relating to commencement of litigation have not been entirely clear. There has also been a more general concern arising from perceptions that the legal profession has become more business oriented during this period, losing some of its “professional” traditions in the process. This transition has led to concerns that lawyers’ public duties were being downplayed in favour of advancing clients’ interests.44 To counter these concerns increased importance has been given to the lawyer’s duty to the court and their role as an officer of the court — the lawyer as zealous litigator whose primary obligation lies in advancing the cause of their clients has given way to greater emphasis on the lawyer’s duty to the court.45 40 41 42

43 44

45

For general information regarding tort reforms and personal injury claim rates, see E Wright, “National Trends in Personal Injury Litigation: Before and After Ipp” (2006) 33(7) Brief 6-12. A Cannon, Some Desirable Features of Lower Court Systems to Verify and Enforce Civil Obligations (PhD thesis, University of Wollongong, 2000) pp 204-205. A Cannon, Some Desirable Features of Lower Court Systems to Verify and Enforce Civil Obligations (PhD thesis, University of Wollongong, 2000) pp 204-205. See also D Bamford, “Litigation Reform 1980-2000: A Radical Challenge?” in W Prest & S Roach Anleu (eds), Litigation: Past and Present (UNSW Press, 2004) p 146. See [2.120]. D Dawson, “The Legal Service Market” (1995) 5 Journal of Judicial Administration 147; G Nettle, “Ethics, the Adversarial System and Business Practice” (2004) 10 Deakin Law Review 67. B Walker “Test of Loyalty — Procedural Reform and Advocates’ Ethics” (1998) 72 Reform 11; Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000) [3.84]-[3.96]; Australian Solicitors’ Conduct Rules 2015 (SA) r 3.1.

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Some of the litigation ills that were thought to beset the civil justice system were sheeted home to excessive adversarialism on the part of lawyers, who were thought to have lost sight of their duties to the court and, more broadly, the justice system. The publicity surrounding some of the litigation that took place in the late 1990s and early 2000s focused attention on the appropriate role of lawyers in litigation. The cases of Flower & Hart v White Industries (Qld) Pty Ltd46 and McCabe v British American Tobacco Pty Ltd,47 as well as the James Hardie Industries corporate restructuring and its impact on Australian asbestosis claims,48 led to considerable media discussion and reflection by commentators on the role of lawyers in litigation. Flower & Hart v White Industries illustrates the tensions civil litigators face when considering whether to commence proceedings. Flower & Hart were a firm of solicitors who acted for the developer of a Queensland shopping centre. When the shopping centre’s builder, White Industries, asked for payment, the developer sought legal advice from Flower & Hart. The developer was motivated by a desire to reduce the amount it would be required to pay the builder. The developer was advised that, though its case was weak (it appeared to have approved all the building work for which it was contractually bound to pay), nevertheless it should commence proceedings to gain a tactical advantage.49 Flower & Hart then issued proceedings on behalf of the developer, alleging a variety of causes of actions including fraud. As the case progressed the developer declined to follow its solicitor’s advice to settle. At the end of a 154 day trial (in which various delaying tactics were considered),50 the court found that there was no basis for the developer’s action and indeed no evidence to support some of the allegations made when the proceedings commenced. Unfortunately, the developer was insolvent by the time judgment was delivered. The builder then successfully sought costs orders against Flower & Hart. The basis for ordering the developer’s lawyers to pay was that the bringing of the proceedings amounted to an abuse of process. Among the findings of the court were that: 1.

Solicitors are unable to simply rely on advice of counsel as defence when their conduct is challenged, as they must make an independent judgment as to the merits of the case and whether proceedings should be instituted;

2.

An abuse of process can arise if proceedings are brought on an arguable cause of action but for an improper purpose; and

46 47 48

(1999) 163 ALR 744. [2002] VSC 73. E Dunn, “James Hardie: No Soul to be Damned, No Body to be Kicked” (2005) 27 Sydney Law Review 339. The solicitors’ letter of advice suggested commencing proceedings so as to gain a “temporary bargaining stance”. Ian Callinan (later Justice of the High Court), senior counsel for the developer, advised that, as the developer: “is anxious to make the matter difficult generally as it can for Whites … I reiterate that the most promising way of achieving this is by having ready as soon as possible, an extremely comprehensive set of Interrogatories” (Flower & Hart v White Industries (Qld) Pty Ltd (1999) 163 ALR 744). The 700 page set of interrogatories was never used.

49 50

[3.100] 65

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3.

Where delay is the purpose for commencing and maintaining the litigation, the proceedings will be an abuse of process.51

[3.110] The corollary to commencing proceedings for an improper purpose is proceedings that are brought when the lawyer believes they have no prospect of success. The propriety of this has remained uncertain. The traditional view was that it is not unprofessional for a lawyer to commence litigation in a hopeless case, provided the client has been so advised and has instructed the lawyer to commence proceedings. Australian appellate courts have differed in recent decisions about whether a lawyer can bring a hopeless case. The trial judge in White Industries (Qld) Pty Ltd v Flower v Hart52 indicated that commencing proceedings that had no prospect of success would not amount to improper conduct, without more. The same view was taken by the English Court of Appeal in Ridehalgh v Horsfeld.53 Some judges in the New South Wales and Queensland Courts of Appeal have taken the alternative view. In Steindl Nominees P/L v Laghaifar,54 Davies JA held: I would prefer to say that it is one thing to present a case which is barely arguable (but arguable nevertheless) but most likely to fail; it is quite another to present a case which is plainly unarguable and ought to be so to the lawyer who presents it. In my opinion, with respect, it is improper for counsel to present, even on instructions, a case which he or she regards as bound to fail because, if he or she so regards it, he or she must also regard it as unarguable.55

The alternative and, we suggest, preferable view authorises the lawyer to commence proceedings only if they have a reasonable belief that the proceedings have prospects of success or that the action is a bona fide attempt to develop new legal principles. This approach was incorporated in the United States Federal Civil Procedure Rules in the 1980s and now appears in Australian professional conduct rules and legislation. In Victoria, the Civil Procedure Act 2010 provides that no claim or defence should be made without having a proper basis on the factual and legal material available and the party’s lawyer must so certify when filing the party’s first substantive document in the proceeding.56 So far we have been considering the “public” aspect of a lawyer’s ethical obligations — the duty to the court and their role in the justice system. In addition to these obligations, there are ethical matters that arise from the lawyer’s duty to their client. Of particular importance in the context of commencing cases is the duty to ensure that the client has been clearly and competently advised as to the risks of litigation and likelihood of the possible outcomes. While the initial retainer letters must now contain certain information, including costs, good practice would ensure that clients are provided with updated assessments of all risks, including costs, at the time litigation is commenced. Professional conduct rules require lawyers to inform their clients of alternative ways of resolving the 51 52 53 54 55 56

Flower & Hart v White Industries (Qld) Pty Ltd (1999) 163 ALR 744. (1999) 163 ALR 744. [1994] Ch 205. [2003] 2 Qd R 683. [2003] 2 Qd R 683. Civil Procedure Act 2010 (Vic) ss 18, 42.

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dispute other than judicial resolution, unless the lawyer “believes on reasonable grounds that the client already has such an understanding of those alternatives as to permit the client to make decisions about the client’s best interests in relation to the matter”.57 The model Legal Profession Acts that are being enacted across Australia require lawyers to advise their clients of any substantial changes in their case.58 Hence, lawyers must update the client on events or circumstances affecting assessments of the merits of the case or risks in the litigation.

ORIGINATING PROCESS AND APPEARANCES [3.120] In the last part of this chapter we examine the formal requirements for commencing litigation — the documents filed at court that commence the case; the “originating process”. We have considered the more difficult questions relating to where and who we are suing and what steps, if any, need to be taken before the proceedings are commenced. Underlying the procedural rules governing originating process is the principle that each party should have reasonable opportunity to present their case. Implicit in this principle is the right to know the case against oneself, which in itself requires notice of the case. The procedural rules governing the originating process serve this principle — filing and serving originating process is the mechanism by which a defendant is informed of the fact that an action has been commenced against them and usually the nature of the case against them. Thus, there are two aspects to procedural rules governing originating process, which we will consider in turn: • the documents used to begin proceedings and the information they must contain; and • the method by which the documents are to be brought to the attention of the defendant (the service rules). Defendants do not issue originating process unless perhaps they are bringing some form of counterclaim or third party claim. The first step for defendants once litigation is commenced is usually the filing of an “appearance” or “notice of address”. This chapter concludes with an outline of the procedural requirements.

ORIGINATING PROCESS [3.130] The trends across the history of procedure are paralleled in the history of originating process. Historically, there were many different forms of originating process which depended on the nature of the case or the court. The trend over the last century has been to reduce and simplify the forms of originating process. Amongst the forms still used today, to differing degrees in different jurisdictions, are the writ (of summons), the summons, the application, the motion, and the petition. Accompanying the movement toward simplification, there has been a blurring of some of the old distinctions between cases involving factual disputes requiring the ordinary trial process and those cases where there were either no factual disputes or indeed, in some cases, no contesting parties. Colbran et al refer 57 58

Australian Solicitors’ Conduct Rules 2015 (SA) r 7.2. See, eg, Legal Profession Uniform Law (NSW) r 174. [3.130] 67

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to the historical distinction between “causes” and “matters”. A matter, in the strict sense, was a case involving only one party and was limited to legal issues and not involving disputes over facts. An action, historically, was a cause commenced by writ of summons with two or more parties involving factual disputes. In the past, the form of originating process used depended in part on whether the dispute was a matter or an action.59 This distinction between a matter and an action is important to understanding why the courts have adopted the different forms of originating process. A factual dispute with opposing parties — an action — requires a process for identifying the facts in dispute and a judge or jury to hear witnesses at trial to gain the necessary evidence of those facts. To achieve this, the initiating document needed to provide sufficient details outlining the factual basis to the plaintiff’s claim, to which the defendant could then reply. On the other hand, if the case was a matter, it did not involve factual disputes and there was no need for a trial with oral evidence as to facts. Instead, what was needed was a mechanism for commencing the case, providing the information in appropriate evidentiary form, and getting a judge to hear the legal argument and render judgment. Thus, the originating process simply set out the legal issue and was accompanied by affidavits that provided the facts in suitable evidentiary form. An action was traditionally begun by writ, whereas matters were begun by a variety of originating processes. The underlying distinction between an action and a matter remains operative in most Australian jurisdictions, that is, the Australian Capital Territory, New South Wales, the Northern Territory, Queensland, Tasmania, Victoria and Western Australia.60 In Victoria and the Northern Territory, for example, the originating process for actions (a writ) is the proper originating process, unless there is only one party or the rules otherwise specify, in which case, an “originating motion” is to be used. Queensland uses a “claim” as the originating process for most cases but what would have been historically regarded as matters are commenced by way of “application”. In New South Wales cases involving disputed facts are commenced by way of a “statement of claim”, whereas other cases involving matters have a “summons” as their originating process. [3.140] Other jurisdictions have moved away from the distinction with the result that there is generally only one form of originating process. In South Australia, for example, almost all cases are actions and are commenced by a “summons”.61 The Federal Court uses an “application” for commencement of proceedings.62 In addition, legislation that gives rise to substantive rights or obligations sometimes prescribes the form of originating process. The Electoral Acts in each

59 60

61 62

S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015) pp 310-313. Court Procedures Rules 2006 (ACT) rr 31 – 35; Uniform Civil Procedure Rules 2005 (NSW) rr 6.2 – 6.4; Supreme Court Rules (NT) O 4; Uniform Civil Procedure Rules 1999 (Qld) rr 8 – 11; Supreme Court Rules 2000 (Tas) r 88; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 4; Rules of the Supreme Court 1971 (WA) O 4, r 1. Supreme Court Civil Rules 2006 (SA) r 34. Federal Court Rules 2011 (Cth) r 8.01.

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jurisdiction, for example, generally require election disputes to be commenced by way of petition. Originating process, in whatever form, informs the defendant of the fact that the case has been commenced and outlines the nature of the case. It also tells the defendant that unless the defendant responds, by filing the appropriate document within the prescribed time, then the plaintiff may proceed to obtain judgment without further notice or having the court hear it. As we have noted, if the case involves a factual dispute, the originating process is usually accompanied by a statement of claim. The time in which originating process may be served is prescribed by the rules.63 These periods vary significantly and in most jurisdictions may be renewed on application. Six to 12 months from date of issue is not uncommon. The Federal Court requires the originating application to be served five days before the date of the first directions hearing.64 The rules generally confer a wide discretion on the court to renew the originating process on the plaintiff’s application. In Savcor Pty Ltd v Cathodic Protection International ASP65 the Victorian Court of Appeal set out the approach to be taken to such applications: (i)

It is the duty of the plaintiff to serve the writ promptly.

(ii)

There must be a good reason for the grant of an extension and if the application is made after the period has expired the reason must be one of substance.

(iii)

It is not possible and indeed is unwise to attempt to define the circumstances which amount to a good reason. It is trite observation but not very helpful that whether or not it is a good reason must depend upon all the circumstances of the particular case. As a general proposition difficulties serving the writ within the 12 months’ period will usually establish a good reason. By way of example where the defendant is evading service, his whereabouts are unknown or some other difficulty is experienced in serving the defendant.66

In the interests of case flow management, in South Australia the matter will be entered into an inactive cases list if no further action is taken at the court following issue of originating process, and the action may be struck out for want of prosecution after a further period.67 In the Australian Capital Territory the matter is struck out if no action has been taken by the time for service has expired.68

63

64 65 66 67 68

Court Procedures Rules 2006 (ACT) r 74; Supreme Court Rules (NT) r 5.12; Uniform Civil Procedure Rules 1999 (Qld) r 24; Supreme Court Civil Rules 2006 (SA) r 39, Supreme Court Rules 2000 (Tas) r 107; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 5.12; Rules of the Supreme Court 1971 (WA) O 7, r 1. Federal Court Rules 2011 (Cth) r 8.06. [2005] VSCA 213. [2005] VSCA 213 at [41] per Gillard AJA, Ormiston & Buchanan JJA agreeing. Supreme Court Civil Rules 2006 (SA) r 123. Court Procedures Rules 2006 (ACT) r 75. [3.140] 69

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Service of originating process after time for service has expired is not a complete nullity.69 If the defendant enters an appearance or otherwise takes steps in the proceedings it constitutes a waiver of the irregularity occasioned by service of the stale originating process.70

SERVICE [3.150] The rules relating to service play an important role in civil procedure. They reflect what courts consider to be adequate methods of communication to satisfy the imperative of ensuring parties have effective notice of the proceeding and the case they have to answer. The rules relating to service apply to all documents, not just originating process. Generally, the rules distinguish between types of service and will prescribe which type of service is required, depending on the nature of the documents being served. For documents carrying greater consequences for the opposing party, such as originating process, personal service is usually required. For documents of lesser importance, what is described as “ordinary service” is sufficient.

Personal service [3.160] Personal service is prescribed by the rules and, while variations do occur between jurisdictions, the underlying approach remains the same.71 The common law had significantly more onerous requirements for service than what is now required under the rules. In most jurisdictions, personal service now requires merely the giving or the leaving of the document with the recipient. Unlike the older common law requirements, neither the nature of the documents nor their contents needs to be identified if the person accepts the documents. In Ainsworth v Redd72 the process server held out the originating process saying “these documents are for you”. The documents were taken by the recipient’s attorney, who was accompanying the recipient and who thought the originating process was some other document. This was still held to be good service. In Australian and New Zealand Banking Group Ltd v Rostkier,73 the act of throwing the documents at the feet of the defendant from outside a garage as its automatic roller-door descended was also held to be good service. If the originating process cannot be left with the defendant, or if the defendant does not accept the document, then service may be effected by leaving it in the vicinity of the defendant and indicating the nature of the document.74 69 70 71

72 73 74

Van Leer Australia Pty Ltd v Palace Shopping KK (1981) 180 CLR 337; Howard v Power [2013] VSC 198. Simpson v Brereton [1964] VR 332; Jadwan Pty Ltd v Porter (2004) 13 Tas R 162. Court Procedures Rules 2006 (ACT) r 6405; Federal Court Rules 2011 (Cth) Pt 10, Div 10.1; Uniform Civil Procedure Rules 2005 (NSW) Pt 10, Div 3; Supreme Court Rules (NT) r 6.03; Uniform Civil Procedure Rules 1999 (Qld) r 106; Supreme Court Civil Rules 2006 (SA) r 67; Supreme Court Rules 2000 (Tas) r 132; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 6.03; Rules of the Supreme Court 1971 (WA) O 72, rr 2 – 3A. (1990) 19 NSWLR 78. (Unreported, Supreme Court of Victoria, Batt J, 2 June 1994). See Primelife Corporation Ltd v Andrejic [2003] VSC 106.

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There are alternative forms of personal service. In all jurisdictions, service may be effected by obtaining the recipient’s solicitor’s written undertaking to accept service.75 This undertaking will usually be endorsed on the served document and a copy given to the person serving the document. It is prudent for any lawyer accepting service on behalf of a client to have written authority to accept service. If the client refuses to enter an appearance, the undertaking is enforceable. While the question of whether a lawyer can withdraw the undertaking before service remains uncertain, it is clear that, once served, the undertaking can only be withdrawn with leave of the court.76 Other methods of service may be upheld. Where the parties have agreed to alternative forms of service, service in compliance with the agreement may constitute valid service. Even where the method of service has not been agreed to, the service may be regarded as valid despite not being in accordance with the rules for service. In most jurisdictions, if it can be shown that the document has come to the attention of the intended recipient (or, in Queensland, their possession), it may constitute valid service.77 Where the recipient has engaged in the litigation, then that should amount to a waiver of any irregularity in service in the same manner as it does with service of a stale process, as it demonstrates knowledge of the litigation.

Proof of service [3.170] For a defendant, the consequences of not responding to originating process are serious. As a safeguard for defendants, the courts insist that proper proof of service be provided to the court, before allowing further steps (for example, signing judgment) to be taken by the plaintiff. Proof of service is demonstrated by the plaintiff filing an affidavit from the person who served the document, outlining how service was effected.

Service on particular parties [3.180] Complications can arise when serving persons with legal incapacity or non-natural persons. Some incorporated bodies set up by statute will have provisions relating to service in that statute. Companies can be served under the Corporations Act 2001 (Cth) or under the court rules. Section 109X of the Corporations Act 2001 (Cth) provides that service by leaving or posting a document to the company’s registered office amounts to good service. The court rules are

75

76 77

Court Procedures Rules 2006 (ACT) r 6464; Federal Court Rules 2011 (Cth) r 10.22; Uniform Civil Procedure Rules 2005 (NSW) rr 10.6, 10.13; Supreme Court Rules (NT) r 6.08; Uniform Civil Procedure Rules 1999 (Qld) r 115; Supreme Court Civil Rules 2006 (SA) r 67(1)(c); Supreme Court Rules 2000 (Tas) r 134; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 6.09; Rules of the Supreme Court 1971 (WA) O 9, r 1(2). Lee v Johnson Taylor [1990] WAR 381. Court Procedures Rules 2006 (ACT) r 6461; Federal Court Rules 2011 (Cth) r 10.23; Uniform Civil Procedure Rules 2005 (NSW) r 10.14; Supreme Court Rules (NT) r 6.10; Uniform Civil Procedure Rules 1999 (Qld) r 117; Supreme Court Civil Rules 2006 (SA) r 67(2)(b); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 6.11. [3.180] 71

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less liberal; they typically require personal service, usually on some person of authority in the company.78 For natural persons suffering a legal disability, service is generally on the person with responsibility for them, and if no such person exists, on a person with whom they reside.79

Substituted service [3.190] In situations where the defendant cannot be located or personal service is otherwise impractical, in all jurisdictions the court may allow a substitute form of service.80 The court rules differ in some respects across jurisdictions. All jurisdictions, except Tasmania and South Australia, require the service to be impractical to found such an application — Tasmania allows substituted service if “a party is unable to effect prompt service”; South Australia has no such criterion in its rules but the court is likely to require impracticability or something similar. The form of substituted service will depend upon the circumstances of the case. It might be by authorising service on another person who, it is believed, may be able to contact the intended recipient.81 Alternatively, substituted service may take the form of authorising service by public advertisement circulating in the area the defendant is believed to reside or was last known to reside.82

Ordinary service [3.200] The alternative to personal service is “ordinary service”. The rules governing ordinary service are prescribed by the court rules and, in general terms, ordinary service is required for most documents used after the proceedings have

78

See, eg, Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 6.04(a), which allows for personal service: (i) on the mayor, chairman, president or other head officer of the corporation; or

79

(ii) on the town clerk, clerk, treasurer, manager, secretary or other similar officer of the corporation. See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 108: (1) A document required to be served personally on a young person must be served instead on the person who is the young person’s litigation guardian for the proceeding to which the document relates. (2) If the young person does not have a litigation guardian for the proceeding the document must be served instead on — (a) the young person’s parent or guardian; or

(b) if there is no parent or guardian — an adult who has the care of the young 80

81

82

person or with whom the young person lives. Court Procedures Rules 2006 (ACT) r 6460; Federal Court Rules 2011 (Cth) r 10.24; Uniform Civil Procedure Rules 2005 (NSW) r 10.14; Supreme Court Rules (NT) r 6.09; Uniform Civil Procedure Rules 1999 (Qld) r 116; Supreme Court Civil Rules 2006 (SA) r 69; Supreme Court Rules 2000 (Tas) r 141; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 6.10; Rules of the Supreme Court 1971 (WA) O 72, r 4. See Clearwater Shipping Corp Inc v Cao [2003] VSC 216, where substituted service consisted of posting process to the defendant’s last known office and home address, to his brother, his landlord and his bank. Abbott v Clark [2006] NSWSC 111.

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commenced. Most commonly, they are documents used in interlocutory proceedings. Such documents can be served personally but usually one of the alternative methods of ordinary service provided for in the rules is used. The most common forms of ordinary service are service by post, by document exchange (DX), by facsimile and, in certain cases, by email. The originating process and, as discussed below, the “appearance” contain the party’s address for service. There are detailed rules governing ordinary service, including presumptions as to when service is effected — for example, whether service is effected at the time a facsimile is sent, or when it is received, or when it is read. Even where the rules do not provide for service by such means, if it can be shown the intended recipient did receive a good copy that would constitute valid service.83

APPEARANCE OR NOTICE OF ADDRESS [3.210] The beginning of this chapter noted that the topic of appearances may be thought to be out of place in a chapter on commencing proceedings. It is covered here because the appearance amounts to the first step in the ordinary process of litigation once proceedings have commenced. It commences the defendant’s formal involvement in the litigation. The appearance is usually very brief — it is a document filed in court and served on the plaintiff and may simply state “the defendant appears” and provide the address of the defendant or its lawyers for future service of documents.84 All jurisdictions, except South Australia, provide for some form of appearance or its equivalent.85 In Queensland and the Australian Capital Territory the appearance is called a “notice of intention to defend”. South Australia no longer has any requirement for the appearance to be made; any document filed in court containing an address of service functions as a substitute for an appearance and there is only a requirement to file a notification of address for service if no such document is filed within 14 days of service of the originating process.86 As we have seen, a defendant’s failure to enter an appearance enables the plaintiff to proceed with the case, including signing judgment without further notice to the defendant. In some cases a defendant may want to argue that the court should not hear the case. There could be challenges to jurisdiction or challenges to the way the proceedings have been commenced. As filing an appearance normally carries with it the presumption that the defendant is accepting the jurisdiction of the court, an alternative procedure is necessary in

83 84

Packham Pty Ltd v Teo [2006] WASC 135. See, eg, Supreme Court of Tasmania, Form 14 Notice of Appearance:

85

Take notice that this appearance has been filed by or on behalf of [name of party or person filing appearance], the defendant [or respondent or third party or as the case may be] whose address for service of documents is [specify address with particularity]. Court Procedures Rules 2006 (ACT) r 100; Uniform Civil Procedure Rules 2005 (NSW) r 6.9; Supreme Court Rules (NT) r 8.03; Uniform Civil Procedure Rules 1999 (Qld) r 135; Supreme Court Rules 2000 (Tas) rr 154 – 157; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 8.03; Rules of the Supreme Court 1971 (WA) O 12, r 1. Supreme Court Civil Rules 2006 (SA) r 59.

86

[3.210] 73

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these situations. In most jurisdictions, this is done by way of a “conditional appearance” or by applications to the court to set aside the service or the originating process. The originating process informs the defendant of the time prescribed by the rules for entering appearances. These times vary from court to court and depend on where the defendant is located. For example, in Western Australia, defendants have 10 days after service to enter an appearance if they are within 300 kilometres of Perth, 16 days if between 300 and 600 kilometres from Perth, 21 days if 600 kilometres or more from Perth, 30 days if in the rest of Australia, and such time as the court orders for service if outside Australia.87

87

Rules of the Supreme Court 1971 (WA) O 5, r 11.

74 [3.210]

CHAPTER 4 How Courts Manage Cases and Make Procedural Decisions The evolution of case management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Australian case management approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 [4.50] General principles of case management . . . . . . . . . . . . . . . . . . . . . . 79 [4.60] The case management framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 [4.70] Standardised case management . . . . . . . . . . . . . . . . . . . . . . . . . 82 [4.80] Differential case management . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 [4.100] Case management practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 [4.110] Master calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 [4.120] Individual case management . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 [4.130] Identifying who manages the case . . . . . . . . . . . . . . . . . . . . . 88 [4.140] Assessing the impact and implications of case management . . . . . . . . . . 88 [4.150] Assessing effectiveness: has case management worked? . . . . . 89 [4.160] Case management and delay . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 [4.170] Case management and costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 [4.180] Case management and settlement rates . . . . . . . . . . . . . . . . 91 [4.190] Issues in practice: the “justice versus efficiency” debate . . . . . 92 [4.250] Systemic issues: implications for the civil justice system . . . . . 97 [4.260] Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 [4.270] Obtaining procedural orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 [4.280] Some of the key case management provisions . . . . . . . . . . . . . . . . . . . . . . 102 [4.20] [4.40]

[4.10] Chapter 1 argues that the last 30 years have seen two major changes in civil procedure and civil litigation: the introduction of case management and the minimisation of resolution by adjudication within courts. This chapter examines the first of these changes, the adoption of case management techniques. It begins by looking at the evolution of case management to understand the scope of the changes, before outlining the different case management regimes in Australia that have been adopted as a result. It then examines some of the issues and implications that arise for the civil justice system, including a discussion of the effectiveness of case management in practice. It concludes with an outline of the procedures for obtaining procedural orders from courts — the interlocutory application process.

THE EVOLUTION OF CASE MANAGEMENT [4.20] As discussed in Chapter 1, common law civil procedure traditionally gave parties control of the issues to be decided and the evidence to be called in a case,

[4.20] 75

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as well as the pace at which the case was prepared for trial.1 To extend the often used analogy of litigation as a sporting contest — what parties did before the contest and the tactics used in the contest were of no interest to the umpire provided they remained within the rules of the game. The parties merely notified the court when they were ready to go to trial, and the judge was supposed to simply ‘turn up’ on the designated day and decide the issues presented by the parties. While the parties were required to comply with certain pre-trial requirements, such as exchanging pleadings and performing discovery, the parties largely dictated the timeframe in which this was done. Adjournments were routinely granted and amendments permitted, even at late stages of the pre-trial process. The extent of the court’s concern with pre-trial conduct was to take such conduct into account when ultimately ordering costs. For example, where one party made a late application to amend their pleading, they were often required to accept costs penalties against them for the additional work such late changes imposed upon the opposing party. As a paradigmatically adversarial process, the focus was entirely upon the impact upon the two parties. That process aimed to minimise any ‘unfairness’ to the parties, and allow them to comprehensively and exhaustively frame the issues and prepare for trial as they saw fit. However, this approach led to great delay for the parties, with even relatively simple litigation liable to drag on for years. While the model lent great flexibility to the parties, the knowledge that any error or oversight made at a pre-stage process could be remedied by a readily granted adjournment and amendment did not encourage the most effective and efficient use of the parties’ time and resources. Moreover, and increasingly damningly, the model made poor and inefficient use of court resources and the management of judicial workload. Late adjournments often led to the trial being vacated, with the rescheduled trial having a knock-on effect on other litigation, further extending systemic delay. The introduction of case management fundamentally altered this traditional approach. The courts began to actively supervise the pre-trial process, managing the pace and progress of preparations to promote the efficient and timely progress to trial. While the parties were (largely) left in control of the issues in the case, they were increasingly stripped of their power to dictate the pace of litigation. [4.25] Concern about the undesirable consequences of party control of the pre-trial process is not new. In particular, ‘the law’s delay’ has long been seen as an ‘evil’ which besets the administration of justice.2 The history of civil procedure is filled with attempts to improve the speed of litigation and the efficiency and effectiveness of the civil justice system.3 An early attempt to introduce some form of court supervision of the pre-trial process came with the introduction in England of the Summons for Directions in 1883. This enabled the court to bring the parties before it so it could make procedural orders that would facilitate the progress of the case through the pre-trial stages. The Committee on Supreme Court Practice and Procedure chaired by Lord Evershed in the 1950s recommended that the 1 2 3

For a discussion of the traditional approach to civil procedure see Millar, “The Formative Principles of Civil Procedure” (1923) 18 Illinois Law Review 1 at 23. See Storey, The Reform of Legal Procedure (Yale University Press, 1912) pp 21-22. In the last 100 years there have been some 60 civil procedure related reports in the UK alone, including three major inquiries in the last 30 years. See [1.80], fn 33.

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courts make better of use of the summons for directions process with a more robust approach but this only enjoyed limited success.4 However, the principal focus of these reforms was largely on the undesirable consequences of party control on the parties themselves, rather than on broader systemic consequences. As a result the paradigm of party-control remained largely intact. This slow drip of reform did, however, combine with increasing concerns over court-funding and an awareness of the broader costs of party-driven delay, to lay the platform for much greater reform. The most visible and far-reaching of these changes has been the introduction of case management, which, in a still unfolding revolution has quietly reshaped the foundations of civil litigation. The concept of ‘case management’ or ‘case-flow management’ is not new. It was initially developed as an approach to service delivery in the areas of health and human services, responding to the need to co-ordinate different service providers to ensure effective and efficient use of government resources to maximise outcomes for government and the patient. Case management ideas soon spread to the insurance industry, correctional services and now the courts.5 While differences of context and complexity ultimately required courts and civil justice system administrators to develop specific case management principles and tools for courts,6 certain core ideas remained constant. For example, one common component adopted by those responsible for courts is the idea that efficiency can be promoted by court co-ordination and supervision of those involved in the case by a ‘case manager’. This emphasis on ‘efficiency’ highlights that the growth of case management as a model of service delivery coincided with the developments in public sector management that attempted to incorporate managerial tools of performance standards and measurable outputs. These ‘new public management’ principles emphasised efficiency, effectiveness and cost, along with increased accountability for decision-makers and service providers. The pervasiveness of these ideas in the public sector ensured that attempts to introduce managerial concepts into the pre-trial process faced less opposition than they might otherwise have done.7

4

5 6

7

C Glasser, “Civil Procedure and the Lawyers — The Adversary System and the Decline of the Orality Principle” (1993) 56 Modern Law Review 307 at 313; R Verkerk, “England and Wales” in CH van Rhee (ed), European Traditions in Civil Procedure (Intersentia, 2005) pp 307, 311. D Gursansky et al, Case Management: Policy, Practice and Professional Business (Columbia University Press, 2003) pp 8-13. One major difference for case management in courts is that case management in the areas of health or social services is focused on the needs of a particular individual whereas in courts the focus is on the dispute or case. While within the health and other human service agencies there can be differences between the interests or wishes of the patient or client and those of the agency, there is generally only one patient or client. The vast majority of cases before courts involve two or more parties with different and usually conflicting interests. As Spigelman observes, these concepts of efficiency, effectiveness, cost and accountability underpins many of the recent developments in courts: Spigelman CJ [as he then was], Quality In An Age of Measurement: The Limitations of Performance Indicators (Speech delivered at the Sydney Leadership Alumni Lecture, Benevolent Society, 28 November 2001, available at http://www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/pages/SCO_sp eech_spigelman_281101). [4.25] 77

Principles of Civil Litigation

The interaction of these three factors — the development of general case management concepts, the emergence of ‘new public management’ principles, and the ongoing reforms to civil procedure — created the conditions for a deep reform in the processes of civil litigation. For example, writing in 1982, Judith Resnik argued that the growth in range and use of procedural tools such as discovery in the 1960s led to increasing numbers of pre-trial procedural disputes and that this encouraged the development of case management in the United States.8 By the mid-1970s a sufficient number of case management schemes had been created in the United States to enable researchers to begin to develop good practice models based upon common principles. Influential in this development was the work of Maureen Solomon, who in 1973 produced an important report on caseflow management.9 This initial work was later updated with David Somerlot in 1987.10 According to Maureen Solomon and David Somerlot the pre-requisites for a successful case management program included: (1)

judicial commitment and leadership;

(2)

court consultation with the legal profession;

(3)

court supervision of case progress;

(4)

the use of standards and goals;

(5)

a monitoring and information system;

(6)

listing for credible dates; and

(7)

strict control of adjournments.11

In 1996 William Schwarzer suggested that for judges the four standard elements of case management were: the setting of a firm trial date; establishing a pre-trial timetable and making lawyers stick to it; defining and narrowing the issues in the case; and promoting settlement.12 [4.30] While Australian jurisdictions had adopted the summons for directions procedure, it was not until the 1980s that Australia first saw the introduction of contemporary case management schemes. In 1985, the Family Court of Australia issued guidelines introducing case management. This move was soon followed by the New South Wales Supreme Court in its Commercial Division.13 Now all Australian jurisdictions have some form of case management, although they vary widely in scope and complexity.

8 9 10 11 12 13

J Resnik, “Managerial Judges” (1982) 96 Harvard Law Review 376 at 378-379. M Solomon, Caseflow Management in the Trial Court: Supporting Study 2 (American Bar Association, 1973). M Solomon & D Somerlot, Caseflow Management in the Trial Court: Now and for the Future (American Bar Association, 1987). As cited in I Scott, “Caseflow Management in the Trial Court” in A Zuckerman & R Cranston (eds), Reform of Civil Procedure (Clarendon Press, 1995) pp 1, 7. W Schwarzer, “Case Management in the Federal Courts” (1996) 15 Civil Justice Quarterly 141 at 144-146. P Sallman, “Life Beyond Caseflow Management” (1993) 3 Journal of Judicial Administration 143; T Sourdin, “Judicial Management and ADR Process Trends” (1996) 14 Australian Bar Review 185.

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AUSTRALIAN CASE MANAGEMENT APPROACHES [4.40] Australian jurisdictions vary considerably in the way they create case management schemes. While the general principles are largely common and increasingly well accepted, the precise mechanisms by which they are realised are less consistent. Generally, these case management schemes are found in a combination of Rules and Practice Directions as few Australian jurisdictions have detailed case management provisions in the Acts that create and confer jurisdiction on Supreme Courts. The key case management provisions are set out in Appendix 4.1 at the end of this chapter. In analysing these various approaches to case management, this section will briefly outline the general principles before laying out a rough taxonomy of case management schemes.

General principles of case management [4.50] The central premise of case management is the adoption of a transformative approach to litigation in which the court supervises, and to some extent, controls the pre-trial progress of the case. In all jurisdictions there has been significant movement towards active judicial case management, reversing the court’s previous passive role.14 The judge has become, in a meaningful way, a ‘manager of litigation’. This transition has emerged from a growing recognition that the “resolution of disputes serves the public as a whole, not merely the parties to the proceedings”.15 The conduct of litigation is no longer seen as a mere private matter for the parties. As a result the court will, in managing litigation, take into account interests beyond those of the immediate parties. For example, there is a clear recognition that courts “have a responsibility to prevent the waste of time and public money”.16 A consequence of the move away from the traditional adversarial model has been the need to articulate the ends, or purposes, such litigation management seeks to achieve. This articulation of purpose helps to guide the judge in the exercise of the novel managerial role. The need for this exposition of ‘overriding objective’ or ‘overriding purpose’ was recognised by Lord Woolf in his influential review of the English civil justice system. Every Australian jurisdiction has now adopted an overriding purpose clause, whether in the rules of court or in statutory enactment,17 directing the court to manage litigation in a way that brings cases to an early and economical disposition consistently with the needs of justice.

14

15 16 17

See R Sackville, “The Future of Case Management in Litigation” (2009) 18 Journal of Judicial Administration 211; Federal Court of Australia Act 1976 (Cth) Pt VB; Civil Procedure Act 2005 (NSW) ss 56 – 58; Civil Procedure Act 2010 (Vic) ss 16-26. Aon Risk Services Ltd v Australian National University (2009) 239 CLR 175 at 217 [113]. See E I Du Pont De Nemours & Co v Commissioner of Patents (1987) 16 FCR 423 at 424. Court Procedures Act 2004 (ACT) s 5A; Federal Court of Australia Act 1976 (Cth) ss 37M–37P; Civil Procedure Act 2005 (NSW) ss 56–58; Supreme Court Rules (NT) r 1.10; Uniform Civil Procedure Rules 1999 (Qld) r 5; Supreme Court Civil Rules 2006 (SA) r 3; Supreme Court Rules 2000 (Tas) r 414A; Civil Procedure Act 2010 (Vic) s 7; Rules of the Supreme Court 1971 (WA) O1, rr 4A and 4B. [4.50] 79

Principles of Civil Litigation

Indeed several jurisdictions have gone further and imposed an obligation or duty on the parties to further the overriding purpose.18 While this purpose helps guide the judge in performing the role of ‘litigation manager’, it does little to reveal what this role involves. That role has three principal aspects: the setting of litigation timetables; the review of litigation progress; and the sanctioning of parties who fail to comply with procedural requirements. First, the courts are taking an increasingly active role in setting out, at an early stage, the timetable on which various stages of the litigation will be performed. This can include regimented requirements set out in the rules of court that govern when particular procedural steps must be performed, such as when pleadings must be filed or when initial directions hearings must be held. Alternatively, the courts may be given the power to set dates by which procedural steps must be performed. These can include the filing of affidavits, the conduct of discovery, the exchange of expert reports and, ultimately, the setting of trial dates. Secondly, the court will actively review the previous conduct of the case and manage its future conduct by holding a series of directions hearings and conferences. These may be held either before a judge, associate judge, master or registrar, and will generally result in binding procedural ‘Directions’ being given. It is generally at these hearings that the court will set forth the relevant procedural timetables and, where necessary and appropriate, amend those previously made. Finally, the courts are increasingly empowered to sanction parties who fail to comply with procedural requirements. Whereas traditionally the parties were given much latitude with respect to applications for adjournments and amendments, the adoption of case management schemes has seen courts far more willing to deny such applications where their impact may adversely affect the overriding purpose. This is increasingly the most significant impact of the adoption of case management schemes. What matters is not so much the precise mechanism by which the court manages the litigation, but the willingness of courts to enforce procedural requirements in a way that may limit or undermine the ability of the parties to have their issues determined on the merits.19 While case management schemes vary significantly between the Australian jurisdictions, the deeper principles remain constant. These general principles include a move to an active judicial involvement in litigation management, an increased awareness of the potential impact of particular disputes on the broader administration of justice, a more prescriptive approach to procedural timetables, and an increasing willingness to sanction parties for procedural failings in a way that affects their substantive rights. [4.55] In turning to analyse the various case management schemes utilised in the different Australian jurisdictions it is useful to lay out a rough taxonomy of case management schemes. Such an analysis can be developed by focusing on two main issues that, in combination, provide a reasonably comprehensive means of characterising management approaches: 1.

Case Management Framework; and

18

See, eg, Federal Court of Australia Act 1976 (Cth) s 37N; Civil Procedure Act 2005 (NSW) s 56(3). See Aon Risk Services Ltd v Australian National University (2009) 239 CLR 175 at 217 [112].

19

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2.

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Case Management Practice

The first of these issues involves the broad structural mechanisms used by a jurisdiction to manage disputes generally. This can involve having a general model of case management where all cases are treated in a standard manner, or a ‘differential’ model, where cases are streamed into management regimes. The second issue involves the specific practices adopted by a jurisdiction for managing particular cases. This principally concerns those who manage the litigation and whether matters of case management will progress according to general pre-determined timetables, supervised by the court generally, or whether specific management plans will be developed for each case by an individual judge. While jurisdictions often use a hybrid model with respect to issues of both structural and specific case management, the consideration of these issues provides a framework for characterising and comparing the various schemes.

The case management framework [4.60] The first issue in analysis of schemes of case management is to consider the broad structural mechanisms used to manage disputes generally. There are two basic approaches to structural case management: 1.

Standardised Case Management; and

2.

Differential Case Management

Systems of standardised case management adopt a general approach whereby all cases will be procedurally managed in a standardised manner. This approach operates by way of a ‘general list’, with all cases managed through a single extensive list. A ‘list’ is akin to a court register and when a case is commenced it is generally entered at the bottom of the list. The case will be moved up the list as other cases are finalised. In contrast to this standardised approach, differential case management systems operate to provide different types of management for different types of disputes. Differential case management is associated with the concept of ‘specialist lists’, with separate lists created for different types of disputes. Cases are entered onto these specialist lists soon after they are commenced. In some jurisdictions cases are entered onto a list at the parties’ request; in others, the parties seek the court’s agreement to have a case entered onto a specialist list. The range of such specialist lists can be extensive. For example, the New South Wales Supreme Court has one of the most differentiated systems of case management, with at least a dozen lists in addition to its general Common Law and Equity lists. These lists include a Defamation List, Professional Negligence List, Real Property List, Family Provision List, Admiralty List, Adoptions List, Corporations List, Administrative and Industrial Law List, Revenue List, Commercial List, and a Technology and Construction List. The underlying premise of differential case management is that cases will be streamed onto specialist lists, with the management of the case determined by the stream into which it is directed. There is extensive variation between the different Australian jurisdictions in the degree to which they adopt differential case management. That spectrum extends from exclusive use of a general list, through a general list with limited specialist lists, to a general list with a significant number of specialist lists. [4.60] 81

Principles of Civil Litigation

Table 4.1 sets out the case management structures in the different Australian jurisdictions. Table 4.1: Australian case management structures Standardised Case Management

Limited Differential Case Management

Extensive Differential Case Management

Australian Capital Territory

Queensland

New South Wales

Tasmania

South Australia

Victoria

Western Australia

Federal Court Northern Territory

Standardised case management [4.70] At a structural level, the simplest model is the standardised case management approach. This approach, adopted by the ACT Supreme Court and the Tasmanian Supreme Court, exists at the extreme end of the continuum and utilises no differential case management scheme; there are no separate lists in these jurisdictions. While this simple model may appear unresponsive to the demands of the case, it can, in fact, aid flexibility. Rather than determine procedural timetables by reference to the ‘stream’ into which the case is directed, this approach can allow a specific case management program to be developed for individual cases. This is, for example, the position in the ACT Supreme Court where a standardised case management structure is combined with a docket system20 to provide a very flexible and responsive approach.

Differential case management [4.80] Differential approaches to structural case management allow a streaming of different types of cases, with the management regime utilised by reference to the stream into which the case is directed. Differential case management can be an efficient way of using court resources, utilising judicial specialisation to effectively manage different types of cases. Unsurprisingly, New South Wales and Victoria have the most developed differential case management systems, reflecting the high volume of cases commenced in those jurisdictions. It is more surprising to find the smallest jurisdiction — the Northern Territory — also operating a multi-list system. The procedural consequences of being in one stream as opposed to another are different in each jurisdiction. In the Northern Territory, it determines who will manage the matter;21 in New South Wales, it also determines many aspects of the procedure to be adopted.22 There are two principal ways of

20 21 22

Practice Direction No 1 of 2012 (ACT Supreme Court). See Supreme Court Rules (NT) O 48. See, eg, Practice Note SC EQ 12, “Real Property List” (2016).

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utilising differential case management, using specialist lists to stream cases by reference to either: 1.

the subject matter of the dispute; or

2.

the complexity of the case.

[4.85] The Victorian Supreme Court provides a good illustration of the former type of differential case management, principally streaming by reference to the subject matter of the dispute. As Figure 4.1 shows, the Supreme Court has nineteen specialist lists spread across its two civil divisions. Figure 4.1: Victorian Supreme Court civil jurisdiction Supreme Court of Victoria (Trial Division)

Commercial Court

Common Law Division

Corporations List

Civil Circuit List

Arbitration List

Judicial Review and Appeals List

Taxation List

Major Torts List

Admiralty List

Personal Injuries List

Technology, Engineering and Construction List

Dust Diseases List

Intellectual Property List

Professional Liability List

Insurance List

Confiscation and Proceeds of Crime List Valuation, Compensation and Planning List Employment and Industrial List Trust, Equity and Probate List Testators Family Maintenance List Property List

[4.85] 83

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The Victorian Supreme Court defines its specialist lists in its Rules and Practice Notes,23 with those lists largely concerning the subject matter of the dispute. The streaming of a case onto a specialist list has significant impact upon the case management of the dispute. For example, in 1986 the Victorian Supreme Court introduced a Commercial List for cases arising from ordinary commercial transactions, including: (i)

the construction of commercial, shipping or transport documents;

(ii)

the export or import of merchandise;

(iii)

the carriage of goods for the purpose of trade or commerce;

(iv)

insurance.24

The Rules provide that a judge is to manage each list and the relevant Practice Note outlines how this is to be done. The Rules require a plaintiff wishing to proceed in the Commercial List to mark in the top left-hand corner of the originating process the words “Commercial List”, or make subsequent application to be so entered into the Commercial List, and the Practice Note sets out the appropriate procedure to be adopted in the Commercial Court, including requirements concerning pleadings, interlocutory applications, discovery, and the management of directions hearings.25 One of the Commercial List judges will become the managing judge and hold the first directions hearing, and usually all further directions hearings and any interlocutory applications in the matter. Parties or their lawyers are to be well prepared for the first directions hearing, and “should be ready to briefly explain the nature of the dispute and the substantial questions in controversy, and to assist the Court to determine the course to be followed in order to achieve the Overarching Purpose”.26 This “Overarching Purpose” is defined in s 7 of the Civil Procedure Act 2010 (Vic) as: “to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.” The court attempts to ensure that the managing judge also becomes the trial judge, although this becomes more difficult with cases that are going to require long trials.27 [4.90] The alternative approach to differential case management is to stream cases by reference to the complexity of the case. This is the approach adopted in the

23

24

25 26 27

See, eg, Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 (Vic) O 2 (Commercial List), O 7 (Taxation List); Supreme Court of Victoria, Practice Note SC CL 4 (Major Torts List, 30/01/2017); Supreme Court of Victoria, Practice Note SC CL 5 (Professional Liability List, 30/01/2017). See Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 (Vic) r 2.01 — added to this list now are matters related to: (v) banking; (vi) finance; (vii) commercial agency; (viii) commercial usage; or in which there is a question that has importance in trade or commerce. Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 (Vic) r 2.03; Supreme Court of Victoria, Practice Note SC CC 1 (Commercial Court, 30/01/2017). Supreme Court of Victoria, Practice Note SC CC 1 (Commercial Court, 30/01/2017), [10.6]. The Practice Notes do allow for a matter to be adjourned part-heard in order to facilitate the one judge hearing the entire trial — see Supreme Court of Victoria, Practice Note SC CC 1 (Commercial Court, 30/01/2017), [14.7].

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Northern Territory, whereby a differential case management scheme with five categories of cases operates by reference to the complexity of the case:28 At the initial directions hearing, the Master must designate the proceeding to be in one of the following categories: (a)

if the hearing time is likely to be 1 to 2 days — Category A;

(b)

if the proceeding is an ordinary matter requiring the supervision of the Master — Category B;

(c)

if the proceeding is a complex matter requiring the supervision of a Judge — Category C;

(d)

if the proceeding is an urgent matter requiring the supervision of a Judge — Category D; and

(e)

if the proceeding involves local witnesses only or no witnesses and, when ready for trial, is likely to be capable of being brought on for trial on less than 2 days’ notice — Category E.

It should be noted that even where jurisdictions principally use a subject-based differential case management system, such jurisdictions may also utilise a specialist list for long or complex cases. [4.95] This complexity-based system of streaming is of particular significance in systems that only make limited use of specialist lists and differential case management. For example, Queensland, South Australia and Western Australia have a limited form of differential case management whereby parties can apply to have their case entered into a special list based on how long or complex the case may be. This approach enables lengthy or complex cases to be individually managed.29 These jurisdictions commonly also have specialist lists directed to particular subject-based forms of dispute. For example, the Queensland Supreme Court has a supervised case list for lengthy cases30 and a commercial list for cases that arise out of trade and commerce.31 All other cases are entered onto the general list. In September 2006, Western Australia consolidated its specialist lists into a Commercial and Managed Cases List.32 The structure of the Queensland and Western Australian lists are represented in Figure 4.2 below. Figure 4.2 follows overleaf.

28 29 30 31 32

Supreme Court Rules (NT) r 48.06(2). See, eg, Supreme Court Civil Rules 2006 (SA), r 115 and Supreme Court Civil Supplementary Rules 2014 (SA) rr 75 – 79. Practice Direction No 11 of 2012 (Qld Sup Ct). Practice Direction No 3 of 2002 (as amended by Practice Direction No 2 of 2008 and Practice Direction No 17 of 2015) (Qld Sup Ct). Practice Direction 4.1 (WA SC), now superseded by Supreme Court of Western Australia, Consolidated Practice Directions (2009), [4.1]. [4.95] 85

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Figure 4.2: General List with limited specialist lists

It should be noted that all jurisdictions in Australia that utilise differential case management continue to make extensive use of general lists. Apart from those jurisdictions that exclusively use a standardised structure of case management, Australian courts use a combination of specialist and general lists. In terms of structural case management, the Australian jurisdictions vary principally on how extensively they make use of differential case management.

Case management practice [4.100] The second broad issue in characterising systems of case management involves the specific practices adopted by a jurisdiction for managing particular cases. Courts vary in how they manage cases, both as to the degree to which pre-determined timetables are used to influence the progress of a case to trial and as to who does the managing. Generally, procedural matters of case management will progress according to either general pre-determined timetables, supervised by the court generally, or specific management plans will be developed for each case by an individual judge. These variables distinguish the two basic models of case management that exist in Australia: 1.

The ‘master calendar’ model; and

2.

The ‘individual case’ model.

In the first of these two basic models of case management control is exercised by requiring the parties to report to the court (often to a master or registrar) at fixed milestones, while the second model involves continuous control by an individual judge, who personally monitors each case on an ad hoc basis.33

33

D Ipp, “Reforms to the Adversarial Process in Civil Litigation — Part II” (1995) 69 Australian Law Journal 790 at 790.

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Master calendar [4.110] The master calendar (or master list) system is the method most used in Australian courts, and involves cases being entered onto a master list when they are commenced in a court. Cases are controlled by the court registry, and are assigned to different judges or judicial officers at different times for different purposes.34 The master calendar system generally makes use of pre-determined procedural timetables which set out the timing of specified case conferences and when procedural steps should be completed. Where a procedural issue requires an interlocutory hearing, or a case conference is required, the parties will apply to the court. The hearing or conference is heard by whichever judicial officer or court official is available when they are due to be held. Usually Masters or Registrars are responsible for the management of the case until it is ready to go to trial. This type of case management system is more likely to be used where there is a high volume of civil litigation. The ordinary or general trial lists of the Supreme Courts follow this pattern, with different degrees of timetabling. In some jurisdictions the Supreme Court has set out prescribed case management events — either a ‘case conference’ or a ‘general directions hearing’ — at specified times after a case has commenced. The rules may also indicate target times and deadlines by which matters are to have completed the pre-trial process. Western Australia, for example, requires the parties to attend a “Status Conference” 21 days after the filing of the first appearance by a defendant, then a “Case Evaluation Conference” 28 weeks after the first appearance is filed, and a “Listing Conference” as soon as possible after the case has been entered into the trial list.35

Individual case management [4.120] In contrast, the individual case management system involves the development of a specific litigation timetable for each particular case. The most common approach, commonly known as the ‘single docket’ or ‘individual docket’ system, involves the assignment of each case to an individual judge who will manage that case from commencement to conclusion, ensuring that the case moves at an appropriate pace.36 In most instances a directions hearing will be held shortly after the case commences, in which the case manager (usually a judge) determines the timetable of the case. The case manager will then hold regular pre-trial hearings or conferences to ensure that the case is proceeding as expeditiously as possible through the pre-trial stages. This form of individualised case management is more commonly used where there are long and complex cases or a small number of cases.37 Most of the specialist lists are conducted in this manner.

34 35 36 37

See ALRC, Review of The Adversarial System of Litigation: Judicial and Case Management (1996) Background Paper 3 (December 1996) p 7. Rules of the Supreme Court 1971 (WA) O 4A, rr 18 – 20. ALRC, Review of The Adversarial System of Litigation: Judicial and Case Management (1996) Background Paper 3 (December 1996) p 7. One large volume jurisdiction that operates with a form of individualised case management is the Federal Circuit Court. [4.120] 87

Principles of Civil Litigation

Another approach to individualised case management has been tried by the Northern Territory. The Northern Territory Supreme Court requires parties to file a “litigation plan” in which parties outline a range of matters including the legal and factual issues in dispute, what procedural steps remain to be taken, and a timetable by which the case should proceed within one month after the closure of pleadings. A directions hearing takes place soon thereafter to discuss the litigation plan.38

Identifying who manages the case [4.130] A final issue in terms of specific case management is that of who in the court manages the litigation. Once more, there exists considerable variation in the approaches adopted in each Australian jurisdiction. However, as has been alluded to above, the approaches generally fall within two major categories: • management of the pre-trial process by Registrars or Masters; or • appointment of one of the court’s judges to manage the case from the beginning. The former is generally associated with cases entered in general lists, whereas the latter is frequently used within specialist lists. The latter is also associated with individual case management.

ASSESSING THE IMPACT AND IMPLICATIONS OF CASE MANAGEMENT [4.140] While the developments of case management have been rolled out over a long period of time, often through incremental changes, cumulatively it has involved a fundamental shift in thinking about the role of judges, courts, and the very form and purpose of civil litigation. This shift has created significant challenges for the civil justice system. Judges are being expected to engage in increasing amounts of managerial or administrative activity — not necessarily a skill set well developed in their prior professional lives — and, in making case management decisions, they are being asked to take into account a range of factors that hitherto had been generally extraneous to procedural decision making. In an institution whose effectiveness relies on independent decision making, it is not surprising that the courts did not universally welcome the development of case management. Case management raises a number of issues for the civil justice system. Some relate to the practical matters affecting the way case management works while others raise more difficult questions about the role of the courts and their judges. These include questions about the efficacy of case management schemes, concerns over what has been somewhat simplistically called the “justice versus efficiency” debate, and the impact of case management on some of the underlying values of the courts.

38

Practice Direction No 4 of 2004 (NTSC).

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Assessing effectiveness: has case management worked? [4.150] Assessing the effectiveness of case management varies according to what one thinks case management was attempting to achieve. Those objectives have often been poorly articulated, and even where they have been expressed they often provide poor criteria for the assessment of case management schemes. There have been exceptions. Lord Woolf, for example, outlined the specific objectives of case management as including the achievement of early settlement, the diversion of cases to alternative methods for resolution, the encouragement of a spirit of co-operation between the parties, the early identification and reduction of live issues, and the progressing of cases to trial as speedily and at as little cost as is appropriate.39 This chapter adopted a narrower conception of the principal objectives. It has argued that case management developed as a result of a convergence of different developments, but that it was primarily a response to concerns about the cost of litigation and the length of time it was taking for cases to proceed through the civil justice system. Using cost, time taken and settlement rates as yardsticks, the evidence on the success of case management is mixed. As is common with procedural reform, the introduction of case management was not accompanied by significant evaluation.40

Case management and delay [4.160] In general terms, the weight of the available evidence suggests that case management schemes have reduced the time taken to finalise cases. The Eyland study of New South Wales and Victorian case management schemes showed significant decline (of up to 50%) in time taken — although the findings were qualified due to methodological issues.41 Overseas research confirms this finding — Ross Cranston, in research carried out as part of the introduction of the new Civil Procedure Rules in England and Wales, reported some evidence that suggests cases moved more quickly following the introduction of case management.42 The most thorough and frequently cited study is from the United States, an evaluation of civil procedure reform under the Civil Justice Reform Act 1990 (US) undertaken by the RAND Corporation (a large and highly respected American think-tank). The Civil Justice Reform Act 1990, enacted by the US Congress, provided for independent evaluation of certain mandated procedural reforms in Federal Courts including case management. Conducted across 10 pilot districts, the RAND Corporation found that early case management was “associated with a 39 40

41 42

Lord Woolf, Access to Justice: Interim Report to the Lord Chancellor on the Civil Justice System in England and Wales (1995) p 30. A Eyland et al, Case Management Reform: An Evaluation of the District Court of NSW and the County Court of Victoria 1996 Reforms (Law and Justice Foundation of NSW, 2003) p 5; C Sage, T Wright & C Morris, Case Management Reform: A Study of the Federal Court’s Individual Document System (Law and Justice Foundation of NSW 2002) p 24. A Eyland et al, Case Management Reform: An Evaluation of the District Court of NSW and the County Court of Victoria 1996 Reforms (Law and Justice Foundation of NSW, 2003). R Cranston, “The Rational Study of Law: Social Research and Access to Justice” in A Zuckerman & R Cranston Ross (eds), Reform of Civil Procedure: Essays on “Access to Justice” (Oxford University Press, 1995) p 42. [4.160] 89

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significantly reduced time to disposition”.43 Of the various case management techniques, early setting of trial dates was the most important in reducing time to disposition.44 Given that the concrete practice of case management, including the setting of procedural timetables, trial dates and the restrictions on amendments and adjournments, have a clear conceptual connection to reductions in delay it seems fair to assert a causal connection between these reductions and the adoption of case management practices.

Case management and costs [4.170] The situation is far less clear with respect to the impact of case management schemes on litigation costs. Case management processes are intended to control litigation costs by promoting efficient management of court business, litigation preparation, and the avoidance of unnecessary work. However, the causal connection between the mechanisms of case management and the attainment of the goal of reduced cost is less clear, and unfortunately the cost-effectiveness of case management — from the perspective of both the courts and the litigants — has received less analysis than its effectiveness in reducing delay.45 Indeed, such research has indicated that case management practices can lead to an increase in costs. For example, the RAND Corporation report concluded that this reduction in delay was “associated with significantly increased costs to litigants, as measured by attorney work hours”.46 The increased costs associated with case management are said to arise from the fact that lawyers are now required to carry out a range of extra activities to conform with case management procedures, activities that did not exist prior to the introduction of case management. For example, preparation for case conferences or directions hearings may involve additional time spent with the client (especially if the client is also required to attend) and with other lawyers. Moreover, as procedural issues are, in a post-Aon environment, increasingly determining the substantive outcomes of disputes, there is an increased emphasis placed on pre-trial procedural steps. As amendments become more difficult to obtain there is increased pressure on lawyers to ‘over-prepare’ to anticipate all potential issues, while at the same time far shorter timelines increase the possibility of mistakes. Moreover, this emphasis on pre-trial steps has arguably led to a more combative approach to procedural issues. Contrary to the initial objectives of creating a ‘spirit of co-operation’ between the parties, new battlefields have opened up for strategic combat. While it may be legitimately argued that many of the costs incurred in complying with case management procedures would have been incurred in any event if the case went to trial or at a point later in the process, some of these costs may indeed be novel costs directly attributable to compliance. Of course, judicial 43 44 45 46

J Kakalik et al, Just, Speedy, and Inexpensive? An Evaluation of Judicial Case Management under the Civil Justice Reform Act (RAND Monograph Report, RAND Corp, 1996) pp 1-2. J Kakalik et al, Just, Speedy, and Inexpensive? An Evaluation of Judicial Case Management under the Civil Justice Reform Act (RAND Monograph Report, RAND Corp, 1996) p 14. ALRC, Judicial and Case Management: Adversarial Background Paper 3 (December 1996). J Kakalik et al, Just, Speedy, and Inexpensive? An Evaluation of Judicial Case Management under the Civil Justice Reform Act (RAND Monograph Report, RAND Corp, 1996) pp 1-2.

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case management also has its own systemic costs, with time spent in pre-trial conferences and other pre-trial processes meaning less time is available for trials. Without further research, assessments of cost-effectiveness of the new approach are difficult to make. Ultimately, the real question may be whether the additional work increases settlement rates or encourages earlier settlement of cases that were, in all likelihood, always going to settle.

Case management and settlement rates [4.180] Again there is insufficient evidence to fully answer this question, but in aggregate terms there does not appear to have been any significant change in settlement rates.47 The reduction in time to disposition suggests that the cases that do settle may be settling earlier as a result of case management procedures. However, the interaction between the observed decrease in delay and the increase in costs make it difficult to adduce a cause from any observed effect. It is not immediately clear why the mechanisms of case management as described in this chapter should lead to early settlement.48 The general principles of the Australian case management scheme, of having active engaged judicial officers set, manage and enforce procedural timetables, considering the interests of both the parties and the broader system, do not conceptually lead directly to any increase in settlement. There is perhaps an unstated assumption — or indeed a post-facto justification — that the early identification of issues, and a need to set out claims in a ‘once-and-for-all’ approach, will lead to a stripping back of extraneous materials, and a reduction in gamesmanship in a way that allows parties to more efficiently negotiate a mutually satisfactory settlement in light of the underlying merits of the dispute. Such a result, if borne out by the evidence, could indicate that case management is achieving the desired goals of the reforms. However, an increase in settlement rates may also indicate undesirable distortions introduced into the civil litigation system as a result of case management schemes. If case management practices increase litigation costs, or even shift those costs to ‘front load’ them into the pre-trial process, it may be that cases are settling earlier only because it has become more expensive to get to trial. Case management mechanisms may perversely be increasing settlement rates by making it prohibitively expensive to get to trial. This brief overview does not provide any comprehensive conclusions as to whether case management schemes have ‘worked’, as not only has the research not yet been done, but there has not been sufficient clarity in outlining what ‘success’ would look like. While there does seem to have been a decrease in delay, there has been little indication of any corresponding decrease in costs or improved settlement rates.

47

48

In contrast, as we have seen in Chapter 1, there is good evidence of falling trial rates in the United States: see M Galanter, “The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts” (2004) 1 Journal of Empirical Legal Studies 459. The connection is perhaps clearer with respect to the move towards court-sanctioned alternative dispute resolutions schemes — described in Chapter 9 — that have arisen in conjunction with the emergence of case management schemes. [4.180] 91

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Issues in practice: the “justice versus efficiency” debate [4.190] Putting aside issues of efficacy, the implementation of case management schemes raises distinct challenges in the judicial resolution of specific disputes and for the operation of the civil litigation system. First, the consideration of broader interests as part of case management changes the dynamic of discretionary decision-making. The judge must more explicitly consider, in addition to the pursuit of a ‘just’ resolution of the dispute between the parties, a broader range of interests, including the impact of delay or amendment on the efficient operation of the judicial system. This change in dynamic is controversial, and debate over its merit has come to be known as the “justice versus efficiency” debate. The debate is really about the weight that should be given to caseflow management issues in deciding discretionary procedural matters, and involves differing opinions as to whether parties should lose the right to bring or defend a claim due to a failure to comply with case management requirements. While courts have an undoubted power to prevent various claims or defences from being raised, or indeed to bring proceedings to an end where there has been an abuse of the court’s procedures, the power is only exercised in extreme cases. Far more controversial is the power of the court to ’sanction’ a party in this way for breaching case management requirements, such as failing to ensure a case progresses according to a pre-determined timeline. Case management rules are designed to do more than just assist the parties to manage their cases with the minimum of costs and delay — case management is also intended to enable the court to manage its affairs effectively and efficiently. Thus, rather than being solely for the benefit of the parties, case management also benefits the courts, the public purse (which pays for the civil justice system) and other litigants waiting their turn in the queue for trial judges. The explicit consideration of such broader interests exacerbates the tension between doing justice and procedural requirements. Traditionally, procedural requirements have given way to a party’s right to have its day in court. Commonly cited in support of this approach is Lord Collins MR’s observation in Re Coles and Ravenshear:49 Although I agree that a court cannot conduct its business without a code of procedure, I think that the relation of the rules of practice to the work of justice is intended to be that of handmaid rather than mistress, and the court ought not to be so far bound and tied by rules, which are after all only intended as general rules of procedure, as to be compelled to do what will cause injustice in the particular case.

This tension is revealed most sharply by procedural decisions refusing permission to amend pleadings or adjourn trials on case management grounds. The effect of such decisions may prevent a party from either raising a substantive claim or defence or requiring a party to proceed when they are not ready (thus prejudicing their ability to fully present their case). Traditionally, courts had tended to grant a request to amend pleadings or to adjourn a trial when necessary to enable a party to put its case fully, and where any prejudice to the other side could be made good by way of costs and other orders. This conflicts with some of the essential requirements for an effective case management scheme, especially the need to maintain strict control of adjournments and to make sure lawyers comply with

49

[1907] 1 KB 1 at 4.

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timetables.50 In this way the pursuit of case management objectives can deny the parties the opportunity to present the case they want, at the time they want, and have it determined on its merits. [4.200] There has been great variation in judicial attitudes within Australian courts to this issue of ’sanctioning’ on case management. In the early 1990s, as case management schemes became more common, those proposing case management schemes tended to give considerable weight to case management requirements when making procedural decisions. South Australia, for example, introduced a fairly prescriptive scheme and early judicial consideration gave it teeth. In Government Insurance Office v Ali,51 the Full Court of the South Australian Supreme Court upheld a decision to refuse to allow a defendant at the pre-trial conference stage to amend its defence to allege the plaintiff in a motor vehicle accident claim was not wearing a seatbelt. If proved, this created a statutory defence that would reduce any quantum of damages and the Full Court recognised that the amendment was necessary to raise this issue. However, under the then case management scheme, interlocutory applications at this stage in the proceedings were only possible in “exceptional and unforeseen circumstances” and in this case the information suggesting the plaintiff had not worn his seatbelt had been available to the defendant for two years. While no trial date had been set, the defendant’s appeal was dismissed to preserve the integrity of case management. Olsson J held that to allow late applications to amend pleadings would mean: [T]he orderly management of litigation could become well nigh impossible; and there would be a strong likelihood of a reversion to the prior inefficiency and near uncontrollable situation which had previously obtained — which the caseflow management concept has been designed to overcome. Quite apart from the serious adverse effect which this would have upon the capacity to deploy scarce judicial resources effectively and efficiently, it would also inevitably result in injustice to others by reason of delay and inconvenience to the other litigants seeking the assistance of the court.52

This followed the approach to case management outlined by King CJ in United Motors v Australian Guarantee Corporation one year earlier: Where there is a late application to amend which, if granted, would necessitate postponement of the trial or there is an application for the postponement of the trial whether made at or shortly before trial, the caseflow management principles adopted by the court as the basis of its procedures will be an important and often the dominant consideration in considering the application. It will always be necessary for the court, however, to take all factors into account.53

[4.210] In New South Wales, the debate over the proper role of case management continued in, at times, strongly expressed opinions in a series of cases in the early to mid 1990s. A number of cases demonstrate the difference of opinion in its Supreme Court on this issue. The decision of the New South Wales Court of Appeal in Cohen v McWilliam54 is illustrative. Here the Court of Appeal considered

50 51 52 53 54

See above [4.20]. (1992) 59 SASR 124. (1992) 59 SASR 124 at 130 per Olsson J. United Motors v Australian Guarantee Corporation (1991) 58 SASR 156 at 161-162 per King CJ. (1995) 38 NSWLR 476. [4.210] 93

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an appeal from a trial judge’s refusal to allow an amendment to the defence at the commencement of the trial to raise a statutory defence under the Companies Code. Priestly JA had no trouble deciding the case — for him it was almost beyond argument: I know of no authoritative decision which says that court efficiency is more important than, or takes priority over, deciding cases on their merits. ... [There] is not one example … where a litigant has been shut out by procedural default from litigating (sometimes on severe conditions) a defence which the court felt was arguable.55

Cole JA, on the other hand, not only disagreed with Priestly JA’s observations on Supreme Court practice, but argued: The passage quoted reflects a philosophy, now outdated and rejected, that costs are a sufficient salve … The modern approach to litigation is, in my view, to ensure that a litigant has a right to an opportunity to have issues which it is desired to have litigated heard upon the merits. But if, through unsatisfactorily explained default or neglect that litigant does not avail itself of that right then justice does not require, having regard to the interests of the opposing litigant, waiting litigants generally, and the costs and inefficiencies attendant upon adjournments and delays, that the defaulting litigant be given a second, or greater number of chances to avail itself of that opportunity.56

[4.220] This debate continued across Australia until resolved, at least for a period of time, by the High Court in State of Queensland v JL Holdings Pty Ltd.57 Again, the issue arose in the context of the refusal to allow late amendment of pleadings, although in this case the amendment was requested at the final directions hearing, some six months prior to the trial. In a joint judgment Dawson, Gaudron and McHugh JJ allowed the appeal, holding: Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties.58

Kirby J, the other judge in the case, agreed that the appeal should be allowed as it was possible to craft procedural orders to enable the amendment to be made and have the trial proceed at the scheduled date. In reaching his decision, Kirby J noted the differing judicial views on case management and outlined some of the relevant considerations that need to be taken into account.59 He held that the right to have one’s case heard and determined on its merits does not necessarily trump all other considerations — it is a matter of weighing up all the factors to ensure justice is done. The effect of JL Holdings was to significantly undermine case management schemes. There were no major attempts to constrain its effect to the Federal Court 55 56 57 58 59

(1995) 38 NSWLR 476 at 478-479 per Priestly JA. (1995) 38 NSWLR 476 at 500 per Cole JA. (1997) 189 CLR 146. (1997) 189 CLR 146 at 155 per Dawson, Gaudron & McHugh JJ. (1997) 189 CLR 146 at 163-175.

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where the case arose and, in the Australian context, its relatively unique case management approach. As a result, parties who had been tardy or who found themselves otherwise out of time for procedural steps were able to make good their default if they could argue refusal to grant them the order they sought would prevent them from having their case heard on its merits. JL Holdings was used to support late applications to adjourn trials, despite research showing that preservation of trial dates is essential to the integrity of case management schemes.60 As a result, in 2001, Lander J noted in Aberdine Pty Ltd v Vineyard Estate Management Pty Ltd: In a sense the parties have reassumed the management of the litigation. If parties are to be granted an indulgence on payment of costs the parties and their legal representatives are de facto managing the litigation. If the Court cannot refuse indulgences and visit sanctions apart from costs the Court has lost the capacity to manage litigation.61

[4.230] In 2009, the High Court of Australia revisited the whole question of the role and weight to be given to case management requirements in the context of amending pleadings. In Aon Risk Services Ltd v Australian National University62 the primary judge had allowed late amendment to the plaintiff’s claim against its insurance brokers, having settled its claim against the insurers at trial in November 2006. The claim arose out of devastating bushfires in Canberra in 2003 that caused significant property damage, including the destruction of the Australian National University’s Mt Stromolo Observatory valued at $75 million. Common to all the judgments in the High Court was the belief that the practical effect of JL Holdings had been to the detriment of the litigation process. The High Court went on to overrule JL Holdings. As French CJ held, the general approach to making amendments to pleadings was to ensure the real issues in the case were before the court but: The discretion is exercised in the context of the common law adversarial system as qualified by changing practice. But that is not a system which today permits disregard of undue delay. Undue delay can undermine confidence in the rule of law. To that extent its avoidance, based upon a proper regard for the interests of the parties, transcends those interests. Another factor which relates to the interests of the parties but transcends them is the waste of public resources and the inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials either because of non-compliance with court timetables or, as in this case, because of a late and deliberate tactical change by one party in the direction of its conduct of the litigation. ... Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes.63

In their joint judgment, Gummow, Hayne, Crennan, Keifel and Bell JJ noted the effect of the incorporation of goals and objectives provisions within rules of court

60 61 62 63

Cirillo v Citicorp [2001] SASC 349. Aberdine Pty Ltd v Vineyard Estate Management Pty Ltd [2001] SASC 442 at [45]. (2009) 239 CLR 175. Aon Risk Services Ltd v Australian National University (2009) 239 CLR 175 at 189 [24], 193 [30]. [4.230] 95

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that explicitly required courts to work towards the just resolution of disputes with minimum cost or delay. This meant: [T]he rules concerning civil litigation no longer are to be considered as directed only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost-effective resolution of a dispute has an effect upon the court and upon other litigants.64

In recognising this broader interest, the joint judgment challenged the JL Holdings approach to the “justice versus efficiency” debate by both narrowing and expanding the relevant concept of ‘justice’ in two ways. First, it expanded the class by ‘justice’ so that it incorporated the interests of other litigants: What may be just, when amendment is sought, requires account to be taken of other litigants, not just the parties to the proceedings in question ... To say that case management principles should only be applied “in extreme circumstances” to refuse an amendment implies that considerations such as delay and costs can never be as important as the raising of an arguable case; and it denies the wider effects of delay upon others.65

Secondly, it narrowed the content of ‘justice’ for the parties themselves, so that justice does not demand an unfettered right to present the argument the parties desire, but rather grants them an opportunity to do so: A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.66

Heydon J, in a separate judgment, joined in the orders made and castigated the management of the litigation, being critical of both the lawyers and the lower courts over the conduct of and delays in the case. He suggested that the case deserved recognition in precedent books: The reasons for placing it there turn on the numerous examples it affords of how litigation should not be conducted or dealt with. The proceedings reveal a strange alliance. A party which has a duty to assist the court in achieving certain objectives fails to do so. A court which has a duty to achieve those objectives does not achieve them. The torpid languor of one hand washes the drowsy procrastination of the other.67

This criticism well illustrates the way in which attitudes to litigation have changed. Thirty years ago, there would have been general amazement that major commercial litigation had got to trial in less than two years, and even with the significant delay taken to decide the application for leave to amend pleadings, a decision on the appeal to the Full Court of the Supreme Court of the Australian Capital Territory had been rendered within four years of the case commencing — the appeal court having taken six months to write its judgment. In the past, this would have been viewed as unexceptional, if not relatively quick, for such litigation. Now, it is unacceptable. That is not to overlook the fact that, for Aon Risk Services, the claim against them was still at the trial stage. Heydon J’s 64 65 66 67

(2009) 239 CLR 175 at 211 [93] and 217 [113]. (2009) 239 CLR 175 at 212 [95]. (2009) 239 CLR 175 at 217 [112]. (2009) 239 CLR 175 at 229 [156].

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criticism was also more directed to the way the procedural application had been dealt with and the approach the plaintiff’s lawyers had taken to it and the litigation in general. Had the plaintiff ultimately succeeded in obtaining leave to amend its claim, it would have been some considerable time before they could expect finalisation of the proceedings. [4.240] The effect of JL Holdings was to facilitate a return to a more laissez faire approach to litigation in a way that undermined the efficacy of case management systems by limiting the use of effective and appropriate sanctions for noncompliance with case management requirements. The High Court in Aon Risk Services Ltd has reversed that trend, with the reintroduction and greater use of effective sanctions for breaches of case management orders. In this way, the reasoning of the High Court in Aon Risk Services Ltd is closer to that of the judicial proponents of case management in the early 1990s. Aon Risk Services Ltd has been well received by the courts, and has been applied with great vigour in many hundreds of cases in the relatively short time since it was handed down.68 While it has been suggested that the case has “re-invigorated the procedural paradigm”69 it is perhaps more accurate to say that it has brought the common law into line with what is fast becoming the dominant hegemony. In the decade and a half since JL Holdings, case management has become a fully integrated aspect of the operation of modern Australian judiciaries. Aon Risk Services Ltd has arguably simply recognised this explicitly. In this new paradigm, courts are routinely considering a broader range of interests, including considerations of institutional efficiency, in a way that is redefining the objectives of the civil litigation system away from just the resolution of specific disputes. This new approach will, however, undoubtedly create additional pressure on litigators and affect the way litigation is conducted.

Systemic issues: implications for the civil justice system [4.250] The introduction of case management practices has not only presented challenges to the resolution of specific disputes, but also has the potential to alter some of the foundational principles underpinning the civil justice system. While case management was introduced as an instrumental solution to problems of delay and expense, these broader systemic implications have the potential to threaten the civil justice system in unexpected and undesirable ways that were not recognised at the time of their implementation. Firstly, the implementation of case management schemes has the potential to change the role of judges in the adjudication of cases because they now know a lot

68

69

See, eg, Arrow International Australia Ltd v Group Konstrukt Pty Ltd [2012] ACTCA 37; Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261; Wilkinson v Perisher Blue Pty Ltd [2012] NSWCA 250; In the matter of Imperium Projects Pty Limited [2017] NSWSC 141; Territory Sheet Metal Pty Ltd v Australia and New Zealand Banking Group Ltd (2010) 26 NTLR 1; Robertson v Dogz Online Pty Ltd [2010] QCA 295; Mt Isa Mines Limited v CMA Assets Pty Ltd & Ors [2016] QSC 260; Channel Seven Adelaide Pty Ltd v Manock [2010] SASCFC 59; PPG Development Pty Ltd v Capitanio [2016] SASC 169; Dodge v Snell [2010] TASSC 12; ICM Investments Pty Ltd v San Miguel Corporation (Ruling No 2) [2012] VSC 509; Brocx v Hughes (2010) 41 WAR 84; Terravision Pty Ltd v Black Box Control Pty Ltd (No 4) [2016] WASC 378. Trevor Roller Shutter Service Pty Ltd v Crowe (2011) 31 VR 249 at 260 [41]. [4.250] 97

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about the case before it begins (particularly in individual docket systems). This changing role of judges has long been a concern of academics like Judith Resnik.70 Judges are now able to influence outcomes and make discretionary decisions using case management techniques, in ways less subject to forms of judicial accountability. As Resnik argues: Managerial responsibilities give judges greater power. Yet the restraints that formerly circumscribed judicial authority are conspicuously absent. Managerial judges frequently work beyond the public view, off the record, with no obligation to provide written, reasoned opinions, and out of reach of appellate review ... Because managerial judging is less visible and usually unreviewable, it gives trial courts more authority and at the same time provides litigants with fewer procedural safeguards to protect them from abuse of that authority.71

Added to these concerns about the effect of case management on some of the principles and values underlying the civil justice system are various practical challenges — judges may not necessarily have the management skills needed for an effective case management system; and courts need to have effective information technology systems to be able to manage cases.72 Greater judicial intervention in managerial issues demands a different set of judicial competencies which judges are unlikely to have developed in their professional career. Similarly, there is the risk that judges who are increasingly exposed to judicial performance standards will be improperly influenced in managerial decision-making by management targets and other statistical goals.73 While the threat posed by these challenges are not insurmountable, they are not insignificant. A second concern, alluded to above, is the potential of case management schemes to transform the content and scope of the court’s duty to do justice. As Cole JA held in his dissenting judgment in Cohen v McWilliam,74 case management emphasises the courts’ duty to provide justice to others beyond the parties in the case: that is, the right to have a case determined on its merits is an important consideration in determining procedural applications but not necessarily paramount and that a range of other factors needed to be taken into account. These included the needs of litigants in other cases and the public who paid for the civil justice system. In addition to a change in who the duty to justice was owed to, the argument has been made that case management furthers a change in the content of the court’s primary duty to do justice. The court, it is said, owes toward the parties in the case before it not so much a duty to hear cases on their merits, but rather to provide parties with reasonable opportunities to have cases determined on their merits.75 70 71 72

73 74 75

One of the most frequently cited articles is her “Managerial Judges” (1982) 96 Harvard Law Review 374. J Resnik, “Managerial Judges” (1982) 96 Harvard Law Review 374 at 378, 380. I Scott, “Caseflow Management in the Trial Court” in A Zuckerman & R Cranston (eds), Reform of Civil Procedure: Essays on “Access to Justice” (Oxford University Press, 1995) pp 17-29. D Ipp, “Reforms to the Adversarial Process in Civil Litigation — Part I” (1995) 69 Australian Law Journal 705 at 719. (1995) 38 NSWLR 476 at 500. Discussed above [4.210]. D Bamford, “Litigation Reform 1980–2000: A Radical Challenge?” in W Prest & S Roach Anleu (eds), Litigation: Past and Present (University of New South Wales Press, 2004) pp 163-165.

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The High Court of Australia in Aon Risk Services76 explicitly extends the scope of to whom the duty to do justice is owed — it is not limited to the parties in the case then before it. Less explicit is the treatment of the content of the duty but the High Court’s approach in Aon Risk Services does diminish the traditional understanding of the content of that duty — that paramountcy is to be given to a party’s right to have its case determined on the merits. A better formulation of the duty to do justice between the parties in this context is that the duty is to provide the parties with a fair and reasonable opportunity to have their case determined on the merits. This new conception of what a ‘just’ resolution requires has far reaching implications that have barely been grappled with. Most significantly, it risks undermining the dispute resolution function of the court by making judicial resolutions less responsive to the underlying concerns, interests and disputes of the parties. This risks diminishing the efficacy of judicial determination at finally resolving the dispute, as the party may seek to challenge the decision or prolong the dispute through collateral means. For example, where the mistakes or strategic choices of legal representatives lead to a party losing a chance to run a given argument or have the dispute resolved on its merits, the party may have a legitimate claim against their representatives. Finally, the success of case management depends on the active promotion of a cultural change amongst legal practitioners. Current legal ethics mandate that lawyers should champion the client’s cause ‘without fear or favour’. This not only permits, but actively encourages the use of procedural rules and tactical manoeuvring as a means of obtaining an advantage over an opponent.77 It is unlikely that any case management system can succeed simply by enforcement of its procedural rules without changing the culture of legal practice and lawyers’ relationships with and responsibilities to clients and to the court.78 Any changes in this regard would represent a profound challenge to the traditional conception and operation of the system of civil justice, and would not only require extensive alterations to legal education and training, but to professional standards and rules of procedure. Such changes must be made in a deliberate and considered way if they are not to unravel well honed systemic strengths.

Conclusions [4.260] After 30 years, it is clear case management is an integral part of civil procedure. It continues to evolve. More recently, there are signs that the concepts behind case management may extend beyond the pre-trial process, to the trial itself. Increasingly, judges are attempting to deal with issues around the length and cost of trials by influencing the way trials are conducted. These measures range from trying to determine the order in which issues are raised at trial, to prescribing time limits for oral evidence, to rethinking the use of experts in trials and the way they give evidence. These changes will undoubtedly be controversial and they need to be accompanied by rational debate based upon sound research.

76 77 78

(2009) 239 CLR 175. G Davies & S Sheldon, “Some Proposed Changes in Civil Procedure: Their Practical Benefits and Ethical Rationale” (1993) (10) 3 Journal of Judicial Administration 111 at 114. ALRC, Judicial and Case Management: Adversarial Background Paper 3 (December 1996). [4.260] 99

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However, the history of the introduction of pre-trial case management does not provide grounds for great optimism that this will occur.

OBTAINING PROCEDURAL ORDERS [4.270] While case management may be a new development in civil procedure, courts have always provided a mechanism by which parties could apply to the court for procedural orders. Often these orders relate to preparation of the case for trial — commonly-sought procedural orders include seeking better or further details of another party’s pleadings or seeking better or further discovery of documents. In other cases, a party may be seeking an injunction or some other form of restraining order until trial to prevent irreparable harm occurring before trial. These orders, made before trial, are known as interlocutory orders. The process for obtaining interlocutory orders is strikingly similar across the Australian jurisdictions. The party seeking the procedural order files an interlocutory application (or a summons or motion) with the court79 which outlines the orders the party is seeking, along with affidavits outlining the facts which the party claims justify the order being made. The court provides a hearing date for the application and written notice of the time and date of the hearing is served on the other party. The hearing is heard by the judicial officer responsible for managing the case — a Master or Registrar where there is a master calendar system of case management, or the managing judge if the case has been assigned to a judge. Traditionally, interlocutory applications have been heard in the chambers of the Master or judge but a number of jurisdictions have provided that matters heard in chambers are to be treated as if they were heard in open court, so the distinction has become less relevant. Another procedural development has been the increasing use of information and communications technology to reduce the costs of the interlocutory application process. In many cases both parties may agree to the procedural order being sought and often the rules will dispense with a need for a hearing in that case. In other cases, the hearings can be very brief and courts may allow them to be undertaken by telephone or even by exchange of submissions by email. One issue that can be of great significance is the question of whether a particular order is, as a matter of law, an interlocutory order. One consequence of an order being classified as an interlocutory order is that the right to appeal it will be more restricted than if the order was a final order. As a general principle, courts discourage appeals from interlocutory orders. Courts achieved this by requiring leave to appeal to be granted by the court before an interlocutory order can be appealed. Courts have taken this approach to prevent parties being able to prolong litigation by appealing procedural orders. The underlying case would normally be suspended while the procedural appeal was being determined and, 79

Applications are used in the ACT (Court Procedures Rules 2006 (ACT) r 6006), the Fed Ct (Federal Court Rules 2011 (Cth) r 17.01), Queensland (Uniform Civil Procedure Rules 1999 (Qld) r 31), South Australia (Supreme Court Civil Rules 2006 (SA) r 131), and Tasmania (Supreme Court Rules 2000 (Tas) r 524). Summons are used in the NT (Supreme Court Rules (NT) r 46.02), Victoria (Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 46.02), and Western Australia (Rules of the Supreme Court 1971 (WA) O 4 and O 59, r 3 — with motions used for ex parte matters). Motions are used in NSW (Uniform Civil Procedure Rules 2005 (NSW) r 18.1).

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given the huge range of potential procedural orders, there is a risk courts would spend disproportionate amounts of resources dealing with procedural cases. In the leading case of Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc,80 Gibbs CJ, Aickin, Wilson and Brennan JJ in a joint judgment endorsed the words of Sir Frederick Jordan CJ in the New South Wales Supreme Court where he said: I am of opinion that … there is a material difference between and exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.81

So what is an interlocutory order? When a definition is expressed in the negative, it suggests a lack of certainty about the boundaries of the definition. That applies here. An interlocutory order is an order that does not finally determine the rights of the parties. Commonly cited in decisions on whether a particular order is interlocutory or not is the judgment of Windeyer J in Hall v Nominal Defendant:82 In most cases the test that seems to be most satisfactory, and the one that accords most nearly with what has been said on the subject in this Court, is it seems to me to look at the consequences of the order itself and to ask does it finally determine the rights of the parties in a principal cause pending between them.

The practical application of the definition is not always easy. As Lord Denning MR said in Slater Rex & Co v Ghosh “[t]he question of ‘final’ or ‘interlocutory’ is so uncertain that the only thing for practitioners to do is look up the practice books and see what has been decided on the point. Most orders have been the subject of decision.”83 A good illustration of the difficulty is Hall v Nominal Defendant, where Barwick CJ held that the refusal of an application for an extension of time in which to bring an action was a final order. Windeyer J initially thought it was a final order but changed his mind and decided it was an interlocutory order — a view shared by Taylor and Owen JJ. Often procedural orders effectively end the case but that does not make them final orders. This is because, strictly speaking, the case has not been brought to an end — a party could still make further applications for similar relief.84 Thus, for example, an order dismissing an action for failing to disclose a reasonable cause of action is interlocutory, not final.85 Similarly, although orders dismissing an action for abuse of process;86 orders refusing to set aside a default judgment; and orders refusing to extend the time for bringing an action may result in the case coming to an end, those orders remain interlocutory.87

80 81 82 83 84 85 86 87

(1981) 148 CLR 170 at 177. (1981) 148 CLR 170 at 323. (1966) 117 CLR 423. Slater Rex & Co v Ghosh [1971] 2 QB 597. Bienstein v Bienstein (2003) 195 ALR 225. Glendinning v Cuzens [2009] WASCA 21. Re Luck (2003) 203 ALR 1. Bienstein v Bienstein (2003) 195 ALR 225. [4.270] 101

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APPENDIX 4.1 SOME OF THE KEY CASE MANAGEMENT PROVISIONS [4.280] Australian Capital Territory

Court Procedures Rules 2006 (ACT) Pts 2.13, 2.14

(Supreme Court) Commonwealth

Federal Court of Australia Act 1976 (Cth) Pt VB

(Federal Court)

Federal Court Rules 2011 (Cth) Pt 5

New South Wales

Civil Procedure Act 2005 (NSW) Pt 6

(Supreme Court)

Uniform Civil Procedure Rules 2005 (NSW) Pt 2

Northern Territory

Supreme Court Rules (NT) O 48

(Supreme Court) Queensland

Uniform Civil Procedure Rules (Qld) Ch 10

(Supreme Court) South Australia

Supreme Court Civil Rules 2006 (SA) Ch 6

(Supreme Court) Tasmania

Supreme Court Rules 2000 (Tas) Pt 14, Div 1

(Supreme Court) Victoria (Supreme Court)

Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 34

Western Australia

Rules of the Supreme Court 1971 (WA) O 4A

(Supreme Court)

102 [4.280]

CHAPTER 5 Defining the Issues Pleadings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 [5.30] The function of pleadings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 [5.40] The pleadings process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 [5.50] The content of pleadings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 [5.60] Material facts not evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 [5.70] As brief as the case permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 [5.80] Facts not law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 [5.90] Pleading in the alternative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 [5.100] Rules relating to specific matters . . . . . . . . . . . . . . . . . . . . . . 114 [5.110] The formalities of pleadings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 [5.120] Amending pleadings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 [5.140] Defective pleadings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 [5.150] Notices to Admit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 [5.160] Defining issues — possible alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 [5.20]

[5.10] At the core of procedural justice is the principle that a party should know what the case against it is and be given an opportunity to adequately prepare its response to that case. As part of the process of commencing proceedings, the plaintiff is required to identify the basis of its legal claim and the remedy it is seeking. All legal claims must be founded on a cause of action. A cause of action consists of “the facts which support a right to judgment”.1 The civil litigator turns to the substantive law, not procedural law, to determine whether the facts in the dispute give rise to a cause of action and thus support a judgment. Once these facts have been identified, procedural justice requires the plaintiff to set out the legal basis for its case in sufficient detail to provide notice to the opposing party. For a claim to be resisted, a defendant will need to contest either some or all of the facts as alleged by the plaintiff or the legal conclusions to be drawn from them. The primary procedural mechanism for defining contested issues in all Australian jurisdictions is by way of the ‘pleadings’ process. The pleadings process enables both the court and other parties to identify the central factual issues in dispute. However, as we will see, pleadings are not intended to identify the evidence to be used to establish the facts. In this chapter we also examine the rules that provide procedures for obtaining admissions that cover both facts and evidence. The pleadings process and the process for obtaining admissions define the ‘live’ issues in the proceeding, in that they enable the parties to ascertain what evidence will be needed to be adduced or what subsidiary facts need to be proved.

1

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 611 per Brennan J. [5.10] 103

Principles of Civil Litigation

PLEADINGS [5.20] The core function of pleadings is to provide notice to the other party about the case against it. Using an iterative process in which assertions, responses and counter-assertions are exchanged means that, by the end of the pleadings process, the parties are able to identify and define the nature, scope and content of the legal dispute between them. While the strictness with which the rules govern the pleadings process has varied over time, the importance of pleadings has not altered. The pleadings have always provided the foundation for the procedural steps that follow by setting the parameters of the dispute. A wide range of questions, from whether a party ought to have their case terminated for failing to disclose a cause of action or defence, to whether a party should be required to discover certain documents, are guided by the contents of the pleadings. Most importantly, at trial, a party is bound by its pleadings and, with limited exceptions, cannot raise issues beyond those contained in the pleadings. It must be recalled, as discussed in Chapter 3, that not all cases require pleadings. Pleadings are typically used where there are facts that are likely to be contested. Where facts are not being contested, the case is likely to proceed using affidavits rather than pleadings. Furthermore, some types of cases are required by statute or rules to use affidavits rather than pleadings.

The function of pleadings [5.30] Pleadings are the major procedural mechanism by which notice of a party’s case is given. The nature of the process leads to the identification of the actual issues in dispute that enables pre-trial procedure and the trial to focus on those issues. Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it; they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial; and they give a defendant an understanding of a plaintiff’s claim in aid of the defendant’s right to make a payment into court.2

The practical importance of pleadings is demonstrated by one of the most widely cited authorities on pleadings in Australia, the High Court’s decision in Banque Commerciale SA (in liq) v Akhil Holdings Ltd.3 Here Akhil had sued the bank, along with two other defendants, for losses arising out of the transfer of shares held in trust for Akhil. The defendants had pleaded in their defences that the action was outside the limitation period and thus statute barred. Akhil then filed a reply in which he pleaded that the transfers involved fraud which, under statute, meant the normal limitation period did not apply. However, Akhil only filed replies to the defences of two of the three defendants and did not file a reply to Banque Commerciale’s defence. The bank did receive a copy of the reply filed and served on the other defendants, and so was aware of the plaintiff’s position. Banque 2 3

Dare v Pulham (1982) 148 CLR 658 at 664 per Murphy, Wilson, Brennan, Deane & Dawson JJ (citations omitted). (1990) 169 CLR 279.

104 [5.20]

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Commerciale did not appear at the trial but was subsequently found liable, along with the other defendants, on the grounds of its involvement in the fraud. Banque Commerciale appealed, arguing that no fraud had been pleaded against it and thus its defence based on the limitations statute must succeed. The High Court allowed Banque Commerciale’s appeal, holding: [P]leadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness.4

The same approach was adopted in a separate judgment by Brennan J, who quoted the words of Jessell MR in Thorp v Holdsworth:5 In fact, the whole meaning of the system is to narrow the parties to definite issues, and thereby to diminish expense and delay, especially as regards the amount of testimony required on either side at the hearing.6

Dawson J dissented, holding that the majority’s approach placed undue emphasis on the procedural rules and led to an injustice. On properly admitted evidence at the trial, the bank had been found to have been a party to fraudulent conduct and the plaintiff should not have been prevented from succeeding against it because of non-compliance with the pleadings requirements.7 This difference in view between Dawson J and other members of the High Court in the Akhil case reflects the ongoing tension that underpins procedure. In many ways the approach taken to pleadings is a good measure of the different approaches taken by judges and courts to the general question of the degree to which procedural requirements should determine outcomes in civil litigation. If generous latitude is given to parties who fail to properly complete the pleadings process, concerns emerge that litigation may become uncertain and thus involve increased delay and expense. When the courts require strict compliance with the rules of the pleadings process, concerns arise that injustices may occur, as cases may not be determined on their merits. Moreover, insistence on strict compliance with pleadings rules tends to encourage tactical pre-trial litigation over pleadingsrelated technicalities. Arguments about pleadings provide a fertile ground for parties who are minded to prolong litigation, and there are many notable examples of cases where pleadings took many years to finalise. In the South Australian State Bank litigation, the State sued the bank’s auditors for $3.1 billion and the action only settled after three years of pleadings arguments following an initial statement of claim some 2,600 pages long.8 In the Gunns Ltd litigation against the political leaders of the Greens, the Tasmanian Wilderness Society and other defendants, it took over two years of pleadings arguments, and four attempts, before an

4 5 6 7 8

(1990) 169 CLR 279 at 286 per Mason CJ & Gaudron J. (1990) 169 CLR 279 at 287-288 per Brennan J. Thorp v Holdsworth (1876) 3 Ch D 637 at 639 per Jessell MR. Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 290-298 per Dawson J. See, eg, South Australia v Peat Marwick Mitchell & Co (1997) 24 ACSR 231. [5.30] 105

Principles of Civil Litigation

acceptable statement of claim was filed by Gunns Ltd.9 Not only can such procedural wrangling be a significant source of cost and delay, it can easily become a distortive practice at odds with the purpose of pleading: one party or the other is, in essence, trying to avoid having issues they are well aware of be determined upon their merits. These concerns have led to calls for the pleadings process to be fundamentally reformed. Before we turn to such critiques, it is necessary to outline first the scope and content of the pleadings process.

The pleadings process [5.40] The first step in the pleadings process is the filing of a statement of claim by the plaintiff. The statement of claim outlines the material facts that the party says justify the remedy it seeks. In some jurisdictions the statement of claim must be filed and served with the originating process, and in others the plaintiff is given a choice of either endorsing the originating process with the statement of claim or filing and serving it after the defendant has entered an appearance.10 The period in which the statement of claim must be filed varies across the relevant jurisdictions.11 In New South Wales, the statement of claim is the originating process in most cases.12 In all jurisdictions, the defendant is required to respond to the statement of claim by filing and serving a defence. In the defence, the defendant admits or denies each of the allegations made in the statement of claim and can plead any additional facts that support its defence. The times for filing a defence vary from jurisdiction to jurisdiction, commencing from the date on which the statement of claim is received: • the Northern Territory and Western Australia allow 14 days for filing;13 • Tasmania allows 21 days;14 • Victoria allows 30 days;15 and • New South Wales, Queensland and South Australia allow 28 days.16

9

Gunns Ltd v Marr (No 2) [2006] VSC 329.

10

The jurisdictions in which statement of claims must be filed with the originating process: Court Procedures Rules 2006 (ACT) r 50; Federal Court Rules 2011 (Cth) r 8.05; Uniform Civil Procedure Rules 1999 (Qld) r 22; Supreme Court Civil Rules 2006 (SA) r 91. In all other jurisdictions, the statement of claim may be served subsequently: Uniform Civil Procedure Rules 2005 (NSW) r 6.2; Supreme Court Rules (NT) rr 5.04, 14.02; Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 5.04, 14.02; Supreme Court Rules 2000 (Tas) r 108; Rules of the Supreme Court 1971 (WA) O 6, r 3, O 20, r 1. For example, in the NT it is within 14 days after the defendant’s appearance (Supreme Court Rules (NT) r 14.02), in Tasmania it is within 21 days after the defendant files a notice of appearance (Supreme Court Rules 2000 (Tas) r 265) and in Victoria it is within 30 days after the defendant’s appearance (Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 14.02). Uniform Civil Procedure Rules 2005 (NSW) rr 6.2, 6.3. Supreme Court Rules (NT) r 14.04; Rules of the Supreme Court 1971 (WA) O 20, r 4. Supreme Court Rules 2000 (Tas) r 266. Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 14.04. Uniform Civil Procedure Rules 2005 (NSW) r 14.3; Uniform Civil Procedure Rules 1999 (Qld) r 137; Supreme Court Civil Rules 2006 (SA) r 92.

11

12 13 14 15 16

106 [5.40]

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Should a reply to the defence be needed, the plaintiff in most jurisdictions has 14 days after the service of the defence to file their reply;17 in Tasmania the plaintiff has a 21-day period to reply; and in Victoria the period is 30 days.18 Leave of the court is usually required if the pleadings process is to continue after the reply. A plaintiff will need to file a reply if the defence has raised issues upon which the plaintiff will need to prove new facts not already covered in existing pleadings. If the plaintiff is simply denying the allegations contained in the defence, there is no need to file a reply as the rules deem all allegations in the last pleading to be denied.19 These timeframes represent a relatively crude but effective first mechanism by which the courts can, through the use of their rules, regulate the progress of the litigation. In this regard it can be considered an indirect form of prescriptive case management. It is important to note that these timeframes can be very tight, particularly for defendants. Not only may legal representatives have to be engaged, but evidence must be surveyed, legal implications and arguments must be anticipated, researched and assessed, and a defence drafted and filed. Given the increasing inflexibility as a result of case management principles, both with respect to adjourning procedural events and amending pleadings, this can place much (potentially undue) pressure on the parties and their legal representatives. The pleadings process comes to an end when the period for responding to the last pleading (after the defence) expires. Thus, in practical terms, if no reply is filed, the pleadings close when the period for filing a reply closes. If a reply is filed, then the pleadings close when the reply is filed, unless leave is granted by the court to file further pleadings in response to the reply.

The content of pleadings [5.50] The rules in all jurisdictions outline the basic requirements for pleadings.20 These are complemented by rules that provide for specific pleadings, such as rules for statements of claim and rules for defences. Pleadings rules are numerous, and vary between jurisdictions. Detailed consideration of the rules in each jurisdiction is beyond the scope of this book, but the annotated loose-leaf services available in most jurisdictions explain the various rules of court in considerable depth.

17

18 19

20

See Court Procedures Rules 2006 (ACT) r 480; Uniform Civil Procedure Rules 2005 (NSW) r 14.4; Supreme Court Rules (NT) r 14.05; Uniform Civil Procedure Rules 1999 (Qld) r 164; Supreme Court Civil Rules 2006 (SA) r 94; Rules of the Supreme Court 1971 (WA) O 20, r 5. Supreme Court Rules 2000 (Tas) r 267; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 14.05. Court Procedures Rules 2006 (ACT) r 482; Federal Court Rules 2011 (Cth) r 16.11; Uniform Civil Procedure Rules 2005 (NSW) r 14.27; Supreme Court Rules (NT) r 13.13; Uniform Civil Procedure Rules 1999 (Qld) r 168; Supreme Court Civil Rules 2006 (SA) r 101; Supreme Court Rules 2000 (Tas) r 228; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.13; Rules of the Supreme Court 1971 (WA) O 20, r 15. Court Procedures Rules 2006 (ACT) Pt 2.6; Federal Court Rules 2011 (Cth) Pt 16; Uniform Civil Procedure Rules 2005 (NSW) Pt 14; Supreme Court Rules (NT) O 13; Uniform Civil Procedure Rules 1999 (Qld) Ch 6; Supreme Court Civil Rules 2006 (SA) Ch 5, Div 2; Supreme Court Rules 2000 (Tas) Pt 7, Div 17; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 13; Rules of the Supreme Court 1971 (WA) O 20. [5.50] 107

Principles of Civil Litigation

Instead, this chapter outlines the general principles that govern the content of pleadings that reflect the approach taken in most, if not all, pleadings rules.

Material facts not evidence [5.60] Perhaps the most important principle guiding the drafting of pleadings is that a pleading is to contain material facts rather than evidence. The material facts are those facts that constitute the cause of action or defence. In a negligence action, for example, the material facts are the facts that establish a duty, the breach of that duty and the damage arising from that breach. Often these can be simply stated. Indeed, the brevity of many of the precedents found in precedent manuals like Bullen & Leake21 often take new practitioners by surprise. This unexpected brevity can in part be explained by the distinction between material facts and evidence. Pleadings are to contain facts but not evidence of those facts. Although the distinction can be difficult to draw in practice, generally evidence is the means by which material facts are proved.22 The material facts represent the factual issues the party must prove in order to establish their case, while the evidence represents the information submitted by the party to establish those facts. For example, in a motor vehicle accident case that is a result of driving at excessive speed, the material fact is the allegation of negligent driving, with the specific allegation being that the driver drove at an excessive or unsafe speed, and the evidence might be the observations of a passenger who saw the speedometer showing 120 kilometres per hour in a 60 kilometres per hour zone, footage of a CCTV camera, or forensic evidence of the length of skid marks. The material facts represent the essential factual findings the party asks the court to make in order to establish the cause of action, while the evidence provides the material upon which the judge can safely make that factual finding. The level of generality permitted or required in the assertion of material facts is governed by several factors, including the need to provide notice of the case to the court and other parties, the prevailing attitudes a court has to pleadings rules, and the circumstances of the particular case. Given that the role of pleadings is to provide notice, bare assertions of material facts are usually insufficient. The pleadings rules in most jurisdictions supplement the requirement to plead material facts with the requirement that a party also provide particulars of those material facts. [5.65] Particulars, in the context of pleadings, are to be distinguished from material facts. The most commonly cited explanation of the difference between the two is in the English decision of Bruce v Odhams Press Pty Ltd: The function of “particulars” … is quite different. They are not to be used in order to fill material gaps in a demurrable statement of claim — gaps which ought to have been filled by appropriate statements of the various material facts which together constitute the plaintiff’s cause of action. The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant. Their function is to fill in the picture of the plaintiff’s cause of action 21 22

Lord Brennan et al, Bullen & Leake & Jacobs: Precedent of Pleadings (18th ed, Sweet & Maxwell, 2015). Goldsmith v Sandilands [2002] HCA 31; Luce Optical Pty Ltd v Budget Specs (Franchising) Pty Ltd [2006] FCA 221.

108 [5.60]

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with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial.23

The determination of what constitutes sufficient particulars has produced much interlocutory litigation. The answer is said to turn, in part, on the particular circumstances of the case and “the good sense of the thing”.24 As a result there is considerable variation between what is regarded as sufficient particulars. It must be emphasised that the notice function of particulars relates to the case a party has to meet. This means that it is no answer to a request for particulars to say that a party already knows the relevant facts or has or can obtain the facts from elsewhere — a party is entitled to know what the opposing party alleges to be the facts.25 In practice, distinguishing material facts from particulars can be difficult, especially since modern practice is to include the particulars in a statement of claim. Traditionally, particulars were provided by way of a separate document subsequent to the statement of claim and were not regarded as being a pleading. The modern trend has been to include them in the pleadings and, in some jurisdictions, to dispense with them altogether. As von Doussa J noted in Beach Petroleum NL v Johnson: A strict distinction between material facts and particulars has tended to become more obscured as the years have gone by. The tendency now is towards narrative pleading as there is a growing concern that pleadings according to traditional rules do not adequately make known to the court and to the parties the nature of the opposing cases in complex matters.26

In South Australia, for example, between 2000 and 2006 the Supreme Court Rules abandoned the distinction between particulars and material facts. Material facts were redefined as including those facts that were needed to give a party fair notice of the case it had to answer, although the 2006 rules appear to have resurrected the distinction between particulars and material facts.27 One consequence of merging material facts and particulars is that, contrary to the holding in Bruce v Odhams Press Pty Ltd, the particulars may make good a gap in the material facts in some circumstances.28 This is not entirely settled and some decisions maintain the older approach.29 In many rules, the work of particulars in providing notice is supplemented by a provision that a pleading must contain those facts necessary to prevent the other side being taken by surprise.30 This does not mean that every fact that a party may rely upon must be pleaded, or otherwise the pleadings would be impossibly long.

23 24 25 26 27 28 29 30

[1936] 1 KB 697 at 712-713 per Scott LJ. American Flange & Manufacturing Co Inc v Rheem Australia Pty Ltd [1963] NSWR 1121 at 1126. Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214. (1991) 105 ALR 456 at 466. See Supreme Court Rules 1987 (SA) rr 46A.03, 46A.09; Cf Supreme Court Civil Rules 2006 (SA) rr 99, 102. See, eg, Bartlett v Swan Television and Radio Broadcasting Pty Ltd (1995) ATPR 41-434. See, eg, Cadence Asset Management Pty Ltd v Concept Sports Ltd [2006] FCA 944. See, eg, Federal Court Rules 2011 (Cth) r 16.41; Supreme Court Rules (NT) r 13.07; Uniform Civil Procedure Rules 1999 (Qld) r 149; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.07. [5.65] 109

Principles of Civil Litigation

Similarly, if pleadings were required to include every fact that a party might rely on, a pleading would require frequent amendment as additional facts will often come to light after the proceeding has commenced. The intent of this provision is to ensure that the pleadings provide the other side with the broad factual issues that a party is alleging. As a result, in most cases, if particulars are properly given, there should be little work for this provision.

As brief as the case permits [5.70] Secondly, there is a general principle that pleadings must be as brief as the case permits. This is an aspirational rule as it is difficult to enforce. The recent adoption of an ‘all cards on the table’ philosophy for litigation encourages longer pleadings. This tendency toward lengthy pleadings is exacerbated when courts take a strict approach to pleadings, both by discouraging late amendments and by refusing to allow matters to be raised at trial unless clearly raised on the pleadings. The response of drafters is to be cautious and include everything in the pleadings. While the actual material facts may be briefly stated, the need to provide particulars so as to prevent the other side being taken by surprise means pleadings can become long and complex. It is now not uncommon for pleadings in complex litigation to run to hundreds, if not thousands, of pages in length. The aspirational principle seeks to minimise unnecessary prolixity, yet is limited by these competing considerations. Nonetheless, the rule demanding the pursuit of brevity can render pleadings defective where unnecessary allegations or descent into evidence may make the pleadings ’embarrassing’ or ’prolix’. The classical exposition of this is found in Davy v Garrett31 where Baggallay LJ said: The complaint is that the statement of claim is prolix and embarrassing. The word “prolix” may be used to denote two different things; it may refer to the too lengthy statement of necessary facts, or to the statement of facts unnecessary to be stated. … Here I think that the statement of claim is embarrassing, both for the offensive length at which the statements of necessary facts are set out, and from the statement of unnecessary fact.32

For those drafting pleadings, one issue that arises where there are multiple causes of action is whether repetition of pleadings makes it prolix. Does a common substratum of facts need to be pleaded for every cause of action when multiple causes of action are being pleaded? In Australian Competition and Consumer Commission v Pauls Ltd,33 where the statement of claim was subject to a strike out application, O’Loughlin J held that repetition in circumstances where multiple causes of action were being pleaded was neither embarrassing nor prolix. While it certainly made pleadings longer, the pleader there had a choice between so doing or using cross-referencing to refer back to earlier parts of the pleading and this was a matter of drafting style and not a grounds for objection. The desire for brevity has led to the adoption of specific rules that seek to limit the material that must be pleaded. For example, the rules generally provide that facts that are presumed by law to be true need not be pleaded and conditions 31 32 33

(1877) 7 Ch D 473. (1877) 7 Ch D 473 at 486. (1999) ATPR 41-747.

110 [5.70]

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precedent need not be established unless denied by the other party. Similarly, this desire also results in provisions in the rules to the effect that any document or conversation can be pleaded rather than requiring a party to reproduce the contents of the document or the words spoken. This allows for the elimination of unnecessary repetition. While the rules are permissive — in that they allow a party to plead the effect of the document for the sake of succinctness — those jurisdictions with more recent versions of this rule have tended to make it mandatory, thus the effect of the document must be pleaded rather than the verbatim content.34 As part of the drive to promote brevity in pleadings, some jurisdictions now have special pleading rules for damages in personal injury cases. If a party was required to set out the details of the nature of injuries suffered, and the consequent loss of function and general impairment, along with details of medical treatment and other economic loss, the statement of claim could become unnecessarily long. One solution to this, used in New South Wales, Queensland and South Australia, is to require a party to plead the type of damage suffered or provide a brief outline of the alleged damage, but then to also subsequently file a document outlining the details of such damage.35 Other jurisdictions still require specific details of injuries and loss to be included in the pleadings. Victoria, for example, requires details of economic loss to be particularised down to the name and address of any employer in the 12 months preceding the injury, including duration of employment and total net income after tax.36

Facts not law [5.80] Thirdly, the traditional approach to pleadings says that pleadings should allege facts, not law, although there is no explicit prohibition against pleading law in the rules. The prohibition is said to arise out of the requirement that a pleading contain only the material facts that a party will rely upon. This, it is argued, means pleadings should not contain legal conclusions or be argumentative. The most common legal conclusion in pleadings is the identification of the cause of action. The traditional approach has been that it is for a party to plead the material facts and the court to give judgment on any cause of action that arises out of those facts — there is no need to identify the specific causes of action.37 Indeed, if the causes of action are pleaded, a court is not limited to considering them.38 However, despite the traditional approach, pleading legal conclusions is common39 and indeed often necessary to make sense of pleadings when multiple

34

35 36 37 38 39

Contrast the Federal Court r 16.04 (Federal Court Rules 2011 (Cth)), which is permissive, against the South Australian Supreme Court Civil Rules 2006 (SA) r 98(3), which states that the effect should be pleaded unless there is good reason to state the actual words. See Uniform Civil Procedure Rules 2005 (NSW) r 15.12; Uniform Civil Procedure Rules 1999 (Qld) r 547; Supreme Court Civil Rules 2006 (SA) rr 99(3), 106. Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.10. South Australia now requires a plaintiff to state the basis of each cause of action (Supreme Court Civil Rules 2006 (SA) r 99(1)(b)). Battye v Shammall (2005) 91 SASR 315; Re Brazendale v Tasmaid Foods Pty Ltd [1991] FCA 508. An allegation that the defendant was “negligent” could be characterised as being a legal conclusion, if not the ultimate conclusion a court is being asked to make. [5.80] 111

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causes of action are pleaded. Some jurisdictions expressly allow the pleading of conclusions of law.40 However, a legal conclusion must be supported by a substratum of facts and a bare assertion of a legal conclusion is considered ’embarrassing’ by the courts and therefore likely to be struck out.41 Such an outcome should be entirely unsurprising given that without such underlying material facts, the court would have no basis upon which it could find such a legal outcome. Moreover, without such a factual substratum the opposing party cannot sufficiently know the case against it. The rules do require a party to plead the statutory basis of any cause of action or defence. Again, though, the failure to do so does not mean that the court cannot recognise that cause of action. Illustrating this are two cases arising from aircraft accidents, Agtrack (NT) Pty Ltd v Hatfield42 and Air Link Pty Ltd v Paterson,43 where the plaintiffs had failed to identify the statutory cause of action. The Civil Aviation (Carriers Liability) Act 1959 (Cth) establishes a statutory liability framework based on an international treaty (the Warsaw Convention) that replaces all other civil liability for personal injury or death arising from aircraft accidents. Cases under the Act for such damages had to be commenced within two years of the accident. In both cases the plaintiff had commenced proceedings in State courts seeking damages based on common law causes of action that the Act extinguished — tort and contract. No claim was made pursuant to the Civil Aviation (Carriers Liability) Act 1959 (Cth) and indeed the High Court found that the plaintiffs had no intention of proceeding under the Act at the time proceedings were commenced. By the time the plaintiffs discovered their mistake the limitation period had expired. The High Court held that in both cases, the facts pleaded had the effect of commencing a claim under the Act. While the pleading might need to be amended to comply with court rules on pleadings, the plaintiffs could proceed on the basis that a claim under the Act had been brought within the two year limitation period. While pleadings should contain material facts and not allegations of law, the rules provide that a party can plead a point of law in some situations.44 This can be useful where a party wishes to bring a preliminary issue to a head. For example, a defendant who believes a statement of claim does not disclose a cause of action could, as an alternative to applying to strike out the statement of claim, plead that no cause of action is disclosed as a defence. As pleading law is generally discouraged, failure to do so does not prevent a party from raising the legal point at trial. The rationale for the prohibition arises out of the requirement that a pleading contain only the material facts that a party will rely upon (which, as we have seen, 40 41 42 43 44

See, eg, Supreme Court Rules (NT) r 13.02(2)(b); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.02(2)(b). McCauley v Hamilton Island Enterprises Pty Ltd (1987) 75 ALR 257. (2005) 223 CLR 251. (2005) 223 CLR 283. Court Procedures Rules 2006 (ACT) r 406; Federal Court Rules 2011 (Cth) rr 16.02, 16.08; Uniform Civil Procedure Rules 2005 (NSW) r 14.19; Supreme Court Rules (NT) r 13.02(2); Uniform Civil Procedure Rules 1999 (Qld) r 149(2); Supreme Court Civil Rules 2006 (SA) rr 99-100; Supreme Court Rules 2000 (Tas) r 249; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.02(2); Rules of the Supreme Court 1971 (WA) O 20, r 12.

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can conflict with the underlying objective of pleadings that parties should be given sufficient notification of the case against them). The principle operates on the basis that the opposing party can infer the legal basis and relevant legal issues on the basis of the material facts pleaded. This is not always the case, particularly if there is a novel legal argument in play. Moreover, such an approach no longer seems consistent with the underlying rationale of civil procedure reforms directed to encouraging settlement. The better an opposing party understands the allegations against them, and the legal foundations upon which they rest, the better they will be able to assess the relative merit of both parties’ positions to provide a conceptually sound foundation for settlement. Further evidence supporting a more relaxed approach to the pleading of legal contentions can be found in the fact that courts may seek from the parties, during the pre-trial process, statements of facts and contentions that are intended to assist the court and the parties to determine the live issues in the dispute.

Pleading in the alternative [5.90] There are special pleading rules that govern the issue of pleading in the alternative. As a general principle, a pleading may plead alternative versions of the facts and causes of actions. For example, rule 16.06 of the Federal Court Rules 2011 provides: A party must not plead inconsistent allegations of fact or inconsistent grounds or claims except as alternatives.

Such pleadings are commonplace, as the Federal Court noted in Commonwealth Bank of Australia v Peto (No 2): Of course, it is possible, and indeed a commonplace to allege inconsistent matters in different counts against different parties based on a cause of action arising out of the one transaction.45

It is then possible, for example, for a party to plead a repudiation of a contract and a claim for damages for breach of contract should repudiation not be established.46 This position should not be surprising as pleadings are, after all, only allegations and it is up to the court to determine which is correct. What is not permitted is pleading of facts that the party knows to be false. As the Victorian Court of Appeal explained in CGU Insurance Ltd v Lawless,47 for a party to positively plead to a version of facts it knew to be untrue would be an abuse of process. The problem with alternative pleadings is that they can make it difficult for the opposing to party to know the case it has to meet, and if such is the case, the pleading is embarrassing and runs the risk of being struck out.48 Even where the alternative versions are properly pleaded it is necessary to distinguish between the alternative versions to prevent the pleading becoming incomprehensible.

45 46 47 48

[2006] FCA 516 at [54]. See Till v National Mutual Life Association of Australasia [2004] ACTCA 26. [2008] VSCA 38. See also Issitich v Worrell [2000] FCA 477. See Geneva Finance Ltd v Boys [2001] WASC 269. [5.90] 113

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Rules relating to specific matters [5.100] Finally, in addition to the general rules discussed above, the rules also contain specific provisions applicable to certain types of cases, or to particular types of pleadings. As an example of the first category, New South Wales sets out special pleadings rules for monetary claims and claims for possession of land.49 The Australian Capital Territory also sets out special pleadings rules for certain types of cases, including monetary claims, and some personal injuries claims.50 In some jurisdictions defamation cases have special pleading requirements.51 Similarly, the rules in most jurisdictions provide that a variety of specified issues or matters must be pleaded or particularised. If a party pleads matters such as fraud, misrepresentation, breach of trust or undue influence, it must do so with particularity because of the seriousness of the allegations. Those against whom such allegations are being made are entitled to know — in detail — the allegations against them. Similarly, if a party pleads a state of mind (including incapacity) related to knowledge, notice, intention or motive, they must plead the particulars about that state of mind.52 The rules in Queensland and the Australian Capital Territory provide extensive lists of matters that must be specifically pleaded in this respect: 24 matters are listed in Queensland; and 26 in the Australian Capital Territory.53 South Australia, by contrast, has no equivalent provisions that require the pleading of specified matters.

The formalities of pleadings [5.110] In addition to the rules that govern the content of pleadings, the rules also provide some formalities with which pleadings must comply. Pleadings must, for example, be divided into consecutively numbered paragraphs, each dealing with a separate matter. This makes the iterative process of assertion and denial efficient. The parties are able to admit or deny the assertions by reference to paragraph numbers without having to repeat the contents of each paragraph. Where a combination of facts are pleaded in a paragraph and particular facts are being denied or admitted, they need to be separately identified. There are also signing requirements, which vary in significance between jurisdictions. Increasingly, and as an attempt to prevent the raising or continuation of unwarranted litigation, jurisdictions are requiring a lawyer to certify that there is a basis to the assertions being made in the pleadings. In the Federal Court, for example, the pleading must contain a statement disclosing the name of the person who prepared it and, if that person is a lawyer, the pleading must also include a certificate signed by the lawyer certifying that:

49 50 51 52

53

Uniform Civil Procedure Rules 2005 (NSW) rr 14.12, 14.15. Court Procedures Rules 2006 (ACT) rr 408, 442, 443. See Uniform Civil Procedure Rules 1999 (Qld) r 174; Rules of the Supreme Court 1971 (WA) O 20, r 13A. See, eg, Federal Court Rules 2011 (Cth) r 16.43; Supreme Court Rules (NT) r 13.10; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.10; Rules of the Supreme Court 1971 (WA) O 20, r 13. Uniform Civil Procedure Rules 1999 (Qld) r 150; Court Procedures Rules 2006 (ACT) r 407.

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[The] factual and legal material available to the lawyer provides a proper basis for: (i)

each allegation in the pleading; and

(ii)

each denial in the pleading; and

(iii)

each non-admission in the pleading.54

New South Wales goes further, requiring that pleadings in many types of cases be accompanied by a verifying affidavit that the deponent believes the allegations to be true.55 In other jurisdictions the lawyer is required to certify, or to sign the pleadings, or identify who drafted them. This may be taken as indicating that they comply with the pleadings rules or, at the very least, it makes whoever drafted them publicly accountable for their contents. South Australia adopted this approach in r 98(1)(b), requiring that a pleading: [B]e endorsed with a certificate by the solicitor certifying that the pleading has been prepared in accordance with the party’s instructions and conforms with these rules.56

Queensland requires only that the pleading be signed by the solicitor filing it but, if settled by counsel, the counsel must be named.57 The Australian Capital Territory, the Northern Territory, Tasmania, Victoria and Western Australia have provisions similar to the Queensland provision.58

Amending pleadings [5.120] All jurisdictions have rules that enable a party to amend documents. Specific provisions apply to the amendment of pleadings.59 The power of a court to grant an amendment to pleadings is an extensive power, which can be resorted to at any stage of the proceedings, including after judgment.60 It is not uncommon for a pleading to be amended more than once.61 Generally, the amended pleading is deemed to have taken effect from the date of the original pleading. This rule is not without criticism, and it has been said to be a rule of practice that rests on a

54 55

Federal Court Rules 2011 (Cth) r 16.01(c). Uniform Civil Procedure Rules 2005 (NSW) r 14.23.

56

Supreme Court Civil Rules 2006 (SA) r 98(1)(b).

57 58

Uniform Civil Procedure Rules 1999 (Qld) r 146. Court Procedures Rules 2006 (ACT) rr 405, 6106; Supreme Court Rules (NT) r 13.01; in Tasmania a party can sign instead of the lawyer (Supreme Court Rules 2000 (Tas) r 226); in Victoria and Western Australia counsel who settled the pleading is to sign and, if no counsel was involved, the solicitor must sign the pleading (Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.01; Rules of the Supreme Court 1971 (WA) O 20, r 7). Court Procedures Rules 2006 (ACT) Ch 2, Pt 2.7; Federal Court Rules 2011 (Cth) Pt 16, Div 16.5; Uniform Civil Procedure Rules 2005 (NSW) Pt 19; Supreme Court Rules (NT) O 36; Uniform Civil Procedure Rules 1999 (Qld) Ch 10, Pt 3; Supreme Court Civil Rules 2006 (SA) r 55; Supreme Court Rules 2000 (Tas) Pt 15; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 36; Rules of the Supreme Court 1971 (WA) O 21. See, eg, Kavia Holdings Pty Ltd v Bevillesta Pty Ltd (No 2) [2006] NSWSC 1160; Genocanna Nominees Pty Ltd v Thirsty Point Pty Ltd (No 1) [2006] FCA 70. In Landini v NSW [2006] NSWSA 1054 the plaintiff obtained leave to amend at trial in 2006, despite having filed a “further further further amended statement of claim” in February 2005, followed by a “fourth further amended statement of claim” in March 2005. Also, see Wang v NSW [2013] NSWSC 886 (Sixth Amended Statement of Claim); Matthews v SPI Electricity Pty Ltd [2013] VSC 221 (Eighth Amended Statement of Claim).

59

60 61

[5.120] 115

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“slender foundation”.62 However, as it is only a rule of practice, a court may order that the amendments take effect from a different date. As will be discussed below, in some jurisdictions the rules provide when certain types of amendments will take effect. In most jurisdictions the plaintiff may, as of right, amend the statement of claim before the close of pleadings. A common approach taken by the rules in all jurisdictions is illustrated by r 16.51 of the Federal Court Rules 2011 (Cth). This provision enables a party (up until the close of pleadings) to amend their pleadings once without the permission of the other parties or the court, and subsequently with the consent of the other parties. If consent is not forthcoming (for the second or subsequent amendment) or if it is after the close of pleadings, the leave of the court must be obtained. There is also a right to amend a pleading where an opponent has amended the prior pleading in the process, for example, if a plaintiff amends the statement of claim, then the defendant has the right to amend the defence in response to those amendments. In New South Wales the right to amend a statement of claim lasts for only 28 days after filing the statement of claim.63 South Australia appears to have taken a more generous approach, with the parties able to amend pleadings within the period allowed for discovery.64 Amending pleadings is often relatively straightforward. New facts come to light or old facts are seen in a new light in the course of pre-trial preparation and, while the facts may be contested, there is little question that the party should be allowed to amend the pleadings. There are, however, two areas that potentially give rise to considerable difficulty. [5.125] The first is that amending pleadings carries with it the potential to significantly add to the length and cost of the litigation. The opposing parties will need to reconsider their cases in light of the amendment; they may need to undertake additional investigations and amend their pleadings in response. In extreme cases, the amendments may make irrelevant or unnecessary much of the previous work done in the case by a party. The consequences of amending the pleadings become greater the closer the case gets to trial. Given that this was one of the major ‘ills’ that case management sought to minimise it is unsurprising that many of the key cases relating to case management arise in the context of applications to amend pleadings. It is now generally accepted that the proper approach to amendment of pleadings requires a court to act consistently with its duty to do justice. If the amendment is needed to enable the party to put its case fully and fairly, then it should be allowed provided that it will not cause injustice by creating unfair expense and delay to the other parties in the litigation and to the workings of the civil justice system. While the question of what is unfair can only be determined in the circumstances of the particular case, the issue of where emphasis should properly be placed in balancing these considerations has varied over time.

62 63 64

Morgan v Banning (1999) 20 WAR 474 per Wheeler J; see also Baldry v Jackson [1976] 2 NSWLR 415; Agtrack (NT) Pty Ltd v Hatfield (2003) 7 VR 63. Uniform Civil Procedure Rules 2005 (NSW) r 19.1. Supreme Court Civil Rules 2006 (SA) r 54.

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The traditional approach has been generous to parties seeking to amend their pleadings. Permission would be granted unless the amendment is obviously futile or the other party in the case would be prejudiced in a way that could not be made good by the awarding of costs. The traditional approach, as articulated by Maxwell P of the Victorian Court of Appeal, held that “a party should always be permitted to amend a pleading to raise an arguable claim or defence, unless the allowing of the amendment would cause prejudice to the other party which could not be adequately remedied by an order for costs”.65 The practical effect of this approach made it difficult to resist applications to amend. The introduction of case management has, slowly, altered this approach by adding additional factors that needed to be taken into account when deciding whether to grant leave to amend pleadings — the emotional effects on the other parties in the case; the detriment to other litigants waiting to have their cases heard; and the impact on the efficiency and effectiveness of the court. This is outlined in Chapter 4, along with an analysis of the 1997 High Court decision in Queensland v JL Holdings Pty Ltd66 which entrenched the traditional approach, and its subsequent reversal in 2009 in Aon Risk Services Ltd v Australian National University.67 As the joint judgment in the latter case makes clear — parties do not have a right to amend pleadings. It is a discretionary decision requiring consideration of a broad range of factors including case management considerations and the impact beyond the confines of the case in which the application is sought. The effect of Aon Risk Services has been to shift the traditional balance so that greater emphasis can now be placed, in making the discretionary decision to allow an amendment or not, on the interests of other litigants and the system at large. As a result courts are more willing to refuse applications for amendment; in turn making such applications more contentious. [5.130] A second area of difficulty exists where an application to amend pleadings conflicts with limitation periods. The proposed amendment may seek to introduce new causes of action, or additional parties to existing causes of action, beyond a relevant limitation period. This raises difficult questions of policy with competing interests — on the one hand, the need to provide finality so defendants are protected from being sued over old disputes, and on the other hand, the wish to enable plaintiffs to have all matters in dispute determined when litigation has already been commenced. The 19th century English authority of Weldon v Neal68 held that a plaintiff would not be allowed to amend its pleading to add another cause of action where that cause of action was out of time by virtue of limitations legislation. Jurisdictions across Australia have responded differently to the “rule in Weldon v Neal”. As rules of court cannot override statutory provisions, the power to allow amendments contrary to the limitations legislation requires statutory authority. For the Federal Court and in New South Wales, the Northern Territory,

65 66 67 68

Panasonic Australian Pty Ltd v Broadtel Communications Ltd [2007] VSC 273 at [4]. (1997) 189 CLR 146. (2009) 239 CLR 175. (1887) 19 QBD 394. [5.130] 117

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Queensland, and Victoria, the necessary statutory authority has been enacted.69 A party may seek leave from the court to enable it to add a cause of action after the expiry of the time for bringing the cause of action, provided any procedural prejudice to the other party is able to be made good by way of costs. In contrast, statutory authority to add parties and causes of actions to pleadings where the limitation period has expired has not been granted to courts in the Australian Capital Territory, South Australia, Tasmania and Western Australia. In these jurisdictions, a more limited abolition of the rule in Weldon v Neal has been attempted,70 such that the rules empower a court to grant leave to amend pleadings after expiry of the limitation period in certain circumstances. For example, a cause of action may be added if the “new” cause of action “arises out of substantially the same facts as the original cause of action”.71 Similarly, the rules enable a court to allow a new party to be added or substituted if the court is satisfied “that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the party intending to sue or, as the case may be, intended to be sued”.72

Defective pleadings [5.140] Pleadings that do not comply with the pleading rules of both form and content will be defective. Such pleadings can be defective in various ways, and the consequences for such defects can range from requiring repair by amendment to termination of proceedings. In the most extreme cases pleadings may be so fatally flawed that a court will determine that the proceedings should be brought to an end. For example, in a case where the pleadings do not disclose a cause of action or a defence, the case may be terminated pre-trial. An opposing party may apply under the rules to have the party’s claim or defence dismissed and judgment entered accordingly. This can be achieved by a variety of procedural mechanisms (for example, summary judgment) where there is no prospect that the defects are repairable, and this issue is discussed in Chapter 6. However, the far more common situation is that the pleading is in breach of the pleading rules but the defect is repairable by an amendment to the pleadings. This chapter focuses on the challenges to pleadings that are defective but able to be repaired by amendment. The rules in each jurisdiction provide that a party may apply to strike out a pleading, or part thereof, that is not complying with the pleading rules.73 The common grounds found across the jurisdictions are:

69

70 71 72 73

Federal Court of Australia Act 1976 (Cth) s 59(2B); Civil Procedure Act 2005 (NSW) ss 64, 65; Limitation Act (NT) s 48A; Civil Proceedings Act 2011 (Qld) s 16; Limitation of Actions Act 1958 (Vic) s 34. While in NSW s 65 would appear to provide a limited departure from Weldon v Neal, s 64 has been given sufficiently broad interpretation so that it effectively abolishes the rule in Weldon v Neal (see Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166). Court Procedures Rules 2006 (ACT) r 503; Supreme Court Civil Rules 2006 (SA) r 54; Supreme Court Rules 2000 (Tas) r 427; Rules of the Supreme Court 1971 (WA) O 21, r 5. Supreme Court Civil Rules 2006 (SA) r 54(7). Rules of the Supreme Court 1971 (WA) O 21, r 5(3). Court Procedures Rules 2006 (ACT) r 425; Federal Court Rules 2011 (Cth) r 16.21; Uniform Civil Procedure Rules 2005 (NSW) r 14.28; Supreme Court Rules (NT) r 23.02; Uniform Civil Procedure Rules 1999 (Qld) r 171; Supreme Court Civil Rules 2006 (SA) r 104; Supreme Court

118 [5.140]

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• where no reasonable cause of action is disclosed; • the pleadings are vexatious or embarrassing; or • the pleadings are an abuse of process. As noted, the failure to plead a cause of action can lead to summary judgment or striking out of pleadings with dismissal of the party’s case. However, a pleading that is less fundamentally defective, but is “unintelligible, ambiguous, vague or general pleading that fails to clearly state the issues”,74 may also be liable to be struck out. Such pleadings are described as being “embarrassing”. Embarrassing in this context refers to the effect of the pleading on the other party. The pleading may be embarrassing because it is drafted in a way that makes it difficult, if not impossible, for the other party to respond to. This may arise from the pleading being so general, vague or — at the other extreme — so complicated, that the responding party cannot ascertain what the case it has to meet is.75 Where the pleadings are defective in this regard, but are repairable, the court will usually grant leave to amend the pleadings. Usually if the pleading does not comply with the rules of pleading or if the pleading had a tendency to cause prejudice, embarrassment or delay or it was scandalous, frivolous or vexatious the pleading or that part of the pleading would be struck out, but the plaintiff would be given leave to either re-plead his or her case in whole or in part. An order might be made to strike out the proceedings themselves if there was a continuing failure to comply with the rules as to pleadings or the plaintiffs insisted on maintaining a pleading which had a tendency to cause prejudice, embarrassment or delay or which was scandalous, frivolous or vexatious, but that would be a rare occurrence.76

It is worth noting that the pleadings cases in the law reports often arise out of third, fourth or more attempts to draft pleadings that comply with the rules before the proceedings as a whole are struck out. [5.145] In addition, pleadings can also be attacked for failing to provide adequate particulars. In such situations, the pleaded material facts may constitute a cause of action but the subsidiary facts in support have not been identified in sufficient detail to enable the opposing the party to know the case it has to meet. In these cases, the remedy is not to strike out the pleading, but to seek further and better particulars. The usual procedure is that the party seeking further or better particulars requests them from the other party. If they are not provided the party who requested them in the first place can file and serve an interlocutory application seeking a court order that the particulars be supplied. Such applications are determined by examining the particular circumstances of the case and the existing pleadings, and asking whether the pleadings, as they stand, serve the purpose for which they are intended.

74 75 76

Rules 2000 (Tas) rr 258 – 259; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 23.02; Rules of the Supreme Court 1971 (WA) O 20, r 19. B Cairns, Australian Civil Procedure (11th ed, Thomson Reuters, 2016) p 280. Sheldon v National Roads and Motorists Association Ltd [2004] FCA 1363; Gunns Ltd v Marr [2005] VSC 251. Chapman v Australian Broadcasting Corporation (2000) 77 SASR 181 at 186 per Lander J. [5.145] 119

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Over time courts have varied in the approach they have taken to pleadings rules and their response to formally defective pleadings. The modern trend is to discourage technical challenges to pleadings and to focus on whether the pleadings serve their intended function. The question of whether a pleading is so defective that it should be struck out is generally to be answered by whether or not the pleading serves the fundamental objective of pleadings and whether any significant deficiencies in it can adequately be overcome by the provision of particulars or by some other means. While it is necessary that a pleading set out with reasonable clarity and detail the case that the other party must meet, the focus must be on whether the pleading is sufficient for the fair and proper disposition of the case, not whether it complies meticulously with the rules of pleading.77

The new case management practices may also influence the approach to defective pleadings. Parties may need to make tactical decisions when faced with defective pleadings that are in breach of the rules but not so fatally flawed as to lead to early termination of the case. Given the trial is restricted to those matters contained in the pleadings, a party may choose not to challenge the pleadings pre-trial but to wait until the trial where it would seek to prevent those matters being litigated. When a very generous approach to amendment of pleadings existed, this strategy carried greater risk, as pleadings could be amended at trial. With the more modern and more restrictive approach emerging to amendment of pleadings since Aon Risk Services Ltd v Australian National University,78 the strategy of not engaging in pre-trial arguments about defective pleadings becomes more attractive.

NOTICES TO ADMIT [5.150] As outlined above, pleadings define ’live’ issues in dispute by a process whereby allegations are either accepted or denied by the opposing party. A complementary mechanism which also serves this function of defining contentious facts is the “Notice to Admit”. A Notice to Admit is a document in which one party asks other parties to agree to certain facts or the authenticity of documents. If the responding party denies the fact or authenticity of the document, it usually is required to provide the grounds for the denial. The effect of Notices to Admit is to encourage admissions, and thereby reduce the number of matters a party has to prove. All jurisdictions have a provision in their rules that enables a party to draft and serve a notice requiring another party to admit specified facts or the authenticity of specified documents.79 While the Federal Court and the Australian Capital Territory rules might appear, on the face of it, to extend to admitting the contents of documents, the prescribed forms make it clear that, in so far as documents are 77 78 79

Noyes v Gwilliam [2006] WASC 183 at [36] per Newnes M. (2009) 239 CLR 175. Court Procedures Rules 2006 (ACT) r 491; Federal Court Rules 2011 (Cth) r 22.01; Uniform Civil Procedure Rules 2005 (NSW) rr 17.3, 17.4; Supreme Court Rules (NT) rr 35.03, 35.05; Uniform Civil Procedure Rules 1999 (Qld) r 189; Supreme Court Civil Rules 2006 (SA) r 156; Supreme Court Rules 2000 (Tas) rr 399, 401; Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 35.03, 35.05; Rules of the Supreme Court 1971 (WA) O 30, rr 2, 5.

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concerned, the rule is restricted to admissions relating to their authenticity. Nevertheless, there is nothing to prevent a party seeking specific admissions of the contents of documents as factual matters. In this regard, South Australia’s r 15680 is even broader, enabling a party to seek admission not just on the authenticity of documents but their admissibility and relevance. A party who receives a Notice to Admit may admit or dispute the claims made in the Notice. Where the responding party disputes the facts, they must do so within 14 days of receiving the Notice (except in Western Australia where the prescribed period is seven days).81 If the party does not respond to the Notice, the rules deem the matters in the Notice to be admitted.82 Furthermore, if a party denies facts which it is asked to admit by a Notice, and those facts are subsequently proved to be true, the party who disputed the fact or authenticity will normally be required to pay the costs incurred in proving that fact or authenticity. Where a party has mistakenly or inadvertently admitted, or is deemed to have admitted, matters following a Notice to Admit, the party may apply to the court to withdraw the admission. As the Queensland Court of Appeal pointed out in Ridolfi v Rigato Farms Pty Ltd,83 a party seeking to withdraw an admission needs to explain on oath how the admission came about and the consequences for the trial if the admission was withdrawn. Leave to withdraw an admission where the facts are not genuinely contested and the goal is tactical advantage (for example, forcing the other party to prove them at trial to enables certain witnesses to be exposed to cross-examination), should be refused.84 There appears to be no limit to the number of Notices to Admit that can be served, although in some jurisdictions they are only available up to a certain stage in the pre-trial process. However, a party cannot issue a second notice relating to the same facts or documents if they have been denied, unless the circumstances have changed. Thus in Permanent Trustee Co Ltd v Gulf Import & Export Co (No 2),85 the plaintiff had served a second Notice to Admit after the defendant had responded, denying the facts in the first Notice to Admit. The defendant failed to respond to the second Notice and was deemed to have admitted the authenticity of certain documents. Harper J held that, normally, a party could not serve a second notice on the same facts but here the defendant had amended its defence in a manner inconsistent with its denial of the matters in the Notice to Admit and so in the circumstances of this case, the plaintiff could serve a second Notice and the defendant was bound by its non-response. The practical purpose of a Notice to Admit is that it may lead to admissions which reduce the matters a party has to prove. However (and perhaps more importantly), it increases the other party’s potential liability for costs. Under this

80 81

82 83 84 85

Supreme Court Civil Rules 2006 (SA) r 156. Rules of the Supreme Court 1971 (WA) O 30, rr 2, 5. The South Australian rules require more than the listing of the facts to be disputed, the party must also outline the grounds as to why the assertion is disputed (Supreme Court Civil Rules 2006 (SA) r 156). In Tasmania and WA this only applies to the authenticity of documents (Supreme Court Rules 2000 (Tas) r 399; Rules of the Supreme Court 1971 (WA) O 30, r 5). [2001] 2 Qd R 455. Permanent Trustee Co Ltd v Gulf Import & Export Co [2006] VSC 110. [2006] VSC 127. [5.150] 121

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mechanism even a winning party can find itself liable for costs of matters which the losing party successfully proved and that the winning party had denied. As a result of these significant implications, the Notice to Admit procedure can involve considerable effort and expense. In Southern Equities Corp Ltd (in liq) v Bond (No 2),86 the notice to admit was 106 pages long and was accompanied by 18 volumes of documents. In those jurisdictions where the basis of any refusal to admit facts must also be provided, parties can apply to the court for further and better responses to the Notices to Admit, creating the potential for the sort of interlocutory warfare that has bedevilled pleadings. Such an outcome once more illustrates the unintended consequences that can undermine procedural reform. While the Notice to Admit process may operate as an effective tool to encourage agreement in the case of simple and non-controversial issues, there is clear potential for the tool to be misused and abused with respect to issues that are genuinely in dispute. There is, for example, a risk that parties may speculatively issue a Notice to artificially bolster their case by exerting costs pressures on an opposing party in a way that distorts litigation. It is worth noting that explaining why an assertion is not admitted, as is mandated in the South Australian rules, may require the party to outline its evidence. As such, this extends the function of Notices to Admit beyond defining issues or facts in dispute. The Notice to Admit starts to more closely resemble those procedural mechanisms intended to maximise the disclosure of information about the dispute and the nature of a party’s case, the subject of Chapter 8.

DEFINING ISSUES — POSSIBLE ALTERNATIVES [5.160] This chapter has outlined the two main mechanisms for defining the issues in dispute: the pleadings process and the Notice to Admit. What has not yet been examined is how effectively they fulfil their function and what alternatives exist. The primary mechanism for defining issues in dispute, the pleadings process, has, under current approaches, the potential to generate considerable interlocutory litigation. Pleadings are easily transformed from a useful functional mechanism into a weapon to harass and entangle opposing parties in a morass of technicalities. The pleadings process was a significant contributor to the ’triumph of form over substance’ and a cause of the general disrepute that common law procedure fell into prior to the major procedural reforms of the 19th century. Since then the approach to pleadings has resembled a pendulum — swinging between considerable latitude and flexibility at one extreme, to a stricter view at the other — as lawyers respond to each approach and the disadvantages of each became apparent. While the courts have recently emphasised the importance of focusing on the function of pleadings rather than the technical rules, the fact that the rules exist at all enables a party to use them to tie up other parties in pleadings battles. As Rogers CJ said in the context of litigation in the New South Wales Supreme Court: [T]he matter bogged down — and I use that word advisedly — in interlocutory motions wherein the defendants took strike-out motions and consistently refused or 86

(2000) 209 LSJS 353; [2000] SASC 213.

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resisted to give discovery … In my view, the defendants’ conduct of the proceedings was perfectly proper in so far as the Rules permitted. It was completely discordant with the principles and concepts which underwrite litigation.87

The cases are replete with expressions of concern at the cost and delay caused by interlocutory battles over pleadings. Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority88 indicated the court should not be left “to sift through a mullock heap of insubstantial and pedantic objections”89 having previously said: Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. … In this case, I have reviewed the statement of claim and the objections to it and I have done so in the case management context to which I have referred. It is my view, that many of the objections which have been taken are pedantic and pettifogging in nature. In many cases, elucidating and resolving the objection would consume an amount of time and resources, which is entirely disproportionate to the benefit to be derived from that process in terms of the identification of the true issues which have to be met in the case. … It seems to me, that only a lawyer interested in technical advantage, obfuscation and delay could feign ignorance of the substantive issues that emerge from that pleading and the case which has to be met.90

Similarly, Hutley JA in the New South Wales Supreme Court held: The search for excessive precision in pleading has to be restrained and the sad history of the Hilary Rules never forgotten (Holdsworth: History of English Law Vol IX p 325). In this case, the defences of the respondent are not known, though more than a year has passed. The appellant has, by the ingenuity (in my opinion, misplaced) of the respondent’s counsel been entangled in pleading difficulties from which at great expenditure of time and labour she has struggled with substantial success.91

Defamation cases, in particular, lend themselves to pleadings disputes over the meanings of words or imputations. Newnes M in Medford v Nationwide News Pty Ltd92 noted the need for pleadings to define issues but also noted: [T]hat is not to justify excessive zeal by defendants in pursuing the refinement of the pleaded imputations. In Buckeridge v Walter … , the [West Australian] Court of Appeal. … endorsed the comments of Kirby J in Favell v Queensland Newspapers Pty Ltd…, to the effect that excessive refinement of pleading issues is to be discouraged and courts should discourage, or minimise, the impediment to a fair trial presented by the process of “trial by interlocutory ordeal”, which is especially prevalent in defamation proceedings.93

The above passages have been reproduced in some length because they highlight the disadvantages that flow from the use of the current pleading process to define issues.

87 88 89 90 91 92 93

AWA Ltd v Daniels t/a Deloittes Haskins and Sells (No 2) (Unreported, Supreme Court of New South Wales, Rogers CJ, 27 April 1993). [2006] WASC 281. [2006] WASC 281 at [14]. [2006] WASC 281 at [8]-[9], [12]. Hepburn v TCN Channel Nine Pty Ltd [1983] 2 NSWLR 682 at 692. [2007] WASC 52. [2007] WASC 52 at [25]. [5.160] 123

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[5.165] The question that then arises is whether the pleadings process could be improved to overcome these problems or whether there is an alternative mechanism that could be used to define issues. One possible response to problems with the Anglo-Australian pleading process would be to abandon factual pleading and replace it with notice pleading. This was the response of the federal civil procedure reformers in the United States in 1938 when faced with the same problems with fact pleadings as currently identified by Australian courts. Rule 8 of the Federal Rules of Civil Procedure in the United States requires “short and plain statement[s]” setting out the jurisdictional basis of the claim and “a demand for judgment for the relief the pleader seeks”.94 There is no need to plead the factual basis of all elements of the cause of action. However, one consequence of the abbreviated pleading process in the United States is that it provides little notice of the details of the case and it does not closely define the live issues in dispute.95 These functions are served by the discovery and pre-trial conference processes. Similarly, the process of filtering unmeritorious claims is not by way of applications to strike out pleadings but is almost entirely by the summary judgment process. One recent proposed change to the pleading process in the United States context is to incorporate a pre-pleadings conference between the parties to serve the purpose of providing each other with notice of the dispute.96 It also has the benefit of providing an early opportunity to resolve the dispute. The conference could also contribute to the other functions that fact pleadings provide — defining the live issues, setting the parameters for the pre-trial process and providing an additional method for filtering out unmeritorious claims. [5.170] Other procedural changes now provide alternative mechanisms for meeting the purposes pleadings are intended to address. In Barclay Mowlem Construction Ltd v Dampier Port Authority97 Martin CJ held that a new approach to pleadings was warranted: In my view, the contemporary role of pleadings has to be viewed in the context of contemporary case management techniques and pre-trial directions. In this Court, those pre-trial directions will almost invariably include; firstly, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; secondly, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; thirdly, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourthly, the exchange of chronologies; and fifthly the exchange of written submissions. Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case.98

The recent introduction of pre-action requirements involving formulation of claims, exchange of experts reports and, in some jurisdictions, compulsory 94 95 96 97 98

Federal Rules of Civil Procedure (US) r 8(a). C Fairman, “The Myth of Notice Pleading” (2003) 45 Arizona Law Review 987. M Moffitt, “Pleadings in the Age of Settlement” (2005) 80 Indiana Law Journal 727. [2006] WASC 281. [2006] WASC 281 at [5]-[6].

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mediation or settlement conferences, are reducing the need for the current fact pleading regime. It seems that the time is approaching for a rethinking of the role of pleadings within the Australian context. One of the changes in litigation has been to reframe the stage in the dispute at which litigation is commenced — the contemporary approach encourages commencing proceedings only when a party is ready to proceed to trial. The old ethos of issuing proceedings and then preparing one’s case at one’s own pace ended with the introduction of case management. It is now common for parties to have sufficient communication before proceedings are commenced to enable them to have a reasonable understanding of the nature of the case. The trend towards pre-action requirements ensures that this is the case.99 In these circumstances a brief form of notice pleading may be sufficient. Should it become clear that the case is likely to go to trial, closer attention could be given to defining the live issues. A lesser change would be to resort to fact pleading at this stage but arguably, as Martin CJ’s comments above suggest, the functions pleadings serve could be met by pre-trial conferences and disclosure requirements. Part of the case management conference process could involve drafting statements of the issues to be determined by the court, either by the parties or by the court with the assistance of the parties. In the Federal Court it is already not uncommon for a managing judge to ask for a statement of facts and contentions to be developed to help define the live issues. Thornberg and Cameron have suggested that: While pleadings may serve other useful purposes, there is no reason to spend litigant and court time in precisely and laboriously calibrating the content of written pleadings. Case management practices, while not without problems of their own, show promise as a way to encourage realistic and early identification of the central issues in a case, to focus discovery, and to specify the issues to be tried.100

Such a change may not be a radical one. Hazard and Dondi, in their survey of comparative civil procedure, note that in most legal systems the parties control the ambit of the disputes and, while there are differences in degree, judges in most jurisdictions play an important role in the process of defining the issues. They argue that it is essential for the judge to frame the case, albeit within the parameters set by the parties. It is in this context that pleadings play a crucial role: Generally, the judge framing the case in such a contest will first check the initial writings produced by the advocates on behalf of their clients. The range and quality of these initial controls have a great impact on whether a procedural system is efficient and effectively aimed at just results. To reach these goals of justice and efficiency, the judge should not limit his task to checking the formal package of the claim, though that is certainly an essential and unavoidable part of the process. However, he should also plunge into the very intellectual and strategic foundation of these contentions. … This often involves ridding the case of many of the useless

99

100

“I would be relatively confident that the position of all Courts in the very near future will generally be to the effect that it will be impossible for a civil dispute to get to trial without having first undertaken a process of mediation” (Martin CJ, Speech to Association of Australian Magistrates Conference, Perth, 10 June 2006). E Thornberg and C Cameron, “Defining Civil Disputes: Lessons from Two Jurisdictions” (2011) 35 Melbourne University Law Review 208 at 210. [5.170] 125

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complexities raised in the initial writings of the advocates for tactical reasons, and figuring out a precise and determined path towards resolution.101

While civil law jurisdictions have traditionally provided greater scope for judicial supervision, Hazard and Dondi show how in France, Germany and Spain the parameters of the dispute are set by the parties, although it takes place under constant judicial supervision which has the benefit of “avoiding abusive strategies by the advocate in the very beginning of a civil case”.102 Closer to home, the Family Court moved to abolish pleadings in 1995. More recently the Family Law Act 1975 (Cth) has been amended to provide statutory support for a new litigation process the Family Court has adopted for cases involving children.103 In the new procedure The judge would proceed to identify contentious issues that required a decision and non-contentious facts through use of the questionnaires and discussion with the parties.104

Finally, it must be remembered that most litigation in the Australian civil justice system is already conducted under a procedural regime that does not require pleadings. In the small claims jurisdiction in courts and tribunals, the notice of the case and the identification of issues are accomplished by a process akin to notice pleading.

101

102

103 104

G Hazard & A Dondi, “Responsibilities of Judges and Advocates in Civil and Common Law: Some Lingering Misconceptions Concerning Civil Lawsuits” (2006) 39 Cornell International Law Journal 51 at 66-67 (citations omitted). G Hazard & A Dondi, “Responsibilities of Judges and Advocates in Civil and Common Law: Some Lingering Misconceptions Concerning Civil Lawsuits” (2006) 39 Cornell International Law Journal 51 at 64. It should be noted, however, that the civil jurisdictions do require fact pleading and usually the identification of the evidence by which the facts are to be proved is also required in the pleadings. Family Law Act 1975 (Cth) Pt VII, Div 12A. M Harrison, Finding a Better Way: A Bold Departure from the Traditional Common Law Approach to the Conduct of Legal Proceedings (Family Court of Australia, 2007) pp 43-44.

126 [5.170]

CHAPTER 6 Pre-Trial Termination of Proceedings Judicial pre-trial termination of proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 128 [6.20] Termination for procedural default . . . . . . . . . . . . . . . . . . . . . . . . . . 129 [6.30] Default of appearance or default of defence . . . . . . . . . . . . 129 [6.70] Failure to remedy defective pleadings . . . . . . . . . . . . . . . . . 137 [6.80] Non-compliance with other procedural orders or requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 [6.100] Abuse of process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 [6.110] Failure to proceed with the action . . . . . . . . . . . . . . . . . . . . 143 [6.130] Summary judgment and pre-trial termination on substantive grounds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 [6.150] Possible directions for reform . . . . . . . . . . . . . . . . . . . . . . . . . 151 [6.160] Consensual and party-based pre-trial termination . . . . . . . . . . . . . . . . . . . 152 [6.170] Discontinuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 [6.180] Consent judgments and orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 [6.15]

[6.10] This chapter examines the various ways proceedings can be terminated without going to trial. As such procedures offer (at least in most cases) a way to reduce cost and delay in resolving a dispute, there has been pressure to expand the circumstances in which they can be utilised. For many litigants, early termination of the proceedings is highly desirable. If a party can quickly resolve a dispute in their favour, without the cost and expense of a full hearing and expansive determination on the merits of the dispute, their experience of the civil justice system is likely to be favourable. Of course, the utilisation of pre-trial termination procedures can be controversial. The use of such procedures can render the losing parties subject to a determination against their interests without the benefits and protections of a full trial. In examining the processes of pre-trial termination in this chapter, these tensions will be recurrent themes. Procedures for the pre-trial termination of disputes fall into two broad categories: (1) judicial termination of proceedings; and (2) party-based termination of proceedings. For the purposes of this chapter, the more significant of these categories is the judicial pre-trial termination of proceedings, whereby the dispute is terminated by a pre-trial order or determination of the court. Such procedures fall into two categories: (a) termination due to procedural default by a party; and (b) termination where a case can be decided without the need of a trial. The first category covers what are commonly described as ’default judgments’. Such judgments may be entered when a party fails to take a required procedural step, such as entering an appearance, or may follow the striking out of defective pleadings. Alternatively, proceedings may be dismissed for want of prosecution. While this last category is not an early termination, it is included here as conceptually it arises from the default of a party in that they have failed to proceed with the litigation. [6.10] 127

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The second sub-category of judicial pre-trial termination of proceedings is conceptually very different, focusing on substantive rather than procedural shortcomings. Procedures for ’summary judgment’ allow the court to make a determination on the merits without a full trial. Such procedures are used, for example, where the court is convinced on the pleadings or supporting documents that the defence (or in some the jurisdictions, the claim) has no chance of succeeding. Alternatively, procedures may allow parties to argue their case before a judge without going through the normal pre-trial process or to trial in cases where the dispute involves no, or at most a very limited, factual dispute. One significant difference between the two sub-categories of early judicial termination is that the court is more willing to set aside default judgments because it is not a judgment based on the merits of the case. As a summary judgment is in effect a judgment on the merits, it cannot be set aside. It can only be challenged through the appeal process. Both these sub-categories raise difficult questions of principle for civil justice reformers. Default judgments, like case management decisions, mean that because of procedural considerations a court may decide a dispute against a party without reference to the underlying merits of their position. However, as the discussion of case management in Chapter 4 demonstrated, the reforms have increasingly scaled back the right to have a case determined on its merits in the interests of broader considerations. Similarly, as discussed below, the test for summary judgment has changed in some jurisdictions to make it easier, at least theoretically, to obtain summary judgments. This change enables a court to give judgment where it thinks there are no reasonable prospects of one of the parties succeeding. Such changes allow the termination of a dispute without the parties having the full benefits of the normal litigation process in instances where there may be some small prospect of the losing party succeeding. This chapter will explore the systemic implications and competing interests of both the traditional approaches, as well as the more recent changes. It will also briefly overview possible future directions for reform, including more radical forms of pre-trial judicial termination such as procedures for provisional judgment. The chapter concludes by looking at procedures for the party-based pre-trial termination of proceedings. Such pre-trial terminations may arise from a unilateral decision of one party, for their own reasons, to discontinue its case, or a bilateral decision of both parties to settle the dispute. In both cases, careful thought needs to be given to the process leading to the effective termination of the dispute. Once a proceeding has been formally commenced in the civil justice system, no one party can independently terminate those proceedings without regard to the other parties. If, for example, a plaintiff has decided not to continue with proceedings, it cannot simply discontinue without dealing with the issues of the expense it has caused to the other party. As we will see, even where both parties have consented to the proceeding ending, the choice of mechanism to achieve this can have significant practical and legal consequences for the parties.

JUDICIAL PRE-TRIAL TERMINATION OF PROCEEDINGS [6.15] Procedures for the judicial pre-trial termination of proceedings allow a dispute to be terminated by a pre-trial order or determination of the court. Such 128 [6.15]

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procedures fall into two broad categories: (a) termination following a procedural default by a party; and (b) termination where a case can be substantively decided without the need of a trial. The procedures of the first category allow the termination of proceedings where there has been a significant procedural failing of a party sufficient to justify the court terminating the dispute against their interest. The second category focuses on substantive rather than procedural shortcomings, and involves procedures that allow the court to make a determination on the merits without a full trial.

Termination for procedural default [6.20] There are a range of procedural failings on the part of one party that can lead to the pre-trial termination of proceedings against that party’s interest. These include: • failure to file an appearance or defence; • failure to remedy defective pleadings; • non-compliance with other procedural orders or requirements; • abuse of process; and • failure to proceed with the action. While the rules in each jurisdiction make provision for default judgments, they vary in structure.1 Some jurisdictions have a general rule relating to default judgments with sub-rules for the different types of default, while others have separate rules for the differing default situations. However, overall, the content of the rules is generally similar.

Default of appearance or default of defence [6.30] The most common of these forms of pre-trial termination arise where one party, generally a defendant, fails to file documents in response to the originating process or fails to file their defence. In such circumstances the opposing party, generally the plaintiff, is able to ask the court to enter judgment against the defendant. This largely administrative procedure allows the pre-trial termination of the dispute without the need for any hearing. This procedure is quite different from the other procedures for the pre-trial termination of disputes for procedural default as the court order can be made without any need for an interlocutory application and, if contested, a hearing. This represents a pragmatic response to dealing with apparently uncontested claims. In all jurisdictions the court has a power to grant a default judgment where the defendant has failed to file, within the time specified by the rules, an appearance (where it is required) or a defence. This default judgment process is justified on the basis that the defendant’s failure to respond to the originating process or file a defence indicates that they are not challenging the plaintiff’s claim. For this 1

Court Procedures Rules 2006 (ACT) Ch 2, Pt 2.11, Div 2.11.2 – 2.11.3; Federal Court Rules 2011 (Cth) Ch 1, Pt 5, Div 5.2; Uniform Civil Procedure Rules 2005 (NSW) Pt 16; Supreme Court Rules (NT) O 21; Uniform Civil Procedure Rules 1999 (Qld) Ch 9, Pt 1; Supreme Court Civil Rules 2006 (SA) rr 228 – 231; Supreme Court Rules 2000 (Tas) rr 342 – 355, 570; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 21; Rules of the Supreme Court 1971 (WA) O 13, 34. [6.30] 129

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assumption to be justifiable and sustainable it is vital that the court is satisfied that the defendant has had proper notice of the claim against them. With judgments in default of appearance this gives rise to the core requirement that the plaintiff must establish that the originating process has been properly served on the defendant. This is normally achieved by filing, together with the document requesting judgment, an affidavit of service deposed to by the person who served the originating process. The court, by administrative process, then enters judgment in accordance with the request. In most jurisdictions the court does not scrutinise the claim in any way — it simply checks to ensure there is a proper affidavit of service. However, in New South Wales and the Australian Capital Territory, an affidavit of support must be filed setting out the basis for the judgment as well as the affidavit of service.2 With judgments in default of defence it is generally not necessary to establish service as ordinarily the defendant will have entered an appearance or equivalent. A plaintiff is simply able to request judgment be entered in their favour once the time for entering or filing a defence has expired. The failure to file a defence justifies the inference that the claim is not contested. However, as South Australia no longer requires the filing of an appearance, it is necessary, in addition, to establish service.3 The Federal Court Rules 2011 incorporate a rule applying to defaults in general which would cover failing to file a Notice of Address or a Defence. The significance of this is that the applicant cannot simply seek judgment by administrative action. The applicant must apply to the court for such an order and the court will review the matter before giving judgment.4 [6.35] While the default process may entitle the plaintiff to judgment in their favour, the nature of the dispute, and particularly the damages sought, affects the default judgment process. For example, if the claim is for a pre-defined pre-determined amount, then the default judgment can cover both liability and damage. However, the default judgment process is more limited where the remedy or relief sought requires a decision from a court. The plaintiff may be able to sign judgment for aspects of the claim and then proceed to hearing on those parts of the claim requiring a decision. A common example of this distinction arises from the different processes required for claims for liquidated damages and claims for unliquidated damages.5 ’Liquidated’ claims are claims where the plaintiff is seeking a specific and clearly ascertainable sum as damages. For example, if X lends Y $20,000 to be repaid in six months and Y fails to repay it as agreed, if X was to subsequently sue Y, the damages sought, in this case the $20,000, are clearly ascertainable. Similarly, if the amount of damages could be ascertained by some rule or formula (for example, by using a specified interest rate), it would be regarded as being a claim for liquidated damages.6 In such cases the default 2 3 4 5 6

Court Procedures Rules 2006 (ACT) r 1119; Uniform Civil Procedure Rules 2005 (NSW) r 16.3. South Australia abolished appearances or notices of address in 2006. Federal Court Rules 2011 (Cth) rr 5.22–5.23. See, eg, Deputy Commissioner of Taxation v Cheung Kong Infrastructure Ltd (No 2) [2013] FCA 885. See, eg, Supreme Court Civil Rules 2006 (SA) r 229(1). Spain v The Union Steamship Company of New Zealand Ltd (1923) 32 CLR 21; Alexander v Ajax Insurance Co Ltd [1956] VLR 436; Norilya Minerals Pty Ltd: Re Ireland v Ireland [2006] FCA 1235.

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judgment is regarded as being a final judgment in the sense that it can be enforced immediately.7 In contrast, a claim for ’unliquidated’ damages requires the court to assess the appropriate damages. An obvious example is a claim for pain and suffering in a personal injury case, where the court is required to make an assessment of the appropriate amount of damages based on evidence as to the extent of the injuries, amongst other things. In these circumstances, the default process enables the court to enter an interlocutory judgment for the plaintiff, with damages to be assessed. This effectively means that the question of liability has been finalised. The plaintiff will have to provide evidence to enable the court to make a decision about the extent of any loss and the amount of damages to be ordered at an assessment hearing. The defendant has the opportunity to be heard and lead evidence on the quantum of damages but is limited to that issue. Determining the amount of damages effectively converts that interlocutory judgment into a final judgment and it can then be enforced in the usual ways. This procedural distinction makes it attractive for a plaintiff to frame their claim as liquidated damages. While the distinction between liquidated and unliquidated damages may appear clear, in practice it can be difficult to draw. For example, liquidated damages claims can include quantum meruit claims.8 These require some form of assessment by the court in that such claims typically arise when work is done pursuant to an agreement but the agreement does not specify the basis of remuneration. In such situations the court will determine a reasonable rate for the work performed. Similarly, a claim for reasonable expenses under an industrial award has been found to fall within the definition of liquidated damages.9

Setting aside uncontested default judgments [6.40] The default procedures described above rest upon an assumption that the defendant has chosen not to contest or challenge the claims of the plaintiff. This inference is based upon the failure of the defendant to take basic and fundamental steps necessary to defend the claim. Upon that inference is founded an extraordinary administrative process that enables the plaintiff to utilise the enforcement mechanisms of the court without judicial assessment of the merit of their claim. As a result of the unusual nature of this process, the rules of court normally contain generous provisions that allow defendants to apply to set aside default judgments.10 Where the default judgment has been irregularly obtained, for instance if there has been some departure from the requirements, the defendant has a broad entitlement to have the judgment set aside ex debito 7 8 9 10

However, default judgments are characterised as being interlocutory judgments for the purposes of appeals (see Carr v Finance Corporation of Australia (No 1) (1981) 147 CLR 246). McInerney v Esanda Finance Corp Ltd (Unreported, Full Court of Supreme Court of Western Australia, 17 January 1997). Spain v The Union Steamship Company of New Zealand Ltd (1923) 32 CLR 21. Court Procedures Rules 2006 (ACT) r 1128; Federal Court Rules 2011 (Cth) r 10.72; Uniform Civil Procedure Rules 2005 (NSW) r 36.16; Supreme Court Rules (NT) r 21.07; Uniform Civil Procedure Rules 1999 (Qld) r 290; Supreme Court Civil Rules 2006 (SA) r 230; Supreme Court Rules 2000 (Tas) r 355; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 21.07; Rules of the Supreme Court 1971 (WA) O 13, r 14. [6.40] 131

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justitiae (done as a matter of right). Examples of the various breaches of procedure that have been held to constitute an irregularity include the failure to effectively serve the defendant, signing judgment early, and signing judgment for other than the relief claimed.11 Such failures challenge the foundational assumption underpinning the default judgment as, for example, it is no longer reasonable to claim the defendant chose not to defend a claim that was not properly served on them. There has been some recent concern, however, that this rule is unduly generous to defendants. In some cases the courts have moved to restrict the right of the defendant to automatically obtain the setting aside of the judgment where a procedural irregularity has created no real prejudice to the defendant. So, for example, the omission of the action number from the copy of the originating process served on the defendant did not lead to the setting aside of the default judgment, nor did mistakenly endorsing a writ issued by the County Court “In the Supreme Court” and directing the appearance be filed at the Supreme Court when the writ provided relevant County Court details.12 However, in light of the extraordinary nature of the default process, substituting an administrative for a judicial decision, the courts have generally been willing to broadly interpret ‘irregularity’ to enable a defendant to set aside a default judgment as of right and contest the case on its merits. [6.45] Alternatively, even where a default judgment has been regularly obtained (or arguably, irregularly obtained but not regarded as justifying automatic setting aside) similar policy considerations allow the defendant to set aside a default judgment if they can persuade the court that doing so would be in the interests of justice. While Australian courts retain an unfettered discretion, they have traditionally followed the principles set out by Lord Wright in the House of Lords in Evans v Bartlam, requiring that the defendant: [M]ust show grounds why the discretion to set it aside should be exercised in his favour. The primary consideration is whether he has merits to which the court should pay heed. If the merits are shown, the court will not, prima facie, desire to let a judgment pass on which there has been no adjudication … The court should also have regard to the applicant’s explanation why he neglected to appear after being served, though as a rule his fault (if any) in respect can be sufficiently punished by the terms as to costs or otherwise on which the court in its discretion is empowered by the rule to impose.13

Meeting these requirements can place a significant burden upon a defendant. This burden reflects the reality that while the fact of the application itself provides evidence that, contrary to the foundational assumption, the defendant does now contest the plaintiff’s claim, the defendant’s initial failure to take basic procedural steps to protect their position genuinely curtails their right to resist the plaintiff’s 11 12

13

Bishop (Thomas) Ltd v Helmville Ltd [1972] 1 QB 464. National Australia Bank v Meehan (Unreported, Full Court of the Supreme Court of Victoria, Ormiston & O’Bryan JJ, 24 February 1994); ANZ Banking Group Ltd v Kostovski (Unreported, Supreme Court of Victoria, Chernov J, 2 July 1997). See also ACN 076 676 438 Pty Ltd v A-Comms Teledata Pty Ltd [2000] WASC 214; Grey v Mango Pre-Paid Calling Cards Pty Ltd [2004] FCA 1664. In Westpac Banking Corporation v Garret (2004) 235 LSJS 246; [2004] SASC 265 the court was willing to consider amending a judgment entered to alter the capacity in which the defendants were sued. Evans v Bartlam [1937] AC 473 at 489 per Lord Wright.

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claim. The application of this test raises several issues for the administration of civil justice, four of which we will examine below. [6.50] First, it remains uncontroversial that, to justify setting aside the default judgment, the defendant must establish that they have a meritorious defence to the plaintiff’s claim. It must go beyond mere assertion and needs to be credible or to have a real prospect of success.14 To establish this, an affidavit is usually provided outlining the basis of the defence, deposing to any relevant facts, explaining the reasons for the default, and any delay in seeking to set aside. It is, though, not immediately clear to what extent the court must assess the strength of the defendant’s case. On the one hand, the test could be restricted so as to reflect the test used when it is alleged a pleading fails to disclose a defence. In this case, the allegations would only need to be accepted for the purposes of the interlocutory application, and the defendant’s assertions would be analysed to see if they could constitute a valid defence. However, on default applications the general approach has been to require the defence to be credible, which necessitates an extensive consideration of the strength of the case. Thus in Watson v Anderson,15 the leading South Australian authority, the Supreme Court upheld the refusal to set aside a default judgment. The defendant indicated that its defence to a claim for nonperformance of a contract to purchase a boat would be that the agreement was no more than an option to purchase. Bray CJ found this defence not credible in view of the wording of a receipt which provided evidence that moneys paid were a deposit for the boat and included arrangements for payment of the balance. While this may seem a practical outcome, it results in a potential procedural anomaly: where parties file an appearance or a defence within the allowed time, the strength of their case is not subject to review beyond whether the allegations are legally cognisable on the pleadings, but if a party has not filed its appearance in time, the court can go beyond its pleadings to consider whether the allegations are credible. It is not immediately clear that such a significant difference should flow from a failure to meet timelines. One response is that the difference in approach can be justified on the basis that a default judgment is a final judgment of the court, and deserves greater protection to promote finality in litigation. This greater scrutiny of the defendant’s case for applications to set aside a default judgment can involve, in some cases, extensive examination and cross-examination of the deponents of the supporting affidavits to assist the court in assessing the strength of the case. However, in practice, most cases do not involve oral evidence and the assessment of the merits of the defence is based solely on the affidavits. Secondly, applications to set aside default judgments raise particular issues with respect to delay. As discussed in Chapter 4, the issue of delay has become increasingly contentious. As Lord Wright’s speech in Evans v Bartlam16 shows, the issue of delay tended to go to costs, although it can also, in some circumstances, raise some doubts about the merits of the defence. Delay may also become 14

15 16

Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239; Watson v Anderson (1976) 13 SASR 329; Gemini Property Investments Pty Ltd v Woodards Investments Pty Ltd & Ors [2000] SASC 210; Cook v DA Manufacturing Co Pty Ltd [2004] QCA 052; Grey v Mango Pre-Paid Calling Cards Pty Ltd [2004] FCA 1664; Flaherty v Stone [2007] TASSC 63. (1976) 13 SASR 329. [1937] AC 473 at 489. [6.50] 133

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relevant in that greater delay in applying to set aside judgment increases the possibility that the party holding judgment might be unfairly prejudiced by the delay. Evidence may no longer be available or the party, and possibly third parties, have altered their positions by relying on the judgment. The traditional approach, however, is that it is most unusual to deny an application to set aside a default judgment on the grounds of delay. This is reflected in the Supreme Court of Western Australian decision in Crayden v Ottaviano,17 where it held that “it is … rare cases in which the Court will decline to set aside a judgment entered in default of appearance when there is a defence on the merits and the failure to enter an appearance has been explained”.18 Nonetheless, over the last 20 years some judges have attempted to refuse applications to set aside default judgments, even when there was arguably a meritorious defence, on grounds of delay and efficiency. While this has led to some serious differences of opinion, the traditional approach has generally prevailed.19 However, the growing influence of mandates for just, quick and cheap resolution, as seen in overriding purposes provisions, may lead to the resurrection of this argument.20 Similarly, the reasoning in Aon Risk Services Ltd v Australian National University21 that has reinvigorated case management would also seem to support a less generous approach to applications to set aside. Thirdly, there are some unfolding developments with respect to consideration, in applications to set aside default judgments, as to whether the moving party gave notice to the opposing party of its intention to sign judgment. While not raised by the rules, this issue of professional courtesy has, in the past, been elevated by courts to one of the factors that may be considered when deciding whether to set aside a default judgment.22 The consideration rests on the assertion that where the plaintiff is aware that a lawyer is acting for a defendant, professional courtesy requires that the plaintiff should notify the defendant of its intention to seek a default judgment. Where the plaintiff fails to give such notice, the courts have been more willing to set aside the default judgment. A practical benefit of this practice was that where the defendant had a meritorious defence, giving such notice would prompt the defendant to comply with procedural requirements, without going through the inefficient process of signing a judgment that would almost invariably be set aside. However, the significance of this consideration has been doubted. In Cameron v King, Master Sanderson of the Western Australian Supreme Court indicated he had: [S]ome doubts as to whether or not a failure to communicate with a fellow solicitor is a factor to be taken into account on an application to set aside a default judgment. All of the cases to which the defendant referred are more than 30 years old. The pace of litigation has changed. The rules of the court are there to be obeyed and a party to litigation is entitled to expect them to be obeyed. Indeed, when a solicitor is engaged

17 18 19 20 21 22

[2003] WASCA 20. [2003] WASCA 20 at [53]. See also Cook v DA Manufacturing Co Pty Ltd [2004] QCA 052. Davies v Pagett (1986) 70 ALR 793; Cohen v McWilliam (1995) 38 NSWLR 476. See Borowiak v Hobbs [2006] NSWSC 1089. (2009) 239 CLR 175. See NGW v Swanson [1993] SASC 4257; Mountain Creek Markets Pty Ltd v Peter Le Compte Developments Pty Ltd [2003] QSC 72.

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by a party the expectation is, if anything, heightened. I have some doubts as to the present day relevance of an argument that a plaintiff snapped judgment.23

Nevertheless, the notice requirement does play a useful function in avoiding unnecessary interlocutory applications and should be taken into account when making decisions about the costs of a successful application, even if it is not part of the criteria when considering the merits of an application to set aside judgment. Moreover, there seems little reason why the courtesy should not extend to the defendant irrespective of whether it has a lawyer acting for it. Lastly, a final issue also possibly undergoing change arises under the court’s consideration of the reasons for a defendant’s failure to enter an appearance or file a defence. The traditional approach in this area, as with other failures to comply with procedural requirements, has been to distinguish between cases where the default arose from the party’s conduct and cases where the party’s lawyer was responsible for the default. Where the default was due to the lawyer, courts have tended to hold that parties should not be visited with the ‘sins’ or omissions of their lawyers. This was justified partly on the grounds that to do otherwise would only expose parties to additional litigation as they would then need to sue their lawyers, but also because such litigation would raise difficult issues as to what was the real loss the party had suffered. This could well require some assessment of the party’s prospects in the initial litigation that the default judgment had brought to an end. Furthermore, alternative sanctions exist for defaulting solicitors, such as personal liability for costs orders. While there is some validity in these concerns, these arguments can be challenged, with the result that such considerations are less likely to support the setting aside of default judgments. There is some evidence to show that this approach is, indeed, changing. It is suggested a more effective way of ensuring lawyers comply with procedural requirements is to allow them to be sued where a party loses the right to have their case determined in the ordinary way due to the lawyer’s neglect. It would not, arguably, require many successful cases against defaulting lawyers to raise the overall standard of conduct in this area and thus the fear of promoting satellite litigation may not be as significant as it might otherwise appear.

Default judgments — some policy issues [6.60] The significance of default judgments for failure to defend for the civil justice system cannot be overstated. Default judgements are the most common form of ‘resolving’ cases within the civil justice system. In the magistrates courts, where over 90% of cases are commenced, in excess of 90% are concluded by a default judgment. The majority of these claims are debt claims, usually consumer debt.24 It is perhaps surprising that so many of these claims are not defended, which begs the question, why is this so?25 The limited research available gives rise

23 24 25

Cameron v King (Unreported, Supreme Court of Western Australia, 2 March 1999). See also Ezekiel-Hart v Law Society (ACT) [2012] ACTSC 103 at [36]. See Australian Law Reform Commission, Debt Recovery and Insolvency (ALRC Report No 36, 1987) [15]. Australian Law Reform Commission, Debt Recovery and Insolvency (ALRC Report No 36, 1987) [83]. The Australian Law Reform Commission research showed, eg, in NSW only 1.8% of debt claims were defended by non-business debtors. [6.60] 135

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to considerable disquiet. The research suggests that the failure to defend cannot be taken as indicating that liability for the debt is accepted or that it is legally justified. For example, reports from financial counsellors and others working in the consumer credit field suggest that claims were overstated or that defences existed to the claims.26 The limited empirical research overseas supports these concerns. Caplovitz’s study in the 1970s interviewed over 1,000 debtors who had been sued in three major cities in the United States.27 Only 71% indicated they had received the originating summons. Unfortunately, Caplovitz did not investigate in detail how many debtors may have had a defence, but even so his research suggested many debtors were discouraged from defending the claim by the creditor or, in some cases, advice from court officials. A later study by Sterling and Schrag investigating default judgments in Washington DC confirmed some of Caplovitz’s findings.28 In their more limited study of the 15 persons who had default judgments entered against them, 13 had not responded to the summons. In almost half the cases the advice they had received from the creditor or court had discouraged them from attending.29 The next most common reason was that they could not afford time off work. In almost a quarter of the cases the summons had not been received. In the two cases where the defendants attended court, they had either not understood court procedures or been overcome by the atmosphere in the court to the point that they did not participate in the hearing and the case had proceeded without their involvement. These findings are disquieting, and challenge the conceptual foundations upon which rest the extraordinary administrative procedure of the default judgment. It may be that the system of default judgments can be conceptually defended, even in light of such findings, as the system would be liable to collapse without such a mechanism. However, at the very least this evidence makes it necessary to consider what reforms may be necessary and possible to address these concerns. One suggested reform is to introduce some form of judicial scrutiny over the substantive claim before a court would grant default judgment. However, as the Australian Law Reform Commission has recognised, the introducing of any form of scrutiny of claims before default judgment would have significant resource implications for the civil justice system. Instead the Commission suggested, in general terms, that some form of audit process should be created by which some claims would be scrutinised. This suggestion may provide an efficient means of responding to these concerns, though it does not appear to have been further developed in any Australian jurisdiction. A more limited reform has been the adoption, in some jurisdictions, of a requirement that the plaintiff file an affidavit in support of the claim before obtaining a default judgment.30 This reform has real merit as it requires the plaintiff to proceed past mere allegations of liability and

26 27 28 29 30

Australian Law Reform Commission, Debt Recovery and Insolvency (ALRC Report No 36, 1987) [82]. D Caplovitz, Consumers in Trouble: A Study of Debtors in Default (The Free Press, 1974). HM Sterling & P Schrag, “Default Judgments Against Consumers: Has the System Failed?” (1990) 67 Denver University Law Review 357. Washington DC had dispensed with the requirement to file an appearance. The first procedural requirement for a defendant was to attend a court hearing. See Uniform Civil Procedure Rules 2005 (NSW) r 16.3(2)(b).

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quantum and, moreover, provides an accountability measure should the contents of the affidavit prove to be untrue.

Failure to remedy defective pleadings [6.70] Whereas the default described in the preceding section includes the complete failure to file pleadings (a defence), in some cases pleadings may be filed but be so fundamentally defective as to justify the pre-trial termination of the proceedings. Chapter 5 has outlined the requirements of the pleadings rules. This section examines how the failure to meet those requirements can lead to pre-trial termination. In extreme cases, a breach of the pleading requirements may be such that the whole of the pleading is struck out.31 The pleadings may, for example, be struck out if they may tend to prejudice, embarrass or delay the trial, or are an abuse of process. Generally, where this sanction for poor pleading practice is utilised the defaulting party will be given leave to file a substitute pleading. Should the party fail to do so within the time specified, judgment in default of pleading may be entered in the ordinary way. Similarly, if no leave to amend the original pleading or to file substitute pleadings is given by the court, and the defective pleading is struck out, a default judgment may be obtained by the other party. A related, but conceptually distinct procedure, allows the pleading to be struck out for failing to disclose a cause of action or defence. In such situations, the relevant defect goes to the substance of the pleading rather than the manner, form or process of the pleading. As Cairns points out, this substantive failing would be grounds for summary judgment, which would foreclose any opportunity to attempt to correct the defect in the pleadings and is preferable from the opposing party’s perspective.32 Nonetheless, if pleadings are struck out on this ground, and the party fails to file compliant pleadings within the allocated time, the opposing party may apply to the court for a default judgment. [6.75] Conceptually, judgment following the striking out of pleadings would not normally be considered as falling within the traditional conception of ’default judgments’, as the fault goes to failure to file compliant pleadings rather than a failure to file at all. By filing even non-compliant pleadings, the party has indicated a desire to assert their interests and resist the opposing party’s claim. Nevertheless, the similarity in the two procedures justifies the inclusion as striking out is a consequence of a default in complying with pleadings rules. Moreover, there is a notable difference in the way the courts approach the question of whether a pleading should be struck out for failing to disclose a reasonable cause of action or defence, and the way the courts approach the question of whether to grant summary judgment. With a strike out application the court assumes the allegations made in the pleadings are correct and then

31

32

Court Procedure Rules 2006 (ACT) r 425; Federal Court Rules 2011 (Cth) r 16.21; Uniform Civil Procedure Rules 2005 (NSW) rr 13.4, 16.2, 16.3; Supreme Court Rules (NT) O 23.02; Uniform Civil Procedure Rules 1999 (Qld) r 171; Supreme Court Civil Rules 2006 (SA) r 104; Supreme Court Rules 2000 (Tas) rr 258, 259; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 23.02; Rules of the Supreme Court 1971 (WA) O 20, r 19. B Cairns, Australian Civil Procedure (11th ed, Thomson Reuters, 2016) [6.590]. [6.75] 137

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considers whether these would constitute a valid cause of action or defence. It does not consider the merits of the case more substantively, the broader approach that underpins the procedures for both setting aside default judgment and applications for summary judgment. Despite this significant difference in application of the procedures, both students and practitioners can be confused by the largely similar grounds that, in most jurisdictions, will support both an application to strike out a pleading and an application to seek dismissal of a proceeding. To further complicate matters the courts also have the power to dismiss a proceeding or give judgment on similar grounds under their inherent jurisdiction. This arises from the overall power of the court to control its procedures to prevent an abuse of process.

Non-compliance with other procedural orders or requirements [6.80] All jurisdictions give courts wide ranging powers to deal with a party who is in default of procedural requirements or has failed to comply with procedural orders made by a court.33 Here, as with defective pleadings, there is overlap with both the inherent power of a court to control the conduct of litigation and the various provisions in the rules. The sanctions include the termination of a party’s case. While there is considerable variation in the ways in which the rules cover non-compliance, there is little difference overall in practical outcome. To use Victoria as an example, r 2.01 provides: (2)

Subject to Rules 2.02 and 2.03, where there has been a failure to comply with these Rules, the Court may — (a)

set aside the proceeding, either wholly or in part;

(b)

set aside any step taken in the proceeding or any document, judgment or order in the proceeding;

(c)

exercise its powers under these Rules to allow amendments and to make orders dealing with the proceeding generally.34

Rule 24 further provides: 24.02

33

34

Failure to obey order (1)

Where a party fails to comply with an order to give particulars of any pleading or with an order for the discovery or inspection of documents or for answers to interrogatories, the Court may order —

(a)

if the party is the plaintiff, that the proceeding be dismissed;

(b)

if the party is a defendant, that the defendant’s defence, if any, be struck out. …

Court Procedures Rules 2006 (ACT) r 1110; Federal Court Rules 2011 (Cth) r 5.22; Civil Procedure Act 2005 (NSW) s 61; Supreme Court Rules (NT) rr 2.01, 24.02; Supreme Court Civil Rules 2006 (SA) rr 12, 228; Supreme Court Rules 2000 (Tas) rr 14, 371–372; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 2; Rules of the Supreme Court 1971 (WA) O 2. Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 2.01.

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Inherent jurisdiction Nothing in this Order affects the inherent power of the Court — (a)

to dismiss any proceeding for want of prosecution; or

(b)

to order that upon the failure of a party to do any act or take any step which under these Rules the party is required to do or take or to comply with an order that the party do any such act or take any such step the proceeding shall be dismissed or the defence struck out and that judgment may be entered or that there be judgment accordingly.35

While the courts retain a power to terminate proceedings at a pre-trial stage for non-compliance with procedural orders, costs orders remain the most frequent sanction for such a breach. These costs orders can include orders that a party pay costs on an indemnity basis or in cases where the significant default arises from the lawyer’s handling of the case, orders that the solicitor pay the costs personally. These are further dealt with in Chapter 12 on costs. Of course, for parties the most severe sanction is to lose the right to have their case proceed any further. As the cases arising from non-compliance with case management requirements show, courts have traditionally regarded this as a last resort. Where any prejudice can be made good by way of costs orders, courts are unlikely to order that a claim or defence be struck out or dismissed. Whether this should remain the prevailing approach has been discussed in Chapter 4 in the context of case management. It should also be noted that non-compliance with procedural orders can in some cases amount to a contempt of court. Thus breaches of interlocutory injunctions or Mareva orders, for example, could lead to the party being held in contempt with fines or, in the most extreme cases, imprisonment.36

Self-executing orders [6.90] In circumstances of repeated breach of procedural orders or requirements courts may make what are known as “self-executing” or “springing” orders. These orders, in effect, give a party one last opportunity to make good the procedural default but carry with it an order that if this is not complied with within a specified time, the party will have the claim or defence struck out. A typical example is an order that the action be struck out if the plaintiff fails to provide discovery by a specified date. It comes into operation without further hearing or consideration if the plaintiff fails to provide discovery by that date. These are generally used only when other avenues to ensure procedural compliance are not available or have been unsuccessful. It was thought that once the order became operational and the matter struck out, it was not possible to resurrect the original action — the proceedings had been terminated. However, on this matter, the High Court has come to the rescue of defaulters. In FAI General Insurance Co Ltd v Southern Cross Exploration NL37 the High Court held that whether a matter could be ’resurrected’ would depend on the rules. Where the 35 36

37

Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 24.02, 24.05. See City Hall Wodonga Pty Ltd v Chicago Investments Pty Ltd [2006] QSC 31 (defendants sentenced to four and two months imprisonment); NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 (defendants sentenced to 288 hours of community service). (1988) 165 CLR 268. [6.90] 139

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rules provide wide ranging powers to extend the time in which procedural steps are to be taken or orders are to be complied with, the court has a discretion to extend the time for complying with the procedural order even after that time has expired. The dire consequences, in some cases, of a self-executing order for a defaulting party have led to the development of some safeguards for defaulting parties. These include requirements that: orders must be clear and unambiguous as to what is required to be done to avoid having the case terminated; the defaulting party has to have a realistic opportunity to comply with the orders; and the party needs to be aware of what must be done and the consequences of not complying. Among the guidelines provided by the Western Australian Court of Appeal in Skahill v Kestral Holdings Pty Ltd38 was the requirement that the defaulting party have actual notice of the self-executing orders and that the orders be expressed as operating so many days after service rather than from a fixed date. While this would seem to be appropriate in many cases, it does shift responsibility from the defaulting party to the non-defaulting party. In Skahill, after some 15 case conferences and use of self-executing orders, the Registrar made orders for a further exchange of information. The plaintiff failed to comply and did not attend the next case management conference on 4 November due to a change in time of the conference. At that conference the court ordered: Unless by 18 November 1999 the plaintiffs provide to the defendants the further information and calculations agreed to be exchanged at the meeting of experts on 31 August 1999 the Statement of Claim be struck out and judgment entered for the defendants with costs.

The court posted details of the orders to the plaintiff on the day they were made and a defendant wrote to the plaintiff on 16 November referring to the orders and seeking the information. It is not clear when the plaintiff learnt of the orders but it provided the required information on 7 December. By that stage the statement of claim had been struck out and judgment entered. The Court of Appeal extended the time for compliance on the basis that the plaintiff did not have actual knowledge of the orders. The defendant should have served the order if it wished to take the benefit of the order.39 It may appear that the burden this judgment places on the defendant to ensure the operation of the order is not particularly onerous, particularly given the extraordinary administrative operation of a self-executing order. However, it is arguable that the Court gave inadequate regard to the conduct of the defaulting party after the order was made. Given the plaintiff knew it was already in default of earlier orders at the time of the case conference; that it had been subject to a prior self-executing order; and it knew orders had been made at the conference, it seems unreasonable to place all the responsibility on the defendant to serve the orders on the plaintiff. Here it might be argued that such a requirement accepts

38 39

[2000] WASC 185. These principles have been further developed in a post-Aon context in Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [No 7] [2010] WASC 351, where Le Miere J, in enforcing the springing order, examined what would constitute sufficient service.

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the plaintiff’s almost wilful blindness to the outcome of the application for the springing order and imposes no standards on the plaintiff. Arguably, self-executing orders represent a preferable way of reconciling the tension between procedural requirements and the right to have one’s case determined on its merits. It in effect gives the defaulting party a final opportunity to make good its default and the termination of the case can be characterised as failing to accept the authority of the court rather than mere non-compliance with procedural requirements. However, the courts’ justifiably cautious approach to using these orders means that where there is reasonable explanation for the non-compliance, the default is likely to be excused.

Abuse of process [6.100] We have noted above how the rules commonly utilise the concept of ’abuse of process’ in the context of defective pleadings and dismissing claims or defences.40 These rule-based powers are complemented by the residual powers of the courts under their inherent jurisdiction. The inherent or incidental jurisdiction of the higher courts includes the power to stay or terminate proceedings when either a step in the proceedings, or the commencement of the proceedings, would amount to an abuse of process. Abuse of process is not confined to specific procedural precedents although the facts giving rise to these precedents are illustrative of how the courts’ powers may be used. This is especially important as it is clear that almost any procedural mechanism could, in certain circumstances, be used for improper purposes. As Gaudron J held in Ridgeway v The Queen: Abuse of process cannot be restricted to “defined and closed categories” because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account of the circumstances of the case. That is not to say that the concept of “abuse of process” is at large or, indeed, without meaning. As already indicated, it extends to proceedings that are instituted for an improper purpose and it is clear that it extends to proceedings that are “seriously and unfairly burdensome, prejudicial or damaging” or “productive of serious and unjustified trouble and harassment”.41

Rather than categorise types of abuse of process, it is more important, for the purposes of this chapter, to focus on the function of the abuse of process power. At the core of the abuse of process principle is the courts’ need to ensure that the courts’ procedures are used fairly and not to cause oppression or injustice. As a consequence, the abuse of process principle promotes fair trials and protects public confidence in the civil justice system.42 As the operation of the principle enables proceedings to be brought to an end without consideration of the merits, including instances where the claim may have merit, the court places a heavy onus on the person alleging an abuse of process to establish it. As a result the procedure is to be exercised only in the “most exceptional circumstances”.43

40 41 42 43

See [6.70]. (1995) 184 CLR 19 at 75. See also Jeffrey & Kautaskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75. Williams v Spautz (1992) 174 CLR 509 at 520. Williams v Spautz (1992) 174 CLR 509 at 529 per Mason CJ, Dawson, Toohey & McHugh JJ. [6.100] 141

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[6.105] While most commonly claims of abuse of process, and as a result the case law, arise in the context of criminal proceedings, the principles equally apply to civil proceedings. McHugh J noted in Rogers v The Queen that abuse of process cases fall generally into three categories: (1)

the court’s procedures are invoked for an illegitimate purpose;

(2)

the use of the court’s procedures is unjustifiably oppressive to one of the parties; or

(3)

the use of the court’s procedures would bring the administration of justice into disrepute.44

The question of what is an illegitimate purpose is not easy to answer. In Williams v Spautz45 the High Court distinguished between motive and purpose: a person may have unworthy or reprehensible motives but that does not constitute abuse of process. Abuse of process exists where the predominant purpose of the proceedings is outside the scope of the proceedings or where the procedure is used for purposes for which it was not designed. Of course, litigation is often commenced with a variety of purposes, which may include achieving outcomes that the proceedings could not provide even if the plaintiff was successful. Thus one purpose in defamation proceedings may be to obtain a public apology even though historically it was not one of the remedies available to the court. Such a purpose is not improper, however, as it is consistent with the purpose of defamation proceedings — the public vindication of reputation. In contrast, where defamation proceedings are issued for the purpose of discouraging a person from speaking out on matters of public controversy, rather than to vindicate the plaintiff’s reputation, then such proceedings may well constitute an abuse of process. In Williams v Spautz itself, Spautz had commenced over 30 proceedings against various individuals who had in some way been involved in processes that had led to his dismissal from employment. The High Court upheld the finding of the trial judge who had found that the predominant purpose of issuing the proceedings was to place pressure on his former employer to either reinstate him or to settle a wrongful dismissal case: It is [an abuse of process] when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed … or some collateral advantage beyond what the law offers.46

The High Court held that the fact that there could have been some prospects of success in the criminal proceedings brought by Spautz did not prevent the court from being able to stay the proceedings as an abuse of process. The categories of what amounts to abuse of process are not closed. We have seen how the rules in all jurisdictions provide sanctions for abuse of process in particular steps, for example, the striking out of pleadings for abuse of process. In some jurisdictions the courts are able to refuse to accept originating process if the

44 45 46

(1994) 181 CLR 251 at 286. (1992) 174 CLR 509. (1992) 174 CLR 509 at 526-527 per Mason CJ, Dawson, Toohey & McHugh JJ. See also Treasury Wine Estates Ltd v Melbourne City Investments Pty Ltd (2014) 45 VR 585.

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Registry believes it to be an abuse of process.47 Amongst the more common illustrations of abuse of process include the commencement of litigation or procedural steps that amount to vexatious, frivolous and oppressive conduct. These expressions are often used in the rules. Cairns suggests that frivolous claims are claims that are not be taken seriously and used the example of proceedings brought against a member of parliament who refused to present a petition to parliament. He contrasts this with vexatious pleadings which are brought “for the purpose of harassment”, for example, to waste time or cause delay.48 To this might be added procedural steps brought merely to run up costs so as to exhaust the funds of the opposing party and thus preclude them from continuing the litigation. Oppression arises when proceedings or a step in them will result in a party having to comply with seriously and unfairly burdensome requirements.49 Delay may also constitute an abuse of process in certain circumstances, leading to the striking out of proceedings. This example of abuse of process is discussed below.

Failure to proceed with the action [6.110] As has been a recurrent theme throughout this book, delay generally is a major concern for the effective operation of the civil justice system, and of maintaining public confidence in it. Issues of delay in the pre-trial process, and the impact of it on litigants and the court, are of particular concern. We have already noted that delay was one of the catalysts for the introduction of case management to Australian courts and much of the examination of sanctions for non-compliance with procedural requirements arises in the context of meeting time requirements. In addition to the general provisions relating to non-compliance, there are two further ways in which delay can lead to pre-trial termination of proceedings: (1) dismissal for want of prosecution, and (2) the incorporation of “inactive cases” procedures within the rules of some jurisdictions. First, most Australian courts have power, either under the rules of court or under their inherent jurisdiction, to dismiss proceedings for want of prosecution. While the rationale for the existence of such a power is obvious, there have been significant differences in approach to the utilisation of the power. The English courts, led by the House of Lords decision in Birkett v James, established a series of criteria governing when a proceeding may be dismissed for want of prosecution: [O]nly where the court is satisfied either (1) that the default has been intentional and contumelious, eg, disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2) (a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious

47

48 49

See, eg, Court Procedures Rules 2006 (ACT) r 6142; Federal Court Rules 2011 (Cth) r 2.26; Uniform Civil Procedure Rules 1999 (Qld) r 15; Supreme Court Civil Rules 2006 (SA) r 53; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 27.06; Rules of the Supreme Court 1971 (WA) O 67, r 5. B Cairns, Australian Civil Procedure (11th ed, Thomson Reuters, 2016) [12.460]. Tony Azzi Automobiles Pty Ltd v Volvo Car Australia Pty Ltd [2006] NSWSC 283; Sheikholeslami v Brungs [2006] FCA 933. [6.110] 143

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prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.50

In contrast, Australian courts have preferred to emphasise the fact that the power to dismiss in these circumstances involves the exercise of a discretion and that the discretion should not be fettered by rigid rules. The status of Birkett v James varies across Australian jurisdictions,51 with States differing as to the extent that they regard the principles in Birkett v James as being applicable.52 Nevertheless, even in those States where Birkett v James is followed, Lord Diplock’s criteria are not regarded as rigid rules and similar factors are used across Australia to assist a court where delay founds an application to dismiss for want of prosecution. The weight to be given to any of the factors depends on the circumstances of each case. Among the common factors are: • the length of the delay; • the explanation for the delay; • the hardship to the plaintiff if the action is dismissed and the cause of the action left statute-barred; • the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay; and • the conduct of the defendant in the litigation.53

Arguably, one possible difference between those jurisdictions that have followed Birkett v James, and those that have declined to follow it, is that in the latter case the grounds upon which a proceeding would be dismissed would not be closed. However, from a practical perspective, there is not a great deal of difference in outcomes across the Australian jurisdictions. As pointed out by Steytler P and Owen JA in The Hancock Memorial Foundation Pty Ltd v Fieldhouse: In our view it is inappropriate to take the considerations identified in Birkett or the five matters mentioned in Ulowski and use them as a check list to be ticked off one after the other. They are all things to which the court should have regard and they will usually be persuasive. But the absence of one or more of them from the credit or debit side of the check list process will not necessarily determine the result. It will always be necessary for the court to stand back and ask: what does justice, in all the notions or senses of it that are relevant, require in the circumstances of this case?54

50 51

52

53

54

Birkett v James [1978] AC 297 at 318 per Lord Diplock. In Batistatos v Road & Traffic Authority New South Wales (2006) 226 CLR 256 the High Court declined to follow Birkett v James in the context of an application to stay proceedings due to the delay in commencing proceedings, suggesting it had been superseded by contemporary rules dealing with dilatory plaintiffs. Queensland and NSW have declined to follow Birkett v James: See Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274; Cooper v Hopgood & Gamin (a firm) [1999] 2 Qd R 113. Western Australia has followed Birkett v James: See Lewandowski v Lovell (1994) 11 WAR 124; Hancock Family Memorial Foundation Pty Ltd v Fieldhouse (2005) 30 WAR 398; Smith v Bank of Western Australia Ltd (2010) 265 ALR 472. Hancock Family Memorial Foundation Pty Ltd v Fieldhouse (2005) 30 WAR 398; Ulowski v Miller [1968] SASR 277; Batiste v State of Queensland [2002] 2 Qd R 119; Spitfire Nominees Pty Ltd v Hall & Thompson (a firm) [2001] VSCA 245. (2005) 30 WAR 398 at [103].

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[6.120] Another issue that has troubled courts has been whether the power to dismiss proceedings for want of prosecution could be used to promote efficiency in litigation. Would delay by itself be sufficient to justify dismissal, even where there has been no prejudice? While Australian courts do not appear to have moved this far, Lord Woolfe’s judgment in Grovit v Doctor,55 where he suggested the prejudice requirement had been interpreted too narrowly and that delay along with other factors might support dismissal for want of prosecution, appears to resonate with some Australian judges.56 One of the reasons why Australian courts have not needed to consider whether delay without prejudice to the defendant would support dismissal is because of the advent of case management. Here there is overlap with the power to dismiss a proceeding for failure to comply with procedural requirements discussed above. As case management provisions contain their own sanctions or are covered by the rules relating to non-compliance with procedural requirements or orders, a defendant may not need to rely on dismissal under the inherent jurisdiction. Following Queensland v JL Holdings Pty Ltd57 the effectiveness of the sanctions for breaching case management requirements were significantly reduced, creating a greater need to rely on the inherent jurisdiction. With Aon Risk Services Pty Ltd v Australian National University58 the High Court has reversed much of the approach underpinning JL Holdings, providing a procedural alternative to relying on dismissal for want of prosecution. This, however, assumes the two approaches to questions of delay are available. The Federal Court, for example, has held that the power to dismiss for want of prosecution has been superseded by the provision in the Federal Court Rules 201159 enabling a court to dismiss a proceeding if a plaintiff fails to prosecute a claim with due diligence. This power is not constrained by the limitations placed upon it by Birkett v James60 and the Federal Court has declined to provide a rigid set of criteria for the exercise of this power.61 On the other hand, the Western Australian Supreme Court has held that case management requirements are relevant factors when considering an application to dismiss for want of prosecution.62 A second way in which delay can lead to pre-trial termination of proceedings arises in those jurisdictions with an “inactive cases” procedure. This procedure was introduced to prevent cases ’disappearing into a black hole’ after they had been commenced. Traditional procedure meant that if no steps were taken in a proceeding after the originating process had expired, the case simply remained open on court files. This led to the accumulation of the detritus of abandoned litigation. To deal with this issue, South Australia, for example, introduced an inactive cases list. A case can be entered onto the inactive cases list if, three months

55 56 57 58 59 60 61 62

(1997) 1 WLR 640. See, eg, Bridge & Marine Engineering Pty Ltd v Taylor [2004] VSC 534. (1997) 189 CLR 146. (2009) 239 CLR 175. Rule 5.22. [1978] AC 297. Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388. “The inherent jurisdiction to dismiss an action for want of prosecution is to be exercised having regard to the case flow management principles” (Hancock Family Memorial Foundation Pty Ltd v Fieldhouse [2005] WASCA 93 at [93] per Steytler P & Owen JA). [6.120] 145

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after the end of the time allowed for serving the originating process, no further action had taken place in the proceeding. The court then notifies the plaintiff of this when it happens and if no action is taken within a further two months, the case is dismissed for want of prosecution.63 In Western Australia, cases can be removed to the inactive cases list by the case manager “if not satisfied that the case is being conducted in a timely way, having regard to the requirements of these rules and the circumstances of the case”, or, if no procedural step is taken in a case for 12 months the case is “taken to be inactive”.64 Once on the inactive cases list, if the parties take no action within six months, the case is “taken to have been dismissed for want of prosecution”.65 Victoria does not have an inactive cases list but the Supreme Court (General Civil Procedure) Rules 2015 does provide that a proceeding may be struck out for failure to serve a statement of claim within the required period.66 Similarly, in the Australian Capital Territory, a case can be terminated if there is no proof of service within 12 months.67 In New South Wales the court can dismiss a case if no action has been taken in the case for more than five months.68

Summary judgment and pre-trial termination on substantive grounds [6.130] The other, and more robust, form of judicial pre-trial termination is by way of obtaining summary judgment. Procedures for summary judgment allow the court to make a final determination on the merits of a dispute, without requiring the parties to go through the full trial process. As a result courts have carefully circumscribed the availability of this procedure. While summary judgment is an extraordinary procedure, it represents an effective means of filtering out unmeritorious cases and allowing such cases to be quickly decided on their merits. The existence of the mechanisms discourages the continuance of hopeless cases, not only promoting settlement, but allowing both parties to avoid the cost and time necessary to conduct a trial in which the outcome is all but inevitable. As discussed, there is a degree of overlap between procedures for summary judgment and those for striking out pleadings. On a strike out application the court examines the pleadings to ascertain whether a legally cognisable cause of action or defence is discernible. If the pleading fails this test those pleadings may be struck out. However, in most cases, and certainly if the facts alleged suggest that a valid cause of action or defence may exist but has not been properly pleaded, the court ordinarily would allow the filing of a fresh pleading to overcome the deficiencies. In contrast, the summary judgment process directly allows for the final termination of the dispute. The summary judgment process was introduced by way of statutory reform in England in 1855 to deal with those

63 64 65 66 67 68

See Supreme Court Civil Rules 2006 (SA) r 123. Rules of the Supreme Court 1971 (WA) O 4A, rr 22, 24. Rules of the Supreme Court 1971 (WA) O 4A, r 28. Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 24.01. Court Procedures Rules 2006 (ACT) r 75. Uniform Civil Procedure Rules 2005 (NSW) r 12.8.

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cases where there is no meritorious defence.69 The process allowed for a more expanded consideration of the case, as rather than simply relying on the pleadings the parties would be required to file affidavits setting out the facts that supported their case. If the court was satisfied on this limited material that the party’s case was without merit, the court would enter judgment. While originally a procedural tool available in limited types of cases to plaintiffs to be used in situations where defendants could not resist the claim, its availability has been extended to all types of cases and to defendants facing unmeritorious claims. Though the processes and scope of the summary judgment procedure have expanded since its introduction, now generally requiring detailed interlocutory submissions and argumentation, its core as a ‘pared-down’ summary form of determination has remained. A summary judgment is a final judgment and not amenable to the setting aside process that is available for default judgments. As the summary judgment process results in a decision on the merits without the parties having had the benefit of the full range of pre-trial procedures and without the forensic testing of the case provided by a trial, courts have traditionally adopted a very conservative approach to its use. The cases are replete with judges reminding themselves of the dangers inherent in this procedure, almost like the incantations of old against evil, warning themselves against its use.70 The traditional test as expressed in Webster v Lampard is that: The power to order summary judgment must be exercised with “exceptional caution” and “should never be exercised unless it is clear that there is no real question to be tried”.71

[6.135] While the cautiousness underlying the approach to summary judgment is well justified, the result has been the restriction of the usefulness of the procedure to very limited circumstances. In the last 20 years some jurisdictions have been persuaded that the threshold could be lowered so that the procedure is available to terminate those cases where there is such a weak case that it has no real (or reasonable) prospect of succeeding. English procedure now incorporates such a test, as does the Federal Court, Queensland, South Australia and Victoria.72 For example, in Queensland, r 292(2) provides:

69

70

71

72

Now to be found in the rules in each jurisdiction: Court Procedures Rules 2006 (ACT) rr 1146, 1147; Federal Court Rules 2011 (Cth) r 26.01; Uniform Civil Procedure Rules 2005 (NSW) r 13.1; Supreme Court Rules (NT) O 22; Uniform Civil Procedure Rules 1999 (Qld) rr 292 – 293; Supreme Court Civil Rules 2006 (SA) r 232; Supreme Court Rules 2000 (Tas) rr 356 – 370; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 22; Rules of the Supreme Court 1971 (WA) O 14, rr 1, 6. This is perhaps put at its highest by O’Keefe J in Johnston v Smith [2002] NSWSC 409 at [18]: “the power to terminate an action by dismissing it summarily should only be exercised in exceptional cases even then with great caution, and it should only be done in the clearest of cases”. See also SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 at [20]. Webster v Lampard (1993) 177 CLR 598 at 602 per Mason CJ, Deane & Dawson JJ. See also Dey v Victorian Railway Commissioners (1949) 78 CLR 62; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. Federal Court Rules 2011 (Cth) r 26.01; Supreme Court Civil Rules 2006 (SA) r 232; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 22.04 & Civil Procedure Act 2010 (Vic) ss 61 – 63. [6.135] 147

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If the court is satisfied that — (a)

the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and

(b)

there is no need for a trial of the claim or the part of the claim; the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.73

The question then arises as to what significance this change of wording, from ’no real question’ to ’no real prospect of success’, has in practice. While some judges have thought it changes little,74 the prevailing view in Queensland is that the changes to the rules, introduced within the context of promoting efficiency in litigation, have created additional scope for summary judgment. Adopting the approach of the English Court of Appeal in Swain v Hillman75 to the similar wording of the English rule, the Queensland Court of Appeal in Deputy Commissioner of Taxation v Salcedo76 held that a weak case that only enjoyed a ‘fanciful’ possibility of success could be terminated without the benefits of the full procedural process, including trial. Further, while the circumstances in which a case would meet para (a) and not para (b) may be rare, one possibility is that it allows for cases where on existing law a case has no realistic prospects of success but as it raises new or novel issues, there is a real possibility the law may be altered on appeal. This issue has been considered by the High Court, in the context of the operation of s 31A of the Federal Court of Australia Act 1976 (Cth) in Spencer v Commonwealth of Australia.77 That provision permits summary judgment if the court is satisfied that the opposite party “has no reasonable prospect of successfully defending the proceeding”. While French CJ and Gummow J held that there would seem to be little distinction between “the requirement of a ‘real’ as distinct from ‘fanciful’ prospect of success”, with the consequence that the provision requires “a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success”,78 the majority took a much more expansive view. In their joint judgment, Hayne, Crennan, Kiefel and Bell JJ took a rather different view of the section. Their Honours noted the important difference in the expression in the English rule, “no real prospect” and “no reasonable prospect” in s 31A. “The two phrases”, their Honours said, “convey very different meanings”.79 Secondly, the majority placed much significance on the “negative admonition” of subs (3) of the Act, which allows that a claim may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is “hopeless” or “bound to fail”. While the subsection is 73 74 75 76 77 78 79

Uniform Civil Procedure Rules 1999 (Qld) r 292(2). See Gray v Morris [2004] 2 Qd R 118 per Chesterman J. [2001] 1 All ER 91. [2005] 2 Qd R 232. See also Ozibar Pty Ltd (as trustee of Ozibar Unit Trust) v Laroar Holdings Pty Ltd [2015] QSC 345. (2010) 241 CLR 118. (2010) 241 CLR 118 at [24]-[25]. (2010) 241 CLR 118 at [51]. See also Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27.

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unique, creating a potential for distinguishing the judgment, the reasoning of the majority seems to point to a greater willingness to allow summary judgments. Nonetheless, the Court reaffirmed that “the power to dismiss an action summarily is not to be exercised lightly”.80 The South Australian provisions vary from the Queensland approach in that the criteria for summary judgment is expressed as being that: “there is no reasonable basis” for the claim or defence.81 There is also no additional requirement that there be no need for a trial. In Ceneavenue Pty Ltd v Martin82 the South Australian Full Court held that the new wording need not require a departure from the traditional approach to summary judgment and that there was no practical difference from the older formulation — that is, is there a real question to be tried? In so doing, it disagreed with the reasoning of the Queensland Court of Appeal in Salcedo and gave little weight to the contemporary emphasis on efficient and speedy litigation. The South Australian decision explicitly adopted the traditional approach to litigation outlined in Queensland v JL Holdings Pty Ltd83 and with the reversal of much of that approach in Aon Risk Services Australia Pty Ltd v Australian National University,84 together with the reasoning set forth in Spencer, a revisiting of the issue in South Australia can be expected.85 What seems reasonably clear is that where the test incorporates concepts of real or reasonable prospects of succeeding, the principles developed under the traditional test are not necessarily applicable. The changes appear to be directed to allowing a more expansive use of the summary judgment procedure. These changes in the language of the test for summary judgment, together with the increased priority given to ensuring efficient and speedy litigation, suggest that the requirement that the claim or defence be so clearly untenable that it cannot possibly succeed before granting summary judgment should no longer be good law. Clearly, courts need to be cautious in exercising a power to prevent a case from proceeding to trial. It is doubtful, however, whether the circumstances surrounding the exercise of the power need to be circumscribed by admonishments requiring “exceptional caution” or use only in the “clearest of cases”. [6.140] Nevertheless, the status of the summary judgment as a form of final determination requires the considered procedures to ensure that it is utilised only in appropriate situations. Summary judgments are arrived at only after careful examination of both the legal and factual foundation of the case to see whether a

80 81 82 83 84 85

(2010) 241 CLR 118 at [60]; see also French CJ and Gummow J at [24]. Supreme Court Civil Rules 2006 (SA) r 232. (2008) 106 SASR 1. (1997) 189 CLR 146. (2009) 239 CLR 175. It should be noted that the South Australian courts have continued to apply Ceneavenue Pty Ltd v Martin (see, eg, Ceneavenue (Kleentex (Thailand) Co Ltd v Corporate Im Pty Ltd [2012] SASC 71 at [19]; Mittiga v Community Corporation 20582 Inc [2012] SASC 202) despite observations that it may not be consistent with the reasons of the plurality in the later High Court decision of Spencer (Davies v Minister for Urban Development and Planning (2011) 109 SASR 518 at 532 [43] per Bleby J). Cf Ross v Perpetual Trustees Victoria Ltd & Ors [2017] SASC 61. [6.140] 149

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reasonable possibility of success exists. This demands that any application for summary judgment requires supporting affidavits and, if necessary, oral evidence from witnesses.86 These affidavits must contain more than bare denials or assertions of a defence — they must depose to facts with sufficient particularity as to satisfy the court that they are credible.87 This does not mean, however, that competing factual assertions are to be resolved at a hearing for summary judgment. Indeed, if there are credible issues in dispute that could reasonably constitute a claim or defence, then the summary judgment procedure is likely to be inappropriate as these matters should be tested at trial. Rather, the process requires the party to assert the factual basis that, if accepted by the court, would support their claim. The court will then assess whether those facts could constitute a reasonable claim or defence, and whether there is a real chance the party could establish them. While the procedures regarding the grant of summary judgment are much narrower than those related to a full trial, it nonetheless provides for close scrutiny of the allegations and detailed argument from the parties. As such the relaxing of the strictures against summary judgment is to be welcomed. Furthermore, it could be argued that a filtering mechanism based on review of the merits of cases is preferable to the current de jure filtering process of cost or expense that prevents many cases from enjoying the full benefits of pre-trial procedures and a trial. There is little empirical data to demonstrate how prevalent summary judgments are or any measure of their impact on the efficiency of the civil justice system. The research that is available is largely based on studies of federal court litigation in the United States. While the different context in which summary judgment operates in the United States — the constitutional right to jury trial, the different pleading rules, and the different costs rules — means the results are not transferable to Australia, they are illustrative. Following a relaxing of the restrictions on summary judgment in the United States in the mid-1980s,88 Issacharoff and Loewenstein analysed a sample of federal court judgments from 1988 and found that in the jurisdictions they were studying, summary judgment was most often used by defendants (in 122 of 140 contested applications) and summary judgment was only denied in 26 cases.89 A more recent study by Burbank suggested that the prevalence of summary judgments in the Eastern District of Pennsylvania had risen from around 1.8 to 7.7% over the 40 years to 2000.90 The success rate of the applications for summary judgment in the more recent studies has been lower — between 20 and 40%.91 Rave also questioned

86 87 88 89 90 91

See Simon Parsons & Co v Barker [2004] TASSC 135. Moscow Narodny Bank Ltd v Mosbert Finance (Australia) Pty Ltd [1976] WAR 109; Glover v Roche [2003] ACTSC 19. Matsushita Elec Industries Co v Zenith Radio Corp 475 US 574 (1986); Anderson v Liberty Lobby 477 US 242 (1986); Celotex Corp v Catrett 477 US 317 (1986). S Issacharoff & G Loewenstein, “Second Thoughts about Summary Judgment” (1990) 100 Yale Law Journal 73 at 92. S Burbank, “Vanishing Trial and Summary Judgment in Federal Civil Cases: Drifting toward Bethlehem or Gomorrah?” (2004) 1 Journal of Empirical Legal Studies 591. D T Rave, “Questioning the Efficiency of Summary Judgment” (2006) 81 New York University Law Review 875 at 901.

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whether the existence of the summary judgment procedure improves the efficiency of the civil justice system.

Possible directions for reform [6.150] Summary judgment is another of those critical areas of procedure where it is difficult to draw the boundaries as to when parties should have their cases concluded without the benefits of the full procedure, including trial. It is suggested that, particularly in light of more conscious concern over cost, delay, efficiency and systemic impact, the procedure should not be constrained by requirements to exercise exceptional caution. Unlike the clash between procedural requirements and the right to a trial for limited types of cases — for example non-compliance with case management orders — there is, in the summary judgment procedure, at least some consideration of the merits of the case. Furthermore, even if the application is refused, the process may, and often does, better define the live issues in the dispute, enabling a more focused pre-trial preparation and trial. Finally, there is no research to show that outcomes would be more accurate (or would be different) if cases that were ended by summary judgment were to go through the full litigation process. Given the expansion of other forms of pre-trial termination, particularly in light of the more prescriptive use of case management techniques, there is a strong argument that the broader form of summary judgment should be more widely available. One radical suggestion, given how few matters actually proceed to trial, is that the summary judgment procedure could be used in all cases, acting as the filtering point to determine which cases should proceed down the trial track. An alternative approach, that would accommodate some of the obvious concerns arising from the changed test for summary judgment, is to develop a procedure for provisional judgments. Here, after the issues in dispute have been clarified, the parties could ask the court to review the documentary material available to it and make a provisional judgment. This possibility, existing in some civil law jurisdictions,92 would essentially convert the summary judgment process to a provisional judgment process. This would enable a court, after hearing and reviewing the documentary evidence, to reach a provisional judgment that converts into a final judgment after a specified period. The difference from a normal merits based judgment is the parties have the right not to accept that determination. Either party has, before the expiration of that period, the right to seek a trial unless the court has decided there are no prospects of success. However, if the parties choose not to accept the determination and go to trial, they are exposed to significant penalties if the final judgment is not better than the provisional judgment. Moreover, right to trial may be conditional, on payment into court of the judgment sum or ordering security for costs. While this is somewhat similar to the case evaluation process outlined in Chapter 9 where we consider a range of dispute resolution methods, the provisional judgment

92

Brazil, eg, has a preliminary judgment process (see A Pellegini Grinova, Proceedings of XIIth World Congress of the International Association of Procedural Law (Mexico, 2003)). Also GP Miller, Preliminary Judgements (Law & Economics Research Paper Series Working Paper 8-09, New York University School of Law, June 2008) proposing preliminary judgments for the United States. [6.150] 151

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becomes a final judgment without further procedural steps, unless one party elects not to accept it and to proceed to trial. As we do not have published data on the use of summary judgments, it is difficult to assess the resource implications for courts of such changes, although it is not unreasonable to believe they could be significant. This might also exacerbate the tendency by some parties to turn the summary judgment application into a mini-trial. This already happens to some degree under the current approach93 and it is difficult to develop clear standards to determine what matters should go to trial. Indeed, it converts the central question to: “when is a weak case strong enough to go trial?” Moreover, giving summary judgment greater scope would, it is conceded, contribute to moving civil litigation to a situation where the primary court resolution process is based on documentary evidence, with affidavits being substituted for oral testimony. However, the evidence in trials is now increasingly being adduced in documentary form so the change may not be as great as it might otherwise appear. Any broadening of the summary judgment procedure could change its overall importance within civil litigation. Without empirical data it is, though, difficult to be certain. Indeed, given the low proportion of cases going to trial, it is quite possible that even under the current rules more cases may be terminated by summary judgment than by trial. It may already be more significant than trials as the mechanism by which cases are brought to conclusion.

CONSENSUAL AND PARTY-BASED PRE-TRIAL TERMINATION [6.160] In the previous sections we examined the various procedural mechanisms by which proceedings can be terminated pre-trial by an order or judgment of the court. These procedures allow one party, or the court, to terminate proceedings without the consent of the other party. We now turn to examine the procedural mechanisms for party-based ’consensual’ termination of proceedings. Such mechanisms allow a party to terminate proceedings without depending upon a court judgment, and generally occurs when all the parties to the dispute have agreed it is to be terminated. This invariably occurs when a proceeding is settled, usually by negotiation or some form of non-adjudicatory dispute resolution process. The most significant mechanism discussed here is discontinuance. In other cases the settlement may involve the obtaining of court orders or judgment by consent. The more common forms of court orders are also described here.

Discontinuance [6.170] The most important of these party-based procedures for pre-trial termination is discontinuance. Conceptually, discontinuance represents the inverse of the default judgment: the former withdraws the proceedings from the court to maintain the legal status quo, while the latter accelerates it to achieve the plaintiff’s desired conclusion. Under the rules in all jurisdictions the plaintiff has the right to discontinue the proceeding up to a certain stage in the pre-trial 93

See Simon Parsons & Co v Barker [2004] TASSC 135.

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process. The point at which this right ceases varies between jurisdictions. In some jurisdictions the plaintiff can discontinue up until it receives the defence (for matters proceeding by way of pleadings).94 In other jurisdictions, the right to withdraw unilaterally continues to either the close of pleadings,95 or where the case is ready for trial.96 On expiration of the time for unilateral discontinuance, a plaintiff can only discontinue with the consent of all parties or with the leave of the court. However, while commencing proceedings is a unilateral act on the part of the plaintiff, this is not entirely true when it comes to terminating proceedings. Even where there is the right to discontinue it is not without consequences for the plaintiff. The civil justice system recognises commencing proceedings has major consequences for defendants — they are involuntary participants and required to expend considerable effort and moneys in defending the case. The price of the discontinuance is that the plaintiff becomes liable to pay the defendants’ costs up to the date of discontinuance. Despite these costs, the plaintiff may nevertheless choose to discontinue proceedings and accept the legal status quo, whether because there has been a change in underlying circumstances, a resolution of the dispute, or because the desired outcome had already been achieved. In practice discontinuance commonly follows a negotiated settlement of the dispute and the parties may agree to a different outcome on costs. In cases where the eventual outcome is uncertain for both parties, for example, the parties may agree that the plaintiff is to discontinue with each side paying their own costs. For this reason it is commonly described as a form of ’consensual’ pre-trial termination. Even where the proceedings are at a stage where the right to discontinue has been lost, the court will usually grant permission to discontinue, although usually with costs or other orders to protect the defendant. The assumption has been that the plaintiff should not be forced into proceeding with the litigation. Permission may be refused, however, if there would be prejudice to the defendant that could not be made good by way of order for costs. There have been examples where the court has held that the plaintiff’s allegations are such that the defendant should have the right to clear its name. In Packer v Meagher,97 the plaintiff had filed a notice of discontinuance as of right and then sought to withdraw it following the defendant’s application to have it struck out. The defendant wanted vindication and Hunt J refused to allow the plaintiff to withdraw the notice of discontinuance but struck it out as an abuse of process, holding I am satisfied that the notice of discontinuance was filed in order to deny to the defendant his chance of obtaining a public vindication … and [demonstrating] that the proceedings were an abuse of process. The defendant should now have that public vindication.98

There is a significant difference between the consequences of a discontinuance and the consequences of the forms of pre-trial termination described in the previous

94 95 96 97 98

Uniform Civil Procedure Rules 1999 (Qld) r 304; Supreme Court Rules 2000 (Tas) r 376; Rules of the Supreme Court 1971 (WA) O 23, r 2. Federal Court Rules 2011 (Cth) r 26.12; Supreme Court Rules (NT) r 25.02; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 25.02. Court Procedures Rules 2006 (ACT) r 1160; Supreme Court Civil Rules 2006 (SA) r 107. [1984] 3 NSWLR 486. [1984] 3 NSWLR 486 at 500. [6.170] 153

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sections. The effect of a discontinuance is to bring the proceedings to an end. It is not equivalent to termination by judgment and the plaintiff is free to bring fresh proceedings. A termination by judgment changes the legal positions of the parties, while a discontinuance reasserts the legal status quo. The plaintiff is restored to their position prior to commencing the action, and is generally entitled to re-agitate the same matter in fresh proceedings. Of course, the plaintiff may find itself barred by limitation periods that have expired in the meantime. Alternatively, the courts may in some circumstances make the discontinuance of the first action conditional on there being no fresh proceedings. Under the rules in all jurisdictions the second proceedings may also be stayed until the defendant’s costs of the first proceedings have been paid.99

Consent judgments and orders [6.180] An alternative means of party-based pre-trial termination allows the parties to apply to the court for a ‘consent judgement’. This procedure allows the parties to protect a negotiated settlement by having its terms incorporated into a judgment of the court. This allows the parties to affect a change in their legal position, and to protect that new position. In contrast to a discontinuance, a consent judgment is a final judgment of the court and enforceable in the same way as a judgment after trial. It is, however, possible to have a consent judgment recalled or set aside though this usually requires the consent of all the parties.100 All jurisdictions provide for the making of consent judgments or orders.101 In Green v Rozen,102 five separate methods of consensual termination were identified: 1.

The first was to enter judgment and then stay enforcement while the terms of the settlement were carried out. A common example is where the parties have agreed that the defendant is to pay the damages by way of instalments. Should the defendant fail to make a payment, the plaintiff can enforce the judgment to obtain the balance owing.

2.

The second method is to have the terms of the settlement made orders of the court as part of the consent judgment.

3.

The third method is to stay the proceedings while the parties carry out the terms of the settlement as set out in a schedule that accompanies the orders. There is no court order that the parties carry out the terms of the settlement, the action is merely stayed to enable this to happen.

99

See, eg, Federal Court Rules 2011 (Cth) r 26.15; Uniform Civil Procedure Rules 1999 (Qld) r 312; Supreme Court Civil Rules 2006 (SA) r 108; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 25.07; Rules of the Supreme Court 1971 (WA) O 23, r 4. See Spann v Stanwell Pty Ltd [1984] 1 Qd R 29; Chamberlain v Deputy Commissioner of Taxation (NSW) (1991) 28 FCR 21. Court Procedures Rules 2006 (ACT) rr 1611, 1612; Federal Court Rules 2011 (Cth) r 39.11; Uniform Civil Procedure Rules 2005 (NSW) r 36.1A; Supreme Court Rules (NT) r 59.06; Uniform Civil Procedure Rules 1999 (Qld) r 666; Supreme Court Civil Rules 2006 (SA) r 227; Supreme Court Rules 2000 (Tas) rr 340, 341; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 59.06; Rules of the Supreme Court 1971 (WA) O 42, rr 7, 8. [1955] 1 WLR 741.

100 101

102

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4.

The fourth method involves the staying of proceedings but on the basis of terms recorded on the briefs of counsel for the parties.

5.

The court simply adjourns proceedings to enable the parties to carry out the terms of settlement.

The flexibility of the consent judgment and its ability to reflect the wishes of the parties can create unexpected concerns. One matter in particular that has troubled this area arises where the compromise or settlement covers matters that go beyond the scope of the proceeding. In issue is whether these extended matters can properly be brought within the ambit and thus the protection of the court orders. Australian authority holds that, while it is a matter of discretion depending on the nature of the additional matters, such extended orders are possible and, in some cases, proper. This approach is justified by reference to the statutory requirements to avoid a multiplicity of proceedings.103

103

Roberts v Gippsland Agricultural & Earthmoving Contracting Co Pty Ltd [1956] VLR 555; General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6. [6.180] 155

CHAPTER 7 Protecting Positions Until Trial Injunctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 [7.30] Criteria for pre-trial injunctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 [7.40] A serious question to be tried . . . . . . . . . . . . . . . . . . . . . . . . . . 162 [7.50] Damages are an inadequate remedy . . . . . . . . . . . . . . . . . . . 163 [7.60] The balance of convenience . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 [7.70] An alternative approach? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 [7.80] Mandatory injunctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 [7.90] Undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 [7.100] Preservation orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 [7.110] Preservation of property orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 [7.120] Interim distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 [7.130] Orders for sale of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 [7.140] Search orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 [7.150] Asset preservation orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 [7.160] Test for freezing orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 [7.170] Appointment of receivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 [7.180] Security for costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 [7.20]

[7.10] Even in a fully efficient legal system, passage through the litigation process takes time. During the passage of time between a cause of action arising and a judgment being delivered, intervening events may so alter the positions of the parties with respect to each other that the court may be unable to provide justice in the case. There are two (conceptually different) situations in which a court’s capacity to deliver justice may be reduced. • First, a court may be unable to deliver justice where the subject matter of the dispute is such that the defendant’s continuing or threatened conduct may render any final judgment ultimately ineffective. • Secondly, a court’s capacity to deliver justice may be lessened in circumstances where a party engages in conduct that will unfairly affect the court’s ability to determine the case. The types of situations in which this pre-judgment protective action is relevant are surprisingly familiar. A common example of the first type of situation arises in disputes over property, where the party in possession or control of that property may attempt to dispose of it in a way that would defeat the other party’s ability to regain the property even should the dispute be decided in their favour. In these circumstances the rules enable a party to seek an interlocutory order restraining the defendant from disposing of the property until the case is finalised. The first situation can also arise when the disputed conduct is continuing, aggravating the harm suffered in a manner that could not be adequately compensated by the usual remedies like damages. A common example of this type of situation arises in [7.10] 157

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disputes between businesses and their former employees, often where the former employee is allegedly acting in breach of a contractual restraining clause in their previous employment contract that sought to limit that employee from working for a competitor or undertaking similar work for a limited period in specified geographic areas. The former employee may allegedly be soliciting former clients for their new business, using confidential information obtained in their former employment, or setting up in competition with the former employer, in a way that breaches that restraining clause. Given that the time necessary for the case to get to trial will normally exceed the life of any such clause, and that damages for the breach of such clauses are often hard to quantify, the plaintiff may be better served by obtaining an interlocutory order restraining the defendant from undertaking the conduct complained of until finalisation of the case. Examples of the second type of situation include those cases where there is a risk that a party may destroy evidence. In such cases, a court may justify making a “search and seizure order” which enables one party to search another party’s home or business and to acquire such evidence before it can be destroyed. Another example is where a party deals with or disposes of its general assets to render any judgment against it nugatory. In response to the risk, a court might make an “asset preservation” or “freezing order” and thus prevent the disposal of the asset. The essential difference between the situations outlined above is that in the first the court is to trying to minimise ongoing harm and is concerned with the conduct or property that is the actual subject matter of the dispute. The second situation focuses on the integrity of the litigation process — either by securing evidence or ensuring any judgment is not defeated by re-arrangement or disposal of the defendant’s assets. In both types of situation, if the integrity of the judicial system of dispute resolution is to be protected, the courts need to have the capacity to protect the interests of parties or to minimise any prejudice that may arise. Without such capacity a party could, by effectively rendering the legal determination substantively irrelevant, improperly undermine the efficacy of that resolution in a way that can challenge vital principles of legality and the rule of law. As a result, it is entirely unsurprising that all Australian jurisdictions provide courts with certain powers to minimise any harm that may arise while the dispute proceeds through the litigation process or to protect the integrity of the litigation process. [7.15] The power to make these interlocutory orders is now found in the rules of court for each jurisdiction and these powers can be exercised at any stage of the proceedings. It will be recalled that in Chapter 3, one of the matters to be considered when contemplating litigation or commencing proceedings was the issue of whether interlocutory orders needed to be sought before the main proceedings were formally commenced, and without notice to the other party. More commonly, exercise of these powers occurs after proceedings are commenced. In all cases, though, the pre-judgment nature of these orders pose distinct challenges to a court in considering whether to exercise these powers. By their nature, these powers to preserve positions pending trial involve inviting the court to intervene, in ways that affect a party’s rights and interests, at a time when the court has not yet determined the merits of the underlying dispute. The inability to determine underlying merits is particularly significant when considering the

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exercise of powers to address the first situation, that is, of ongoing conduct or increasing harm. In the past, courts used to justify this intervention on the basis that they were protecting the status quo. This justification has been criticised because it does not clearly establish the point in time from which the status quo is to be protected; whether, when the cause of action arose, when the proceedings were commenced, or when the interlocutory order was sought. Furthermore, it is misleading to suggest that the order preserves the situation when in reality it may infringe the rights of a party as much as it preserves them for another party. This chapter will examine the range of procedural mechanisms for protecting party interests and will expand upon these conceptual difficulties posed by the use of interlocutory measures. The chapter will begin by examining the longestablished power of the court to grant a pre-trial injunction. It will then look at the various forms of preservation orders and orders instructing a third party to manage certain aspects of a party’s affairs. Finally, the chapter turns to the circumstances in which the court has power to order a plaintiff to lodge moneys in court to ensure any costs orders against it are effective.

INJUNCTIONS [7.20] One of equity’s principal contributions to modern procedure, the injunction is a court order that requires a party to refrain from undertaking certain acts, or, less commonly, requires a party to perform a particular act. Initially, injunctions were only available in the High Court of Chancery but the absence of such a useful remedy in the common law courts led the British parliament to extend, in 1854, the availability of the remedy to the common law. Since the commencement of the Judicature Act 1873 (UK) in 1875 all divisions of the English High Court have had power to issue injunctions. This is also the position for the Australian superior courts. Injunctions can be sought at any stage of a proceeding. In the pre-trial process, injunctions are described as being either “interim” or “interlocutory”, although there is some overlap in the use of those terms. In situations of urgency, a plaintiff may make an ex parte application at the commencement of proceedings for an “interim injunction”. If granted, the injunction is usually for a short period, and the application is relisted for further hearing with notice to the other party. At that hearing the court will consider whether the injunction is to be continued as an “interlocutory injunction” until final disposition of the case (unless the injunction is dissolved earlier by court order). An interlocutory injunction may be sought at any stage of the proceedings, and need not follow an interim injunction. In contrast to these pre-judgment orders, the permanent injunction can be sought as part of the final orders disposing of the case. This section is, however, concerned only with the first two categories of injunctions, those granted by courts as part of the pre-trial process. [7.25] While there is no doubt that Australian courts possess the jurisdiction to order injunctions, the question of when pre-trial injunctions should be ordered has been controversial. The starting point is the statutory provision which, in most jurisdictions, empowers a court to issue injunctions where it is “just and

[7.25] 159

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convenient”.1 This phrase is based on s 25(8) of the Supreme Court of Judicature Act 1873 (UK), which provided that an “injunction may be granted … by an interlocutory order of the court in all cases in which it shall appear to the court to be just or convenient that such an order should be made”.2 The ambiguities of that phrase have, however, led to different views being taken of the scope of the power to grant interlocutory injunctions. From one point of view, the power granted in s 25(8) can be seen as comprehensive — it is not limited to those disputes over which the Court of Chancery had jurisdiction and would grant an injunction. This view emphasises and gives full measure to the expression “just and convenient” in the statute. Under the contrasting narrower view, the statutory reform can be seen as simply enabling all courts to exercise the power to grant injunctions only in circumstances where the Court of Chancery would have exercised it. Judicial authority for both views can be found in Australia and England, though it is now clear that the narrower interpretation of the power has prevailed.3 In the leading Australian case, Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd,4 the majority of the High Court followed the weight of authority that held the broad language of the statutory provision was to be read down, with the result that the granting of interlocutory injunctions could only be supported where the primary action is founded on an existing cause of action and the final relief sought vindicates a recognised legal right.5 In that case, the application for interlocutory injunction failed because the primary cause of action advanced there, viz an invasion of privacy, was not known to Australian law. There is, however, support for the broader view of the power to grant interlocutory injunctions to be found in the judgment of Kirby J and, to a degree, in the dissenting judgment of Callinan J. In contrast to the majority, Kirby J held: Every court, but particularly a court within the Australian Judicature established under the Constitution, must obey, and give full effect to, valid Australian legislation understood according to its terms. This is the starting point for a consideration of the power of the Supreme Court. With respect, it is erroneous to start with Chancery practice, the history of injunctions, or observations of English judges on those subjects. It is equally erroneous to start with the opinions of local judges who have

1

2 3

4 5

Court Procedures Act 2004 (ACT) s 62 (if “appropriate”); Federal Court of Australia Act 1976 (Cth) s 23 (if “appropriate”); Supreme Court Act 1970 (NSW) s 66 (“just or convenient”); Supreme Court Act (NT) s 69 (“just or convenient”); Civil Proceedings Act 2011 (Qld) s 9 (“just or convenient”); Supreme Court Act 1935 (SA) s 29 (“just or convenient”); Supreme Court Civil Procedure Act 1932 (Tas) s 11(12) (“just and convenient”); Supreme Court Act 1986 (Vic) s 37 (“just and convenient”); Supreme Court Act 1935 (WA) s 25(9) (“just or convenient”). The expression was subsequently amended to “just and convenient” — Supreme Court Act 1981 (UK) s 37. In England Lord Denning MR, for example, supported a broader approach in Chief Constable of Kent v V [1983] QB 34 but Donaldson and Slade LJJ supported the narrow approach, with Donaldson implying that the broad approach would lead to “palm tree” justice. (2001) 208 CLR 199. “The basic proposition remains that where interlocutory injunctive relief is sought in a Judicature system court, it is necessary to identify the legal (which may be statutory) or equitable rights which are to be determined at trial and in respect of which there is sought final relief which may or may not be injunctive in nature” (Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 241 per Gummow & Hayne JJ).

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not begun the “elucidations” of their relevant powers, as they should, with the terms of the statute by which those powers are granted.6

Using Kirby J’s approach, the expression “just and convenient” includes cases which are in the early stages of the litigation process and where the cause of action may not be fully established or clearly identifiable, but the nature of the potential harm requires a restraining order. One of the concerns behind the reluctance to give “just and convenient” its full meaning is the belief that there needs to be constraints on the grant of such wide discretionary power. It is feared that without constraints, such as the need for a substantive cause of action vindicating legal rights, judges might fall into the trap of unprincipled decision-making.7 While it may be accepted that judges should not act in an arbitrary manner according only to what vague notions of ’justice’ may require, it does not follow that such a result would inevitably flow from the adoption of the broad interpretation. Like all legal tests, the passage of time will establish guiding principles of when the usage of the power is warranted. Indeed, it is clear that the exercise of the jurisdiction to grant interlocutory injunctions will be circumscribed by the need to meet specified criteria for granting of the injunction.

Criteria for pre-trial injunctions [7.30] In an application for an interim or interlocutory injunction, the court is usually being asked to make decisions affecting the rights of the parties in the early stages of litigation. The application for the injunction may arise before the pleadings process has been completed and thus before the issues in dispute have been clearly identified. The application usually arises before the information gathering process of disclosure or discovery so the evidence may be incomplete. This context has influenced the content of the legal criteria developed by the courts to assess whether an injunction should be granted. In particular, the criteria for granting an injunction combines two principal considerations — an evaluation of the merit of the underlying (or primary) proceedings and an evaluation of the harm that would arise from the granting or the non-granting of the injunction. For the last 30 years, the prevailing approach has been that outlined by Mason ACJ in Castlemaine Tooheys Ltd v South Australia8 which required an applicant seeking an injunction to show that: 1.

there is a serious question to be tried;

2.

that damages would not be an adequate remedy; and

3.

the balance of convenience favours the grant of the injunction.9

6 7

(2001) 208 CLR 199 at 266. “It is beyond controversy that the role of Australian courts is to do justice according to law — not to do justice according to idiosyncratic notions as to what is just in the circumstances. Hence, the rule of law and not the rule of judges” (Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 231 per Gaudron J). (1986) 161 CLR 148. This approach affirmed in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57. See Gleeson CJ & Crennan J at 68; Kirby J at 106. For a recent application of the Castlemaine principle see Marino v St Bartholomew's House Inc [2016] WASC 182.

8 9

[7.30] 161

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A serious question to be tried [7.40] The first criterion that must be fulfilled before an application for an interlocutory injunction can be granted is that the proceeding must raise a “serious question to be tried”. This criterion goes to the merits of the underlying case. Clearly, if the case is one which has no legal or factual issue for a court to determine then there is no warrant for interfering with the party’s activities. In this context ’serious’ refers to the merits of a case, not its importance. The criteria essentially requires that the case has sufficient merit before the court can justify intervening before trial. While this underlying rationale of requiring a ’threshold’ degree of merit is not new, the “serious question to be tried” formulation is a relatively recent test. The language of the test adopted by Mason ACJ in Castlemaine Tooheys Ltd v South Australia,10 “a serious question to be tried”, is derived from Lord Diplock’s 1975 judgment in American Cyanamid Co v Ethicon Ltd.11 It is a departure from the High Court’s 1968 decision of Beecham Group Ltd v Bristol Laboratories Pty Ltd,12 where the High Court (in following earlier English and Australian authority) expressed the merits criterion as being the need to make out a “prima facie” case. This expression had been interpreted as setting a higher threshold (for example, greater than 50% chance of success) and led to courts engaging in close assessment of the merits. Lord Diplock in American Cyanamid believed that such an assessment at so early a stage in the pre-trial process was unnecessary, if not detrimental. In establishing the new “serious question to be tried test”, he set a very low threshold of what constitutes sufficient merit: The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried.13

More recently, the High Court has taken the opportunity, in Australian Broadcasting Corporation v O’Neill14 to attempt to clarify the meaning of “serious question to be tried”. Gummow and Hayne JJ, in a joint judgment, returned to Beecham’s case and adopted the language of “prima facie case”. In attempting to reconcile that test with the American Cyanamid language of “a serious question to be tried”, they reject those interpretations of “prima facie case” that elevate the merits test requiring the demonstration of a ’more probable than not’ prospect of success.15 Gummow and Hayne JJ go on to indicate that: [T]he requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.16

In so doing their Honours appear to conflate what would have been regarded as a separate limb of the test for an injunction — the balance of convenience — with the first arm of the test — merits. Their approach also imports a range of answers to the question of what is “the requisite strength of the probability of success” 10 11 12 13 14 15 16

(1986) 161 CLR 148. [1975] AC 396 (“American Cyanamid”). (1968) 118 CLR 618 (“Beecham's case”). American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 407 per Lord Diplock. (2006) 227 CLR 57. (2006) 227 CLR 57 at 82. (2006) 227 CLR 57 at 84.

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because the answer varies depending on the type of case and the rights being claimed. Thus, in Australian Broadcasting Corporation v O’Neill, Gummow and Hayne JJ find that injunctions to restrain defamatory publication were historically treated as being a special case and were only granted with exceptional caution because of the public interest in free speech. They concluded that the trial judge had, in effect, paid insufficient notice to the special nature of the interest.17 Interestingly, Gleeson CJ and Crennan J (in a joint judgment) expressly adopted the approach of Gummow and Hayne JJ, in so far as they outlined the criteria for an injunction, although they use the expression “serious question to be tried” for the merits threshold.18 However, while Gleeson CJ and Crennan J also held that the lower courts gave insufficient weight to the interest in free speech, it is not entirely clear from their judgment whether this arises in the context of the merits test or is part of a balancing of harms. One of the consequences of setting a higher threshold for the merits test, such as a prima facie probability of ultimate success, is that the injunction application often finalised the matter. The parties gain, it is said, a strong indication of the court’s view of the strength of the case and the likely outcome and as a result the case is more likely to be settled. With a lower threshold merits test, such as the one Lord Diplock adopted in American Cyanamid, a successful application for an injunction cannot be taken as an indication of how a case may be ultimately determined. While the higher threshold promotes efficiency by encouraging earlier finalisation of cases, it also increases the risk of less accurate outcomes. The outcomes may be less accurate because the court is deciding the application early in the litigation process and, had the full evidence and issues been developed, there may have been a different, more accurate, outcome.

Damages are an inadequate remedy [7.50] In recognition of the imposition injunctions can involve, the second requirement necessitates consideration of whether damages would be an inadequate remedy. Although this criterion is treated, in Castlemaine Tooheys Ltd v South Australia,19 as a separate limb of the test for an injunction, it is often incorporated within the balance of convenience criterion.20 The underlying principle is that if damages would provide adequate compensation for the continuing harm, the court should not intervene pre-trial. The harm will be made good by way of damages after trial if the applicant succeeds at trial. As pre-trial injunctions restrict the rights of one party at a point when the merits of the dispute are yet to be finally assessed, they are used only where the dispute will lead to continuing harm that is not easily or appropriately compensated by damages.

17 18 19 20

(2006) 227 CLR 57 at 87-89. (2006) 227 CLR 57 at 68. (1986) 161 CLR 148. See, eg, American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 407 per Lord Diplock; Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 81-82, 84 per Gummow & Hayne JJ. [7.50] 163

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The balance of convenience [7.60] After having determined that there is a “serious question to be tried” and that damages would not be an adequate remedy, the court must then determine where the “balance of convenience” lies. In this context, “balance of convenience” refers to the weighing up of the consequences for the applicant if the injunction is not granted against the consequences for the respondent if it is granted. This weighing up process will depend on the circumstances of each case but some matters may shed light on the question of harm. Delay or acquiescence on the part of the applicant in seeking the injunction may suggest the nature or degree of harm suffered does not require intervention before trial. Existing continuing conduct will provide a stronger basis for seeking an injunction than the possibility of future conduct or conduct that has been completed.

An alternative approach? [7.70] As the above discussion of the “serious question to be tried” criterion begins to illustrate, the assessment of merit at the pre-trial stage can create real difficulties. One radical solution to overcome the difficulties of attempting to assess merits in interlocutory hearings is advocated by Brooks and Schwartz.21 They argue that focusing on irreparable harm and merits does not promote economically efficient behaviour by parties pre-trial. Even when damages might be an adequate remedy, interlocutory injunctions should be considered as they can promote efficient pre-trial behaviour. Brooks and Schwartz suggest injunctions should be granted wherever a plaintiff is prepared to pay into court an amount to compensate the defendant for the harm caused by the grant of an injunction if the plaintiff should ultimately fail in the proceedings. This creates a price for the injunction and largely transfers the decision-making to the plaintiff, who acts upon its own assessment of the costs and benefits gained by the grant of the injunction. As an alternative to this, they posit a court should only grant an injunction where it believes the benefits to the plaintiff outweigh the costs to the defendant.

Mandatory injunctions [7.80] As discussed above, an injunction can operate to require a party to refrain from engaging in some action (a “negative” or “prohibitory” injunction), or may require a party to carry out some action (a “positive” or “mandatory” injunction). Mandatory injunctions give rise to three further issues: 1.

Additional criteria: The first of these is whether additional criteria must be met to justify the grant for mandatory injunctions. It has been argued that, as mandatory injunctions require a party to do some positive act, they involve a greater imposition with the result that courts should be more cautious in granting such applications.22 There are, however, Australian

21

R Brooks & W Schwartz, “Legal Uncertainty, Economic Efficiency and the Preliminary Injunction Doctrine” (2005) 58 Stanford Law Review 381. See State of Queensland v Australian Telecommunications Commission (1985) 59 ALR 243; Locabail International Finance Ltd v Agroexport (“The Seahawk”) [1986] 1 WLR 657; Cash

22

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cases that hold that there is no additional or separate test for mandatory injunctions. In Businessworld Computers Pty Ltd v Australian Telecommunications Commission,23 Gummow J (as a Federal Court judge) declined to follow the predominant approach and held that mandatory injunctions were not subject to any additional requirement. Gummow J’s approach has found some acceptance in New South Wales,24 Victoria,25 Western Australia26 and in the Federal Court.27 It also follows the reasoning of Hoffman J in the English case, Films Rover International Ltd v Canon Film Sales Ltd.28 In Films Rover Hoffman J demonstrated that the higher standard arises out of the belief that the harm suffered by incorrectly granting a mandatory injunction may be higher than for a prohibitory injunction. Where the mandatory injunction does not carry such a risk, there is no need for a higher degree of assurance than required for prohibitory injunctions. As some prohibitory injunctions also carry risks of significant harm if wrongly granted, there is no need to burden the courts with what purports to be an additional requirement for mandatory injunctions. As argued above, the proper application of the balance of harm or convenience test ties the consideration of the degree of assurance required to the degree of harm that would arise if wrongly granted. On this construction there is little need for any further restrictive requirements for mandatory injunctions. 2.

23 24 25 26 27 28 29

Ongoing conduct: The second issue arises where the mandatory order requires a party to engage in ongoing conduct, as opposed to a discrete action. Courts are reluctant to make orders that are likely to require ongoing supervision by the court with ongoing interlocutory hearings to determine whether there is full compliance with the orders made. This reluctance led the House of Lords in Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd29 to hold that mandatory injunctions should not be granted that require the carrying on of a business. This is a matter of practice rather than a settled rule and Australian courts have been willing to grant such injunctions in appropriate cases. For example, in Diagnostic X-Ray Services Pty Ltd v Jewel Food Stores Pty Ltd, the Victorian Supreme Court ordered a defendant to “take all necessary steps to maintain, conduct and carry on a petrol station business during usual business hours with all

Converters Pty Ltd v Hila Pty Ltd (1993) 9 WAR 471; Active Leisure (Sports) Pty Ltd v Sportsman's Australia Ltd [1991] 1 Qd R 301. (1988) 82 ALR 499. Neoinvent Pty Ltd v National Broadband Pty Ltd [2005] NSWSC 1162; Body Technology Pty Ltd v Babak Moini [2010] NSWSC 1414 at [8]; Tumminello v TAB Ltd [2011] NSWSC 1639 at [43]. Bradto Pty Ltd v Victoria (2006) 15 VR 65. Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 at [76]-[87]. NA Retail Solutions Pty Ltd v St George Bank Ltd [2010] FCA 290 at [80]. Cf Parmalat Australia Pty Ltd v VIP Plastic Packaging Pty Ltd (2013) 210 FCR 1. [1987] 1 WLR 670. [1998] AC 1. [7.80] 165

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due diligence and efficiency” even after the defendant had abandoned the petrol station.30 3.

Characterisation: The third issue arises from the fact that maintaining different tests for mandatory injunctions can lead to barren characterisation arguments. It leads to parties drafting convoluted orders in attempts to disguise mandatory injunctions as prohibitory injunctions. For example, a Western Australian court was presented with an application to restrain the defendant from “not providing partial discharges of [a] registered mortgage”.31 The response of courts has been to say that the focus must be on the effect of an order, not on the form in which it is drafted.32

Undertakings [7.90] The operation of both prohibitory and mandatory injunctions restrict the rights and impose additional obligations on the respondent party. If that party is unsuccessful in the primary proceedings, this earlier imposition will not appear unjust. However, if that party is ultimately successful in those underlying proceedings, the interference imposed by the injunction takes on a wrongful tone. Courts have attempted to address the risk of wrongly granting a pre-trial injunction by requiring the party seeking an injunction to undertake to pay any damages that flow from the granting of the injunction, should that party not ultimately succeed at trial. This undertaking has been described by some judges as being the “price of the injunction”.33 In some jurisdictions it is required by the rules,34 and in others is required as a matter of practice. The requirement that an undertaking be given can be dispensed with in some circumstances. In Blue Wedges Inc v Port of Melbourne Corporation,35 the Victorian Supreme Court held that such dispensation could only arise in exceptional circumstances. In that case, the plaintiff, a coalition of environmental groups, sought an injunction to prevent the trial dredging of Port Phillip Bay, arguing that such conduct was in breach of environmental protection legislation. The plaintiff did not have the financial resources to meet any undertaking and argued that, as 30

31 32

33

34 35

Diagnostic X-Ray Services Pty Ltd v Jewel Food Stores Pty Ltd (2001) 4 VR 632. Orders omitted but can be found in Diagnostic X-Ray Services Pty Ltd v Jewel Food Stores Pty Ltd [2001] VSC 9 at [23]. Temwood Holding Pty Ltd v Asean Australian Assets Pty Ltd [2000] WASC 84. Steytler J said of the application to restrain the defendant from “not providing partial discharges of [a] registered mortgage”: “This curious formulation of the terms of the injunction (cast, as it is, as a restraint preventing AAA from ‘not providing partial discharges’) is presumably the product of a hope that the restraint will be seen as a prohibitory injunction and not a mandatory injunction. That hope is misplaced. The injunction sought by Temwood is plainly a mandatory injunction. The form in which it has been drafted cannot alter its substance” (Temwood Holding Pty Ltd v Asean Australian Assets Pty Ltd [2000] WASC 84 at [20]). Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 at 319 per Stephen J; State of Queensland v Rodd [2004] QSC 312; De Boer v Williams [2004] NSWSC 351. See, eg, Court Procedures Rules 2006 (ACT) r 732; Uniform Civil Procedure Rules 1999 (Qld) r 264; Supreme Court Rules 2000 (Tas) r 445. [2005] VSC 305. See also Environment East Gippsland Inc v VicForests (No 2) [2009] VSC 421.

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the litigation was in the public interest, an undertaking should not be required. Mandie J held that the undertaking might be dispensed with if there was a “manifest breach of the law” or “irremediable harm or serious damage”.36 In so doing the court was simply requiring a high degree of assurance that the injunction would be correctly granted or that the consequences would be very significant if it was not granted. As these high threshold tests suggest, cases where courts have dispensed with the undertaking are rare. In 1986, Young J (as he then was) consulted the judges of the New South Wales Supreme Court and none of them could recall an instance where an undertaking was dispensed with.37 The Queensland and Australian Capital Territory rules provide that undertakings should be required unless there is a “good reason” that might support a lesser standard than “exceptional circumstances”.38 It is important to note that the undertaking is to the court and not to the other parties. The court retains a discretion to decline to order an assessment of the damages sought pursuant to an undertaking, but as the High Court held in Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd,39 the undertaking should normally be enforced. There is an alternative approach to this area of law which has some support from 19th century English cases. This approach takes the view that, if the court made a “correct” decision given the evidence at the time it granted the injunction, a party should not be required to meet an undertaking if subsequently after consideration of all the evidence at trial, the party who obtained the injunction fails. Some support for this view can be found in the judgment of Jessel MR in Smith v Day,40 while in Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd although Barwick CJ thought there was merit in this approach, he regarded the prevailing approach outlined above as settled.41

PRESERVATION ORDERS [7.100] In this section, the various procedural mechanisms that enable a party to preserve the subject matter of the dispute or evidence are examined. We have already noted the power to grant injunctions can serve to preserve the subject matter in dispute, but now turn to the specific powers courts possess to preserve property, evidence or to ensure that its benefits are protected. These broad ranging and significant powers operate to help protect the integrity of the judicial proceedings. To this end, the rules contain provisions that not only provide for the preservation of property (which in some cases may also amount to evidence), but also separately enable courts to make orders to preserve evidence. In this chapter we will consider the following forms of preservation orders. 1.

preservation of property orders

36 37 38 39 40 41

[2005] VSC 305 at [10]-[11]. [2005] VSC 305 at 341. Court Procedures Rules 2006 (ACT) r 732; Uniform Civil Procedure Rules 1999 (Qld) r 264. (1981) 146 CLR 249. See also Lan v Kaymet Corporation Pty Ltd [2017] NSWCA 52. Smith v Day (1882) 21 Ch D 421 at 424-425 per Jessel MR. Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 at 310. [7.100] 167

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2.

orders for sale of property

3.

search orders

4.

asset preservation orders

5.

appointment of receivers

While the underlying rationale of most of these preservation orders is self-evident, it is worth highlighting that the second category, orders for the sale of property, is directed to the “protection of the benefits of property”. These orders are relevant in situations where the disposal of the disputed property may be necessary to ensure its value or benefit is retained. An obvious example is where the property consists of perishable items.

Preservation of property orders [7.110] The rules in all jurisdictions contain provisions relating to preservation of property, though they vary in content between jurisdictions. In most jurisdictions the relevant rule refers to not only preservation of property but also its detention and custody.42 In some jurisdictions the power to inspect property is also incorporated in the relevant rule.43 Where the power to inspect is not accompanied by the power to preserve, separate provision is made elsewhere in the rules for inspection (along with taking samples and conducting experiments).44 In South Australia, the rule simply provides for preservation of property.45 From a practical perspective this difference in rules would not appear, with one exception, to be significant. The power to make orders to preserve property would ordinarily include the power to make orders to detain or affect the custody of property. The exception relates to the exercise of the power against persons who are not party to the proceedings.46 In some jurisdictions the rules expressly extend to non-parties.47 Given the effect of the rule is to preserve property until disposition of the case, a preferable view is to interpret the power fully, so as to enable orders to be made against non-parties irrespective of whether rules expressly so provide. The purpose of the rule enabling the preservation of property is “the preservation of the identity and integrity of specific property (property in specie) pending the disposition of the court”.48 Courts have taken a broad view of their powers to preserve property. As Master Newnes noted in the Minister of Health v 42

43 44 45 46 47 48

See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 25.3: “In proceedings concerning property, or in which any question may arise as to property, the court may make orders for the detention, custody or preservation of the property”. See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 250; Rules of the Supreme Court 1971 (WA) O 52, r 2; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 37.01. As examined in [8.300]. Supreme Court Civil Rules 2006 (SA) r 248. See “Halsbury’s Laws of Australia” (LexisNexis) 325: Practice and Procedure, Preservation and Inspection of Property [325-2820]. For example, Uniform Civil Procedure Rules 1999 (Qld) r 252; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 37.01; Supreme Court Rules (NT) r 37.01. Porteous v The Hancock Family Memorial Foundation (Unreported, Supreme Court of Western Australia, Parker J, 28 May 1996) p 18.

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Brambles Australia Ltd: “O 52 r 2(1) gives the Court a wide discretion to do what is reasonable and necessary for the administration of justice”.49 In Rhein-Flugzeugbau Gmbh v Sea Wing International Pty Ltd,50 the Tasmanian Supreme Court ordered the defendant to deliver a hovercraft to the Sheriff for storage. The hovercraft was already being kept in secure storage and there was no risk of it being disposed of, but the court was not satisfied it could rely on the defendant’s undertakings not to operate the vehicle. It should be noted that only specific property (that is, property capable of being precisely identified) can be protected. A document can be property, as can money, if it can be identified and provided it has not been merged with other money. Illustrating the need for clearly identified property is Porteous v The Hancock Family Memorial Trust where the Western Australian Supreme Court held the relevant rule did not support orders preventing the disposition of assets generally, the holding of meetings or payment of dividends.51

Interim distributions [7.120] Most jurisdictions have specific provisions enabling a court to order, before trial, a distribution of property or income if the claim is less than the total value of the property.52 In Tasmania the power to distribute appears to be limited to income.53 The court needs to be certain that there will be a surplus before ordering a distribution. As Young CJ noted in Indyk v Wiernik, albeit in the context of a probate matter: I have never made an order for interim distribution because I have never had a clear case where, on looking at all the predictions that can be made, it can be seen that in the ultimate, even after paying the costs of the litigation, there will be the sort of surplus that will justify an interim distribution.54

Orders for sale of property [7.130] As suggested at the beginning of this section, the nature of some property the subject of dispute may be such that the passage of time involved in resolving the dispute may be sufficient to destroy the value of that property. In such cases it is more important that the value of the property, rather than the discrete property itself, is preserved. For this reason, disputes over perishable goods may require the sale of those goods and the securing of the proceeds until the case is finalised. The trend in the rules is towards expressly providing for the power to be used for 49 50 51 52

53 54

Minister of Health v Brambles Australia Ltd [2006] WASC 86 at [20], citing Smith v Peters (1875) LR 20 Eq 511. [1997] TASSC 135. Porteous v The Hancock Family Memorial Foundation (Unreported, Supreme Court of Western Australia, Parker J, 28 May 1996). Court Procedures Rules 2006 (ACT) rr 707, 708; Federal Court Rules 2011 (Cth) r 14.13; Uniform Civil Procedure Rules 2005 (NSW) rr 25.5, 25.6; Supreme Court Rules (NT) r 37.06; Supreme Court Civil Rules 2006 (SA) r 248(4); Supreme Court Rules 2000 (Tas) r 441; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 37.06; Rules of the Supreme Court 1971 (WA) O 52, r 8. Supreme Court Rules 2000 (Tas) r 441. Indyk v Wiernik [2006] NSWSC 868 at [23]. [7.130] 169

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all forms of personal property. For example, the South Australian rules state that “[i]f the property is perishable, or it is desirable for some other reason to sell the property, the Court may order the sale of the property”.55 Some jurisdictions continue to use “perishable property” as the central concept by which the rule is to be interpreted. Thus, the Tasmanian rule provides that the power is to be exercised for perishable property and then expressly includes shares in the definition of perishable property.56 Queensland gives “perishable property” even wider scope, defining it as “property, other than land, that is perishable or likely to deteriorate or decrease in value”.57 However, even where the term has not been expressly given broader meaning, courts have interpreted it broadly. Hence, the power to sell perishable property has enabled orders for the sale of horses and shares.58 The different provisions protecting positions contained in the rules means that there is often an overlap. In a given fact situation, more than one rule may apply. This overlap was clearly demonstrated in Oriti v Melcross Clothing Pty Ltd.59 Here, the applicants sought orders preserving the stock in trade of the clothing company pursuant to the preservation of property rule in the Federal Court Rules60 (or in the alternative, a Mareva order),61 or as a further alternative, an injunction restraining the respondents from disposing of the clothing company. The dispute arose as a result of a falling out between the directors of the clothing company and the applicants, who alleged the stock was being sold at below value to relatives of one of the directors. Branson J refused to grant the preservation order under O 25, r 2 because there was no dispute over the ownership of the goods. The evidence revealed that as the goods were fashion items they needed to be sold while current. An application seeking an order for a court-controlled sale was refused as the sale would have required special skills, trade contacts and experience, and the applicants had failed to provide adequate information to enable terms of sale or the appropriate manner of sale to be determined. The application for a Mareva order failed because the applicant had not established that there was real risk of disposition of assets, amounting to an abuse or frustration of the court’s process. The result was that the court allowed the respondents to continue selling the stock but required a full and proper accounting of all dealings with the stock.

Search orders [7.140] The third category of preservation orders operate to protect the integrity of the proceedings by ensuring the protection of relevant evidence. Such ’search orders’ require a party to allow nominated persons on to their property to search 55 56 57 58 59 60 61

Supreme Court Civil Rules 2006 (SA) r 248(3). See also Court Procedures Rules 2006 (ACT) r 716; Federal Court Rules 2011 (Cth) r 14.12; Uniform Civil Procedure Rules 2005 (NSW) r 25.4. Supreme Court Rules 2000 (Tas) r 438. Uniform Civil Procedure Rules 1999 (Qld) r 251. See also Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 37.04. Larner v Fawcett [1950] 2 All ER 727; Evans v Davies [1893] 2 Ch 216. [1994] FCA 1248. Then: Federal Court Rules (Cth) O 25, r 2; now: Federal Court Rules 2011 (Cth) r 14.11. Then: Federal Court Rules (Cth) O 25A; now: Federal Court Rules 2011 (Cth) r 7.32. Mareva or “freezing” orders are discussed below at [7.150].

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and seize specified material or evidence. Historically, such orders for search and seizure of evidence were known as “Anton Piller orders”, after one of the English cases in which the power to make such orders was recognised.62 While the power to grant such search orders was initially said to arise under the inherent jurisdiction of the court, that power has now been codified within the relevant rules.63 There is now considerable uniformity in those rules, largely as a result of the work of a committee set up by the Chief Justices of Australia and New Zealand to promote such harmonisation.64 The function of the relevant orders is to preserve evidence, enhancing the accuracy of any determination made by the court. To this end parties are able to apply for an order to “secure or preserve” evidence, including requiring a respondent to permit entry onto premises for purposes of searching and seizing evidence.65 Indeed, the procedure goes beyond the granting of permission to ’search’, and can require the respondent to disclose the whereabouts of the evidence being sought. Courts have sought to distinguish civil law ’search orders’ from criminal law ’search warrants’ by making the theoretical distinction that search orders, in contrast with search warrants, do not give authority to search without the owner’s consent. However, in reality, the practical difference is small because the person against whom the search order is made may be regarded as having committed a contempt of court if they refuse entry.66 The search orders exceptional nature has been continually stressed by the courts who have noted, for example, that “this form of relief stands at the extremity of the court’s powers and should only be granted in the extreme case.”67 The key to the exercise of this “extreme” power is the risk that the evidence will be destroyed or disposed of by the party possessing it. In such circumstances, to give notice of the application for a search order may lead to the very result the court is seeking to prevent, and so applications for such orders are normally heard ex parte. [7.144] The criteria for obtaining a search order contained in the Federal Court Rules 2011 are indicative of the approach in all Australian jurisdictions: The Court may make a search order if the Court is satisfied that: (a)

62 63

64 65 66

67

an applicant seeking the order has a strong prima facie case on an accrued cause of action; and Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55. Court Procedures Rules 2006 (ACT) r 751; Federal Court Rules 2011 (Cth) r 7.42; Uniform Civil Procedure Rules 2005 (NSW) Pt 25, Div 3; Supreme Court Rules (NT) O 37B; Uniform Civil Procedure Rules 1999 (Qld) r 261A; Supreme Court Civil Rules 2006 (SA) r 148; Supreme Court Rules 2000 (Tas) r 937J; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 37B; Rules of the Supreme Court 1971 (WA) O 52B. See K Lindgren, “Harmonisation of Court Rules and Forms” (2009) 83 Australian Law Journal 359. There must be some doubt as to whether the use of the word “secure” adds anything not encompassed by “preserve”. See Long v Specifier Publications Pty Ltd (1998) 44 NSWLR 545 at 569-571 per Powell JA. In Bhimji v Chatwani Scott J described this as involving “the court in the hypocrisy of pretending that the entry and search is carried on because the owners of the premises have consented to it” (Bhimji v Chatwani [1991] 1 All ER 705 at 712 per Scott J). Cokinos v Walker [2007] NSWSC 1040 at [8]. [7.144] 171

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(b)

the potential or actual loss or damage to the applicant will be serious if the search order is not made; and

(c)

there is sufficient evidence in relation to a respondent that: (i)

the respondent possesses important evidentiary material; and

(ii)

there is a real possibility that the respondent might destroy such material or cause it to be unavailable for use in evidence in a proceeding or anticipated proceeding before the Court.68

The criteria recognise the level of intrusion and interference imposed on a respondent and imposes a high threshold for the obtaining of the order. The criteria are redolent with language emphasising this — a “strong” prima facie case; “serious loss”; “important” evidentiary material; and a “real” possibility evidence might be destroyed or made unavailable. Added to this, the rule is accompanied by a Practice Note setting out in considerable detail the process for the execution of a search order, including safeguards for the defendant.69 One example of such protection is the requirement, set out in the rules, for an independent solicitor to supervise the search.70 The independent solicitor’s duties include not only supervising the search and taking custody of any relevant evidence but advising the defendant of their rights, including the right to seek independent legal advice. The Practice Note also indicates that the number of persons executing the order is to be as small as reasonably possible and it is preferable that they be named on the order. It may be reasonable to include, for example, independent information technology experts to assist in the search. The Practice Note further requires that the party seeking a search order is required to give consideration as to who might be present on the premises when the search is conducted and make appropriate provision. If, for instance, a woman or a child is likely to be present, the court is required to give consideration as to whether the independent solicitor should be female. Any evidence seized is to be kept confidential by the independent solicitor until the party from whom it has been seized has had the opportunity to be heard on the matter.71 The court will usually require the party seeking the search order to enter into an undertaking that it will meet any damages arising out of the granting of the order if the order is ultimately found to have been unwarranted. The applicant also has to undertake to meet the expenses of the independent solicitor and independent computer experts (if required). The applicant may be required to provide security for the undertaking by way of bank guarantee — a matter that an applicant’s solicitors should be careful to bring to their client’s attention.72 [7.146] While there is no published data on the use of search and seizure orders, they appear to be most commonly made in the context of intellectual property 68 69 70 71

72

Federal Court Rules 2011 (Cth) r 7.43. Search Orders Practice Note (GPN-SRCH) (Federal Court, 25/10/2016). Federal Court Rules 2011 (Cth) r 7.46. See Search Orders Practice Note (GPN-SRCH) (Federal Court, 25/10/2016). See also B Coogan, “Anton Piller Orders: The Foundations for a Practical Order and its Execution” (2006) 26(5) Proctor 21. M Holler, “Mareva (Freezing) Orders and Anton Piller (Search) Orders: New Federal Court Rules and Practice Notes effective 5 May 2006” (2006) 33(6) Brief 26.

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disputes. A well publicised example, the Kazaa case,73 involved copyright owners taking action against computer file sharing systems. Here the Federal Court not only ordered searches of the respondent’s computer system but also of internet service providers’ and certain universities’ computer systems. Suzor has argued that the breadth of the search and seizure orders granted in the Kazaa case has significant privacy implications and that the court has “set an alarming precedent for intellectual property enforcement” by lowering the threshold requirements, thereby enabling the applicant to access the internet records of a vast number of individuals.74 Canada also incorporated the Anton Piller order into its courts’ procedural armoury. There too the order has developed in the context of intellectual property claims. One Canadian development that has excited interest is the use of “rolling orders”, where search and seizure orders are made against unknown respondents (“Jane Doe”) to enable copyright owners to execute such orders against street stall operators and other low level distributors of allegedly counterfeit products.75 Australian courts have on rare occasions granted similar orders.76 It should be noted that despite, or indeed because of, such developments, the Canadian experience has been that concerns about the extreme nature of the order have led to increasing safeguards and increasing judicial scrutiny of the use of the order. Notably, data suggests a significant decline in its use since 2000.77

Asset preservation orders [7.150] The second of civil procedure’s ‘nuclear weapons’ is the asset preservation or freezing order. Such an order has the effect of preventing a defendant from transferring or disposing of their assets until proceedings have been resolved, even where the assets are not the subject of the dispute. The reach and imposition of such orders is, therefore, far greater than that of property preservation orders. The order was originally called a “Mareva injunction”, an expression that continues to remain in common use. However, the term “freezing order” or “asset preservation order” reflects a better understanding of its origins.78 While the freezing order is akin to a negative injunction — in that it restrains the defendant from disposing of or dealing with its assets — it does not share the equitable origins that continue to influence the ‘true’ injunction.

73 74 75

76 77 78

Universal Music Australia Pty Ltd and Others v Sharman License Holdings Ltd (2004) 205 ALR 319 (Kazaa case). N Suzor, “Privacy v Intellectual Property Litigation: Preliminary Third Party Discovery on the Internet” (2004) 25(3) Australian Bar Review 227 at 243. See, eg, Fila Canada Ltd v Jane Doe & John Doe [1996] 3 FC 493; Nike Canada Ltd v Jane Doe (1999) 1 CPR (4th) 289. See also J Berryman, “Thirty Years After: Anton Piller Orders and the Supreme and Federal Courts of Canada” (2007) 2 Journal of International Commercial Law and Technology 128. See P Biscoe, Mareva and Anton Piller Orders: Freezing and Search Orders (LexisNexis Butterworths, 2005) pp 269-271. See N Lipkus, “The Tale of Two Remedies Rationalizing the Anton Piller Order in Canada” (2006) 19(3) Intellectual Property Journal 459, referring to declines in the order of 75-90%. See Cardile v LED Building Pty Ltd (1999) 198 CLR 380. Also, D Wright, “Mareva Orders as Part of the New, Emerging Law of Remedies” (2001) 20(1) University of Tasmania Law Review 98. [7.150] 173

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The freezing order was initially developed in England. In the leading authority, Mareva Campania Naviera SA v International Bulkcarriers SA,79 the English Court of Appeal appeared to rely on the statutory power to grant interlocutory injunctions where just and convenient, although later authority based the power on the inherent jurisdiction to prevent abuse of process.80 Over the last 20 years, some Australian jurisdictions have incorporated the power to make such orders within their rules but others continued to rely on the inherent jurisdiction. More recently, the work of a rules harmonisation committee set up by the Council of Chief Justices has seen a set of common provisions incorporated into each jurisdiction’s rules and Practice Directions.81 For example, r 37A.02 of the Victorian Supreme Court (General Civil Procedure) Rules 2015 (Vic) states: (1)

The Court may make an order (a freezing order), upon or without notice to the respondent, for the purpose of preventing the frustration or inhibition of the Court’s process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied.

(2)

A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.82

In addition to these procedural provisions, the Corporations Act 2001 (Cth) also empowers courts to make freezing orders in some circumstances arising out of the conduct of those responsible for the management of corporations.83 [7.155] The freezing order, like the search order, has been viewed as being at the outer extremities of civil procedure. In contrast to the more conventional property preservation order, the court’s power to freeze assets is not limited to assets connected to the litigation but may extend to any of the defendant’s assets. In other words, it enables a plaintiff to effectively interfere with the defendant’s property or business generally. The effect of a freezing order is such that when it is made courts will usually make provision in the order to exempt such sums from the freezing order as to pay for the defendant’s reasonable living expenses and legal costs.84 Nevertheless, the potential breadth of the order and the possible practical consequences for the defendant mean the use of this power must be closely controlled.

79 80 81

82 83 84

[1980] 1 All ER 213; [1975] 2 Lloyd’s Rep 509. See Jackson v Sterling Industries Ltd (1987) 162 CLR 612; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380. Court Procedures Rules 2006 (ACT) r 741; Federal Court Rules 2011 (Cth) r 7.32; Uniform Civil Procedure Rules 2005 (NSW) r 25.11; Supreme Court Rules (NT) O 37A; Uniform Civil Procedure Rules 1999 (Qld) r 260A; Supreme Court Civil Rules 2006 (SA) r 247; Supreme Court Rules 2000 (Tas) r 937B; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 37A; Rules of the Supreme Court 1971 (WA) O 52A. Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 37A.02. Corporations Act 2001 (Cth) ss 486A, 1323. Frigo v Culhaci [1998] NSWCA 17.

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Despite these concerns, the history of the freezing order shows a rapid expansion in its reach.85 Limited initially to foreign defendants and the restraining of the transfer of assets outside the jurisdiction, the scope of the court’s power to grant freezing orders now applies to all defendants and even third parties who may have some control over assets. It also now extends to all assets, both within and outside the jurisdiction. The scope of the court’s power to grant freezing orders is not limited to restraining the disposition of the assets but can also extend to restraining dealing with them so as to diminish their value. Initially, it was thought the power existed only to restrain asset transfers where the transfer was intended to defeat the effect of any potential judgment. This too has changed over time so that the motives of the defendant have become less relevant — what the court focuses on is the effect of the dealing with the assets.86

Test for freezing orders [7.160] Unlike the rule governing search orders, the harmonised rule providing for freezing orders does not set a high threshold for obtaining such orders. The rule simply provides that it applies if the applicant “has a good arguable case on an accrued or prospective cause of action that is justiciable in court”. The court also needs to be satisfied: [H]aving regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur: (a)

the judgment debtor, prospective judgment debtor or another person absconds;

(b)

the assets of the judgment debtor, prospective judgment debtor or another person are: (i)

removed from Australia or from a place inside or outside Australia; or

(ii)

disposed of, dealt with or diminished in value.87

Recent cases have not interpreted these provisions as setting particularly high thresholds.88 The applicant does not need to show that the defendant’s intention in dealing with the assets is to defeat the judgment. The fact that the dealing with the assets will prevent the plaintiff recovering any judgment is sufficient. Perhaps more significantly, the relevant threshold for the assessment of merit has been interpreted as being set low. In Errigal Ltd v Equatorial Mining Ltd,89 White J of the New South Wales Supreme Court deferred to the meaning given to “good arguable case” by Lord Mustill, who said:

85 86 87 88 89

See CM Hetherington, “Mareva After Thirty Years” (2004) 8 University of Western Sydney Law Review 21. This expansion is not without its critics — see D Ong, “Unsatisfactory Aspects of the Mareva Order and Anton Piller Order” (2005) 17(1) Bond Law Review 92. See Federal Court Rules 2011 (Cth) r 7.35(4). See, eg, KGL Health Pty Ltd v Mechtler [2007] FCA 1410; Robmatjus Pty Ltd v Violet Home Loans Australia Pty Ltd [2007] VSC 165; Aymban Pty Ltd v Grove Park Pty Ltd [2007] NSWSC 1089. [2006] NSWSC 953 at [26]. See also Bhushan Steel Ltd v Severstal Export GmbH [2012] NSWSC 583. [7.160] 175

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I consider that the right course is to adopt the test of a good arguable case, in the sense of a case which is more than barely capable of serious argument, and yet not necessarily one the judge considers would have better than a 50% chance of success.90

Given the potential impact of an asset preservation order, it is perhaps surprising that the merits threshold is not particularly high. There is a great difference between the asset preservation order requirements of demonstrating the “good arguable case” with the arduous requirements of the search order rule. The search order requires “a strong prima facie case on accrued cause of action” and “serious” loss or damage if the order is not made. To point out this contrast is not to suggest courts are unaware of the drastic nature of the remedy or the need to closely scrutinise applications for such orders,91 but rather to note that the unique nature of the freezing order provides grounds for suggesting that a higher threshold than currently exists is desirable. While there continues to be debate about the theoretical basis of the freezing order, it is clear that it has become a well accepted procedural tool in much of the common law world. However, the United States Supreme Court has continued to deny the power to make freezing orders under traditional equitable principles and there such a procedural device can only be developed if it is incorporated within rules of court.92

Appointment of receivers [7.170] The final class of preservation orders are directed to the appointment of receivers. An order for the appointment of a receiver is an extraordinary procedural device whereby a court appoints a person to take control of and manage the property in dispute or the defendant’s business.93 This is perhaps the most intrusive of the procedural devices considered in this chapter — while a search order is extremely intrusive the search itself has limited aims and lasts only for a short time; similarly, while a freezing order can have a very serious impact on a defendant, they remain in control of their affairs. With the appointment of a receiver, however, the defendant loses control over property or management of their affairs to an outsider appointed by the court.94 For this reason it is regarded as being a measure of “last resort”:95

90 91 92 93

94

95

Ninemia Maritime Corporation v Trave GmbH & Co KG (The Niedersachsen) [1984] 1 All ER 398 at 404. Cardile v LED Building Pty Ltd (1999) 198 CLR 380 per Gaudron, McHugh, Gummow & Callinan JJ. CM Hetherington, “Mareva After Thirty Years” (2004) 8 University of Western Sydney Law Review 21. Strictly speaking, a receiver was appointed to secure property and a manager to administer the business of the defendant but this distinction is not always observed and a receiver is appointed to manage the business. “Putting to one side a winding up order, which will in the normal course ultimately result in a company's being given its quietus, we cannot for the moment think of an order of greater consequence to a company than one which, until further order, robs it of its control over its own assets and business” (National Australia Bank Ltd v Bond Brewing Holdings [1991] 1 VR 386 at 540 per Kaye, Murphy & Brooking JJ). Martyniuk v King [2000] VSC 319 at [27].

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The drastic nature of the power to appoint a receiver is … a drastic, harsh and dangerous one and should be exercised with care and caution, … receivership is a drastic course allowed only under pressing circumstances and granted only with reluctance and caution and … the appointment of a receiver is an extraordinary and drastic remedy, to be exercised with utmost care and caution and only where the court is satisfied there is imminent danger of loss if it is not exercised.96

Receivers are well known to other fields of law and are commonplace in the commercial world. Many commercial loan agreements require a loan to be secured by property and include provisions that allow the lender to appoint a receiver to take control of that property if the borrower is in default of the agreement. Where a company is involved, the Corporations Act 2001 (Cth) contains extensive provisions governing receivership.97 [7.175] All Australian jurisdictions have provisions that enable a court to appoint a receiver when it is “just or convenient so to do”.98 While the appointment of receivers has its origins in equity (and in particular the protection of the property in dispute pending determination of the case by the court), the breadth of the phrase “just or convenient” enables the appointment of receivers in a wide variety of situations.99 By way of example, receivers can be appointed to manage the affairs of a trust when they have fallen into disarray;100 and they can be appointed when uncertain and conflicting interests within the membership of an association means the membership is unable to manage certain aspects of the association.101 Once appointed, the powers of the receiver can be extensive. The order appointing the receiver will set out the powers of the receiver and the receiver can always apply to the court for further powers if the need arises. Thus in University of Western Australia v Gray (No 6)102 the Federal Court empowered the receiver to conduct litigation seeking a court determination to resolve membership questions and the rights of members of an incorporated association. It is not entirely clear as to what the relevant criteria will be when considering an application to appoint a receiver. Some judges have approached this question by adapting the criteria used for injunctions — is there a serious question to be tried; what is the balance of convenience; and would damages be an adequate remedy?103

96 97 98

99 100 101 102 103

National Australia Bank Ltd v Bond Brewing Holdings [1991] 1 VR 386 at 541 per Kaye, Murphy & Brooking JJ. See Corporations Act 2001 (Cth) Pt 5.2. Court Procedures Act 2004 (ACT) s 63 (when “appropriate”); Federal Court of Australia Act 1976 (Cth) s 57; Supreme Court Act 1970 (NSW) s 67; Supreme Court Act (NT) s 69; Civil Proceedings Act 2011 (Qld) s 12; Supreme Court Act 1935 (SA) s 29; Supreme Court Civil Procedure Act 1932 (Tas) s 11(12) (when “just and convenient”); Supreme Court Act 1986 (Vic) s 37 (“just and convenient”); Supreme Court Act 1935 (WA) s 25(9). The rules in each jurisdiction also contain provisions governing receivers. Martyniuk v King [2000] VSC 319. Martyniuk v King [2000] VSC 319. University of Western Australia v Gray (No 4) (2006) 59 ACSR 678. [2006] FCA 1656. See, eg, De Jersey J in Joseph v The Pelerman Group Pty Ltd (as Trustee for the Reuben Pelerman Trust and the Pelerman Hospital Unit Trust) (Unreported, Supreme Court of Queensland, De Jersey J, 22 April 1998). [7.175] 177

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However Warren J in Martyniuk v King104 expressed some doubts as to whether the tests for injunctions were appropriate where a receiver was being appointed to protect trust property and manage the affairs of the trust.105 Certainly, one similarity to injunctions that clearly exists is the requirement that the party seeking the appointment of a receiver give an undertaking that they will pay damages for losses incurred should the appointment ultimately be shown to be unjustified.106 Furthermore, the receiver may also be required to lodge security against negligent performance of its duties. It is not clear how often this is required in practice or whether it is still justified. Nowadays, receivers are usually professional receivers or liquidators who are registered and carry professional indemnity insurance, which ordinarily provides sufficient protection to the party subject to the receivership. In 1987 the New South Wales Supreme Court suggested registered liquidators would not be required to provide security,107 although this was not followed in Queensland in 2002.108 A further issue when applying for appointment of a receiver is whether the application can be made ex parte. In the leading case, National Australia Bank Ltd v Bond Brewing Holdings Ltd,109 the Victorian Supreme Court was extremely critical of the fact a receiver had been appointed on an ex parte application and suggested notice should be given wherever possible. It is clear that the appointment of a receiver on an ex parte application should only occur in exceptional circumstances.110

SECURITY FOR COSTS [7.180] The final form of pre-trial order, the order for security of costs, is conceptually distinct from the other categories, as they are directed not to the rights and interests in the underlying dispute, but to the rights accruing through the litigation. Such orders are not connected with the subject matter of the dispute or with the evidence, but are an attempt by a party to ensure that — should it be ultimately successful — it will be able to recover any costs orders made in its favour. Security for costs orders are perhaps more closely akin to asset preservation orders than the other forms of protective orders, but even that analogy is loose at best as the order only matters should costs be accrued in the course of litigation. Security for costs orders do not seek to preserve existing rights, but instead restrict current actions to protect rights that may accrue in the future. The cases, and indeed the rules in some jurisdictions,111 reveal contradictory principles inherent in security for costs as a procedural tool. The foundational 104 105 106 107 108 109 110 111

[2000] VSC 319. [2000] VSC 319 at [42]. National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386; National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271. McIntyre v Perkes (1988) 15 NSWLR 417. Re Red Wagyu Australia Pty Ltd [2003] 1 Qd R 445. [1991] 1 VR 386. Moon v Australian Securities and Investments Commission (2002) 43 ACSR 125. See, eg, Rules of the Supreme Court 1971 (WA) O 25, rr 1 – 2.

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principle, that a plaintiff’s poverty should not prevent it from litigating a claim, is faced with the premise that procedure should do what it can to ensure that a defendant who has successfully defended an unmeritorious claim is able to recover its costs. Security for costs is one of the major checks on ‘weak’ claims. Without it the costs rules lose their effect because a plaintiff who has no assets is able to pursue a defendant, knowing it is not in a position to meet any costs orders made against it. However, requirements for security for costs can operate to aggravate existing access to justice concerns, as it arguably creates a systemic bias against the financially weaker party. An apparently weak case may nonetheless ultimately be successful, and an order for security for costs may effectively prevent a plaintiff from prosecuting their case. The difficulty with orders for security for costs is that the tension between these underlying principles is meaningful and unavoidable. The judicial system rightfully pursues both the objectives of accessibility and of costs recoverability. This can create real difficulties in determining whether it is appropriate in a given case to grant an order for security for costs. [7.185] The rules in all Australian jurisdictions enable a court to order security for costs.112 The power to do so can also be founded on the court’s inherent jurisdiction.113 Security for costs may also be ordered where the plaintiff is a corporation under the Corporations Act 2001 (Cth).114 The rules in each jurisdiction list a variety of circumstances that would support the ordering of security for costs. While there is significant variation in the details of each relevant rule across Australia there are some commonalities. One common feature is the ability to seek security for costs in circumstances where the benefits of the litigation are shared by non-parties.115 Where the plaintiff is impecunious, courts may — by way of security for costs — ensure that the non-parties provide the defendant with a means of enforcing any costs orders made in its favour. Another common circumstance is where the plaintiff resides overseas or has limited assets in the jurisdiction. Here differences exist, with some jurisdictions restricting the availability of cost orders to overseas plaintiffs116 and others to

112

113 114

115 116

Court Procedures Rules 2006 (ACT) r 1900; Federal Court Rules 2011 (Cth) r 19; Uniform Civil Procedure Rules 2005 (NSW) r 42.21; Supreme Court Rules (NT) O 62; Uniform Civil Procedure Rules 1999 (Qld) Ch 17; Supreme Court Civil Rules 2006 (SA) r 194; Supreme Court Rules 2000 (Tas) r 828; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 62; Rules of the Supreme Court 1971 (WA) O 25. Qintex Australia Ltd (in liq) v ANZCAP Nominees Pty Ltd [2000] QSC 394; Mentyn v Law Society of Tasmania (No 2) [2004] TASSC 127. Corporations Act 2001 (Cth) s 1335. Section 1335 of the Corporations Act 2001 (Cth) provides only one general ground for the exercise of the power to order security of costs: “if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the [successful] defendant”. The case law shows considerable overlap with the impecuniosity ground contained in the broader provisions of the various Rules of Court: KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276. See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 671(b). See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 671; Supreme Court Civil Rules 2006 (SA) r 194. [7.185] 179

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plaintiffs not resident in the jurisdiction.117 The foundation for seeking security for costs for plaintiffs ex juris but within Australia would seem weak. It is stronger for ‘foreign’ plaintiffs as enforcing court orders becomes more difficult, but even then this foundation may be weakening, with a more interdependent business world and increasing international recognition of court orders. A further scenario commonly encountered is where there is some evidence to suggest that the plaintiff is being evasive. In some rules, for example, misstating the plaintiff’s address or changing it with some intention to deceive is grounds for supporting an order for security for costs.118 The most common basis for seeking security for costs is where the plaintiff is impecunious. The general rule has been that where the plaintiff is an individual, poor financial standing will not support an order for security for costs unless the plaintiff is standing in for other persons, that is, as a nominal plaintiff.119 When considering corporate plaintiffs (and grounds other than impecuniosity) courts have looked at a number of factors including: • whether the making of the order would stifle the proceedings; • whether the application has been brought promptly; • the merits of the case; • whether the defendant contributed to the plaintiff’s impecuniosity; • whether there are other persons willing to accept the risks of adverse costs orders; • whether in reality the plaintiff’s claim is defensive in that it is a response to ‘self-help’ on the part of defendant; and • whether the litigation involves a matter of public interest.120 In making the difficult decision between the competing interests of the plaintiff and the defendant, the court is determining where the risk of loss should lie, should the plaintiff fail. In this context some courts have taken into consideration the capacity of the parties to carry the loss.121 Thus, a large corporate defendant may be more likely to fail in its application for security for costs than an individual or less well-off corporation, an approach that has attracted criticism.122

117 118 119 120 121 122

See, eg, Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 62; Rules of the Supreme Court 1971 (WA) O 25. See Uniform Civil Procedure Rules 1999 (Qld) r 671(c); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 62.02(e). Schokman v Hogg [2003] QCA 28; Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276. Schokman v Hogg [2003] QCA 28; Acohs Pty Ltd v Ucorp Pty Ltd (2006) 155 FCR 181; Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276. Remm Construction (SA) Pty Ltd v Allco Newsteel Pty Ltd (1992) 57 SASR 180; Pioneer Park Pty Ltd (in Liq) v ANZ Banking Group Ltd [2007] NSWCA 344. Prime Forme Cutting Pty Ltd v Baltica General Insurance Ltd (1989) 8 ACLC 29.

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CHAPTER 8 Gathering Information [8.20] [8.30] [8.50]

[8.240]

[8.270] [8.280] [8.290] [8.300] [8.310]

Underlying tensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 A need for reform? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Discovery of documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 [8.60] Discovery between parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 [8.70] Availability of discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 [8.80] Initiating discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 [8.90] The timing of discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 [8.100] The form of discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 [8.110] The content of discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 [8.150] Modifying discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 [8.160] Continuing discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 [8.170] What if the other party believes the list of documents is inadequate? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 [8.180] Discovery of documents by non-parties . . . . . . . . . . . . . . . . . . . . 194 [8.190] Duty on parties and their lawyers relating to discovery . . . . 196 [8.200] Pre-action obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 [8.210] After commencement of proceedings . . . . . . . . . . . . . . . . . 197 [8.220] Uses to which discovered documents can be put . . . . . 198 [8.230] Inspection of documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 Interrogatories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 [8.250] Use to which answers to interrogatories can be put . . . . . . . . 201 [8.260] Failure to comply with discovery and interrogatory requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 Subpoenas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 Expert evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 Medical examinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Inspection and testing of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 [8.320] Legal professional privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 [8.340] Settlement negotiation privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 [8.350] Privilege against self-incrimination . . . . . . . . . . . . . . . . . . . . . . . . . 212 [8.360] Public interest immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213

[8.10] The core of all legal work involves assisting clients by the gathering of information and the application of legal principles to that information. For litigation, this means gathering information about the dispute, applying substantive law to it to ascertain where a client stands (that is, determining the merits of the case) and then determining, in light of this assessment, how the dispute might be brought to an end in a way that best serves the client’s goals. While each of these stages involves distinct skills and procedures, the reality of modern practice is that the majority of most lawyers’ time is directed to the first of these tasks. The procedures and practices of information gathering have come to dominate much [8.10] 181

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of modern litigation practice, and now represent a principal portion of case preparation time and legal costs. While the information gathering process begins the moment the client first makes contact with the lawyer, once litigation is commenced a wide range of procedural tools for gathering information are made available to the party.1 These procedures extend to gathering information both from other parties and from those not involved in the litigation. These processes include, amongst others, provisions for the ’discovery’ of documentary evidence, for ’interrogatories’ to acquire information from other parties, for exchanges of expert reports, and for the inspection of property. As we explore in this chapter, documentary information is often the most important type of information sought by lawyers. Oral testimony of observed events always requires an assessment of credibility of the witness whereas, while documents may be subject to interpretation, they usually are regarded as providing an authentic record of events. In situations of conflicting oral evidence, the versions supported by documentary evidence are more likely to be accepted by courts. In addition to this are documents created recording the observations or opinions of experts who have been consulted by the parties after the dispute arose.2 The importance of documentary information is further demonstrated when one considers that 95% of cases are resolved without oral evidence (that is, before trial), and in most of those cases decisions about settlement are based on documentary information available to the parties.3 [8.15] Traditionally, the analysis of the topic of information transfer between litigating parties has characterised the process as the provision of information by parties. In such an analysis, the procedural tools are described in terms of what a party is required to disclose in order to conform to the rules. Discussion of these tools often focuses on concerns over costs of compliance.4 However, an alternative focus, and the approach taken in this chapter, is to characterise the process as an information gathering process, which provides necessary tools for finding information. This chapter emphasises the beneficial function of the process, rather than the costly or intrusive side of information provision. This alternative focus links the disclosure requirements with other procedural tools or requirements (like subpoenas and interrogatories) within the overall conceptual framework of the ‘gathering of information’. It also brings the use of the term “discovery” closer to

1

2

3 4

As we have seen in Chapters 3 and 7, some of the procedural tools for gathering information are available before proceedings are commenced, but use of these procedural tools generally takes place after commencement. As we will see, information collected or a document created for the purpose of obtaining legal advice or for litigation purposes is generally protected from disclosure, being described as “privileged” information. See below [8.310]. However, increasingly some types of information that would have previously fallen within the category of privileged information are now required to be disclosed. Expert reports and the factual information that underpins their conclusions, along with witness statements, are two examples of information once privileged but which now must be revealed. See, eg, J Macfarlane, The New Lawyer: How Settlement is Transforming the Practice of Law (2008, UBC Press) p 7. See, eg, D McGrath, “E-discovery War Stories on Home Soil” (2009) 47 Law Society Journal 34; A Ryan, “Discovery: The Law's Need to Adapt to Changing Times” (2008) 18 Journal of Judicial Administration 116.

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its ordinary meaning (“to find out”) rather than defining it as the obligation to provide information, which is inherently confusing for non-lawyers.5 The focus on information gathering does not, however, diminish the significance of the obligation to provide information to the other side. This obligation includes the provision of information that is damaging to a party’s own case which, on the face of it, seems contrary to the adversarial principles underpinning the common law civil justice system. The adversarial principle suggests that a party should keep as much of its case hidden, while at the same time finding out as much as it can about the other side’s case. However, more recently courts have emphasised an alternative approach to information provision in an attempt to prevent trial by ambush and to improve the accuracy of factual findings — the requirement that ‘all cards be put on the table’. Complicating what the appropriate approach to the gathering of information in litigation should be, is the need to avoid unnecessary pre-trial activity. Many of the procedural rules were developed before the ‘information age’ and they need to be adapted to take account of the exponential growth in information in the last 50 years.6

UNDERLYING TENSIONS [8.20] The underlying tensions between these conflicting principles are genuine and difficult to resolve. There are many cases that illustrate this tension, and examples of the highest level courts attempting to balance these tensions include the judgments in the English case of Air Canada v Secretary of State for Trade7 and the Australian High Court’s decision in Esso Australia Resources Ltd v Commissioner of Taxation.8 In Air Canada the issue was whether increased airport charges at Heathrow Airport were the result of unlawful government direction. The plaintiffs sought to obtain certain government documents relating to how the increased charges came about over which the government claimed an exception from disclosure. At first instance Bingham J ordered the government to provide the documents, holding: The concern of the court must surely be to ensure that the truth is elicited, not caring whether the truth favours one party or the other but anxious that its final decision should be grounded on a sure foundation of fact. … I do not think any court could be confident that its decision on those issues was founded on a sure foundation of fact in the absence of the documents.9 5

6

7 8 9

The focus on providing information is more relevant for those jurisdictions where disclosure is automatic because a party is not required to take any steps to acquire the information. Yet, even in those jurisdictions where disclosure is automatic, the use of the term “disclosure” carries with it the connotation of revealing private information and the unnecessary implication of confidentiality. Perhaps adopting the expression “providing” information uses a more neutral concept. R Marcus, “Confronting the Future: Coping with Discovery of Electronic Material” (2001) 64 Law & Contemporary Problems 253; P Naismith, “The Discovery of Electronic Evidence” (2003) 12 Journal of Judicial Administration 180; Symposium papers in (2004) 73 Fordham Law Review 1. [1983] 2 AC 394. (1999) 201 CLR 49. Air Canada v Secretary of State for Trade [1983] 2 AC 394 at 410-411 per Bingham J quoted by Lord Denning. [8.20] 183

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However, the Court of Appeal and the House of Lords gave different priorities to the competing principles, holding the documents did not need to be disclosed. Lord Wilberforce reasoned: In a contest purely between one litigant and another … the task of court is to do, and seen to be doing, justice between the parties. … There is no higher or additional duty to ascertain some independent truth. It often happens, from the imperfection of evidence, or the withholding of it, … that an adjudication has to be made which is not, and is known not to be, the whole truth of the matter.10

The Australian example of Esso Australia Resources v Commissioner of Taxation11 involved the issue of whether information could be obtained from the other party even though it would disclose information about the advice the company was receiving from its lawyers. Under the existing common law principle of client legal privilege, such information was protected from disclosure if the document containing the information had been prepared solely for the purposes of obtaining legal advice or as part of litigation. The strictness of this test severely limited the amount of information that would fall within this exception to disclosure. The High Court effectively overruled earlier authority to hold that documents would fall within the exception if the dominant purpose for their creation was the obtaining of legal advice or legal services — a test which would greatly increase the information that could be withheld from disclosure. In a joint judgment, Gleeson CJ, Gaudron and Gummow JJ said: The search is for a test which strikes an appropriate balance between two competing considerations: the public policy reflected in the privilege itself, and the public policy that, in the administration of justice and investigative procedures, there should be unfettered access to relevant information.12

Justice McHugh preferred to retain the sole purpose test reasoning that with the dominant purpose test: [I]t will inevitably restrict the amount of information that a person can be required to disclose … Courts will have less information before them. … Because that is so, courts may sometimes have to make decisions contrary to what they would have made if the sole purpose test was the governing criterion.13

Justice Kirby also opposed increasing the amount of information that would be withheld by a party: [There is] increasing recognition of the importance to persons affected of access to all relevant information and the special importance of such access in the case of courts. Because courts are engaged in a formal procedure and are armed with compulsive powers to fulfil their functions, it is potentially destructive of respect for their decisions if they are obliged to arrive at them, deprived of access to potentially relevant and important communications.14

The cross-currents of conflicting objectives are also played out in the history of procedural change in this area. Discovery is one of equity’s contributions to civil procedure. In the Court of Chancery proceedings were instituted by way of a bill. 10 11 12 13 14

[1983] 2 AC 394 at 438. (1999) 201 CLR 49. (1999) 201 CLR 49 at 72 per Gleeson CJ, Gaudron & Gummow JJ. (1999) 201 CLR 49 at 76 per McHugh J. (1999) 201 CLR 49 at 88.

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The bill consisted of three parts — allegations, outline of evidence held and interrogatories. Parties could also file a separate bill of discovery. While equity allowed a plaintiff to apply to the court for an order that the defendant discover any documents, the defendant had more limited rights — they too could apply for discovery by way of bill but only after they answered the original bill. The bill of discovery also enabled a proceeding to be stayed until discovery had been given but this was limited to proceedings in equity. However, related actions at common law could also be injuncted until an order made pursuant to a bill of discovery had been complied with. With the enactment of the Common Law Procedure Act 1854 (UK), common law courts gained the power to make orders requiring discovery of documents and the answering of interrogatories.15 This history provided the foundation for a discovery procedure that has remained relatively unchanged until recently.

A NEED FOR REFORM? [8.30] Gathering information can be the most labour intensive and thus the most expensive part of the litigation process. For many cases commenced in the civil justice system, information gathering may be relatively straightforward — for example, in a claim arising out of a motor vehicle accident it is not likely to extend beyond accident and medical reports, repair quotes for property damage, or documentation to demonstrate medical expenses and economic loss. However in complex litigation, particularly commercial litigation commenced in the higher courts, the process of gathering information can be extremely expensive and time consuming. The extent of information gathering in complex commercial cases has led to calls for major reforms to the procedural tools for gathering information.16 These concerns over the expense, both temporal and financial, of the discovery process has led some Australian jurisdictions, in the last decade or so, to attempt to limit the availability of discovery and the amount of information needing to be disclosed. In some jurisdictions the test for discovery of documents has become narrower and the use of interrogatories discouraged. Before the merit of these reforms can be assessed, or the need for them justified, it is necessary to clearly outline the underlying rationale for, and objectives of, the procedural tools for gathering information. These tools positively influence the litigation process by affecting: 1.

Accuracy of outcome: First, the information gathering helps to ensure all relevant information is available to both parties with the result that the outcome will be more accurately based on the factual reality that has given rise to the dispute, that is, is closer to the truth. For those cases resolved without adjudication, the parties will be better able to assess the merits of the case; for those going to judgment, the court will have all the relevant information before it.17

15 16

B Cairns, The Law of Discovery in Australia (The Law Book Company, 1984) pp 8-11. See, eg, Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (ALRC Report No 89, 2000) [6.67]-[6.73]. The latter situation does assume that the adversarial ethic will lead to the parties presenting all the relevant information to the court, which is not always the case. See Finkelstein J's criticisms in AMP Services v Manning [2006] FCA 256 at [47]-[48].

17

[8.30] 185

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2.

The efficiency of the litigation process: Secondly, the ability of parties to gather information also improves the efficiency of the civil justice system for both parties and courts. The quality and completeness of information about a case affects the ability of parties to assess the merits of their cases and the likely outcome should the case proceed to judgment. With better information gathering, parties are more likely to settle cases — promoting efficient resolution of cases for parties. For courts, efficiency is gained by not having as many cases going to trial or requiring judgment. Efficiency for courts is also gained by a reduction in the risk of trials being delayed due to new issues or facts. Where new information is raised at (or just before) trial it may be necessary, to avoid surprise or ambush, to have the trial adjourned so that a party can respond to the new issues or facts. Rigorous pre-trial information gathering processes diminish such possibilities.

3.

Procedural equality: Thirdly, these information gathering processes enhance procedural equality by ensuring parties have equal access to the available information about the dispute. Leaving aside the effect of the doctrine of privilege, in theory all parties to a dispute have access to all the information relating to the dispute. However, the reality can be different. The costs of providing or obtaining the information may mean one party is unable to inspect or use all of the information available to it. Perhaps more insidious is the potential for one party to use the information gathering processes to exert financial pressure on the other party, such as the notorious ’document dump’ whereby voluminous marginally relevant material is made available to the opposing party.

4.

Party control of the dispute: Finally, these procedural tools for gathering information contribute to maintenance of party control of the ambit of the dispute. This relationship is perhaps less apparent than those above, and overlaps with the accuracy objectives (also discussed above). If accuracy or truth seeking is to be one of the main objectives of the civil justice system then the common law system has to have some procedural mechanisms to ensure the maximum amount of relevant information is provided to the court. In the common law legal system, parties are largely autonomous and empowered in the information gathering process. The ability of parties to gather information relevant to the case lessens the need for the judiciary to take on an information gathering function. Indeed, such an active judicial role in fact finding would be inconsistent with traditional understandings of the role of judges in the common law litigation process.

While these positive influences are real and substantial, the degree to which procedural tools for gathering information achieve these objectives is far from perfect. While the early provision of higher quality and more accurate information can aid settlement and lead to more efficient trials, the processes of gathering that information can greatly extend the necessary pre-trial work. Where a dispute may have been likely to settle in any case, these processes may delay settlement and increase legal transaction costs by involving ultimately unnecessary work. Even where cases go to trial, the benefits of a shortened trial must be balanced against the pre-trial delay necessary to deal with discovery and other processes. The threats to procedural equality posed by these processes have been discussed 186 [8.30]

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above. The impact upon accuracy is perhaps more conceptually difficult. While there is a clear and apparent mechanism for such processes to aid accuracy, as discussed in Air Canada there is a real question as to the extent to which the judicial system should pursue ’truth’. The importance and efficacy of these processes is, therefore, dependent upon underlying foundational conceptions of the judicial system. These conceptions can shift over time, as can be seen with respect to the final issue of party control. While the procedural informationgathering tools may contribute to party control of litigation, the merit of such a conception of litigation is increasingly being challenged. As seen in Chapter 4, many recent procedural reforms have weakened this party-driven view of litigation. As this evolves, this may have significant consequences for the systems of information gathering. [8.40] The remainder of this chapter discusses the procedural tools for gathering information that are made available to parties by the civil justice system. The first of these, and most important in practice, is the tool that has been traditionally called “discovery”. The term “discovery” has been used to include both discovery of documents and the use of interrogatories; although more recently the term has come to mean only the former.18 This chapter will examine both of these procedural tools in turn, before examining a related tool for gathering information, the subpoenas for production of documents. The chapter then examines the procedural tools governing experts’ reports, before examining the related procedural tools by which a party can gather information about the person or property that is the subject of the dispute by subjecting them to forensic examination or investigation. The chapter concludes with a consideration of the law relating to privilege. As indicated above, privilege is a common law principle that enables a party to withhold certain information from any of the procedural tools that enable information to be gathered by other parties. There are three main categories of privilege — client legal privilege, settlement privilege, the privilege against self-incrimination — and a related doctrine, the public interest immunity — that are particularly applicable to discovery of documents, interrogatories and subpoenas.

DISCOVERY OF DOCUMENTS [8.50] While the term “discovery” was once used to cover the general field of what might be called “disclosure”, nowadays it is more commonly used in a narrower sense to describe the procedural requirements relating to disclosure of documents. While the trend is towards substituting the term “disclosure” for the term “discovery”,19 this chapter continues to use the term “discovery” to mean the procedural requirements relating to disclosure of documents as, for the time being, it remains the more common.

18 19

Discovery also includes the oral deposition process commonly found in North American common law jurisdictions. For example, Uniform Civil Procedure Rules 1999 (Qld) Ch 7; and Supreme Court Civil Rules 2006 (SA) Pt 3. [8.50] 187

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At the core of the discovery procedure is the requirement for a party to provide the other parties to the case with a list of all documents relevant to the issues in the case that the party has in its possession (or has had in its possession at some stage in the past). The list, which in some jurisdictions is in affidavit form, will indicate those documents that the party claims are protected from disclosure by privilege. Usually the list will also indicate the whereabouts of relevant documents no longer in the party’s possession. Often incorporated within the ambit of discovery are the consequent or related procedures of inspection and production. These provide the party receiving the list of documents with access to the listed documents (other than those protected by privilege). In every Australian jurisdiction discovery is now governed by rules of court. However, there is still scope to revert to the old equitable principles of discovery in some situations not covered by the rules. This mainly arises when discovery occurs before the commencement of proceedings. Our survey of the principles of discovery will first examine discovery between parties before turning to discovery from non-parties. Many of the principles considered in our discussion of the former are applicable to the latter. In the final part of this section, we will discuss the significant ethical challenges for lawyers created by the discovery process. In most cases at least some of the information is known only to one party, so any breach of requirements to discover that information is unlikely to be detected by others. The civil justice system has attempted to deal with this by placing heavy professional obligations on lawyers when it comes to discovery.

Discovery between parties [8.60] Discovery between parties is the predominant form of discovery. Our analysis of the discovery process, as set out in the rules and in equity, involves consideration of: (1) the sorts of cases discovery is available for; (2) the way discovery is initiated; (3) the stage in the litigation process at which discovery occurs; (4) the form discovery takes; and (5) the content of discovery.20

Availability of discovery [8.70] In most Australian jurisdictions, discovery is available for all types of cases. However, in some jurisdictions concerns about cost and delay in litigation said to result from the discovery process have led to the limiting of the availability of discovery for specified classes of cases. Amongst these are New South Wales, where discovery is not available in personal injury claims except in special circumstances, and Tasmania, where discovery is not available for cases arising out of motor vehicle accidents.21 There is little public discussion of the justification for these limitations but one possible explanation for these exclusions is that for 20

21

It should be noted that in some jurisdictions the parties have the capacity to develop their own discovery procedures, either dispensing with discovery altogether or modifying the existing rules-based discovery procedure. The extent to which dispensation or modification of the rule of discovery occurs is not known, but anecdotal evidence suggests it is not common in those jurisdictions where it is possible. Certainly there are few, if any, reported cases arising from party determined discovery procedures. Uniform Civil Procedure Rules 2005 (NSW) r 21.8; Supreme Court Rules 2000 (Tas) r 383.4.

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personal injury accident claims (which covers most motor vehicle accidents) there are relatively few documents and the most important of these tend to be the experts’ reports, especially medical reports, which under other procedural rules are required to be provided to the other party. Perhaps the most significant restrictions on the general availability of discovery are imposed in the Federal Court. There, a party may only apply for discovery where they can convince the court that it will be necessary to “facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible.”22

Initiating discovery [8.80] Jurisdictions vary in how discovery is initiated, reflecting in some ways each jurisdiction’s view of discovery. Those jurisdictions concerned about abuse of discovery modify the methods for initiating discovery, introducing procedural disincentives to limit its use; whereas those jurisdictions less concerned about cost and delay and more focused on making sure that all information is ‘on the table’ do the opposite. For jurisdictions falling within the former category (the Federal Court and New South Wales), parties have to apply to the court for an order of discovery.23 In jurisdictions falling in the latter category (Queensland, South Australia and the Northern Territory), discovery is automatic and all parties have to provide discovery by a certain stage of the proceedings.24 For those jurisdictions which fall in between these two extremes (Tasmania, Victoria, Western Australia and the Australian Capital Territory) discovery is initiated by way of a request (often in the form of a specified notice) by one party to another.25

The timing of discovery [8.90] Changes to priorities and thinking occurring within the civil justice system raise interesting issues for the timing of discovery. For example, the increasing emphasis on promoting settlement suggests that discovery should occur before major attempts are made to encourage settlement or use ADR processes — otherwise settlement may occur without the parties knowing their true position or the full case against them. In contrast, where concerns over costs dominate, there may be an incentive to delay discovery so that the case is given the opportunity to settle before the significant costs of discovery are incurred. These tensions mean that in practice there is no standardised approach to when discovery should occur. Certainly, in those jurisdictions where a court order is required before discovery can take place there is no specified time for discovery so the exact timing of any application for discovery is left to the parties.26 In those jurisdictions where discovery is initiated by request, a request for discovery generally can only be 22 23 24 25

26

Federal Court Rules 2011 (Cth) r 20.11. Federal Court Rules 2011 (Cth) r 20.12; Uniform Civil Procedure Rules 2005 (NSW) r 21.2. Uniform Civil Procedure Rules 1999 (Qld) r 211; Supreme Court Civil Rules 2006 (SA) r 136; Supreme Court Rules (NT) r 29.02. Court Procedures Rules 2006 (ACT) r 607; Supreme Court Rules 2000 (Tas) r 383; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 29.02; Rules of the Supreme Court 1971 (WA) O 26, r 1. Note that there are restrictions as to when an application can be brought. For example, the Federal Court rules provide that an application may not be made until 14 days after all [8.90] 189

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made after the close of pleadings.27 In jurisdictions where discovery is automatic, the close of pleadings is used to trigger discovery. In Queensland, for example, discovery must take place within 28 days after the close of pleadings; in the Northern Territory the time for discovery is shorter, and must occur within 21 days of the close of pleadings.28 South Australia is the odd jurisdiction out in the context of the timing of discovery. Discovery is to be automatically provided within 21 days of the settlement conference, and if no settlement conference was held discovery must have occurred by the close of pleadings.29 While placing the discovery process after the main settlement “event” may seem odd at first sight, it must be remembered that South Australia has adopted a pre-action exchange of information process, including formulated claims to assist the settlement process.30 Placing discovery after the settlement conference means that the potentially expensive process of discovery is restricted to those cases most likely to proceed to trial.

The form of discovery [8.100] There is some variation between jurisdictions as to the precise form of discovery. In each jurisdiction, the rules detail how the list of documents is to be prepared, usually with reference to a prescribed form. Despite this variation, there are certain common features in the form of discovery. Generally, the form is often divided into three parts: 1.

a part listing those documents currently in possession of the party;

2.

a part listing those documents no longer in the possession of the party (and usually what has happened to them); and,

3.

a part listing those documents for which privilege is claimed.31

There is a heavy obligation placed on parties and their lawyers to ensure full discovery is made. How this is enforced procedurally varies between jurisdictions.32 Most jurisdictions (the Australian Capital Territory, the Federal Court, New South Wales, Tasmania and Western Australia) require the list of documents to be supported by a verifying affidavit.33 The Northern Territory and Queensland

27 28 29 30 31

32 33

respondents have filed a defence or an affidavit in response to the affidavit accompanying the originating application: Federal Court Rules 2011 (Cth) r 20.13. See, eg, Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 29.02. Uniform Civil Procedure Rules 1999 (Qld) r 214(2)(e); Supreme Court Rules (NT) r 29.03(2). Supreme Court Civil Rules 2006 (SA) r 136(4). See Chapter 3 for discussion of pre-action disclosure. See, eg, Supreme Court Civil Supplementary Rules 2014 (SA), Sch 3 (Approved Forms), Form 29C; Rules of the Supreme Court 1971 (WA), Sch 2, Form 17. Queensland departs from other Australian jurisdictions in only requiring discovery of documents in the possession of the party (Uniform Civil Procedure Rules 1999 (Qld) r 211(1)(a)). Note the rule states “in possession or under the control” of a party. The ethical obligations on parties and their lawyers to ensure full discovery is made are discussed later in this chapter. See [8.190]. Court Procedures Rules 2006 (ACT) r 608(3); Federal Court Rules 2011 (Cth) r 20.22; Uniform Civil Procedure Rules 2005 (NSW) r 21.4; Supreme Court Rules 2000 (Tas) r 384(4); Rules of the Supreme Court 1971 (WA) O 26, r 4(3), Sch 2, Form 18.

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only requires the party to produce a list of documents.34 Queensland and Western Australia also require a party’s solicitor to certify that the party has been fully apprised of its obligations to provide discovery.35 Victoria does not use a list of documents per se but requires parties to provide an affidavit of documents which includes a paragraph indicating that full discovery has been made.36 In South Australia the list of documents includes a paragraph signed by either the party or its lawyers outlining that discovery obligations have been fully discharged.37

The content of discovery [8.110] At the core of discovery are the rules that determine whether a document needs to be disclosed. In general terms, documents that are or have been in the party’s possession that are relevant to the dispute must be discovered. There are really three critical issues that must be considered in determining if a document needs to be discovered: (1) the definition of “documents”; (2) the nature of ’possession’; and (3) the definition of “relevancy”.

Documents [8.120] In this context, the term “document” is given very wide definition by the rules and the Acts Interpretation Acts.38 For discovery purposes, virtually any medium which records information constitutes a “document”. The Tasmanian definition in r 381, for example, captures “anything on which is marked a word, figure, letter or symbol which is capable of carrying a definite meaning to a person conversant with it”.39 Film, photos, discs, tapes, and even stone tablets with hieroglyphics would appear to fall within the definition. The development of electronic records has further extended the concept of documents. In Sony Music Entertainment (Australia) Ltd v University of Tasmania,40 the Federal Court considered electronic databases were documents in the context of seeking discovery of backup files from university servers allegedly containing illegally downloaded MP3 music files.

Possession [8.130] It is important to note that the concept of ’possession’ of documents is, in the context of discovery, very different from the legal concepts found in property law. While almost all the rules relating to discovery refer to “possession”, many rules also use other concepts like “custody”, “power” or “control”. This is because civil litigation process designers have usually sought to bring as many documents as possible within the scope of discovery. For example, documents owned by 34 35 36 37 38

39 40

Supreme Court Rules (NT) r 29.03; Uniform Civil Procedure Rules 1999 (Qld) r 214. Uniform Civil Procedure Rules 1999 (Qld) r 226; Rules of the Supreme Court 1971 (WA) O 26, r 16A. Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 29.04, Form 29B. Supreme Court Civil Supplementary Rules 2014 (SA), Sch 3 (Approved Forms), Form 29C. See Supreme Court Civil Rules 2006 (SA) r 4 for an example of a definition in the rules (“anything that records information is a document”); see Uniform Civil Procedure Rules 1999 (Qld) r 211 for an example of a reference to an Acts Interpretation Act. Supreme Court Rules 2000 (Tas) r 381(e). (2003) 129 FCR 472. [8.130] 191

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someone other than the party but in the party’s possession are required to be discovered.41 Likewise, documents which are not in the party’s physical possession, but are controlled by the party, or documents over which the party has an enforceable right, may also be subject to disclosure.42 It is important to note that possession is not limited temporally to the time discovery is made. It includes documents that were in possession of the party, including those that may have been destroyed.43

Relevancy [8.140] Perhaps the most controversial issue in assessing whether a document must be disclosed is the issue of relevancy. In most jurisdictions relevancy will be assessed by reference to issues raised by the pleadings, though this should be interpreted broadly: for example, Western Australia’s rules refer to “relevant to any matter in question”.44 Traditionally, relevance in this context has been given a very wide interpretation. The relevancy test, often described as the “Peruvian Guano test”, captures documents that both directly affect the case, and documents not directly related to the case but which would nevertheless lead to a “train of inquiry” that would produce such information.45 Subsequent cases have stated the test in very broad terms requiring, for example, that a party must discover any document which will “throw light on the case”.46 It is important to note that the test of relevancy for discovery purposes is far wider than that for the evidential purposes of admissibility: a document may be required to be disclosed even if that documents would be inadmissible at trial. However, it should be noted that documents only relevant to the credibility of witnesses will not be discoverable.47 While information about witness credibility could undoubtedly be useful, the increase in the expense of discovery has generally be seen to overwhelm this benefit. Even with this limitation, these tests have traditionally led to an expansive, and often very expensive, discovery process. More recently, there have been moves to rein in the breadth of the Peruvian Guano test in a number of Australian jurisdictions. For example, Queensland and South Australia now require the documents to be “directly relevant”.48 Whilst no precise meaning can be given to this expression, it is clear that it does not encompass documents that only lead to a train of inquiry.49 However, these changes have not had the drastic consequences one might expect — in most South 41 42 43 44 45 46 47

48 49

Turner v Davies Energy Recycling Corp Pty Ltd [1981] 2 NSWLR 324. Taylor v Santos Ltd (1998) 71 SASR 434; Linfa Pty Ltd v Citibank Ltd [1995] 1 VR 643. Oberdan v Commonwealth Bank of Australia Ltd [1999] SASC 141 at [57]. Rules of the Supreme Court 1971 (WA) O 26, r 2. Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55. Donaldson v Harris (1973) 4 SASR 299 at 304-305 per Wells J; Australian Dairy Corporation v Murray Goulburn Cooperative Ltd [1990] VR 355. Beecham Group Ltd v Bristol-Myers Co [1979] VR 273 at 277-278 per Menhennitt J; Officine Meccaniche Toschi SpA v Cosco Holdings Pty Ltd [1992] 2 Qd R 418; Expectation Pty Ltd v PRD Realty Pty Ltd [1999] FCA 1207. Supreme Court Civil Rules 2006 (SA) r 136(1)(a); Uniform Civil Procedure Rules 1999 (Qld) r 211(1)(b). Mercantile Mutual Custodians Pty Ltd v Village Nine Network Restaurants & Bars Pty Ltd [2001] Qd R 276; Channel Seven Adelaide Pty Ltd v Lane (2004) 234 LSJS 225 at 230-231 per Duggan J.

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Australian cases where documents were held not to be directly relevant, the documents were still required to be discovered because discovery was deemed to be in the interests of justice.50 Furthermore, as the major expense in discovery is in the sorting and categorising of documents to enable the creation of a list of documents, the amount of effort required remains largely the same whichever test is used. A different approach has been taken in the Federal Court and in New South Wales. As a court order is necessary before a party can be required to disclose documents, the court possesses a greater ability to specify the sorts of documents that need to be disclosed. Thus, the Federal Court Rules51 list categories of discoverable documents including documents that “adversely affect the party’s own case” as well as those that “support another party’s case” and the recent Central Practice Note: National Court Framework and Case Management (CPN-1) (along with past case law) shows a commitment to limiting discovery to the circumstances of the case.52 In New South Wales, disclosure is ordered for certain categories of documents that are relevant to a fact in issue or of a certain type and that are created within specified periods.53

Modifying discovery [8.150] As discovery is a matter that ultimately falls within a court’s discretion,54 in all jurisdictions the courts have power to modify discovery. Parties may apply to the court to vary their obligations under discovery rules if, for example, the obligations would otherwise be oppressive. Alteration of the level of detail is another modification that may be made to the discovery requirements. A party may, for example, apply to the court for permission to present the list of documents in bundles or named categories. Such alterations may lessen the expense of individually identifying documents.

Continuing discovery [8.160] It is important to note that the obligations of disclosure imposed by discovery are continuing, and do not cease after the initial discovery. For example, parties are under an obligation to disclose documents that were in the party’s possession but for some reason were not discovered, where those documents come to light after discovery. Similarly, the rules in most jurisdictions require documents that come into a party’s possession after initial discovery to be discovered (ie. there is a continuing obligation of discovery).55 50 51 52

53 54 55

See, eg, Rehn v Australian Football League (2003) 225 LSJS 378. Federal Court Rules 2011 (Cth) r 20.14(2). Central Practice Note: National Court Framework and Case Management (CPN-1) (25/10/ 2016), [10]. See, eg, Reading Entertainment Australia Pty Ltd v Birch Carroll & Coyle Ltd [2002] FCAFC 109; Kyocera Mita Australia Pty Ltd v Mitronics Corporation Pty Ltd [2005] FCA 242. Uniform Civil Procedure Rules 2005 (NSW) r 21.2; National Australia Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8. See, eg, Ammerlaan v Distillers Co (Bio-chemicals) Ltd (1992) 58 SASR 164 at 167 per Millhouse J. See, eg, Federal Court Rules 2011 (Cth) r 20.20; Uniform Civil Procedure Rules 2005 (NSW) r 21.6; Supreme Court Civil Rules 2006 (SA) r 136(8); Rules of the Supreme Court 1971 (WA) O 26, r 2. [8.160] 193

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What if the other party believes the list of documents is inadequate? [8.170] Traditionally, courts have been reluctant to investigate the adequacy of lists of documents or engage in their verification.56 We have already seen that most jurisdictions require the lists to be verified or given affidavit form and breaches of the obligation to provide full discovery can carry significant consequences. However, in each jurisdiction procedures exist that enable a party to question the adequacy of discovery in certain situations. Most commonly, parties dissatisfied with the list of documents can seek further and better discovery of specific documents. Courts, however, have been keen to prevent parties from simply trying to “fish” for documents. Courts require some evidentiary basis for believing the documents exist.57 In those jurisdictions where the list of documents is not supported by affidavit, a party may seek to have the list verified on oath. Finally, parties may also be able to interrogate or cross-examine the deponent of any affidavit supporting the allegedly deficient list of documents.58

Discovery of documents by non-parties [8.180] By its nature, disclosure is an obligation that flows from being a party in a case. However, in more recent times discovery has been extended by rules to enable a party, in certain circumstances, to seek disclosure by a non-party. Non-party discovery can arise in two different contexts: pre-commencement for identifying potential defendants; and, post-commencement where a non-party possesses relevant documents. 1.

Pre-commencement discovery: The first context arises before proceedings have commenced, when a potential plaintiff seeks documents, usually to help it identify potential defendants or to help it ascertain whether a case should be commenced. The extent of discovery before commencement of proceedings varies between jurisdictions. Generally, though, most jurisdictions enable a potential plaintiff to seek pre-action discovery for the purposes of identifying potential defendants.59 This identification purpose represents a far tighter and more limited focus than the normal party-party discovery. In addition, some (but not all) Australian jurisdictions have rules enabling a party to seek pre-action discovery to ascertain the strength of the case.60

56 57

Mulley v Manifold (1959) 103 CLR 341. See, eg, Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (No 5) [2001] SASC 335; T O'Connor & Sons Pty Ltd v Entact Clough Pty Ltd [2003] WASC 69; Firns v Tzovaras [2006] NSWSC 925. See Supreme Court Civil Rules 2006 (SA) r 145. See, eg, Federal Court Rules 2011 (Cth) r 7.22; Uniform Civil Procedure Rules 2005 (NSW) r 5.2; Supreme Court Civil Rules 2006 (SA) r 32; Rules of the Supreme Court 1971 (WA) O 26A, r 3. See also Road and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35; Reeve v Aqualast Pty Ltd [2012] FCA 697; Dallas Buyers Club LLC v iiNet Ltd (2015) 327 ALR 670. For example, see Federal Court Rules 2011 (Cth) r 7.23; Supreme Court Civil Rules 2006 (SA) r 32.

58 59

60

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Post-commencement non-party discovery: The second context arises after a proceeding has been commenced, when a party believes a person or corporate body has documents that are relevant to the case. The extent of non-party discovery after commencement of proceedings is quite uniform across Australia, and is available under the rules in all jurisdictions except Tasmania. In most jurisdictions, a party seeking such discovery must apply to the court for an order that the non-party provide discovery and the supporting affidavit must usually provide some evidentiary basis for believing the documents are relevant.61 Queensland and the Australian Capital Territory have adopted a different procedure, whereby a court order is not required for non-party discovery after proceedings commence. Instead a party merely serves a notice seeking discovery on a non-party. The non-party recipient of such a notice can object to having to disclose such documents, but the onus is on the non-party to object.62 In Tasmania, parties may be able to use s 196C of the Evidence Act 2001 (Tas), which enables a party to apply for a court order to inspect personal property “if the inspection may be material to the proper determination of the question in dispute or the making of any inquiry”.

While the rules may appear to provide generous opportunities to seek non-party discovery, the courts, conscious of the expense and effect on non-parties, have tried to restrict the use of such provisions by creating thresholds that must be crossed before the non-party is required to provide discovery. For postcommencement non-party discovery, the party seeking discovery must be able to identify the relevant documents; show that they are likely to be in the non-party’s possession; and show that no better means of obtaining the information exists. For pre-action discovery similar sorts of thresholds exist.63 The discussion above concerns statutory or rules based procedures for non-party discovery. But that still leaves another possible situation — a person seeking discovery from a non-party in situations not covered by the rules. In such situations, a party may be able to revert to the principles of equitable discovery. The availability of equitable discovery, in part, turns on whether the rules are regarded as “covering the field”. In the discussion above, we have noted how non-party discovery after proceedings have commenced exists in all jurisdictions (albeit in differing forms). The place where equitable discovery may arise is in the context of pre-action discovery, where the extent of rules based procedures varies widely. The last 40 years have seen the re-emergence, and gradual extension of, the availability of equitable discovery. It is often described as a “Norwich” order, after the English case that established its continued existence. The plaintiffs were seeking to identify who was breaching their patent by importing certain goods

61

62 63

Federal Court Rules 2011 (Cth) r 20.23; Uniform Civil Procedure Rules 2005 (NSW) r 5.4; Supreme Court Rules (NT) r 32.07; Supreme Court Civil Rules 2006 (SA) r 146; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 32.07; Rules of the Supreme Court 1971 (WA) O 26A, r 5. Court Procedures Rules 2006 (ACT) rr 660 – 663; Uniform Civil Procedure Rules 1999 (Qld) rr 242 – 245. See Casley-Smith v Stirling District Council (1989) 51 SASR 447; Hooper v Kirella Pty Ltd (1999) 96 FCR 1; Szumylo v Ixia Pty Ltd [2001] SASC 262. [8.180] 195

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into England. The plaintiffs sought and obtained equitable discovery from the Customs and Excise Commissioners, who recorded all imports.64 Equitable pre-action discovery is no longer restricted to identifying possible defendants nor is it limited to mere torts.65

Duty on parties and their lawyers relating to discovery [8.190] The obligations on both parties and their lawyers relating to discovery are extensive. Parties can find it difficult to understand why they seem to be providing information that assists their opponents. Such an obligation appears, at first glance, to be contrary to the adversarial nature of the proceedings. Moreover, while these obligations are extensive, they are difficult to enforce. As the information is only known to one party it is difficult for the other party to know whether they have made full disclosure: there exists no ’objective’ lists against which to assess the extent of discovery. We have already seen that a party cannot use further and better discovery processes to go on a “fishing expedition”; a party must persuade the Court that there are reasonable grounds for believing that the specific document exists before the further and better discovery processes can be used. These limitations make devising effective accountability mechanisms for the operation of discovery particularly important. In this context, the ethical standards of legal practitioners takes on particular importance. It does not overstate matters to argue that the proper functioning of the discovery process relies on the fulsome observation of those ethical standards. With respect to discovery, the professional duties of lawyers require that lawyers ensure that the parties understand their obligations. Lawyers must also make an independent determination about whether full and proper discovery has been made. The duty is said to arise as soon as litigation is contemplated and the duty extends to explaining not only the scope of discovery to clients but also explaining the duty not to destroy documents that might need to be disclosed. The failure to meet these obligations can have serious professional ramifications for the lawyer.

Pre-action obligation [8.200] The obligations of parties and their lawyers arise as soon as litigation is contemplated. However, while the existence of an obligation is clear, the extent of the obligation in Australia is not entirely certain, with the parameters still under review. The Victorian Supreme Court in the controversial case of McCabe v British American Tobacco66 considered the issue of document destruction prior to commencement of proceedings. The defendant had adopted a document ’retention’ (destruction) policy, which was held at trial to prevent the plaintiff from having a fair trial. The document destruction issue came before the court as part of the discovery process. Many of the documents had been available in earlier litigation so the plaintiff knew of their existence. The trial judge struck out the

64 65

66

Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133. See State Bank of South Australia v Smoothdale (No 2) Ltd [1993] SASC 4352; Hooper v Kirella Pty Ltd (1999) 96 FCR 1; Computershare Ltd v Perpetual Registrars Ltd [2000] VSC 139; Idoport Pty Ltd v National Australia Bank Ltd [2004] NSWSC 695. [2002] VSC 150.

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defence and entered judgment for the plaintiff. While the judgment was overturned on appeal by the Victorian Court of Appeal, the court did hold that: [T]here must be some balance struck between the right of any company to manage its own documents, whether by retaining them or destroying them, and the right of the litigant to have resort to the documents of the other side. The balance can be struck, we think, if it be accepted that the destruction of documents, before the commencement of litigation, may attract a sanction (other than the drawing of adverse inferences) if that conduct amounts to an attempt to pervert the course of justice or (if open) contempt of court, meaning criminal contempt (inasmuch as civil contempt comprises wilful disobedience of a court order and will ordinarily be irrelevant prior to the commencement of proceedings).67

Legislation has been now been enacted in Victoria to make destruction of a document reasonably likely to be used in evidence in a proceeding a criminal offence and to provide for variety of sanctions in civil actions including striking out a statement of claim or defence.68 In other jurisdictions the law remains as expressed in British American Tobacco v Cowell.69

After commencement of proceedings [8.210] The situation after the commencement of proceedings is much clearer. Australian courts have followed the English approach of placing a heavy obligation relating to discovery on practitioners. In Ferguson v Mackaness Produce Pty Ltd, MacFarlan J held that: It is therefore, I hope, clear from what I have said that it is not sufficient for a solicitor simply to inquire of his client or of a principal, if he himself happens to be an agent only for the principal’s solicitor in another State, if he has any documents and request that he send any documents that he has to him; the obligation extends much further, namely, to the extent that the solicitor is obliged to make an appraisal of the case and form his own opinions as to what documents probably are in existence and actively to seek out from the client or his interstate or foreign principal whether or not those documents exist.70

The practitioner would be guilty of professional misconduct if he or she knowingly allowed a client to swear a wrong or misleading affidavit of documents.71 The Victorian Supreme Court upheld a three year suspension of a lawyer’s right to practise where the lawyer failed to discover a document in the course of litigation.72

67

68 69

70 71 72

British American Tobacco Australia Services Limited v Cowell (as representing the estate of Rolah Ann McCabe, deceased) [2002] VSCA 197 at [173] per Phillips, Batt & Buchanan JJA. The High Court refused special leave to appeal. Crimes Act 1958 (Vic) ss 254 – 255; and Evidence (Document Unavailability) Act 2006 (Vic). British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524. See also C Cameron & J Liberman, “Destruction of Documents before Proceedings Commence: What Is a Court to Do?” (2003) 27 Melbourne University Law Review 273. Ferguson v Mackaness Produce Pty Ltd [1970] 2 NSWLR 66 at 68. Myers v Elman [1940] AC 282. Guss v Law Institute of Victoria [2006] VSCA 88. [8.210] 197

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Uses to which discovered documents can be put [8.220] It should be noted that parties and their lawyers are under a further obligation with respect to the use of discovered documents.73 Essentially, this obligation requires that the parties only use the documents for the purposes of the litigation in which they have been discovered. It should be noted that this limitation extends beyond discovery to almost all information acquired through procedural rules. The restriction on the use of discovered documents, sometimes described as an “implied undertaking”, continues to exist even though the documents have been used in court and thus have entered the public domain. Hence, although third parties can use the information if they hear it during the court hearing, the parties in the case cannot. This restriction can lead to surprising results, as illustrated in the case of Harman v Secretary of State for the Home Department.74 In this case, the issue about the use of discovered documents arose in the context of public interest litigation. A non-government organisation (NCCL) was running a campaign against certain prison practices and Harman was its lawyer. NCCL sued the Home Office and obtained discovery of a large number (2,800) of government documents relating to prison practices. The trial was surrounded with a significant amount of publicity and took 22 days. The first five days were spent on the plaintiff’s opening speech during which counsel read into transcript 800 documents. After the hearing, the plaintiff’s solicitor allowed a journalist to read the documents in her office. The solicitor was held to have committed contempt of court in that she used the documents for a purpose not connected “with the conduct of that action, but for some collateral or ulterior purpose”.75 Recent Australian authority has continued to follow the approach in Harman. In McCabe v British American Tobacco Australia Services Limited,76 the Victorian Supreme Court was asked to release the plaintiffs from the obligation to use the documents only for the purposes of the litigation in which they had been discovered. The Victorian Court of Appeal overturned the primary judge’s ruling that the obligation came to an end once the documents had become evidence in the case, holding: Where documents are provided to a party to litigation under some coercive process of the court with the result that an implied undertaking attaches to the effect that, without the leave of the court, they not be used otherwise than for the purposes of the litigation, the party bound by that undertaking is not freed of it simply because the document in question is marked as an exhibit in the proceeding in the course of which it was provided. To the extent that knowledge of the document has become public by dint of its tender in open court, members of the public will be free to make use of that knowledge as they will … but the party affected by the undertaking remains bound as to use of the document itself.77

73 74 75

76 77

See M Groves, “The Implied Undertaking Restricting the Use of Material Obtained during Legal Proceedings” (2003) 23 Australian Bar Review 15. [1983] 1 AC 280. Harman v Secretary of State for the Home Department [1983] AC 280 at 302 per Lord Diplock. Note, however, the Court imposed no penalty and there was a strong dissent by Lords Simon and Scarman. [2002] VSC 150. British American Tobacco Australia Service Ltd v Cowell (as representing the estate of Rolah Anne McCabe) [2003] VSCA 43 at [48]. See also Hearne v Street (2008) 235 CLR 125.

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It should be noted that the Federal Court has amended its rules, such that the undertaking ceases when the document is read or referred to in open court and thus such a document can be used for other purposes.78

Inspection of documents [8.230] Discovery is really a two stage process — first there is the making of the list of documents and secondly there is the inspection and/or production in court of those documents for which privilege has not been claimed.79 The first stage only takes on significance and purpose in light of the second stage of inspection. It is through this inspection process that the opposing party has the opportunity to see the relevant document and to appraise themselves of its content. As a general principle, a party has the right to inspect documents specified in the list of documents. The party providing the list of documents is required to indicate where documents may be inspected.80 The party inspecting the documents is able to make copies of the documents. In practice, inspection is often informally arranged by the solicitors for the parties, and it is not unusual in simple cases for a party to request that copies of certain documents be sent to it. In addition to the right to inspect and copy documents that appear in the list of documents, parties have the right to inspect documents referred to in any pleading or affidavit. This means parties need to exercise care when drafting such documents, especially affidavits.81 Where a document contains confidential information that a party believes should not be disclosed because, for example, it is irrelevant or privileged, the party may seek to have those parts masked or may restrict access to the document to specified persons. A court may order that the documents be released to a party’s lawyer with the condition that the information is not conveyed to the party.82

INTERROGATORIES [8.240] There are a range of other mechanisms, beside discovery, that can be utilised for the gathering of information for litigation. One of the more important of these pre-trial processes by which a party can compulsorily acquire information from other parties is the use of interrogatories. Through the delivery of interrogatories a party can require another party to provide sworn written answers to discrete questions. The process begins with the interrogating party drawing up a list of questions (known as interrogatories). The other party is then 78 79 80 81 82

Federal Court Rules 2011 (Cth) r 20.03. See also Uniform Civil Procedure Rules 2005 (NSW) r 21.7. It must be recalled that Queensland provides that inspection or production of documents can constitute disclosure (Uniform Civil Procedure Rules 1999 (Qld) rr 216, 217). See, eg, Federal Court Rules 2011 (Cth) r 20.31; Supreme Court Civil Rules 2006 (SA) r 140; Rules of the Supreme Court 1971 (WA) O 26, r 8. See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 222; and Century Drilling Ltd v Gerling Australia Insurance Company Pty Ltd [2004] QSC 120. See Magellan Petroleum Australia Ltd v Sagasco Amadeus Pty Ltd [1994] 2 Qd R 37; Reebok International Ltd v Sydney Organising Committee for Olympic Games [2000] NSWSC 295. [8.240] 199

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required to answer the questions in writing on oath or affirmation. As already noted, bills in the Court of Chancery had an interrogating part so the interrogatory process is another of equity’s contributions to civil procedure. The information contained in answers to interrogatories is to be distinguished from that obtained from pleadings. Pleadings are allegations — they allege the material facts which the party must establish to found a cause of action and do not amount to evidence. In contrast, answers to interrogatories can be used as evidence. Perhaps more than any other pre-trial process, the availability of the interrogatory process at any given time is a barometer of the courts’ attitudes towards litigation more generally. When the courts have major concerns over cost and delay in litigation and are exploring ways to reduce the demands of litigation, interrogatories become less available. When concerns about accuracy of outcomes prevail, interrogatories become more available. Over the last 50 years, the trend has been towards limiting the availability and use of interrogatories as concerns about cost and delay have taken precedence. While all Australian jurisdictions allow interrogatories (now called “pre-trial examination by written questions” in South Australia),83 in most jurisdictions (the Federal Court, New South Wales, Northern Territory, Queensland, South Australia and Western Australia) a party requires the court’s permission to interrogate.84 Other jurisdictions (the Australian Capital Territory, Tasmania and Victoria) allow some interrogatories as of right.85 In some jurisdictions, such as Queensland, concerns over cost and delay have seen the introduction of rules limiting the number of interrogatories.86 In New South Wales, the rules proscribe interrogatories in certain classes of cases. Rule 22.187 prohibits interrogatories in personal injury cases in the absence of special reasons. In those jurisdictions where leave is required, the courts have attempted to minimise use of interrogatories by requiring the party seeking to interrogate to demonstrate that there is no less expensive or better means of obtaining the information.88 The time in which a responding party must file answers to interrogatories varies across Australia. Where leave of court is required to administer the interrogatories, the court will usually specify a time for answering.89 In Western Australia, a responding party must answer within 14 days of service of the interrogatories, whereas in South Australia, there exists a default time limit for responding to interrogatories of 28 days from service of the interrogatories.90 83 84

85

86 87 88 89 90

Supreme Court Civil Rules 2006 (SA) Ch 7, Pt 6. Federal Court Rules 2011 (Cth) r 21.01; Uniform Civil Procedure Rules 2005 (NSW) r 22.1; Supreme Court Rules (NT) r 30.02; Uniform Civil Procedure Rules 1999 (Qld) r 229; Supreme Court Civil Rules 2006 (SA) r 150; Rules of the Supreme Court 1971 (WA) O 27, r 1. Court Procedures Rules 2006 (ACT) r 630; Supreme Court Rules 2000 (Tas) r 405; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 30.02 (the right only exists after the close of pleadings). See Uniform Civil Procedure Rules 1999 (Qld) r 229(2), which limits a party to 30 interrogatories. Uniform Civil Procedure Rules 2005 (NSW) r 22.1. See Pearce v Hall (1989) 52 SASR 568; Ranger v Suncorp General Insurance Ltd [1999] 2 Qd R 433. See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 22.3(1). Rules of the Supreme Court 1971 (WA) O 27, r 2; Supreme Court Civil Rules 2006 (SA) r 151(1)(a).

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[8.245] The continuing tension between allowing parties sufficient capacity to acquire information, and the need to place limits on that capacity to prevent excessive costs, is also demonstrated by the matters that a party can be interrogated about. The scope of the interrogatories is controlled by the pleadings.91 Interrogatories must go to proving material facts in dispute. Interrogatories that only go to questions of credit are not allowed. Similarly, a party can only interrogate about the authenticity or authorship of documents and not the contents of documents.92 As with discovery of documents, the obligations on parties and their lawyers are considerable. A party is under a duty to make inquiries of agents and employees to ascertain answers and, if the party has no knowledge but has a belief as to what the answer is, the party is under a duty to disclose any such reasonable belief. This duty extends to expert knowledge that is available to the deponent and the deponent can be required to revisit scenes of accidents or locations if this is material.93 Respondents can object to having to answer an interrogatory on a range of grounds, including a belief that it would disclose privileged information; that it would be oppressive; or that it is unnecessary. The latter two categories become largely otiose in those jurisdictions where a court has granted leave to interrogate. That is because the court will normally have considered whether the interrogatories were oppressive or unnecessary in deciding to grant leave to interrogate. Discussion of what amounts to oppression and whether interrogatories would amount to fishing are influenced by whether the prevailing concern driving civil procedure is to maximise disclosure or to rein in costs of litigation.

Use to which answers to interrogatories can be put [8.250] The utility of interrogatories arises from their ability to provide a mechanism for obtaining information which can be presented to the court as evidence. However, the information gathered from interrogatories is only evidence, a party is not bound by their answers to interrogatories at trial. Of course, if a party departs from their interrogatory answers at trial, such departure is likely to raise serious questions about the credibility of the witness and of any alternative versions. This threat to credibility posed by departing from interrogatory answers is illustrated nicely by Mundy v Bridge Motors Pty Ltd.94 In this case the plaintiff, a mechanic, was suing his employer, the workshop owner, for injuries suffered when he was pinned to a wall after a car suddenly went in reverse. At trial, the plaintiff swore that there was only a matter of seconds between him walking behind the car and it reversing. This suggested that the plaintiff had no time to take evasive action, whereas, in his answers to interrogatories, he had sworn that 91 92 93 94

Except in Tasmania, where the rules unusually set out a range of matters which can be the subject of interrogation (Supreme Court Rules 2000 (Tas) r 406). See Adams v Dickeson [1974] VR 77; Barbarian Motorcycle Club Inc v Koithan (1984) 35 SASR 481. See Sharpe v Smail (1975) 5 ALR 377; Tipperary Developments Pty Ltd v Western Australia [2004] WASC 179; Director-General of Community Services v D [2006] NSWSC 827. (1987) 45 SASR 125. [8.250] 201

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it took three to four minutes before the car reversed. The defendant argued that the plaintiff should be held to the answer given to interrogatories. The trial judge held that a party can depart from its answers at trial but the judge pointed out that a party risks damaging their credibility or reliability by so departing. It is, after all, one piece of evidence against another. In Mundy, the inconsistency was not seen as overly detrimental to the plaintiff’s case because the court accepted his explanation for the inconsistency — that the plaintiff misunderstood the interrogatory.

Failure to comply with discovery and interrogatory requirements [8.260] The failure to comply with the requirement to discover documents or answer interrogatories carries similar sanctions for both the defaulting party’s case and for them personally. In addition to the general sanctions for non-compliance with any procedural requirements, there are specific sanctions contained in the rules specifically relating to discovery and interrogatories. These sanctions can be extreme. For example, failure to discover may lead to the plaintiff having the action dismissed or the defendant having the defence struck out and judgment entered accordingly.95 Personally, the failure to comply with an order for discovery or answer interrogatories could constitute a contempt of court with all the sanctions that flow from that. However, the cases suggest that for a party to be found in contempt, the party would need to have been “wilfully disobedient” and this disobedience would need to be established to a high standard of proof.96

SUBPOENAS [8.270] Subpoenas represent an alternative means of compelling production of information from third parties. A subpoena differs from the other procedures we have already discussed in this chapter in that, traditionally, they were only effective when a case got to trial. They did not produce information pre-trial. There are two types of subpoena: one that compels production of specified documents at trial; and another that requires a witness to attend the trial. Historically, subpoenas for production of documents were known as “subpoena duces teum” and subpoenas for giving oral evidence as “subpoena ad testificandum”. While all jurisdictions provide for subpoenas, every jurisdiction has now abandoned the traditional nomenclature in favour of plain English names for subpoenas such as “subpoenas for production” or “subpoenas to give evidence”.97 Most jurisdictions maintain the distinction and have two separate forms of 95

96 97

See, eg, Court Procedures Rules 2006 (ACT) rr 670 – 671; Federal Court Rules 2011 (Cth) rr 5.22 – 5.23; Supreme Court Civil Rules 2006 (SA) r 228; Rules of the Supreme Court 1971 (WA) O 26, r 15. See, eg, Maff Investments Pty Ltd (in liq) v Fuller (1991) 3 WAR 546. Court Procedures Rules 2006 (ACT) r 6600; Federal Court Rules 2011 (Cth) Pt 24, Div 24.2; Uniform Civil Procedure Rules 2005 (NSW) Pt 33; Supreme Court Rules (NT) O 42; Uniform Civil Procedure Rules 1999 (Qld) Ch 11, Pt 4; Supreme Court Civil Rules 2006 (SA) Ch 7, Div 4; Supreme Court Rules 2000 (Tas) Pt 19, Div 3; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 42; Rules of the Supreme Court 1971 (WA) O 36B.

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subpoena but others, for example, the Federal Court, South Australia and Tasmania, have subsumed the two forms into a single subpoena. The more substantive area of reform with respect to subpoenas has been to make them returnable prior to trial. The original function of subpoenas was to ensure witnesses and documents were available at the trial of an action. However, the utility of their availability at trial, especially with regard to documents, is somewhat limited if the party has not had the opportunity to inspect the documents before the trial. The rules in many jurisdictions now provide that, if the subpoena is for production of documents, the documents are to be posted or produced to the court prior to the trial and thus become available for inspection.98 From a practical point of view, use of subpoenas can have tactical disadvantages — it may put a witness offside and make them hostile. On the other hand, many witnesses prefer a subpoena because it avoids the perception of having assisted a particular party (for example, public officials, institutions and occasionally employees or witnesses with some form of relationship with one or more parties), and it may also assist a witness in explaining and justifying their absence from work to employers. One practical matter when considering whether to issue a subpoena is that the party requesting the issue of a subpoena by a court is required to provide “conduct money”. Conduct money is money to cover the costs of complying with the subpoena. While at common law there was no obligation to pay any expenses incurred before attending court, the rules in most jurisdictions require the person seeking the issue of the subpoena to pay any reasonable expenses incurred in obtaining the requested documents, which include expenses involved in obtaining legal advice on the subpoena.99 [8.275] The subpoena is akin to a summons in that it is a court order. As such, the sanctions for non-compliance are significant. Non-compliance amounts to a contempt of court.100 Thus, the subpoena must clearly identify what is being sought and be addressed to the appropriate person.101 The recipient of the subpoena can, before attendance or production, apply to have the subpoena set aside. The rules generally provide the grounds for such applications, which include that the subpoena is vexatious, oppressive or an abuse of process. The recipient of the subpoena can also object to producing the documents or answering questions at the time compliance is required on the usual grounds for exclusion of evidence, for example, relevance and privilege.102 Two broad matters of principle continue to underpin courts’ approaches to subpoenas. The first matter is the continuing tension between ensuring maximum 98

99

100 101 102

See, eg, Federal Court Rules 2011 (Cth) rr 24.17 – 24.20; Uniform Civil Procedure Rules 2005 (NSW) rr 33.6 – 33.9; Supreme Court Civil Rules 2006 (SA) rr 176 – 178; Rules of the Supreme Court 1971 (WA) O 36B, r 6. See Pyramid Building Society (in liq) v Farrow Financial Corp Ltd (in liq) [1995] 1 VR 464; ANZ Banking Group Ltd v Actus Australia Pty Ltd [2000] WASC 244. In Telstra Corp Ltd v AAPT Ltd [1999] FCA 1410 AAPT were ordered to pay over $45,000 to a non-party for costs of complying with a subpoena. See Pyoja Pty Ltd v 284 Bronte Rd Development Pty Ltd [2006] NSWSC 831. Rochfort v Trade Practices Commission (1982) 153 CLR 134. National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372; Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90; Commonwealth v Albany Port Authority [2006] WASCA 185. [8.275] 203

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disclosure of information and minimising expense and delay. The second matter is the overlap between discovery and subpoenas. With respect to the first matter there appears to be a move towards increasing disclosure with the courts’ concern about fishing for documents diminishing. The early return of subpoenas for documents also helps reduce expense by not only avoiding delays at trial while parties react to the documents they may have just received, but also enabling the parties to assess the strengths of their cases, thereby promoting settlement.103 However, with respect to the second matter, the courts remain very concerned that discovery should not be extended by resort to subpoenas. This is to prevent subpoenas being used to circumvent the recent changes that limit the availability or scope of discovery, thus defeating the objectives underpinning the changes to discovery — reducing litigation costs and delay.104

EXPERT EVIDENCE [8.280] The information gathering processes discussed above allow for the acquisition of relevant information generally from a party or non-party. There are, however, special mechanisms directed to the pre-trial gathering and exchange of discrete categories of information and evidence. The particular significance of these classes of information has led to specialised rules governing the access to these forms of information. Perhaps the most important of these mechanisms are those relating to the disclosure of expert reports. The role of expert evidence in civil litigation cannot be overstated. Its significance is such that every jurisdiction has procedural provisions dealing with pre-trial disclosure of experts’ reports. There has been longstanding judicial concern about the quality of expert evidence. In 1995 Lord Woolf in his report on English civil justice wrote: Expert witnesses used to be genuinely independent experts. Men of outstanding eminence in their field. Today they are in practice hired guns. There is a new breed of litigation hangers-on, whose main expertise is to craft reports which will conceal anything that might be to the disadvantage of their clients.105

This view has been seen by some as overly cynical106 but there is no doubt that there are significant concerns. Even with experts of the highest integrity, there is a selection bias in that lawyers will choose those experts whose views coincide with their case which may not provide the court with the full scope of expert opinion. In the field of medico-legal assessments it is often the case that defendants will use particular medical experts who are almost never used by plaintiffs and vice versa. There may be, for example, validly held but differing views within the particular field of expertise. There are also concerns about the way expert evidence is

103 104 105 106

See Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136; Stanley v Layne Christensen Co [2004] WASCA 50. Pasini v Vanstone [1999] FCA 1271; NSW Commissioner of Police v Tuxford [2002] NSWCA 139; Azzi v Volvo [2006] NSWSC 283. Lord Woolf MR, Access to Justice, Interim Report to the Lord Chancellor on the Civil Justice System in England and Wales (HMSO, London, 1995) p 183. M Rackeman, “The Management of Experts” (2012) 21 Journal of Judicial Administration 168 at 169-170.

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produced in court, with doubts about the capacity of the judges and lawyers to fully understand the technical or scientific issues involved and to thoroughly test the expert’s evidence.107 While in most jurisdictions parties retain the right to choose their own expert witnesses, there has been increasing provision for jointly appointed experts and court appointed experts. This is intended to remove some of the adversarial bias inherent in parties instructing their own experts. Queensland introduced, potentially, the most significant departure from party autonomy in this area with a presumption that experts were to be either jointly appointed or appointed by the court in Supreme Court proceedings.108 Interestingly this has not been fully tested and it appears the prevailing view amongst lawyers and some of the judiciary is that this is not mandatory and that the traditional common law approach still applies.109 In all jurisdictions statute, rules or practice directions now emphasise the duties of the expert witness. In the South Australian Supreme Court, for example, the Supreme Court Civil Supplementary Rules 2014, r 156, insists that: (1)

An expert witness has an overriding duty to assist the Court on matters relevant to the expert’s area of expertise.

(2)

An expert is not an advocate for a party.

(3)

An expert’s paramount duty is to the Court and not to the person retaining the expert.

Amongst the most significant changes to the process of preparing reports are provisions prescribing what must be covered in the reports. These require the reports to identify facts and assumptions; documents relied upon; reasoning behind conclusions; and any qualifications or reservations about any of the matters covered by the report that need to be made explicit.110 Other changes include enabling courts to order experts retained by the parties to meet before giving evidence. Most commonly this happens after a report is prepared and the experts meet to discuss their reports and provide a joint statement to the court on what they agree on and where they differ. However, a court may be able to require the experts to meet before the report is prepared so that their report is more informed, taking into account the views of other experts. Some commentators suggest that it is the joint meeting, especially if held before reports are written, that provides the greatest improvement in the quality of experts’ reports and efficiency of trial process when dealing with experts.111 Trial efficiency is also said to be promoted by the development of procedures to enable experts to give evidence at the trial concurrently. Colloquially known as 107 108 109 110 111

P McClellan, “The Future Role of the Judge: Umpire, Manager, Mediator or Service Provider” (2012) 50 Law Society Journal 69. Uniform Civil Procedure Rules 1999 (Qld) rr 423(b), 429G. K Wylie, “Queensland Single Expert UCPR Provisions: Dead-letter Law or Under-utilised Opportunity?” (2012) 32 Queensland Lawyer 215. See, eg, Supreme Court Civil Rules 2006 (SA) r 160 and Supreme Court Civil Supplementary Rules 2014 (SA) r 157; Federal Court Rules 2011 (Cth) r 23.13. P McClellan, “The Future Role of the Judge: Umpire, Manager, Mediator or Service Provider” (2012) 50 Law Society Journal 69. [8.280] 205

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’hot-tubbing’, the experts for all the parties on an issue are empanelled together and their oral evidence is given in the form of a discussion led by the judge and the barristers. The experts are able to comment on each other’s evidence and to justify their own conclusions.112 The utility of this is not without its critics who suggest that intervention in the report preparation of the process is of greater benefit.113 Finally changes have been made to the rules governing disclosure of experts reports. Usually, experts’ reports are obtained by parties for the purposes of litigation and thus would, on the face of it, be subject to a claim of privilege.114 However, in most Australian jurisdictions, the rules require pre-trial disclosure of experts’ reports if the expert, or his or her report, is to be used at trial.115 In the Federal Court and Western Australia disclosure follows a court order. However, Queensland and South Australia have more extensive disclosure requirements, which require all experts’ reports obtained to be disclosed pre-trial even if they are damaging to a party’s case.116 The sanction for failing to disclose a report is that the expert may not be permitted to give evidence at trial. The growth in pre-trial disclosure of experts’ reports that will be relied upon at trial reflects the increasing importance given to maximising efficiency in litigation by preventing trial by ambush and minimising the need for adjournments of trials. Those jurisdictions that require disclosure of all reports give priority to making sure parties, and thus the court, have access to all relevant information about a dispute. The extent of the disclosure requirements is taken furthest in South Australia, where a party is required to not only disclose the report but, if requested by another party, any documentation relevant to the report. This provision extends to any material the expert has relied upon, details of fee arrangements, and any communication between the expert and the party commissioning the report. A party can apply to the court to be excused from the disclosure requirements if the disclosure would cause unfair prejudice.117 These South Australian disclosure requirements are additional to the pre-action disclosure requirement which requires prospective plaintiffs and defendants to disclose experts’ reports.118

112

113 114 115

116 117 118

S Rares, “Using the ‘hot tub’: How Concurrent Evidence Aids Understanding of Expert Evidence” (2011) 10 Judicial Review 171; Andrew Ross, “Murky waters: An Expert's Perspective on the Effectiveness of Expert Conclaves and ‘hot tubs’” (2013) 119 Precedent 30; G Edmonds, “Secrets of the ‘hot tub’: Expert Witnesses, Concurrent Evidence, and Judge Led Law Reform in Australia” (2008) 27 Civil Justice Quarterly 51. P McClellan, “The Future Role of the Judge: Umpire, Manager, Mediator or Service Provider” (2012) 50 Law Society Journal 69 at 175-176. See below [8.320]. Court Procedures Rules 2006 (ACT) r 1241; Federal Court Rules 2011 (Cth) r 23.11; Uniform Civil Procedure Rules 2005 (NSW) r 31.28; Supreme Court Rules (NT) O 44; Supreme Court Rules 2000 (Tas) r 516; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 44; Rules of the Supreme Court 1971 (WA) O 36A. Uniform Civil Procedure Rules 1999 (Qld) r 212(2) (experts reports to be disclosed as part of general disclosure); Supreme Court Civil Rules 2006 (SA) r 160(1)(b). Kenneally v Pouras (2004) 87 SASR 346. Supreme Court Civil Rules 2006 (SA) r 33; see [3.80].

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MEDICAL EXAMINATIONS [8.290] Other specialised mechanisms govern the access to medical information regarding a party, particularly those mechanisms that allow one party to have another party medically examined. While such procedures will not be necessary in much litigation, in some cases the medical condition of parties can be a live issue. This will most obviously be so in personal injury cases, but may also arise in circumstances where the capacity of a person to make decisions may be called into question. Depending on the nature of the case, various statutory provisions exist in each jurisdiction that enable a party to have another party medically examined. Generally, statutes dealing with motor vehicle and work injury accidents make specific provision for these examinations.119 However, if the case involves the health or condition of a party, and medical examination is not provided for by some other statutory provision, the rules may provide mechanisms to allow medical examinations to take place. While the details vary, provisions for medical examinations are found in the rules in New South Wales, the Northern Territory, South Australia and Western Australia.120 Where the rules are silent, resort may be made to the court’s inherent jurisdiction to support an order that a party undergo a medical examination.121 What constitutes a medical examination depends on the relevant rule but generally an expansive view of the concept of medical examination is taken so that it includes psychologists and, in some jurisdictions, physiotherapists, chiropractors and podiatrists. The request from a party to have another party medically examined must be reasonable in all the circumstances and must relate to health issues raised by the pleadings.122 A medical examination will not be granted for the purpose of determining whether the party is fit to give instructions or to give evidence. If a party subject to the request fails to submit to the examination the action may be stayed with no entitlement to damages for the period of the refusal.123

INSPECTION AND TESTING OF PROPERTY [8.300] Similar ’intrusive’ mechanisms exist relating to the inspection and testing of property that is relevant to the proceedings. Whereas discovery allows the gathering of documentary information, these mechanisms allow a party to directly gather information from property by inspecting and testing that property. Like medical examinations, these mechanisms will not be relevant to many classes of disputes, however in some cases it may, for example, be necessary to examine a piece of industrial plant or test the safety of a given product.

119 120 121 122 123

See, eg, Motor Vehicles Act 1959 (SA) s 127; Transport Accident Act 1986 (Vic) s 71; and Workers Compensation Act 1958 (Vic) s 27. Uniform Civil Procedure Rules 2005 (NSW) Pt 23, Div 1; Supreme Court Rules (NT) O 33; Supreme Court Civil Rules 2006 (SA) Ch 7, Pt 7; Rules of the Supreme Court 1971 (WA) O 28. Starr v National Coal Board [1977] 1 All ER 243; Gray v Hopcroft [2000] QCA 144. Jackson v Queensland [2005] QSC 161; Morrison v Hanby Pty Ltd [2000] SASC 135. Richards v Kadian [2005] NSWCA 328. [8.300] 207

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The rules in all Australian jurisdictions contain broad provisions giving a court the power to inspect and test property.124 The power to inspect and test carries with it a range of concomitant powers including the power to enter premises or land, take samples, and carry out experiments. Except in Western Australia, this power enables the inspection and testing of any property in the possession of a non-party. In Western Australia the rules are slightly more restrictive in that they require the property to have some nexus to the dispute and do not, on their face, allow interference with the property of non-parties.125 As with other intrusive tools for gathering information, the courts exercise their power to inspect and test property cautiously. The powers cannot be used to embark on a fishing expedition; although some jurisdictions (the Northern Territory and Victoria, for example) do make specific provision for the power to inspect and test property to be used to determine whether proceedings should be brought.126 In addition to the powers within the rules, a court’s inherent jurisdiction also supports inspection and testing orders.127 This overlaps with the Anton Piller order discussed in Chapter 7, which is used to search and seize evidence.

PRIVILEGE [8.310] The procedural mechanisms discussed above provide a powerful and extensive range of tools for gathering information relating to proceedings. Together, these mechanisms promote the pursuit of accuracy in litigation, and help to ensure all parties have access to any relevant information relating to those proceedings. However, this interest in allowing broad access to information is not an absolute value, and exists in tension with competing principles that restrict the operation of information gathering processes. For example, we have seen that while discovery (including by interrogatories) and subpoenas are powerful tools for acquiring information, the substantial consequences of cost and disruption which may result from their utilisation have seen courts limit their use. There are, however, more fundamental concerns about the level and the nature of intrusion into private affairs that result in restrictions being placed on the forms of information that must be disclosed. The courts have developed a series of principles, called “privileges”, which would enable a person to refuse to provide information or evidence when otherwise compelled to do so by court processes. These substantive restrictions on the type of information that must be disclosed operate to protect competing public interests. These principles of privilege operate so that a party is not required to disclose relevant information that would otherwise be required to be disclosed. There are three main categories of privilege:

124

125 126 127

Federal Court Rules 2011 (Cth) r 14.01; Uniform Civil Procedure Rules 2005 (NSW) r 23.8; Supreme Court Rules (NT) r 37.01; Uniform Civil Procedure Rules 1999 (Qld) r 250; Supreme Court Civil Rules 2006 (SA) r 147; Supreme Court Rules 2000 (Tas) r 437; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 37.01. Rules of the Supreme Court 1971 (WA) O 28, r 2. Supreme Court Rules (NT) r 37.02; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 37.02. Rutile Mining Development Pty Ltd v Australian Oil Exploration Ltd [1960] Qd R 480.

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• legal professional privilege (increasingly known as client legal privilege); • settlement privilege; and • privilege against self-incrimination. In addition to these three categories is the related concept of public interest immunity, which protects high level government information. The principles of privilege do not apply simply to the discovery of documents, but extend to cover any situation where a party may be required to provide information. For example, it can be claimed when giving oral evidence, when answering interrogatories, or when being interviewed by the police. These principles are properly conceived of as an aspect of the law of evidence. However, as these principles have an important role to play in the pre-trial process, a brief outline of the principles is provided here. Australia is divided into two groups when it comes to evidence law — those jurisdictions (the Australian Capital Territory, the Federal Court, New South Wales, Northern Territory, Victoria and Tasmania) that have adopted all or most of the Uniform Evidence Act,128 which comprehensively covers the law of evidence; and the remaining jurisdictions that have retained the common law rules of evidence, albeit complemented by statute. The applicability of the Uniform Evidence Acts to the pre-trial stage of litigation is not straightforward and varies depending on the degree to which their provisions have been incorporated in procedural rules. Nevertheless, when it comes to privilege, there is considerable uniformity in its content across Australia. This final section will provide a brief overview of the three principal forms of privilege and of the related concept of public interest immunity.

Legal professional privilege [8.320] The first category of privilege, legal professional privilege, operates to protect confidential information that passes between a client and their lawyer for the purposes of obtaining legal advice or assistance. Legal professional privilege covers two situations: 1.

Communications between client and lawyer for the purpose of obtaining legal advice; and

2.

Communications between client or lawyer and third parties for purposes of actual or anticipated litigation.

Legal professional privilege is an old privilege, the history of which goes back several hundred years.129 The privilege belongs to the client not to the lawyer, hence the Uniform Evidence Acts perhaps more accurately described it as “client legal privilege”. In Grant v Downs,130 Stephen, Mason and Murphy JJ provided an often cited explanation for the rule:

128 129 130

Evidence Act 2011 (ACT); Evidence Act 1995 (Cth); Evidence Act 1995 (NSW); Evidence Act 2001 (Tas); Evidence Act 2008 (Vic); and Evidence (National Uniform Legislation) Act (NT). Some argue these should be seen as two separate privileges: see A Ligertwood, Australian Evidence (4th ed, LexisNexis Butterworths, 2004) pp 274 – 277. (1976) 135 CLR 674. [8.320] 209

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The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available.131

Client legal privilege is a privilege that exists only with respect to communications with lawyers acting as lawyers. So, for example, communications with an accountant who has a law degree do not attract the protection of client legal privilege.132 [8.330] The scope of the privilege has been subject to significant change in recent decades. Documents, like other forms of communication, may come into existence for more than one reason, which raises questions about whether communications serving more than one purpose fall within the privilege. In Grant v Downs,133 the High Court held that, at common law, only documents created for the sole purpose of obtaining legal advice or related to litigation would be protected by this privilege. However, in the 1999 case of Esso Australia Resources Pty Ltd v Commissioner of Taxation,134 the High Court abandoned the sole purpose requirement; instead adopting a test that held documents would fall within the privilege where they were created for the dominant purpose of seeking legal advice or litigation. The effect of this changed test is to increase the ability of a party to refuse to disclose information and to reduce the amount of information available to both other parties and the court. The “sole purpose” test is easier to apply because if there was more than one purpose, the privilege could not be claimed. As the “dominant purpose” test allows there to be multiple purposes behind the creation of the document, courts now have to decide between competing purposes. As a result, more pre-trial litigation over whether documents were privileged was expected. The lack of any empirical research on the topic, however, means we have no evidence of what the impact of this change has been. Client legal privilege is not simply a rule of evidence. It is a common law right which can only be abrogated by statute and even then the courts will not construe statutory provisions affecting the existence of the privilege unless that is the clear intention of Parliament.135 However, the privilege can be lost either because the client waives it or acts in ways inconsistent with the maintenance of the privilege. This could occur where the communication no longer remains confidential

131 132 133 134 135

(1976) 135 CLR 674 at 685. Although the sole purpose test adopted in Grant v Downs was later over-ruled, this explanation of the rationale has been adopted in subsequent cases. See Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233; Waterford v Commonwealth (1987) 163 CLR 54; Commonwealth v Vance (2005) 158 ACTR 47. (1976) 135 CLR 674. (1999) 201 CLR 49. Baker v Campbell (1983) 153 CLR 52.

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because, for example, a client provided the communication to others or used it for purposes other than obtaining legal advice or in litigation.136 The role and scope of client legal privilege is controversial. We have seen how in 1999 the High Court dramatically altered the test in Esso,137 increasing the range of communications to fall within the privilege. While some media comment challenges the rationale behind the privilege,138 it is a principle found in both common and civil law legal systems. The 2007 Australian Law Reform Commission inquiry into client legal privilege in the federal context strongly affirmed the importance of the privilege and recommended it only be “abrogated in exceptional circumstances”.139

Settlement negotiation privilege [8.340] The second form of privilege, settlement negotiation privilege, arises with respect to communications made in the course of trying to settle a matter. This privilege extends to not only cover relevant communications made at trial, but also those made at pre-trial stages, including with third parties. The rationale for the privilege is to promote settlement by encouraging full and frank discussions between parties. Protecting such communications avoids the risks of communications made in an attempt to settle a case being subsequently used against a party. The basis and scope of this privilege was examined by the High Court in Field v Commissioner for Railways.140 In that case, the claim of privilege was over statements made by the plaintiff to the defendant’s medical specialists in the course of a medical examination outlining how the accident occurred. The arrangements for the medical examination had been made in letters which were marked “without prejudice”. While the High Court reaffirmed the existence of the privilege, it held the plaintiff’s statements were too far removed from the negotiations. Ordinarily, the doctor in these circumstances could expect to be called to give evidence of the examination if the negotiations broke down. The existence of the privilege does not rely on the use of the words “without prejudice”. While the use of that expression certainly is of assistance in establishing whether the privilege should apply, the application of the privilege ultimately depends upon an assessment of whether the communications were genuinely made with a view to inducing settlement. It follows that simply labelling a communication “without prejudice” will not automatically attract the protection of the privilege. Importantly, the privilege only protects communications made in the settlement negotiation so that a party is free to attempt to prove

136 137 138

139 140

See Goldberg v Ng (1995) 185 CLR 83; Mann v Carnell (1999) 201 CLR 1. Esso Australia Resources Pty Ltd v Commissioner of Taxation (1999) 201 CLR 49. See P Faris, “Legal Professional Privilege: A Loophole that Needs Closing”, Crikey http://ww w.crikey.com.au (30 November 2006); J McComish, “Foreign Legal Professional Privilege: A New Problem for Australian Private International Law” (2000) 28 Sydney Law Review 297. Australian Law Reform Commission, Privilege in Perspective: Client Legal Privilege in Federal Investigations (ALRC Report No 107, 2007) p 34. (1957) 99 CLR 285. [8.340] 211

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through other evidence any matters raised in the course of settlement negotiations.141 The privilege does not apply in criminal cases where the privilege against self-incrimination applies.

Privilege against self-incrimination [8.350] This third category of privilege, the privilege against self-incrimination, arises principally in the criminal context. The origin of the privilege is obscure and associated with a range of privileges. The central privilege protects a person from having to provide information which may expose them to criminal punishment. The associated privileges protects a person in a range of situations, including where a person is at risk of civil penalty, forfeiture of real property or ecclesiastical censure. The latter two categories derive from English principles relating to feudal land tenure and the existence of a state church, the Church of England, and are thus not of much practical relevance to Australia. The privilege exists both pre-trial and at trial. This is a matter of substantive law given great weight by the judiciary and can only be withdrawn by statute. Like legal professional privilege, the courts will only interpret a statute as abrogating the privilege against self-incrimination where there is clear parliamentary direction or intention to do so.142 Like legal professional privilege, this privilege is not without its detractors — especially in the context of civil litigation.143 The existence of the privilege reflects a policy choice which gives greater weight to the importance of requiring an adversary to prove their case by independent evidence. The privilege is said to be part of the common law accusatory process and acts as a check on the investigatory and prosecutorial authorities. As such it is seen as protecting personal privacy, personal liberty and human rights.144 The debate about whether these privileges can be claimed by corporations has largely been resolved. In the Environment Protection Authority v Caltex Refining Co,145 the EPA served statutory notices on Caltex seeking information about alleged breaches of anti-pollution legislation by Caltex. In a 4:3 decision, the High Court held that the privilege against self-incrimination did not apply to corporations.

141 142 143

144

145

See 789Ten Pty Ltd v Westpac Banking Ltd [2004] NSWSC 594. Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328; Reid v Howard (1995) 184 CLR 1. “It is difficult to see any reason why in civil proceedings the privilege against selfincrimination should be exercisable so as to enable a litigant to refuse relevant and even vital documents which are in his possession or power and which speak for themselves. … I regard the privilege against self-incrimination exercisable in civil proceedings as an archaic and unjustifiable survival from the past” (AT&T Istel Ltd v Tully [1993] AC 45 at 53 per Lord Templeman). D Dolinko, “Is There a Rationale for the Privilege Against Self Incrimination?” (1985) 33 University of California Los Angeles Law Review 1063; A Alschuler, “A Peculiar Privilege in Historical Perspective: The Right to Remain Silent” (1996) 94 Michigan Law Review 2625; R Hemholz et al, The Privilege against Self-incrimination: Its Origins and Development (University of Chicago, 1997). (1993) 178 CLR 477.

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Public interest immunity [8.360] The final category of restriction on the obligation to disclose information is that of public interest immunity. While it may operate in a similar way to the privileges described above, technically public interest immunity is not a privilege as it does not belong to a party. Instead, the principle operates to protect high level government information from disclosure. While it is most often raised by governments it can, however, be claimed by parties or raised by a court of its own motion. A claim that information is protected from disclosure by public interest immunity involves the balancing of competing public interests — the public interest in the effective and fair administration of justice against other public interests such as national security or the effective and fair administration of government. The principle operates so that certain information that would otherwise be relevant to the proceedings will be immune to disclosure as there is an overriding public interest in retaining the confidentiality of that information. Prior to 1978 Australian courts were prepared to leave the resolution of this issue to the government. If the government decided certain information should not be released, the court would accept that decision as binding. The process by which this happened was that the government would issue conclusive certificates stating that disclosure was against the public interest and the court would not question the certificate. However this process was abandoned after the High Court, in Sankey v Whitlam,146 asserted the court’s right to make the decision about whether information should be released. Sankey brought private prosecutions against Prime Minister Gough Whitlam and three of his Ministers over attempts by the Whitlam Government to borrow moneys from overseas. The prosecutor sought discovery and inspection of documents held by the Government and Loan Council over which public interest immunity was claimed. The High Court accepted that there are strong grounds for protecting government documents relating to formulation of government policy at high level but held there was no blanket protection — each case was to be decided on its merits by the court. The High Court ordered disclosure of some documents in their entirety and, after inspecting others, ordered disclosure of only the parts relevant to the case. While the courts have refused to accept any blanket protection of a given class of information, they have made it clear that Cabinet documents on current and controversial matters are of a class that warrants protection from disclosure in all but exceptional circumstances: [T]he disclosure of the deliberations of the body responsible for the creation of state policy at the highest level, whether under the Westminster system or otherwise, is liable to subject the members of that body to criticism of a premature, ill-informed or misdirected nature and to divert the process from its proper course. The mere threat of disclosure is likely to be sufficient to impede those deliberations by muting a free and vigorous exchange of views or by encouraging lengthy discourse engaged in with an eye to subsequent public scrutiny.147

If the matters are old or non-controversial, even Cabinet documents can lose protection from disclosure.148 146 147 148

(1978) 142 CLR 1. Commonwealth v Northern Land Council (1993) 176 CLR 604 at 615. See Adelaide Brighton Cement Ltd v South Australia (1999) 75 SASR 209. [8.360] 213

CHAPTER 9 Court Annexed Alternative Dispute Resolution The “Practice” of Settlement Policy Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Alternative dispute resolution (ADR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 [9.30] Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 [9.70] Court annexed mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 [9.130] Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 [9.150] Neutral evaluation and case appraisal . . . . . . . . . . . . . . . . . . . . . 235 [9.180] A conclusion of questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238 [9.10] [9.20]

INTRODUCTION [9.10] We have dealt with case management and associated issues in Chapter 4, and have seen how the courts, through the various rules of court, strive to manage litigation so as to achieve a just, expeditious, efficient and economical resolution of disputes.1 It might be argued that case management thereby promotes settlement, rather than conventional adjudication, as the primary means of dispute resolution;2 settlement of a dispute certainly appears to satisfy most of the above objects of case management,3 as it is usually a timely and relatively inexpensive means of dispute resolution. On the other hand, it might also be argued that any general trend towards settlement is merely incidental to case management and not

1

2

3

See Court Procedures Act 2004 (ACT) s 5A; Civil Procedure Act 2005 (NSW) s 56(1) and Uniform Civil Procedure Rules 2005 (NSW) r 2.1; Supreme Court Rules (NT) r 1.10(1)(a); Uniform Civil Procedure Rules 1999 (Qld) r 5; Supreme Court Rules 2000 (Tas) r 414A; Supreme Court Civil Rules 2006 (SA) rr 3, 116; Civil Procedure Act 2010 (Vic) ss 1(1)(c), 7(1); and Rules of the Supreme Court 1971 (WA) O 1 rr 4A, 4B. See L Arthur, “Does Case Management Undermine the Rule of Law in the Pursuit of Access to Justice?” (2011) 20 Journal of Judicial Administration 240 at 246; D Bamford, “Litigation Reform 1980-2000: A Radical Change?” in W Prest & S Roach Anleu (eds), Litigation: Past and Present (University of New South Wales Press, 2004) pp 146-170. This is certainly suggested in the Civil Procedure Act 2010 (Vic) ss 47–48. It should also be noted that these case management objectives now arguably represent the overarching purpose of civil procedure itself — see Civil Procedure Act 2010 (Vic) ss 1, 7; and Federal Court of Australia Act 1976 (Cth) s 37M. Also see Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 for the High Court’s view on the importance of case management and its objective of achieving a just, efficient and economical resolution of civil disputes. [9.10] 215

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necessarily the goal of case management per se.4 However, given that one of the primary objects of the various rules of court is “to facilitate and encourage the resolution of civil disputes by agreement between the parties”,5 one may safely conclude that litigation management schemes generally have settlement of disputes as an overarching objective. In any case, Australian courts promote settlement in a number of other direct and explicit ways. It has been evident for some time now that court policy is to promote the settlement of disputes: courts generally hold that it is in the public interest that parties resolve their dispute through settlement rather than litigation.6 Courts consequently strongly encourage and promote settlement of disputes, and it has even been said that it is “the primary aim of any judicial system” to encourage the parties “to dispose of the dispute between them by compromise”.7 The reason issue is taken with the courts’ promotion of settlement is that such a policy assumes that settlement of a dispute is always a ‘good’, whereas, for example, settlement of a dispute may involve one party sacrificing a legitimate claim or defence simply to avoid possible consequences not directly related to the merits of the dispute itself. In promoting such an outcome, the question may be raised as to whether courts fail to live up to the paramount claim of all Australian 4

5

6

7

For instance, as case management regimes are designed to reduce costs and delay, this would naturally be conducive to settlement as the parties are less likely to be wedded to the litigation pathway, by virtue of not having invested enough time and resources to develop a litigation mentality. Supreme Court Civil Rules 2006 (SA) r 3(b). Also see Rules of the Supreme Court 1971 (WA) O 1, r 4B(1)(d). The same point is made in cases: see Shaw v Jarldorn (1999) 76 SASR 28 at 29 per Doyle CJ; Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 262 per Debelle J; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 per Kirby P, Mahoney JA & Samuels AJA; and Leichhardt Municipal Council v Green [2004] NSWCA 341 at [14] per Santow JA. Law Societies also promote settlement, usually through ethical rules that dictate that legal practitioners must inform clients of the “alternatives to fully contested adjudication” see, eg, Australian Solicitors’ Conduct Rules 2015 (SA) r 7.2. Also see Civil Procedure Act 2010 (Vic) ss 13–15 for the establishment of related statutory obligations upon legal practitioners in this respect. See Cutts v Head [1984] Ch 290 at 306 per Oliver LJ, and 315 per Fox LJ; Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 at 1299 per Lord Griffiths; Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 at 354-355 per Rogers CJ; Hillier v Sheather (1995) 36 NSWLR 414 at 420-423; Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 264 per Debelle J; Leichhardt Municipal Council v Green [2004] NSWCA 341 at [14] per Santow JA; Morris v McEwen (2005) 92 SASR 281 at 289 per Besanko J; Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at 440 per Warren CJ, Maxwell P & Harper AJA; South Eastern Sydney Area Health Service v King [2006] NSWCA 2 at [83] per Hunt AJA; and Cth v Gretton [2008] NSWCA 117 at [41] per Beazley JA. Also see Civil Procedure Act 2010 (Vic) s 9(1)(b). Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 at 354-355 per Rogers CJ. The ALRC has commented that litigants “are encouraged, sometimes even pressured, to settle their matters”: see Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000) p 390. This has recently been further emphasised in the federal sphere by the Civil Dispute Resolution Act 2011 (Cth), which places an obligation upon “people [to] take genuine steps to resolve disputes before certain civil proceedings are instituted” (s 3). This legislative obligation echoes an earlier NADRAC recommendation — see NADRAC, The Resolve to Resolve — Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (2009) p 35. Also see Civil Procedure Act 2010 (Vic) s 22 which creates an obligation for each party to a civil dispute to use “reasonable endeavours to resolve a dispute by agreement”.

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legal systems: that they are systems concerned with the administration of justice. Put another way, settlement may be expeditious, efficient and economical, but is it just? This issue will be addressed later in the chapter.

ALTERNATIVE DISPUTE RESOLUTION (ADR) [9.20] The primary means by which the courts explicitly promote settlement of litigation is by encouraging, sometimes to the point of compelling, parties to engage in ADR processes, especially mediation. The courts’ championing of ADR is a relatively recent experience that appears to stem from the assumption that ADR addresses the access to justice issues of delay, complexity and especially cost, often raised with respect to traditional litigation.8 There are many different forms of ADR: mediation, arbitration, facilitation, conciliation, neutral evaluation, case appraisal and negotiation. In fact, any form of dispute resolution that does not involve conventional adjudication of the dispute may be defined as ADR.9 Of course, things are never quite that simple, as ADR may not necessarily be an “alternative” to adjudication if adjudication is not a viable option. There is continued debate about ADR terminology,10 and a concise definition of ADR remains elusive.11 For present purposes, although recognising such definitional complexities, we may nonetheless hold ADR to be any mode of dispute resolution outside conventional adjudication. All the myriad processes of ADR are aimed at resolving a dispute, either indirectly or directly, and data indicates that ADR is very successful in this respect. It has been estimated that over 90% of all civil litigation is resolved without recourse to trial.12 The particular ADR process may be purely facilitative of settlement, it may be advisory, or it may actually determine the dispute (for example, arbitration). ADR processes that are determinative have much in common with traditional adjudication, as they involve a neutral third party determining the dispute in an enforceable (quasi-judicial) fashion, and often incorporate the same laws of evidence, and sometimes even identical procedural 8

9

10

11 12

See Civil Proceedings Act 2011 (Qld) s 37(b); Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427 at [21] per Einstein J. Also see Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000) pp 255, 411; Australian Law Reform Commission, Review of the Federal Civil Justice System (ALRC Discussion Paper No 62, 1999) pp 21-22. See Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000) p 411; J Sternlight, “ADR is Here: Preliminary Reflections on Where it Fits in a System of Justice” (2002-2003) 3 Nevada Law Journal 289 at 289 and NADRAC, Dispute Resolution Terms (2003) p 4. See NADRAC, A Framework for ADR Standards (2001) p 8. For example, it may be more appropriate to label ADR as “appropriate dispute resolution”. This is the phrase utilised in Victoria — see Civil Procedure Act 2010 (Vic) Ch 5. NADRAC believes that the continued use of inconsistent ADR terminology may undermine the future development of ADR — see NADRAC, The Resolve to Resolve — Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (2009) pp 48-50. See S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015) pp 74-75. See S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015) p 876. [9.20] 217

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rules. The main difference between a determinative ADR process and traditional adjudication is that the ADR process is usually established by the parties themselves. For instance, in the case of arbitration the parties often decide upon an appropriate arbitrator, the procedure to be adopted, and the issues the arbitrator is granted power to determine. In a facilitative ADR process, such as mediation, the third party simply assists the parties to settle the dispute themselves. The mediator may help the parties identify the issues actually in dispute, clarify the alternatives to pursuing litigation, develop options with the parties for resolving the dispute, and if agreement is reached, assist in the drafting of any terms of settlement. The mediator has no power to decide the dispute, although if the parties agree, the mediator may provide certain opinions concerning the nature of the dispute. Such opinions might relate to fact or law, but are always purely advisory and non-binding. This is also true of the more recent ADR procedures of neutral evaluation and case appraisal, both of which are more aptly described as advisory, rather than facilitative. In both of these procedures the parties present their arguments to a neutral third party, who applies the relevant law to the disclosed facts, and then makes a non-binding decision on the matter. The parties may then embark upon further negotiation, or litigation, based on that determination. The common aspect of the facilitative and advisory ADR processes is that the third party cannot make a binding decision with respect to the dispute, unless given explicit power to do so by the parties, at which point the process moves into the determinative stream of ADR. The three broad streams of ADR (determinative, facilitative and advisory) do not operate in isolation and parties may, theoretically, move between them as they wish.13 The universal thread in ADR is that of party control over the power that the third party possesses. Of all the ADR processes, the most common, and the most commonly successful, is party to party private negotiation. So, all this talk of third party roles is not really applicable to the vast majority of litigation that is resolved by negotiation. If we were to include those disputes that are resolved by private negotiation prior to litigation, then the importance of the third party role in ADR is further diminished. However, given the nature of this book, and its focus upon litigation already commenced and the procedural issues that are consequently raised, there will be no discussion on the process of negotiation itself.14 For the purposes of providing an overview of ADR we will concentrate on two forms of traditional ADR — that of mediation and arbitration — and the recent court supported innovations of neutral evaluation and case appraisal.

13

14

There also exist other “hybrid processes”, such as MedArb (a mixture of mediation and arbitration): see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 169-173. Much has already been said concerning the various types of negotiating styles (eg, competitive v co-operative); the unequal bargaining power inherent in private negotiation; and the ethical issues that may arise in such confidential and essentially unaccountable transactions. I refer the reader to such works. For example, see N Alexander, J Howieson & K Fox, Negotiation: Strategy, Style, Skills (3rd ed, LexisNexis, 2015).

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Mediation [9.30] In terms of the more established ADR processes, we will first look at mediation. Mediation is the most utilised ADR process outside party to party negotiation.15 Indeed, mediation may be viewed as a more formal continuation of party to party negotiation; in this respect it is simply “facilitated negotiation”.16 The most significant aspect of mediation for our purposes is the level of encouragement the process receives from the Australian courts: mediation is far and away the most popular court annexed ADR process.17 NADRAC (National Alternative Dispute Resolution Advisory Council) has broadly defined the process as follows: Mediation is a process in which the parties to a dispute, with the assistance of a dispute resolution practitioner (the mediator), identify the disputed issues, develop options, consider alternatives and endeavour to reach an agreement. The mediator has no advisory or determinative role in regard to the content of the dispute or the outcome of its resolution, but may advise on or determine the process of mediation whereby resolution is attempted.18

Mediation is an inherently flexible process and may take myriad forms, as the shape of the process is only limited by the parties’ needs and wants. Consequently, a more precise definition is futile.19 Fundamentally, the purpose of mediation is to facilitate settlement of the dispute, or at least certain aspects of the dispute.20 The mediator may have some power within the mediation, but only that granted by the parties. Any resolution reached is achieved by the parties themselves; the mediator only provides assistance in getting the parties to agree.21 In other words, the parties own the mediation process and the agreement achieved, not the mediator. Typically, mediation is initiated when the parties decide that mediation is to be pursued (or in some cases the court decides for them), the parties then appoint an appropriate mediator (or the court does so) and the parties in agreement determine the process of the mediation. [9.40] As stated, the actual process of the mediation may take many forms, but usually it will pass through the following phases or stages:22

15 16 17

18 19 20 21

22

See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 522-525. L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 145. See ALRC, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000) pp 411-413, 515-516; and J Hunter, C Cameron & T Henning, Litigation I: Civil Procedure (7th ed, LexisNexis Butterworths, 2005) p 41. NADRAC, Dispute Resolution Terms (2003) p 5. For a discussion of this definition dilemma see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 12-25. L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 30-32. It should, however, be noted that mediation may serve other functions (Boulle pp 33-34). As Hunter et al suggest: the mediator merely “facilitates communication between the parties with a view to assist them to reach a resolution of their dispute” (J Hunter, C Cameron & T Henning, Litigation I: Civil Procedure (7th ed, LexisNexis Butterworths, 2005) p 42). It should be noted that there also exist a number of conceptual models of mediation which will impact upon what particular process a mediation adopts. Boulle suggests four such [9.40] 219

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1.

The mediator makes an opening statement. This may involve explaining the objectives of mediation; describing the nature of the process; clarifying the roles of the mediator and the parties in the mediation; stating the confidentiality of mediation; proposing conduct codes; and verifying that the parties understand the nature of mediation and have authority to settle the dispute. The mediator may also invite the parties to agree on terms of process;

2.

Such terms of process will usually include each party having an opportunity to put forward their own uninterrupted perspective of the dispute. The mediator will usually invite the parties to do this immediately after the mediator’s opening statement. Each party makes a presentation, highlighting their own interests and positions, and issues that they view as significant. The mediator may then step in again (depending on that particular mediator’s style), and verify, define, summarise and/or clarify each party’s perspective. The purpose of this exercise is to illuminate the areas of agreement between the parties (thereby immediately reducing the issues in dispute) and clearly identify the issues that are actually in dispute;

3.

Once both parties have aired their grievances, and the mediator has clarified the real issues in dispute, the mediator, in consultation with the parties, may suggest an agenda (based on the parties’ identified interests, positions and/or needs) for the mediation, and an order in which the issues for resolution will be discussed;

4.

Based on this agenda, and any process framework devised in the mediation, the mediator and the parties begin to develop, explore, and consider options for resolving each issue in turn. Depending on the mediator’s style, the mediator may suggest options for resolution, or may simply encourage the parties to do so. In essence, each issue on the agenda is the subject of further negotiation. Part of this process may involve the mediator converting the parties’ positions into interests. This stage of the mediation is where the mediator’s particular facilitative and option development skills come into play; and

5.

If agreement between the parties results from the mediation, the mediator may verify and/or clarify that agreement, and if necessary, or desired by the parties, aid in drafting the settlement agreement for execution.23 The mediator may then submit a closing statement and terminate the mediation.

The above is but one example of the stages of mediation.24 As the parties design the mediation, or the mediator determines the process on the basis of the

23 24

models: settlement, facilitative, transformative, and evaluative — see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 43-47. The suggested template in this chapter is probably best described as a facilitative model of mediation. For a discussion of mediation agreements see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 649-659. Nonetheless, many commentators agree that the stages of mediation usually follow a similar path to the one described. For various ideas on the stages of mediation see S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015) pp 91-92; G Tillett

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particular dispute and parties involved, standards will vary, as each party will have different views on the best process. Further, an often overlooked factor is the mediator themselves, as each mediator will be stylistically and ideologically distinct and thus bring contrasting ideas to the mediation process.25 A current issue of debate concerns how far a mediator may go in terms of their role within the mediation.26 Specifically, the question is: must the mediator be exclusively facilitative, or may the mediator adopt an advisory or evaluative role within the mediation? Opinions differ; some say mediation is an essentially facilitative process,27 whereas others feel that it may be necessary and productive for a mediator to provide opinion about the factual or legal content of the dispute if requested.28 Given that the purpose of mediation is settlement of the dispute, and the role of the mediator is to create conditions conducive to that settlement (which, traditionally, is limited to developing an appropriate process for the mediation, or re-expressing a party’s position as an interest for further negotiation), highlighting the dangers of litigation, and thereby adopting an advisory or evaluative role, may well provide the greatest incentive to settlement of the dispute, and so arguably should be an important aspect of the mediator’s role.29 On the other hand, such an evaluative function may not be appropriate for all disputes. [9.50] Perhaps the best approach is to maintain an open outlook, and to determine the mediator’s appropriate role on a case by case basis by reference to the objectives of the mediation process. The object of mediation is to get the parties to agree, and the mediator is there to facilitate this agreement by assisting and encouraging the parties to communicate, negotiate and, eventually, agree,30 but how this is achieved will vary from mediation to mediation, so it is unproductive to rigidly assert a particular model of ‘the mediator’, as certain mediations may demand an interventionist, and thereby unconventional, mediator. For example, although a facilitative approach may be suitable when the parties are equal in terms of resources and power, if there is a marked imbalance in these areas an interventionist mediator that takes more control of the process may be a more

25 26 27 28

29

30

& B French, Resolving Conflict: A Practical Approach (4th ed, Oxford University Press, 2010) pp 140-142; and L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 43-47. See G Tillett & B French, Resolving Conflict: A Practical Approach (4th ed, Oxford University Press, 2010) p 144, who view the mediator as the “key variable” in mediation. For a good discussion of this issue see J Hunter, C Cameron & T Henning, Litigation I: Civil Procedure (7th ed, LexisNexis Butterworths, 2005) pp 42-47. NADRAC, Dispute Resolution Terms (2003) p 9. See D Hensler, “Our Courts, Ourselves: How the Alternative Dispute Resolution Movement Is Re-shaping Our Legal System” (2003-2004) 108 Penn State Law Review 165 at 189. Others feel that mediation should be “transformative” rather than evaluative or facilitative: see R Baruch Bush & J Folger, The Promise of Mediation: Responding to Conflict Through Empowerment and Recognition (Jossey-Bass, 1994); and Hensler at 190-192. For a discussion of the various levels of mediator intervention (from “minimalist” to “directive”) see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 37-42. See H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 146-156. [9.50] 221

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appropriate option. Conversely, if a mediator is too interventionist, then the basic criteria for a mediator, that of impartiality and neutrality,31 is corrupted (either actually, or perceptually). Of course, if the power imbalance is so great as to require a mediator to step off this line of neutrality, then the dispute is probably not appropriate for mediation in the first place. On the other hand, “one could argue that mediators have a role in facilitating just outcomes at the expense of absolute neutrality”.32 There are many issues to consider in determining the appropriate role of a mediator, but what can be said with certainty is that whether a mediator is purely facilitative or actively interventionist, the approach a mediator takes will significantly affect the process. [9.60] Whatever form the mediation takes, the essential criterion is always confidentiality, as mediation would otherwise be futile. Adequate discussion of the various issues within the dispute, and the proper development of options for resolving the dispute, would simply not be feasible if the parties were overly wary of disclosing information. Effective mediation requires confidentiality.33 As information provided during the course of mediation constitutes part of settlement negotiations, the disclosure of evidence obtained during a mediation is prima facie inadmissible, as such information is deemed to be privileged. This is recognised by both courts and the legislature, as disclosures during mediation are viewed as “without prejudice” communications.34 The policy behind this privilege is to promote settlement of a dispute, by allowing negotiations to occur without the dagger of adverse litigation consequences hanging over every disclosure. As the High Court has explained: As a matter of policy the law has long excluded from evidence admissions by words or conduct made by parties in the course of negotiations to settle litigation. The purpose is to enable parties engaged in an attempt to compromise litigation to communicate with one another freely and without the embarrassment which the liability of their communications to be put in evidence subsequently might impose upon them.35

31

32 33 34

35

It should be noted that 'neutrality' is not easily defined: S Douglas, “Constructions of Neutrality in Mediation” (2012) 23 Australasian Dispute Resolution Journal 80 at 81-86. Sourdin makes the point that mediator neutrality and impartiality is inextricably linked to issues associated with the parties’ power inequality — see T Sourdin, Alternative Dispute Resolution (4th ed, Lawbook Co, 2012) p 84. S Douglas, “Constructions of Neutrality in Mediation” (2012) 23 Australasian Dispute Resolution Journal 80 at 85. See H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) p 178. Without going into unnecessary detail, “without prejudice” communications are those communications (including both written and oral correspondence) made during the course of settlement negotiations. The main case on point is Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285, especially at 291-294 per Dixon CJ, Webb, Kitto & Taylor JJ. Also see Austotel Management Pty Ltd v Jamieson (1995) 57 FCR 411 at 416; Biovision v CGU Insurance Ltd [2010] VSC 589 at [32]-[41]; and Betfair Pty Ltd v Racing NSW (2009) 260 ALR 538 at 562-565. This settlement privilege is also guaranteed by legislation: see, eg, Evidence Act 1929 (SA) s 67C; and Evidence Act 1995 (Cth) s 131. Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291 per Dixon CJ, Webb, Kitto & Taylor JJ.

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However, before we take absolute confidentiality for granted in mediation, it must be understood that there exist limitations to this confidentiality.36 A major issue at present concerns the admissibility of evidence, the existence of which was only discovered at mediation. The question is: if all discussions within mediation are privileged, and thereby inadmissible, what happens if information divulged at mediation leads to a train of inquiry that results in further evidence for a party? Such evidence is not evidence of the actual discussions within mediation, but without utilising the information contained within those discussions the further evidence would not have been discovered. It is arguable that logic would suggest that, given the means by which this information is obtained, courts should hold the subsequent evidence to be inadmissible. Courts have not been supportive of this interpretation of the requirement of confidentiality. Courts have consistently held that although a party is prevented from adducing evidence of anything said or done during the mediation, that party may nonetheless adduce evidence of the identical information through other means. Provided no reference is made to the communications made within mediation, independent and direct evidence of the information contained within those communications may be admissible.37 In other words, the courts have adopted a distinction between the communications themselves, and the information contained within them. This is the case, despite the fact that the party adducing such information, although proven by reference to evidence obtained outside the confines of the mediation, would have been unaware of the existence of that information prior to its disclosure in the supposedly confidential confines of mediation. At first glance, this seems a strange state of affairs. On the other hand, there is good reason not to have a guarantee of absolute confidentiality in mediation as such a wide exclusionary rule could be open to abuse. For instance, it might be utilised by an unethical party to “sterilise” important information.38 Further, the somewhat frail confidentiality of settlement privilege may be buttressed by other rules of evidence that prescribe limits to what evidence discovered indirectly through mediation may be admissible. For example, if a document has been prepared by a party’s legal representative for the purposes of the mediation, then it may be inadmissible in any case by virtue of the application of legal professional privilege.39 At the end of the day, the “extent of confidentiality in relation to all aspects of mediation involves balancing competing interests and policies”:40 there is the public interest in promoting settlement versus 36 37

38

39

40

For a discussion of various forms of such limitations see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 691-704. See AWA Ltd v Daniels (1992) 7 ACSR 463 at 468; Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291 per Dixon CJ, Webb, Kitto & Taylor JJ; Lukies v Ripley (No 2) (1994) 35 NSWLR 283 at 288-289 per Young J; and Williamson v Schmidt [1998] 2 Qd R 317 at 332-336 per Lee J. See AWA Ltd v Daniels (1992) 7 ACSR 463 at 468. Also see B Mayer, Beyond Neutrality: Confronting the Crisis in Conflict Resolution (Jossey-Bass, 2004), who discusses other means by which mediation may be misused (pp 95-99). The main authority on legal professional privilege is Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49. The crucial question is probably whether privilege is waived in the course of mediations, especially in terms of an “imputed waiver”. On the issue of waiving legal professional privilege — see Mann v Carnell (1999) 201 CLR 1. L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 714. [9.60] 223

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the public interest in obtaining all information necessary for the proper hearing of a matter in the interests of justice. It is a matter within the courts’ discretion, and ultimately will be decided on a case by case basis. Of course, the various public policy reasons for imposing limits on mediation confidentiality are probably lost on the particular litigant, and such “users of mediation services are likely to have higher expectations as to the confidentiality of the process than is legally or practically realistic”.41 This raises the question as to whether parties would be so willing to mediate, and provide frank disclosure, if the state of the law in this respect was known. In giving advice to the client, does the legal practitioner mislead the client if the practitioner informs the client that all discussions within the mediation will be confidential? Does the mediator likewise mislead the parties when he or she states at the outset of the mediation that all discussions are confidential? These issues that stem from limited confidentiality continue to plague the mediation process, and require further legislative and/or judicial clarification.

Court annexed mediation [9.70] It would be trite to observe that Australian courts possess the power to make a broad range of referral orders. This power extends to referring litigation to alternative resolution mechanisms attached to the court. For example, courts may order that a matter be referred to an assessor,42 and/or a special referee or expert,43 for consideration and determination of certain issues. This has not seemed to create much angst among court users, the legal profession, or academics. Nor should it, as such processes are merely intended to aid the court, and the parties, in defining the issues in dispute. A problem is encountered when the court makes orders for mediation, as mediation is (theoretically) based on the voluntary agreement of the parties, yet all jurisdictions grant the court power to refer parties to mediation without the parties’ consent, or indeed in the face of opposition from the parties.44 In essence, it is a regime of compelled or mandatory mediation. This raises a number of issues that will be discussed in due course. Court compelled mediation shares the confidentiality requirement of all mediation; mediations are viewed as privileged settlement communications, and

41 42 43

44

L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 714-715. See, eg, Supreme Court Act 1935 (SA) s 71; Supreme Court Civil Procedure Act 1932 (Tas) s 37; and Supreme Court Act 1935 (WA) s 56. See Court Procedures Rules 2006 (ACT) r 1531; Federal Court Rules 2011 (Cth) r 28.61; Uniform Civil Procedure Rules 2005 (NSW) r 20.14; Uniform Civil Procedure Rules 1999 (Qld) r 501; Supreme Court Act 1935 (SA) s 67; Supreme Court Rules 2000 (Tas) rr 574 – 582; and Supreme Court Act 1935 (WA) ss 50 – 51. See Court Procedures Rules 2006 (ACT) r 1179; Federal Court of Australia Act 1976 (Cth) s 53A(1A); Civil Procedure Act 2005 (NSW) s 26(1); Supreme Court Rules (NT) O 48.13; Civil Proceedings Act 2011 (Qld) s 43 and Uniform Civil Procedure Rules 1999 (Qld) rr 319 – 320; Civil Procedure Act 2010 (Vic) s 66(2); Supreme Court Act 1935 (SA) s 65(1) and Supreme Court Civil Rules 2006 (SA) r 220(1); Alternative Dispute Resolution Act 2001 (Tas) s 5(1); and Supreme Court Act 1935 (WA) s 167(1)(q). This is in line with the ALRC suggestion that courts retain this power to order parties into mediation in the interests of promoting settlement: see Australian Law Reform Commission, Review of the Federal Civil Justice System (ALRC Discussion Paper No 62, 1999) p 249.

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thereby prima facie inadmissible.45 The court annexed form of mediation also supports the conventional notion of what constitutes mediation, and what is the appropriate role of the mediator. The courts view mediation as “a structured negotiation process in which the mediator, as a neutral and independent party, assists the parties to a dispute to achieve their own resolution of the dispute”.46 The distinctions between court compelled and voluntary mediation are encountered in the appointment of the mediator, and the determination of the process of mediation. The courts have the power to appoint a mediator,47 and that mediator,48 or the court,49 has the power to determine the mediation process. Presumably such a determination would occur with consultation between the parties, but the rules themselves make scant reference to the need for such consultation. Yet, the major theme of mediation, regardless of the particular form it takes, is that the mediation is owned by the parties. This highlights the paramount criticism of court compelled mediation: that any compulsion with respect to mediation results in a fundamental contradiction.50 This criticism may be expressed as the question: if the basic condition of mediation is that it is a voluntary process, can mediation function effectively when the parties are compelled to participate? Mandatory mediation also raises issues of lack of empowerment and self-determination, when the existence of such factors are often touted as some of the benefits of mediation.51 It may be argued that compelled mediation is not necessarily a problem in this respect if the other aspects of the mediation, such as choice of mediator and agreement on process, remain voluntary. But what if the court dictates these criteria? Can it really be described as mediation in such cases? [9.80] This issue of mandatory mediation has received much attention.52 Initially, court annexed ADR, including mediation, was only ordered at the request of the 45

See Civil Procedures Act 2004 (ACT) s 52B; Civil Procedure Act 2005 (NSW) s 30; Supreme Court Rules (NT) O 48.13(8); Supreme Court Act 1935 (SA) s 65(6); Alternative Dispute Resolution Act 2001 (Tas) s 10; Civil Procedure Act 2010 (Vic) s 67; Supreme Court Act 1935 (WA) s 71.

46

Court Procedures Rules 2006 (ACT) r 1176(1). NSW has an identical definition: see Civil Procedure Act 2005 (NSW) s 25. Similar definitions are found in other jurisdictions: see, eg, Civil Proceedings Act 2011 (Qld) s 40; Supreme Court Civil Rules 2006 (SA) r 4; Alternative Dispute Resolution Act 2001 (Tas) s 3(2). See, eg, Court Procedures Rules 2006 (ACT) r 1177; Civil Procedure Act 2005 (NSW) s 26(2). See, eg, Civil Procedure Act 2005 (NSW) s 32; and Supreme Court Rules 2000 (Tas) r 519(2). See, eg, Federal Court Rules 2011 (Cth) r 28.22; Uniform Civil Procedure Rules 2005 (NSW) r 20.2; and Supreme Court Rules 2000 (Tas) r 519(3). This was commented upon by the ALRC: see Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000) pp 515-516. This issue is not necessarily encountered in other court appointments, such as assessors, expert referees, and receivers. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 82-86. See R Ingleby, “Court Sponsored Mediation: The Case Against Mandatory Participation” (1993) 56 Modern Law Review 441; H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 235-236, 270-275; J Wood, “Federal Court-Annexed Mediation Seventeen Years On” (2004) 14 Journal of Judicial Administration 89; J Hunter, C Cameron & T Henning, Litigation I: Civil Procedure (7th ed, LexisNexis Butterworths, 2005) pp 48-56; B Tronson, “Mediation Orders: Do the Arguments Against Them Make Sense?”

47 48 49 50

51 52

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parties,53 but the courts policy of promoting settlement resulted in a trend towards the increased “institutionalisation of mediation”,54 which, in turn, has demanded that the power to refer a matter to mediation be exercised by the courts at their own discretion.55 It would appear that the courts see no serious problem with compulsory referral to mediation, and in fact view mandatory mediation as both valuable and appropriate.56 It is court policy to prefer settlement to trial, and this has resulted in a marked growth and acceptance of mandatory mediation. Provided the court sees a chance of settlement, party opposition to mediation appears to be little disincentive to make the referral order.57 The focus on mediation has largely been “driven by the judiciary”,58 and there now exists a “clear judicial preference in favour” of compulsory mediation.59 The judiciary get over the ideological hurdle of forcing a party into an essentially voluntary process by focusing on the practicalities; namely, that a reluctant party may find the mediation constructive once they are compelled to engage in it.60 This is borne out by some surveys.61 Slightly ludicrously, some courts have even attempted to remove the reluctant party issue by simply demanding that they not be reluctant: some court rules dictate that parties to mediation have a duty to take part “genuinely and constructively”,62 and “to participate, in good faith”,63 but also, presumably, to withdraw at any time.64 This last point is the point to remember, so the judiciary say, as the compulsion relates

53 54 55 56

57 58 59 60

61

62 63 64

(2006) 25 Civil Justice Quarterly 412; M Dewdney, “The Partial Loss of Voluntariness and Confidentiality in Mediation” (2009) 20 Australasian Dispute Resolution Journal 17; K Mahoney, “Mandatory mediation: A positive development in most cases” (2014) 25 Australasian Dispute Resolution Journal 120. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 566-567. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 395-396. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 568-569. See Hopeshore Pty Ltd v Melroad Equipment Pty Ltd (2004) 212 ALR 66 at 76 per Branson J; ACCC v Lux Pty Ltd [2001] FCA 600 at [25]-[32]; ASIC v Rich [2005] NSWSC 489; and Lidoframe v NSW [2006] 1262 at [7]. After reviewing the available case law Mack came to a similar conclusion: see K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) pp 69-75. T Sourdin, Alternative Dispute Resolution (4th ed, Lawbook Co, 2012) p 297. J Hunter, C Cameron & T Henning, Litigation I: Civil Procedure (7th ed, LexisNexis Butterworths, 2005) p 55. See ACCC v Cadbury Schweppes Pty Ltd (2004) 61 IPR 270; Higgins v Higgins [2002] NSWSC 455. In particular see Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427 at [40] where Einstein J talks of “reluctant starters, but who become willing participants”. See also NADRAC, The Resolve to Resolve — Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (2009) pp 24-25. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 6768; and B Mayer, Beyond Neutrality: Confronting the Crisis in Conflict Resolution (Jossey-Bass, 2004) pp 111-113. Court Procedures Rules 2006 (ACT) r 1180. See also Uniform Civil Procedure Rules 1999 (Qld) r 325. Civil Procedure Act 2005 (NSW) s 27. See also Civil Procedure Act 2010 (Vic) s 22; and Uniform Civil Procedure Rules 1999 (Qld) r 322. See Alternative Dispute Resolution Act 2001 (Tas) s 6.

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to attending the mediation, and not settling the dispute.65 That may be true, and the parties may terminate the mediation, and then pursue further litigation without penalty, but does this not suggest that the process may be futile and a waste of resources? Some argue that it depends on the reason for the opposition to mediation. For example, the disinclination to mediate may stem from litigants not wanting to be seen to crave mediation, as this may be viewed as a sign of weakness by the other side in the dispute.66 However, what if this is not the case, and a party genuinely does not wish to mediate its dispute? The courts seem to be saying ‘too bad’, and point to the fact that the parties retain the right to continue with litigation after the mediation. Sadly, this ignores the financial realities of many litigants, who may only possess the resources to pursue one method of dispute resolution, and not the two that may be forced upon them. In such a case, compelled mediation may serve to effectively deny a party their right to trial.67 This is a serious injustice. [9.90] Of course, this situation will not apply to all litigants, and this broader outlook leads to perhaps the best defence of mandatory mediation, which focuses upon the benefits to society at large, and future litigants in general, rather than any negative effect on particular present litigants. The argument is essentially that it would be a good thing if more people wanted to mediate their dispute, rather than litigate, yet private mediation of disputes is rare.68 There appears to be inherent resistance from litigants to utilise mediation,69 and “without some degree of compulsion, it appears that few will choose mediation”.70 The courts use of mandatory mediation, although raising issues in the short term with respect to a particular litigant’s interests, may in the long term lead to greater public, and legal profession, awareness, understanding and acceptance of mediation, such that it no longer needs to be mandatory. That may be so, but what about the current litigant forced into mediation? Are the supposed long term benefits of mandatory mediation worth the risk of real short term injustice? It is worth considering, before answering this question, whether any injustice really exists, or at least exists to the level that those opposed to mandatory mediation might suggest. Clearly, in the example of the impoverished litigant, who can only afford ‘one stab at it’ — ‘it’ being conflict resolution — forced mediation may serve to deny that litigant their right to trial, but in other cases, where the party is merely reluctant, and in a position to continue the litigation after the mediation, what injustice is actually perpetuated upon them? 65 66 67 68 69

70

See Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427 at [24] per Einstein J. This point was made in Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427 at [40] per Einstein J. See H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) p 273. See H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) p 258. See B Mayer, Beyond Neutrality: Confronting the Crisis in Conflict Resolution (Jossey-Bass, 2004) pp 3-40, who makes the point that the lack of public support for ADR constitutes something of a crisis. K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 4. Also see B Mayer, Beyond Neutrality: Confronting the Crisis in Conflict Resolution (Jossey-Bass, 2004) pp 56-57; and L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 66. [9.90] 227

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Perhaps, at the end of the day, only a waste of their time and resources, and perhaps not even that. The available research suggests that mandatory mediation does not seem to have a marked impact upon the success of the mediation,71 or indeed upon the parties’ satisfaction with the mediation.72 As Mack has concluded: The empirical research does not support the conclusion that voluntary participation is essential. Parties who have been compelled to participate in ADR may still achieve outcomes they regard as satisfactory through a process they find fair. The empirical literature does not itself resolve the questions of principle or legitimacy. This is a policy decision.73

So it may not be a waste of resources to force a litigant into mediation. As Mack concedes, the lack of free will in choosing mediation may impact upon perceptions of fairness and legitimacy,74 but there seems to be an overall party satisfaction with the process once initiated. Another point, made by Boulle, is that the supposed freedom of choice inherent in ’voluntary’ mediation may exist more in theory than in practice in any case.75 [9.100] The other matter to bear in mind in assessing the worth of compulsory mediation is that mediation is a non-determinative ADR process. This is the point the courts have stressed; a party does not risk nor lose anything by mediating the dispute. This may or may not be true in a facilitative mediation, but it is certainly a questionable assumption if the mediator prefers an interventionist or advisory role, and thereby controls not only the process of the mediation, but also the content of the dispute. Such a problem is exaggerated when the mediator is appointed by the court, as court appointed mediators tend to be court registrars or other judicial officers, and therefore parties may perceive a lack of neutrality and impartiality, such that they may feel the process is no longer owned by them.76 There are additional disadvantages to mediation that place doubt on its appropriateness for just dispute resolution. For example, there exists a risk inherent within mediation that any power imbalance between the parties will not be adequately addressed,77 or indeed accentuated.78 In essence, in embarking

71

72 73 74 75 76

77

78

Mack holds that the empirical research is “contradictory” on whether or not compulsory referral to mediation has an adverse impact on the success of the mediation: K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 47. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 4. K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 54. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 51. He states that as “a matter of practical reality mediation is not always a voluntary process”: L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 63-69. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 76-77. For a discussion of the considerations relevant to the judge being the mediator see The Duke Group Ltd (in liq) v Alamain Investments Ltd (2003) 229 LSJS 166. For a discussion of this issue see H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 160-163; L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 196-205; G Tillett & B French, Resolving Conflict: A Practical Approach (4th ed, Oxford University Press, 2010) pp 92-93, 114-115; and S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015) pp 111-113. See OM Fiss, “Against Settlement” (1984) 93 Yale Law Journal 1073 at 1076-1077 for a discussion of the ways in which this power imbalance may manifest.

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upon mediation, parties “may lose some of the safeguards under the formal justice system”.79 In particular, as mediation is party based and does not necessarily adopt any objective standards, there may be grave injustice visited upon the weaker party.80 Indeed, NADRAC has suggested that for a mediation to produce a just outcome there must be “rough parity of power between the parties”.81 Of course, the other question to ask in studying this criticism is whether mediation is actually any different to conventional adjudication in this respect. Does not traditional adjudication also run the same risk of legitimising power imbalances?82 Perhaps, but Fiss makes the point that at least the judge can employ measures (such as the application of promulgated rules of evidence and rules of procedure) designed to reduce the impact of party resource inequality.83 For Fiss, this is the “critical difference”84 between adjudication and settlement: even if the judge is unable to rectify the disparity of party power, he or she at least strives to do so, whereas settlement negotiations, including mediation, accept the inequalities as part of the process of settlement. This may be a meritorious criticism in the case of a purely facilitative mediator, but a more interventionist mediator, using various processes within the mediation, may be just as likely or unlikely as a judge to succeed in reducing any party inequality.85 Mediation nonetheless lacks the reference to the objective standards of court, which may alleviate inequalities by their mere existence, irrespective of the judge’s ability to otherwise reduce party inequality. [9.110] Tillett and French make the point that “[p]ower imbalance is an almost inevitable factor in conflict”86 and consequently any conflict resolution process that fails to address that imbalance is unlikely to be effective.87 It is arguable that mediation tends to leave party power imbalances intact, rather than

79 80

NADRAC, Issues of Fairness and Justice in ADR (1997) pp 16-17. See G Tillett & B French, Resolving Conflict: A Practical Approach (4th ed, Oxford University Press, 2010) p 142; and NADRAC, Issues of Fairness and Justice in ADR (1997) pp 16-17.

81

See NADRAC, Issues of Fairness and Justice in ADR (1997) p 28. Also see OM Fiss, “Against Settlement” (1984) 93 Yale Law Journal 1073 at 1076; and G Tillett & B French, Resolving Conflict: A Practical Approach (4th ed, Oxford University Press, 2010) p 92. For a discussion of the issues to consider in determining whether mediation is appropriate to a particular dispute see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 314-332. See C Menkel-Meadow, “Whose Dispute is it Anyway? A Philosophical and Democratic Defense of Settlement (In Some Cases)” (1995) 83 Georgetown Law Journal 2663 at 2687-2691. See OM Fiss, “Against Settlement” (1984) 93 Yale Law Journal 1073 at 1077-1078. See OM Fiss, “Against Settlement” (1984) 93 Yale Law Journal 1073 at 1077-1078. See C Menkel-Meadow, “Whose Dispute is it Anyway? A Philosophical and Democratic Defense of Settlement (In Some Cases)” (1995) 83 Georgetown Law Journal 2663 at 2687-2688. G Tillett & B French, Resolving Conflict: A Practical Approach (4th ed, Oxford University Press, 2010) p 82. G Tillett & B French, Resolving Conflict: A Practical Approach (4th ed, Oxford University Press, 2010) pp 83, 92.

82

83 84 85

86 87

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“subordinated to the higher norms of social justice”.88 Consequently, court annexed mediation has been referred to as the privatisation of justice,89 or second class justice.90 Party power imbalance is a real problem for mediation, and one that the courts have yet to adequately address, as mediation is promoted by the courts predominantly on the basis that it serves the goals of settlement and reduced cost, which makes the court’s assessment of its mediation service “less sensitive to other justice dimensions”.91 However, opposition to mandatory mediation may ultimately be futile. It is quite clear that the courts will continue to refer disputes to mediation, and in increasing numbers.92 This institutionalisation of mediation is, of course, a slightly surreal phenomenon given that ADR was “born of resistance and opposition to the formal justice system”, yet it “has been extensively integrated and co-opted into that system”.93 We have highlighted some problems inherent within this system, but there are also advantages to court compelled mediation. In favour of court annexed mediation (including compulsory mediation) is that court connected mediation is more regulated than private mediation.94 This may make court annexed mediation more efficient, less costly, and timely.95 Regulation also creates consistency, certainty and accountability96 (although at the cost of some degree of flexibility) — all positive attributes. In addition, parties may find it difficult to determine whether a dispute is appropriate for mediation, so the court deciding for them may constitute a positive for some litigants.97 Finally, within court annexed mediation there can be a more effective evaluation of the service.98 These last two points raise two important questions: 1. what should be the referral criteria for a dispute?; and 2.

how do you evaluate a mediation?

As to the first question, Mack provides a comprehensive study of the issue, canvassing possible referral criteria99 and suggesting that perhaps the court does 88

89 90

See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 210. Also see H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 65-67. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 207-209. See M Frey, “Does ADR Offer Second Class Justice?” (2000) 36 Tulsa Law Review 727.

91

L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 191.

92 93

See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 9. H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) p 8. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 67-69, 572. This regulation may take myriad forms — for example, at the conclusion of a court annexed mediation some jurisdictions require certificates to be filed – see, eg, Civil Proceedings Act 2011 (Qld) s 49(1). See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 67-68. For example, a party may apply for a court order to give effect to any agreement reached at an appropriately certified court annexed mediation – see Civil Proceedings Act 2011 (Qld) s 50. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 68. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 68. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) pp 55-68. Also see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 510-555, 578-595.

94

95 96

97 98 99

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not possess the necessary skill to assess such criteria.100 Certainly, the legislation and/or rules that provide the court with the power to refer matters to mediation do not provide any useful guidance in this respect.101 However, the final conclusion reached by Mack is that it is almost impossible to determine what are appropriate referral criteria,102 especially in terms of establishing specific criteria indicative of whether a dispute is likely to have mediation success.103 In terms of evaluating a mediation, similar issues of ambiguity are encountered. It is notoriously difficult to evaluate ADR processes in terms of success.104 Mediation, by nature, is an inherently flexible process, so comparative evaluation with trial seems impossible, as in a trial the court operates according to set standards (for example, rules of evidence, procedure, and substantive legal principles), so a court may be assessed according to how close it operates to these ideals. The same cannot be said for mediation, however it may not be necessary to evaluate mediation by reference to adjudication. [9.120] Unfortunately, even if mediation is to be evaluated in isolation, there remains the problem of confidentiality: how do you properly evaluate an essentially confidential process? Even if parties are willing to remove this protection of confidentiality for the purposes of court assessment of its service, another obstacle is encountered in determining what are to be the indicators of an effective mediation? It would seem to depend on what one defines as the goals for mediation.105 Is it settlement effectiveness, party satisfaction with process, parties’ ability to present their own narrative, efficiency (time and resources), empowerment, durability of any agreement, maintaining an ongoing relationship between the parties, and/or achieving just outcomes?106 With the exception of settlement effectiveness, such indicators are difficult to quantify.107 If mediation is evaluated purely by reference to settlement rates, then it is quite successful as mediation has high settlement rates,108 and once a matter is referred

100

See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 4.

101

See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 578; and K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) pp 71-81. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 8. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) pp 89-90. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) pp 15-24; S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015) p 119; NADRAC, The Resolve to Resolve — Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (2009), pp 80-88; and H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) p 23. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) pp 29-32. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) pp 29-32. This is a real problem for court annexed mandatory mediation because some level of sufficient evaluation is absolutely essential for a government service, which is, in effect, what mandatory mediation becomes: see J Senger, Federal Dispute Resolution: Using ADR with the United States Government (Jossey-Bass, 2004) pp 225-260. Boulle makes the point that perhaps the only certain quantitative measure of mediation effectiveness is settlement rates — see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 531.

102 103 104

105 106 107

108

[9.120] 231

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to mediation it will usually settle at mediation or shortly thereafter.109 One may therefore say that mediation sits very nicely within current court policy, as referring a dispute to mediation clearly promotes settlement of that dispute. The question remains, however, whether this settlement should be so encouraged. This will be dealt with later in the chapter. All these points for and against mandatory mediation, coupled with the practical reality that it is here and here to stay, lead one to conclude that, overall, it is probably not whether the mediation is mandatory that we should focus on, but whether the other aspects of the mediation make up for the initial problems of compulsion, as the “quality of mandatory mediation programs is one of the greatest importance in ameliorating many of the possible problems”.110

Arbitration [9.130] As stated earlier, if one defines ADR as simply any form of dispute resolution outside the traditional litigation sphere, then arbitration qualifies as a form of ADR. However, arbitration differs from the other ADR processes discussed in a fundamental way: the arbitrator’s decision is binding. NADRAC defines arbitration as: Arbitration is a process in which the parties to a dispute present arguments and evidence to a dispute resolution practitioner (the arbitrator) who makes a determination.111

Arbitration is thus a quasi-judicial process: it is adversarial in nature and operates in a very similar manner to a court, as arguments are presented from each side, the arbitrator considers such submissions, and then makes a binding decision on the basis of those submissions. This is the essential feature of arbitration: that it is determinative. However, it differs from judicial adjudication as arbitration is far more flexible in process, as there may be no need for extensive pleadings, less discovery is ordered or necessary, there is less strict compliance with rules of evidence, and the arbitrator may act in a more inquisitorial manner.112 It is these considerations that make arbitration especially suitable for certain commercial disputes. Accordingly, many aspects of arbitration are governed by particular industry standards and/or the uniform commercial arbitration legislation

109

110 111 112

See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 532. However, it should also be noted that settlement rates appear to differ substantially depending upon whether the data collected relates to completed mediations or just matters referred to mediation — R Buth, “Limits to the Quantitative Data on Courtconnected Mediation in Federal Courts of Australia” (2009) 20 Australasian Dispute Resolution Journal 229 at 232-233. H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) p 275. NADRAC, Dispute Resolution Terms (2003) p 4. See J Hunter, C Cameron & T Henning, Litigation I: Civil Procedure (7th ed, LexisNexis Butterworths, 2005) p 60; and H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 251-254.

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operating in all jurisdictions.113 It is beyond the scope of this present chapter to highlight all the issues with respect to arbitration.114 The determinative nature of arbitration raises the question as to whether arbitration is really a form of ADR?115 The focus of ADR is settlement yet arbitration resolves a dispute — not by promoting settlement but rather by determining the dispute for all parties. So, how is this different from traditional litigation? The answer is not really different at all, except that there is less opportunity for appeal from an arbitrator’s award than a court decision: hardly a comforting disparity. The main distinction between adjudication and arbitration is that, at least in theory, the parties must agree on arbitration, choose an arbitrator and decide on aspects of the arbitration process itself. Of course, in practice the later two may not occur (for example, due to conventions established within particular industries, certain procedures may become the accepted norm, and the parties may not wish to appoint the arbitrator themselves) but the parties must always agree on arbitration. [9.140] Arbitration is often chosen by the parties prior to a dispute. It is common for parties to enter into a contract, or a related “arbitration agreement”,116 that stipulates that any dispute will be resolved by arbitration. Such a document will usually also outline the particular arbitration process. The validity of an arbitration agreement will be governed by both case law and legislation. Generally speaking, a fundamental requirement of such an agreement, in order to make it binding on the parties, is that the parties agree upon arbitration to the exclusion of all other methods of dispute resolution, including traditional litigation.117 In this way, parties effectively contract to deny themselves litigation rights under certain circumstances.

113

114

115 116 117

See Commercial Arbitration Act 2017 (ACT); Commercial Arbitration Act 2010 (NSW); Commercial Arbitration (National Uniform Legislation) Act 2011 (NT); Commercial Arbitration Act 2013 (Qld); Commercial Arbitration Act 2011 (SA); Commercial Arbitration Act 2011 (Tas); Commercial Arbitration Act 2011 (Vic); and Commercial Arbitration Act 2012 (WA). Note: the above Acts are practically identical, so a reference to a section in one Act may be read as a reference to the same numbered and worded section in all the other Acts. Note that some commentators suggest that court annexed arbitration should be clearly distinguished from arbitration under the Commercial Arbitration Acts: see H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) p 252. I refer the reader to other works in this respect: G Tillett & B French, Resolving Conflict: A Practical Approach (4th ed, Oxford University Press, 2010) pp 159-171; S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015) pp 120-126; and M Barry & N Wailes, “Contrasting Systems? 100 Years of Arbitration in Australia and New Zealand” (2004) 46 Journal of Industrial Relations 430. See H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 297-298. An arbitration agreement is simply an agreement in writing to refer certain disputes to arbitration: see Commercial Arbitration Act 2012 (WA) s 7. See, eg, Commercial Arbitration Act 2012 (WA) s 7(1). For a discussion of arbitration agreements, and arbitration generally see the High Court case of PMT Partners Pty Ltd (In Liq) v Australian National Parks & Wildlife Service (1995) 184 CLR 301. [9.140] 233

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In all jurisdictions power is granted to the court to order parties to a dispute into arbitration.118 The conduct of the arbitration may be the same as that of the court from which the order came,119 or it may be different according to the arbitrator’s determination of the needs of the arbitration,120 the parties’ agreement on arbitration procedure,121 or the court’s order in that respect,122 provided basic rights to natural justice and fairness are upheld.123 Generally speaking, arbitration is not bound by the rules of evidence124 but must be conducted according to law unless the parties agree,125 and, in any case, “[t]he parties must be treated with equality and each party must be given a reasonable opportunity of presenting the party’s case”.126 The award of the arbitrator is final and binding on the parties,127 and is usually either considered to be a judgment of the court,128 or can be converted to a judgment with relative ease.129 In the Federal Court, Tasmania and Victoria the court will not make an arbitration referral order without the agreement of the parties,130 whereas in other jurisdictions such agreement, although perhaps sought by the court, is not necessary to make the order.131 Such court compelled arbitration is a dangerous beast. It has all the pitfalls discussed with respect to compelled mediation, and none of the safeguards, as mediation is non-binding even if the mediator is interventionist, whereas arbitration is not concerned with settlement — arbitration determines the dispute. This is an especially perilous situation when one considers that there is very little appellate review of the process,132 yet the process is fundamentally adjudicatory in both nature and practice.

118

See Court Procedures Rules 2006 (ACT) rr 3250 – 3262; Federal Court of Australia Act 1976 (Cth) s 53A and Federal Court Rules 2011 (Cth) r 28.02; Civil Procedure Act 2005 (NSW) s 38; Supreme Court Act 1935 (SA) s 66 and Supreme Court Civil Rules 2006 (SA) r 221(1); Supreme Court Civil Procedure Act 1932 (Tas) s 37A(1); Civil Procedure Act 2010 (Vic) s 66 and Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 50.08; and Supreme Court Act 1935 (WA) s 51.

119 120

See Civil Procedure Act 2005 (NSW) s 51. See Commercial Arbitration Act 2012 (WA) s 19(2) – (4); Civil Procedure Act 2005 (NSW) s 49; and Commercial Arbitration Act 2013 (Qld) s 19.

121 122 123 124 125 126 127 128 129 130

See Commercial Arbitration Act 2013 (Qld) s 19(1). See Supreme Court Civil Rules 2006 (SA) r 222(1); and Federal Court Rules 2011 (Cth) r 28.11. See Commercial Arbitration Act 2012 (WA) s 18; and Civil Procedure Act 2005 (NSW) s 48. See Commercial Arbitration Act 2011 (Vic) s 24(1). See Commercial Arbitration Act 2012 (WA) s 28. Commercial Arbitration Act 2013 (Qld) s 18. See Civil Procedure Act 2005 (NSW) s 40; and Commercial Arbitration Act 2012 (WA) s 35(1). See Civil Procedure Act 2005 (NSW) s 40. See Supreme Court Act 1935 (SA) s 66(4). See Federal Court of Australia Act 1976 (Cth) s 53A(1A); Supreme Court Civil Procedure Act 1932 (Tas) s 37A(1); and Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 50.08. See, eg, Court Procedures Rules 2006 (ACT) r 3919(2) and Supreme Court Civil Rules 2006 (SA) r 221(1). There is only a limited right to appeal an arbitrator’s decision — see Commercial Arbitration Act 2011 (SA) s 34A.

131 132

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Neutral evaluation and case appraisal [9.150] These recent developments that borrow heavily from some civil law systems may be described as neither facilitative nor determinative, but rather advisory forms of ADR. These processes sit between mediation and arbitration,133 taking the advantages of both, while leaving behind many of the disadvantages. In these processes a similar system to arbitration operates in the sense that the parties present arguments in a court setting, but with more relaxed rules of evidence. The advantage over arbitration is that the decision of the case appraiser or neutral evaluator is non-binding, which allows the parties to continue to pursue their rights in litigation. The decision thus becomes simply another piece of information for the parties to consider in their decision whether to pursue further litigation, or seek settlement of the dispute. In this sense the decision is purely advisory. Unlike facilitative ADR processes, such as mediation, the third party actually provides an assessment of each party’s case.134 Such an assessment would clearly be facilitative of settlement because it would serve to highlight weaknesses, and thereby unrealistic claims or defences, for each party.135 If claims and defences become more reasonable as a consequence, then settlement becomes more likely. In essence, the process is likely to make unreasonable parties reasonable; thereby encouraging reasonable settlement offers, and discouraging unreasonable rejection of such offers. The benefits of neutral evaluation appear to be many, however, although some jurisdictions have adopted a formal process for neutral evaluation, it continues to be rarely utilised.136 The main jurisdictions that advocate neutral evaluation are the Australian Capital Territory and Tasmania.137 In both jurisdictions the court may, by order (with or without the parties consent), refer a dispute to neutral evaluation and appoint the neutral evaluator.138 Both jurisdictions have an identical view of what constitutes a neutral evaluation: “a process of evaluation of a dispute in which the evaluator seeks to identify and reduce the issues of fact and

133

134

135

136

137

138

In fact, it may be viewed as a similar procedure to the American process of “mandatory non-binding arbitration”: see D Hensler, “Our Courts, Ourselves: How the Alternative Dispute Resolution Movement Is Re-shaping Our Legal System” (2003-2004) 108 Penn State Law Review 165 at 178. This is an advantage over mediation because although such weaknesses may be highlighted during mediation, it is unlikely to carry the same symbolic weight, and is therefore less likely to be acted upon. See M J Rankin, “Case Appraisal and Neutral Evaluation: The Creation of Objective Standards for Negotiating Settlement of Protracted Civil Disputes” (2012) 1 Journal of Civil Litigation and Practice 91 at 92. As to why this remains so, it is interesting to note that there is evidence that neutral evaluation has mixed party satisfaction results: see K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 35. Although in Vic early neutral evaluation is recognised as an “appropriate” dispute resolution process (it is also considered a possible judicial resolution conference), no specific regulation or definition of the process is provided — see Civil Procedure Act 2010 (Vic) s 3. See Court Procedures Rules 2006 (ACT) r 1179(1)-(2); and Alternative Dispute Resolution Act 2001 (Tas) s 5(1). [9.150] 235

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law that are in dispute”.139 Within this process, the evaluator’s role includes “assessing the relative strengths and weaknesses of each party’s case and offering an opinion about the likely outcome of the proceeding”.140 In common with mediation, communications within the neutral evaluation are deemed to be privileged.141 Neutral evaluation points the way to the future of dispute resolution, as it is a very powerful adjunct to the settlement process. An adverse decision for one party does place strong pressure on that party to make some concessions in an attempt to settle the dispute. When utilised in conjunction with the formal offers to settle (discussed in Chapter 10), this process would appear to promote settlement of the dispute in a very persuasive manner.142 [9.160] This combination of settlement conducive procedures is exactly what the Queensland courts have done with the innovation of case appraisal, which is essentially a neutral evaluation process with potential costs implications attached to the outcome (similar to the costs consequences applicable to formal offers to settle): neutral evaluation with teeth. Under this regime the court has power to refer, by order, any dispute to case appraisal.143 This may be done on application by the parties,144 or if the court deems fit.145 An approved case appraiser is appointed by the court146 and the “case appraiser provisionally decides a dispute”.147 This differs slightly from neutral evaluation, as although the evaluator may provide an opinion as to the likely outcome of the dispute should it go to trial, this is but one of many roles of the evaluator, whereas a case appraiser’s role is solely focused on providing a decision on the dispute. The case appraiser has the power to decide procedure for the dispute before them,148 provided that any adopted procedure enables a “sound opinion of the likely outcome of the dispute”.149 In addition, the case appraiser is under an obligation to complete the case appraisal “as quickly as possible”.150 Clearly, the case appraisal is not meant to be conducted as formally and rigidly as a court 139 140 141 142

143 144 145 146 147 148 149 150

Court Procedures Rules 2006 (ACT) r 1176(3); Alternative Dispute Resolution Act 2001 (Tas) s 3(3). Court Procedures Rules 2006 (ACT) r 1176(4); and Alternative Dispute Resolution Act 2001 (Tas) s 3(4). See Court Procedures Rules 2006 (ACT) r 1183; and Alternative Dispute Resolution Act 2001 (Tas) s 10. For a more comprehensive discussion of neutral evaluation see M J Rankin, “Case Appraisal and Neutral Evaluation: The Creation of Objective Standards for Negotiating Settlement of Protracted Civil Disputes” (2012) 1 Journal of Civil Litigation and Practice 91 at 97-103. See Civil Proceedings Act 2011 (Qld) s 43(3); and see Uniform Civil Procedure Rules 1999 (Qld) r 334 for the specifics that a referring order must contain. See Civil Proceedings Act 2011 (Qld) s 42(1); and Uniform Civil Procedure Rules 1999 (Qld) r 320(a). See Civil Proceedings Act 2011 (Qld) s 43; and Uniform Civil Procedure Rules 1999 (Qld) r 320(b). See Uniform Civil Procedure Rules 1999 (Qld) r 334(1). Civil Proceedings Act 2011 (Qld) s 41(1). See Civil Proceedings Act 2011 (Qld) s 45(1). Civil Proceedings Act 2011 (Qld) s 45(1)(b). Civil Proceedings Act 2011 (Qld) s 45(1)(c).

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hearing, but the case appraiser may in special circumstances receive evidence and examine witnesses under oath,151 and the court may subpoena persons for that purpose.152 Indeed, the case appraiser for a referred dispute “has the power of the court referring the dispute to decide the issues in dispute in the referred dispute”.153 However, the court retains overriding power and may “at any time, give directions about procedure to be used at the case appraisal”.154 Case appraisal also has an inquisitorial dimension as the case appraiser may seek information with respect to the dispute that is not otherwise provided by the parties,155 although if this involves “extra cost” the case appraiser can only do so with the parties’ agreement or leave of the court.156 Once the case appraisal has run its course, the case appraiser provides a written decision (that may or may not provide reasons for the decision),157 which although not binding on the parties, carries significant potential weight.158 The case appraiser files the decision (and accompanying certificate),159 and the onus shifts to the parties to consider the decision; specifically, whether or not to elect to go to trial. If no election is made, it is assumed that the parties agree with the case appraiser’s decision being binding on them, and it is then presumed to be “final and binding”.160 If a party does not elect to go to trial within the time limit set aside for such election, the other party may apply to the court for “an order giving effect to a case appraiser’s decision”.161 [9.170] If a party is dissatisfied with the case appraiser’s decision, that party may elect to have the dispute proceed to trial.162 In such a case the matter then proceeds normally, and the dispute is determined as if the case appraisal had never occurred.163 Such election must be made within 28 days after the filing of the case appraiser’s decision.164 The real bite in the case appraisal comes when the court must exercise its discretion as to costs. The rules make it quite clear that if the court’s decision is “not more favourable overall” to the party that challenged the case appraiser’s decision, then the costs of the proceeding, including the case appraisal itself, “must be awarded against the challenger”.165 Only if there exist “special 151 152

See Civil Proceedings Act 2011 (Qld) s 45(2). See Civil Proceedings Act 2011 (Qld) s 46(2).

153

Uniform Civil Procedure Rules 1999 (Qld) r 335(1). Although the case appraiser cannot punish for contempt: see Uniform Civil Procedure Rules 1999 (Qld) r 335(2). Civil Proceedings Act 2011 (Qld) s 45(3). See Uniform Civil Procedure Rules 1999 (Qld) r 337. Uniform Civil Procedure Rules 1999 (Qld) r 337(2). See Uniform Civil Procedure Rules 1999 (Qld) r 339(1). See Civil Proceedings Act 2011 (Qld) s 51; and Uniform Civil Procedure Rules 1999 (Qld) r 341(2). See Civil Proceedings Act 2011 (Qld) s 49(2); and Uniform Civil Procedure Rules 1999 (Qld) r 342(2). Uniform Civil Procedure Rules 1999 (Qld) r 341(2). Civil Proceedings Act 2011 (Qld) s 51(1). See Uniform Civil Procedure Rules 1999 (Qld) r 343. See Uniform Civil Procedure Rules 1999 (Qld) r 343(3). See Uniform Civil Procedure Rules 1999 (Qld) r 343(2). See Uniform Civil Procedure Rules 1999 (Qld) r 344(1).

154 155 156 157 158 159 160 161 162 163 164 165

[9.170] 237

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circumstances” will the court not make such a costs order.166 This seems a fair response, as the party that runs the litigation further has thereby wasted the time and resources of the other party. It is also highly conducive to settlement negotiations, even if a party has a concern about the accuracy of the case appraisal. On the other hand, this may be the main potential problem with case appraisal, as some litigants may simply take the case appraisal on the chin, irrespective of whether or not they believe it to be correct, as they may not wish to run the costs risk associated with proceeding to trial.167 Although this results in resolution of the dispute, it does not, at first glance, seem a particularly just outcome. However, there is a safeguard within the mechanism: the case appraiser’s decision is likely to be a reasonably accurate assessment of the matter. The fact that a particular party disagrees with that assessment may not be a significant concern, as acquiescing to the case appraisal determination is likely to be the best objective decision for that party because the case appraiser is likely to make substantially the same decision as the court would. This point highlights the additional settlement conducive benefit of case appraisal (and to a lesser extent neutral evaluation): the appraisal may provide the objective standard essential to negotiating settlement of the dispute. That is, some civil disputes may become protracted due to the lack of an applicable objective standard, and a particular case appraisal may constitute such a standard, thereby increasing the likelihood of settlement.168 Of course, all of this assumes a certain quality of case appraiser, but as judicial officers appoint, and replace if necessary,169 the case appraiser, with the view to appointing an expert neutral third party, it is, thus far, a fair assumption to make.

A CONCLUSION OF QUESTIONS [9.180] As we have seen, the court has wide ADR referral powers, and appears quite content to exercise those powers with or without the parties’ explicit agreement. This is especially the case with mandatory mediation, the most common form of court annexed ADR. There are two main issues to consider with respect to court annexed ADR, and perhaps ADR generally: 1.

is it successful?; and

2.

is it consistent with a notion of justice?

The first question raises the further question: how do you define success? Is it just settlement rates? Is it just the economic equation of reducing court costs, or easing

166 167

168

169

See Uniform Civil Procedure Rules 1999 (Qld) r 344(2). The same issue is encountered when one considers the other court sponsored avenue for promoting settlement — that of attaching costs implications to offers to settle the dispute — and will be discussed further in Chapter 10. For further discussion of this issue see M J Rankin, “Case Appraisal and Neutral Evaluation: The Creation of Objective Standards for Negotiating Settlement of Protracted Civil Disputes” (2012) 1 Journal of Civil Litigation and Practice 91 at 92-96. See Uniform Civil Procedure Rules 1999 (Qld) r 345(1).

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the business of overcrowded courts?170 Or is there something more that is required to conclude that a particular dispute has been ‘successfully’ resolved?171 As the courts’ purpose, and express policy, in advocating ADR is to encourage settlement of disputes, one may conclude that the courts define ‘success’ as ‘settlement’. However, as court annexed ADR is a relatively recent phenomenon (especially the newer forms of ADR, such as case appraisal), a determination as to whether or not the court has been successful in its endeavour to have more matters settle may be premature. There also exist a number of factors, not least the essentially confidential nature of settlement, that may preclude any such determination in the future. It would be difficult to ascertain whether settlement of a particular dispute occurred due to the parties, for example, being compelled to mediate, or whether the dispute settled for reasons not connected to the mediation, or whether the dispute was going to settle in any case. This last point is worth considering. Most disputes settle, and most disputes have always settled; hence, most disputes are always going to settle. We are not yet in a position to establish with any certainty whether the court policy of promoting settlement via ADR referral has had, or will have, any lasting impact on settlement rates. Perhaps time will tell. For the sake of argument, let us assume that the court’s innovations in this respect have been successful: that more matters now settle as a result of the court’s ADR referral policy and practice. The question then becomes: why is settlement of a dispute an objective the court promotes? The court’s encouragement of settlement via ADR is justified almost solely in terms of real or imagined costs and time savings172 (although the wish to avoid delay may simply stem from the belief that time is money). Whether it be a desire to save private costs of litigants, or public costs of maintaining a heavy action list in courts, the courts’ focus is economic.173 The advocating of ADR is made almost exclusively in light of these goals of reducing court pressure and easing the resource burden on the litigant. This is especially the case with court compelled mediation. One issue with such a narrow focus, whereby the sole benefits of mediation are said to be increased settlement of disputes and reduced cost, is that adequate assessment of the service offered is neglected; seldom is mediation promoted in terms of any “intrinsic qualities” of mediation that make it preferable to litigation.174 170

171 172

173

174

It is interesting to note that there is evidence that the courts’ promotion of ADR does not really reduce the case load of the court: see Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000) p 414. See Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89, 2000) pp 413-416. See M Rankin, “Settlement at All Cost: The High Price of an Inexpensive Resolution?” (2009) 20 Australasian Dispute Resolution Journal 153 at 153-155; and H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 53, 259-264. Advocates of ADR will point to other advantages over litigation — such as party satisfaction and continued relationships between litigants (see M Galanter & M Cahill, “‘Most Cases Settle’: Judicial Promotion and Regulation of Settlements” (1994) 46 Stanford Law Review 1339 at 1350-1351 for a comprehensive list of the supposed benefits of settlement), however, regardless of whether these assumed benefits have any basis, the courts themselves tend not to highlight these issues, but rather focus on the economic equation. J Hunter, C Cameron & T Henning, Litigation I: Civil Procedure (7th ed, LexisNexis Butterworths, 2005) p 48. [9.180] 239

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[9.190] Another interesting issue raised by the courts’ economic justification for ADR referrals, is that although ADR does appear to have a positive influence on delay,175 the alleged costs savings of ADR may be a myth: indeed, settlement may not actually reduce costs on an individual case by case basis, or generally across the system.176 In addition, any potential costs savings may not eventuate in every case,177 or ADR may in theory reduce costs, but if offered by the courts, it may result in greater overall costs to the system.178 Even if a settlement process, such as mediation, is less costly and reduces delay, proponents of the advantages of settlement in this respect assume that a settlement will not be further litigated. If the parties to a settlement return to court, this will negate any initial costs savings achieved.179 Putting such matters aside (that is, let us assume that settlement of a dispute results in a net reduction of cost, for both litigants and courts), other problems are encountered with the courts’ approach. For instance, as our legal system is inordinately expensive, and arguably unjustifiably so when it is the site for the exercise of our rights, litigants may well be seduced into settling the dispute purely because they cannot afford litigation.180 Given the centrality of our legal system in terms of defending and exercising our rights as citizens, the question may reasonably be asked: in promoting settlement on the basis of costs savings, are we losing something far more valuable than money? In a feverishly capitalist society it may be difficult for some to comprehend how little intrinsic value money actually possesses, but compared to ideals such as ‘rule of law’ and especially ‘justice’, a focus solely on money is rendered common and pathetic. In focusing on the ‘bottom line’ have we neglected our duty to aspire to higher ideals?181 Law is not about money; or, rather, law should not be about money. So, what should law be about? ‘Justice’ comes to mind. This leads to the second question raised by court annexed ADR: is it just for the courts to refer disputes to ADR for the purposes of settlement? Maybe, if the only justice required is settlement of a dispute, but what if this pressure to settle, which may account for the (arguably) high settlement rates, constitutes an injustice? This, of course, raises the question as to what we may mean by justice. Is a demand for justice a demand for procedural justice or fairness or substantive justice? It might be argued that

175 176 177

178 179 180 181

See H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 60-61. See K Mack, Court Referral to ADR: Criteria and Research (NADRAC, 2003) p 3; and H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) pp 53-59. This also raises the point that it is difficult to accurately estimate the costs of engaging in ADR in the first place, and any costs assessment will depend on the particular parties, and the particular dispute: see H Astor & C Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002) p 55. See C Menkel-Meadow, “Whose Dispute is it Anyway? A Philosophical and Democratic Defense of Settlement (In Some Cases)” (1995) 83 Georgetown Law Journal 2663 at 2666. See OM Fiss, “Against Settlement” (1984) 93 Yale Law Journal 1073 at 1082-1084. See OM Fiss, “Against Settlement” (1984) 93 Yale Law Journal 1073 at 1076. As Fiss states: “To settle for something means to accept less than some ideal” (OM Fiss, “Against Settlement” (1984) 93 Yale Law Journal 1073 at 1086).

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ADR provides one but not the other.182 Justice within our legal system is conventionally defined as a combination of the two, and is said to be operating when there exist promulgated principles that are applied to all equally, through systems of procedural fairness, and decided according to objective standards.183 In other words, conventional litigation. By definition, ADR does not satisfy this idea of justice. The outcome of most ADR processes is not determined according to community standards, there is no public accountability for any decision made or the process itself, there is no appeal process, there is no precedent setting, and there are no warnings nor information provided to the public concerning the purported injustice that forms the basis of the dispute in question. As a consequence, ADR cannot play the role of adjudication in providing objective rules of behaviour,184 or precedent.185 Unlike adjudication, ADR cannot provide society with the legal principles that serve as guidelines for conduct.186 However, such a view unfairly distorts the values of settlement, as MenkelMeadow explains: Settlement can be justified on its own moral grounds — there are important values, consistent with the fundamental values of our legal and political systems, that support the legitimacy of settlements of some, if not most, legal disputes. These values include consent, participation, empowerment, dignity, respect, empathy and emotional catharsis, privacy, efficiency, quality solutions, equity, access, and yes, even justice.187

One also needs to ask whether litigation really possesses the features we usually attribute to it. Are the assumptions about the traditional court process empirically substantiated, or is this just a case of “litigation romanticism”?188 [9.200] Regardless of any shortcomings of settlement achieved through ADR, what must be recognised and understood is that ADR is a reality of our legal system,189 and the centrality of ADR and settlement to our present legal system

182 183 184

185 186

187

188 189

See M Rankin, “Settlement at All Cost: The High Price of an Inexpensive Resolution?” (2009) 20 Australasian Dispute Resolution Journal 153 at 156-157. See L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) p 190. See D Bamford, “Litigation Reform 1980-2000: A Radical Change?” in W Prest & S Roach Anleu (eds), Litigation: Past and Present (University of New South Wales Press, 2004) pp 146-170, 161-165. See M Galanter & M Cahill, “‘Most Cases Settle’: Judicial Promotion and Regulation of Settlements” (1994) 46 Stanford Law Review 1339 at 1386-1387. See D Luban, “Settlements and the Erosion of the Public Realm” (1995) 83 Georgetown Law Journal 2619 at 2626-2639; and M Galanter & M Cahill, “‘Most Cases Settle’: Judicial Promotion and Regulation of Settlements” (1994) 46 Stanford Law Review 1339 at 1381-1387. C Menkel-Meadow, “Whose Dispute is it Anyway? A Philosophical and Democratic Defense of Settlement (In Some Cases)” (1995) 83 Georgetown Law Journal 2663 at 2669-2670 Also see S Issacharoff and R H Klonoff, “The Public Value of Settlement” (2009) 78 Fordham Law Review 1177 at 1199. C Menkel-Meadow, “Whose Dispute is it Anyway? A Philosophical and Democratic Defense of Settlement (In Some Cases)” (1995) 83 Georgetown Law Journal 2663 at 2669. See S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015), pp 73-76 & 138-139. [9.200] 241

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has fundamentally changed our legal system; both in procedure and philosophy.190 What constitutes ‘justice’ in our society is changing as a result of the focus on settlement.191 Perhaps ADR, and especially mediation, is the future and incorporates “an alternative conceptualisation of justice”,192 with a focus on interests and needs, rather than rights and duties. Perhaps the benefits to society as a whole in resolving disputes through mediation may be such as to justify the courts’ promotion of mediation irrespective of the other concerns canvassed above.193 Consequently, rather than rally against settlement via ADR, perhaps the best approach is to accept that the vast number of disputes will settle through such means, but devise ways in which the settlement process (whatever that may be) can reflect some of the values of adjudication, such as “openness, political transparency, legal justice, and public-good creation”.194 In this way, one seeks to strike a favourable balance between settlement and adjudication. The extent to which this can be achieved is open to debate. Maybe the recent innovations of neutral evaluation and case appraisal are worth further investigation in this respect? Maybe, in the end, the balanced conclusion one may reach is that, although the promotion of settlement through ADR is not a good thing, it is not necessarily a bad thing either, provided it is done in the right way. As Galanter and Cahill concluded: Settlement is not intrinsically good or bad, any more than adjudication is good or bad. Settlements do no share any generic traits that commend us to avoid them per se or to promote them … The task for policy is not promoting settlements or discouraging them, but regulating them. How do we encourage settlements that display desirable qualities?195

Perhaps the best way to regulate settlements so that they may more suitably display such desirable qualities (in essence, qualities presumed to exist within traditional litigation) is to allow the courts to oversee the process, as they

190

191

192

193

194 195

See D Luban, “Settlements and the Erosion of the Public Realm” (1995) 83 Georgetown Law Journal 2619 at 2662; C Menkel-Meadow, “Whose Dispute is it Anyway? A Philosophical and Democratic Defense of Settlement (In Some Cases)” (1995) 83 Georgetown Law Journal 2663 at 2664; L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 559-561. See D Bamford, “Litigation Reform 1980-2000: A Radical Change?” in W Prest & S Roach Anleu (eds), Litigation: Past and Present (University of New South Wales Press, 2004) pp 146-170, 161-166. L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 559-561. Also see L Arthur, “Does Case Management Undermine the Rule of Law in the Pursuit of Access to Justice?” (2011) 20 Journal of Judicial Administration 240 as 247, who believes that settlement is “complementary” to adjudication, rather than “anti”-adjudication. Perhaps we are also seeing the development of the “Multi-door Courthouse” that incorporates a number of dispute resolution options — see L Boulle, Mediation: Principles, Process, Practice (3rd ed, LexisNexis, 2011) pp 309-612; and NADRAC, The Resolve to Resolve — Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (2009) pp 68-69. D Luban, “Settlements and the Erosion of the Public Realm” (1995) 83 Georgetown Law Journal 2619 at 2647. See M Galanter & M Cahill, “‘Most Cases Settle’: Judicial Promotion and Regulation of Settlements” (1994) 46 Stanford Law Review 1339 at 1388.

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currently do with respect to mandatory mediation. Such symbolic legitimisation of settlement through ADR would inevitably encourage further use of the court sponsored ADR procedures for inducing settlement of a dispute, thus resulting (presumably) in more settlements. Settlement may, or may not, be a societal ‘good’ but, if adequately regulated, we may hope that settlements via ADR may constitute ‘good’ settlements in and of themselves.

[9.200] 243

CHAPTER 10 Calderbank Letters and Formal Offers to Settle Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 Calderbank letters: An exception to privilege . . . . . . . . . . . . . . . . . . . . . . . 246 [10.30] The Calderbank criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247 [10.40] Costs implications of Calderbank offers . . . . . . . . . . . . . . . . . . . . 249 [10.60] Calderbank offers versus rule sanctioned offers to settle . . . . 253 [10.80] Formal offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 [10.90] Payment into court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 [10.100] Formal offers to settle/offers to compromise . . . . . . . . . . . . . . 258 [10.150] Conclusion: some dangers highlighted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 [10.10] [10.20]

INTRODUCTION [10.10] We have seen in Chapter 9 how the court promotes settlement of disputes through discretionary utilisation of its power to refer matters to ADR. Another means by which the courts promote settlement is to financially penalise parties that fail to accept certain settlement offers from the other party.1 The financial penalty is achieved by the imposition of adverse costs orders made against the party that unreasonably rejects such an offer. As these costs orders may amount to an award of indemnity costs, there is an unambiguous financial incentive to accept reasonable offers to settle. This chapter will study the mechanics of this process. Using costs orders to penalise parties that fail to accept specific offers to settle is a relatively recent phenomenon. The ordinary rule is that costs follow the event, and that such costs are taxed on a party-party basis.2 This rule will generally be followed unless there exist “special circumstances”3 to warrant a departure from the rule. The existence of offers to settle, and the unreasonable rejection of such offers, are now deemed to constitute such special circumstances. Historically, the only offer that carried any such potential costs implications was the payment into court process. The limitations of this system were that it was only available to the defendant, and that it was only applicable to claims for monetary relief. The

1

2

3

See George v Webb [2012] NSWSC 86 at [55] per Ward J, in which it was stated that “[t]he policy objectives underlying the costs provisions [with respect to offers of compromise] … are to encourage early settlement of proceedings”. See Donald Campbell & Co v Pollak [1927] AC 732 at 811-812 per Viscount Cave LC; Latoudis v Casey (1990) 170 CLR 534 at 540 per Mason CJ, at 558 per Dawson J; Oshlack v Richmond River Council (1998) 193 CLR 72 at 88-89 per Gaudron & Gummow JJ, at 117-118, 121 per Kirby J; and Commonwealth v Gretton [2008] NSWCA 117 at [38] per Beazley JA. See Ritter v Godfrey [1920] 2 KB 47 at 52. [10.10] 245

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procedure remains available in some Australian jurisdictions, and will be discussed later in the chapter. Currently, all Australian jurisdictions now have more flexible, yet formal, means of offering to settle a dispute. Under these systems, the offer to settle may be made by either party, and may be made in all proceedings. The offer to settle is filed or lodged at court, and served on the other party. Rejecting the offer to settle will usually result in the offeree having an adverse costs order made against them if the matter proceeds to judgment, and the offer is not bettered at judgment. In this way the costs penalties attached to formal filed offers to settle may defy the convention that costs will follow the event, as a party may ultimately be successful at trial, but still have costs awarded against them if they were less ‘successful’ than the offer made to them prior to trial. We will look more closely at these formal filed offers to settle later in the chapter, as despite the advantages of filing and serving formal offers, the use of informal or contractual offers is still prevalent in litigation. These offers are usually contained in a solicitor’s “without prejudice” letter. It is now the case that the court will, in some circumstances, consider such offers in exercising its discretion as to costs. However, there are certain criteria that such letters must satisfy in order to be so considered.

CALDERBANK LETTERS: AN EXCEPTION TO PRIVILEGE [10.20] Historically, the courts were unable to consider informal offers to settle because such offers were deemed to be “without prejudice” communications, and therefore prima facie inadmissible as evidence. There was, and remains, good reason for this, as settlement negotiations require this guarantee of confidentiality in order to function properly.4 The problem with refusing to consider such offers in the exercise of the courts’ discretion as to costs was that parties were thereby under no added financial incentive to make or accept reasonable settlement offers. This began to change with the case of Calderbank v Calderbank.5 The Calderbank case was a matrimonial property dispute heard by the English Court of Appeal. Obiter dictum in this case suggested that a letter labelled “without prejudice”, although thereby inadmissible as to any substantive issue, could nonetheless be produced when the court is considering costs at the conclusion of the determination of substantive issues, provided the letter states as much;6 namely, that the letter expresses that it is “without prejudice save as to costs”, or words to that effect. This is the Calderbank principle, which was soon followed in both the UK and Australia. Initially, it was thought that the Calderbank rule was only applicable to matrimonial proceedings, but this interpretation did not last long, and in the case of Cutts v Head,7 it was held that the Calderbank principle was generally applicable. However, the court also added the proviso that any such Calderbank offer would 4 5 6 7

See the classic statement on this point by Bowen LJ in Walker v Wilsher (1889) 23 QBD 335 at 339. [1976] Fam 93; [1975] 3 All ER 333. See Calderbank v Calderbank [1976] Fam 93 at 105-106. See [1984] 1 All ER 597; [1984] Ch 290.

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only be considered in proceedings where a payment into court was inappropriate.8 In other words, if there existed a court sanctioned process of offering to settle a dispute, then this should be adopted. In following Calderbank, Australian courts initially incorporated this proviso,9 but it was soon abandoned, and the Calderbank principle was held to be generally applicable without any such condition.10 An offer contained in a Calderbank letter effectively reserves the right, otherwise foregone in a standard “without prejudice” letter, for the party making the offer to produce the offer to the court for consideration when the court is exercising its discretion as to costs. In this way, the letter becomes admissible for this specific purpose, notwithstanding the general rule that settlement communications are privileged and therefore inadmissible.

The Calderbank criteria [10.30] For an offer to be considered a Calderbank offer there is no set expression that must be utilised, but words to the effect of “without prejudice save as to costs” will suffice. The main point stressed by the courts is that the without prejudice nature of the letter must be made conditional, so that it may be produced as to costs.11 This is just one factor of a properly drafted Calderbank letter; there exist a number of other criteria that the letter must possess in order for such an offer to have the desired effect on the exercise of the court’s discretion as to costs. There are three essential criteria in this respect: 1.

the letter should be clearly marked “without prejudice save as to costs”, or words to that effect;

2.

the letter must state the time period in which the offer will remain open; and

3.

the offer contained within the letter must be as clear and precise as is reasonably practicable, so as to indicate the exact nature of the offer.

The necessity of the first criterion is self-evident and has already been discussed, while the essentiality of the other two criteria will become clear in due course. What can be said at this stage is that if a letter satisfies the above criteria, then it will probably be considered by the court in the exercise of its discretion as to costs. A better drafted letter might not only state that the letter is intended to be a Calderbank letter,12 but also specifically indicate what particular costs advantage the offeror will seek in the event that the matter proceeds to judgment (for

8 9 10

11 12

[1984] 1 All ER 597; [1984] Ch 290 at 312. See Azzopardi v Netin [1986] VR 593 at 601; and Biernacki v Klenka [1988] 80 ACTR 1. See Messiter v Hutchinson (1987) 10 NSWLR 525 at 528 per Rogers J; Mideco Manufacturing Pty Ltd v Tait [1989] VR 50; Dobb v Hackett (1993) 10 WAR 532 at 539 per Murray J; Pirrotta v Citibank Ltd (1998) 72 SASR 259; Morris v McEwen (2005) 92 SASR 281; Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [7]; and Australian Medic Care Company Ltd v Hamilton Pharmaceutical Pty Ltd [2009] FCA 1494 at [13]. See Smith v Smith [1987] 2 Qd R 807. See Joint v Stephens (No 2) [2008] VSC 69 at [57]; and Love v Roads Corporation [2011] VSCA 434 at [181]-[186]. [10.30] 247

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example, indemnity costs rather than party-party costs).13 It may also be useful to specify the reasons why the offer should be accepted, perhaps by highlighting the weaknesses of the offeree’s case,14 but, again, this is not essential, nor recommended in some cases.15 Obviously, the form a Calderbank letter may take varies enormously, but it is good practice to at least consider including the above suggestions. Of the three essential criteria referred to above, clearly the most difficult to get right is the last criterion. It is essential because the costs implications that may flow from the offer require a comparison between the judgment and the offer, and a finding as to whether or not the rejection of the offer was unreasonable. Such assessments require accurate comparison. The offer must be precise and clear enough to enable the court to determine whether or not the offer was bettered at judgment, and the offeree must be equipped “to make a carefully considered comparison between the offer made and the ultimate relief it is seeking in all its aspects,”16 so the offer must be such as to “leave the offeree in no reasonable doubt as to the nature and extent of what is being offered”.17 As the court generally finds an amount for quantum exclusive of interest and costs, it is often suggested that the offer should similarly be made exclusive of costs and interest so that the above comparisons can be more readily made.18 Making the offer inclusive of costs may not, of itself, be fatal in terms of having the court consider the offer as a Calderbank offer,19 but it will affect the precision and clarity of the offer, which, in turn, may result in the letter not being 13

As indicated in Love v Roads Corporation [2011] VSCA 434 at [181]-[186], this is not an essential requirement of a Calderbank letter, as the ultimate order as to costs is at the court’s discretion, but there exists authority to suggest that it is probably best practice to include such a statement (see Grbavac v Hart [1997] 1 VR 154 at 160-161; and Hazeldene’s Chicken Farm Pty Ltd v Workcover Authority (Vic) (No 2) (2005) 13 VR 435 at 440-442).

14

See Hazeldene’s Chicken Farm Pty Ltd v Workcover Authority (Vic) (No 2) (2005) 13 VR 435 at 440; Joint v Stephens (No 2) [2008] VSC 69 at [54]; Australian Medic Care Company Ltd v Hamilton Pharmaceutical Pty Ltd [2009] FCA 1494 at [14]; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [18]. On the other hand, the point has been made that the “statement of a reason why an offer should be accepted is a material factor in deciding whether an offer ought reasonably to have been accepted” — Mediterranean Olives Financial Pty Ltd v Gita Lederberger (No 2) [2011] VSC 333 at [10]. Also see Wenzel v Australian Stock Exchange Ltd [2002] FCA 353 at [8]; Grech v Grech [2016] VSC 35 at [20]. Indeed, in Technology Leasing Ltd v Lennmar Pty Ltd (No 2) [2012] FCA 1216, Cowdroy J went so far as to state that a Calderbank letter “must contain a statement of reasons why the opposing party’s claim must fail” (at [24]), and a “failure to include this information means that it was not unreasonable for the applicant to reject the offer” (at [25]). Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [24]. Grbavac v Hart [1997] 1 VR 154 at 155 per Winneke P. See Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [24]; GEC Marconi Systems Pty Ltd v BHP Information Technology (2003) 201 ALR 55; Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (Formerly GIO Insurance Limited) [2006] NSWSC 583 at [40]; and BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 4) [2009] FCA 1448 at [13]. See Bates v Nelson [1976] 6 SASR 149 at 158 per Mitchell J; and Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322. Cf Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97; and Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (Formerly GIO Insurance Limited) [2006] NSWSC 583.

15

16 17 18

19

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considered as to costs as it is too imprecise to enable the court to make a comparison with the judgment,20 or to make a determination of the reasonableness of the offeree’s rejection of the offer.21 If costs and/or interest must be included in the offer amount, then the letter should clearly indicate how the amount is apportioned between these three items of principal offer amount, costs, and interest, and perhaps further how both costs and interest are to be substantiated. This may serve to alleviate the court’s concerns about the offer being insufficiently precise. Of course, best practice is to avoid these potential difficulties, and simply indicate that the offer is exclusive of costs, and draft the letter so that the costs component is clearly isolated from the principal offer.22 For the identical reasons of precision and clarity, if there are multiple causes of action, the offer must state to which cause of action it applies, or how the offer is to be apportioned between the various causes of action. The main issue with making a Calderbank offer is always clarity and precision,23 and the letter should be drafted with this foremost in mind.

Costs implications of Calderbank offers [10.40] As to the costs consequences that may flow from a rejected Calderbank offer that is not bettered by the offeree at trial, given that courts have wide discretion as to costs,24 almost anything is possible. There existed some authority to suggest that if the rejected Calderbank offer is not bettered at trial by the offeree, then this results in a prima facie presumption that the party rejecting the offer should pay the offeror’s costs on an indemnity basis from the date of the offer.25 This is no longer good law, and presently the status of a Calderbank offer is that it is relevant to the exercise of the courts’ discretion as to costs, but does not automatically create any presumption as to costs.26 The fact that the offer is not 20

See Associated Confectionery (Aust) Ltd v Mineral and Chemical Traders Pty Ltd (1991) 25 NSWLR 349, and Kemp v Ryan [2011] ACTSC 42, in which the court held that unless the offer was “unambiguously clear” as to interest and costs it would be too ambiguous to consider (at [34]).

21

See Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (Formerly GIO Insurance Limited) [2006] NSWSC 583 at [40], the court held that: “a Calderbank letter which is expressed to be ‘inclusive of costs’, is insufficiently precise to qualify as a Calderbank offer, for the reason that the offeree is placed in a position of not being able to determine the appropriate amount to attribute to the substantive claim and the costs incurred in advancing it.” Also see Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [24]. See Perry v Comcare (2006) 226 ALR 724 at 738 per Greenwood J; and Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (Formerly GIO Insurance Limited) [2006] NSWSC 583 at [41]. For instance, the letter may state “in addition to costs”, or “each party bear their own costs”, or similar directions — the point being that the offeree can clearly assess what is actually being offered by the letter (see Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 at 102). See Grbavac v Hart [1997] 1 VR 154 at 160; and Roberts v Rodier [2006] NSWSC 1084 at [8]. See Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [5] per Beazley JA. See Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425, especially at 451 per Rolfe J. See Bates v Nelson (1973) 6 SASR 149 at 158 per Mitchell J; MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 at 240; Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 265

22

23 24 25 26

[10.40] 249

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bettered on judgment may be an influential or significant factor in the exercise of that discretion,27 but it does not, of itself, demand departure from the ordinary rule as to costs (that is, that costs follow the event on a party-party basis).28 The focus is now on whether the offer was unreasonably or imprudently rejected.29 If the offer is deemed to have been unreasonably rejected, then the court will usually award costs against the party that so rejected the Calderbank offer, and such costs orders may be on an indemnity basis.30 The crucial assessment of whether or not the rejection of the offer was reasonable is made upon consideration of all the circumstances that existed at the time of the offer.31 In this light, the fact that the offer was not bettered at trial carries less weight in this assessment then one might intuitively think, as the rejection of the offer may have been reasonable at the time the offer was made, irrespective of whether it was bettered at trial. Put another way, if the offer was not bettered at trial, this would

27

28

29

30

31

per Debelle J; SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323; Jones v Bradley (No 2) [2003] NSWCA 258; Leichhardt Municipal Council v Green [2004] NSWCA 341; Morris v McEwen (2005) 92 SASR 281 at 290 per Besanko J; Hazeldene’s Chicken Farm Pty Ltd v Workcover Authority (Vic) (No 2) (2005) 13 VR 435 at 438-440; Anderson Group Pty Ltd v Tynan Motors Pty Ltd [No 2] (2006) 67 NSWLR 706 at 708; Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194 at [7] per Ipp JA; Commonwealth v Gretton [2008] NSWCA 117 at [43] per Beazley JA; Blackman v Gant (No 2) (2010) 29 VR 29 at 78-79; Technology Leasing Ltd v Lennmar Pty Ltd (No 2) [2012] FCA 1216 at [22]; and Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [14]. See Smith v Smith [1987] 2 Qd R 807 at 809-810; and Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 267 per Debelle J. This is especially so if the offer amount is far more favourable to the offeree than the judgment sum: Grech v Grech [2016] VSC 35 at [21]. See Azzopardi v Netin [1986] VR 593; Mideco Manufacturing Pty Ltd v Tait [1989] VR 50; Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (Formerly GIO Insurance Limited) [2006] NSWSC 583 at [36]; CGU Insurance Ltd v Corrections Corporations of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 at [75]; and Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at 8. See Commonwealth v Gretton [2008] NSWCA 117 at [117] per Hodgson JA. Also see Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at 8; Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [9]; and Stevenson v Regents Park Sporting and Community Club Ltd [2012] NSWSC 736 at [3]. For a discussion of the circumstances that a court might consider in determining whether or not a rejection of an offer was unreasonable see Hazeldene’s Chicken Farm Pty Ltd v Workcover Authority (Vic) (No 2) (2005) 13 VR 435 at 439-444 per Warren CJ, Maxwell P & Harper AJA; Commonwealth v Gretton [2008] NSWCA 117 at [48]-[82] per Beazley JA; Pepe v Platypus Asset Management Pty Ltd (No 2) [2011] VSC 21 at [10]-[11]; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [16]-[18]; Grech v Grech [2016] VSC 35 at [16]-[17]. As to the general meaning to be given to the terms “imprudent” or “unreasonable” in rejecting an offer, the matter is decided on a case by case basis, but some useful observations were made in Seven Network Limited v News Limited (2007) 244 ALR 374. See Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at 443-444; and Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at 8. For a discussion of the circumstances in which this might occur see Racing & Wagering Western Australia v Software AG (Australia) Pty Ltd (No 2) (2008) 29 IPR 297 at 299-301 per McKerracher J. See Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 at 101; Shaw v Jarldorn (1999) 76 SASR 28 at 30 per Doyle CJ; Dunstan v Rickwood (2007) 38 Fam LR 491 at [50]; Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at 8; Blackmagic Design Pty Ltd v Overliese [2010] FCA 126 at [15]; and MM Constructions (Aust) Pty Ltd v Port Stephens Council (No 7) [2012] NSWSC 250 at [39].

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suggest that the offer was reasonable, but the rejection of a reasonable offer is not necessarily unreasonable.32 One of the better expositions of the current position is as follows: The making of an offer of compromise in the form of a Calderbank letter … where the offeree does not accept the offer but ends up worse off than if the offer had been accepted, is a matter to which the Court may have regard when deciding whether to otherwise order, but it does not automatically bring a different order as to costs. All the circumstances must be considered, and while the policy informing the regard had to a Calderbank letter is promotion of settlement of disputes an offeree can reasonably fail to accept an offer without suffering in costs. In the end the question is whether the offeree’s failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure.33

There might be any number of reasonable reasons to reject an offer that was not subsequently bettered at trial, for example: there may be other issues in a particular matter more important than monetary compensation, such as reputation;34 the offer may only be a tiny percentage better than the judgment, which may not be enough to warrant departure from the ordinary costs rule;35 the party’s case at the time of the offer may have been fundamentally different to the case presented at trial;36 there may have been a change of circumstance, such as a counterclaim not initiated at the time of the offer;37 the offeree may have had inadequate information (such as undiscovered expert reports) to make an informed decision on the offer;38 there may have been unreasonable conditions attached to the offer;39 the offer may lack clarity such that it would not be unreasonable to reject it;40 the offer may have been left open for an insufficient amount of time, such that it may be deemed an unreasonable period of time for proper consideration of the offer;41 or there may be disentitling conduct by the offeror in the manner in which the litigation, as a whole, was run.42 [10.50] Another aspect that the courts place great weight on in their assessment of reasonableness is whether or not the offer itself was genuine, as one can only 32

33 34 35 36 37 38 39 40 41

42

See Commonwealth v Gretton [2008] NSWCA 117 at [120] per Hodgson JA; and CGU Insurance Ltd v Corrections Corporations of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 at [75]. SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37] per Giles JA. See Dodds v Premier Sports Australia (No 2) [2004] NSWSC 389, especially at [30]-[31]. See Humphries v TWT Ltd (1993) 113 FLR 422. See Morris v McEwen (2005) 92 SASR 281 at 293 per Besanko J. See Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd (2001) 53 NSWLR 626. See Vale v Eggins (No 2) [2007] NSWCA 12 at [22]; Morris v McEwen (2005) 92 SASR 281 at 283-284 per Debelle J; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [18]. See Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at 440-442. See Roberts v Rodier [2006] NSWSC 1084 at [8]. See Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [117]; Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at 440-442; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [16]. See Morris v McEwen (2005) 92 SASR 281 at 283-284 per Debelle J. [10.50] 251

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unreasonably reject a genuine offer.43 The offer must be genuine in the sense that it constitutes a “real and genuine element of compromise”44 and “compromise connotes that a party gives something away”.45 Thus, a plaintiff making an offer for a claim that is only nominally less than the full claim — in essence, an offer to capitulate — is unlikely to secure the costs advantages sought,46 as the offer is probably not going to be deemed to be a genuine compromise, but rather “designed simply to trigger the entitlement to payment of costs on an indemnity basis”,47 in which case it will not be permitted to do so.48 On the other hand, the “genuine” criterion is assessed according to all the circumstances, so theoretically it may also be the case that a plaintiff offering little less than the full claim amount may still be deemed to be making a genuine offer.49 As stated earlier, provided the Calderbank letter contains a sufficiently precise offer, and the court determines that the offer has been unreasonably rejected, then the court would be in a position to order costs (even indemnity costs) against the party that unreasonably rejected the offer. However, the court may still decide, in the exercise of its discretion as to costs, to ignore the Calderbank letter, despite the letter satisfying all relevant criteria, and despite an unreasonable rejection of the offer contained in the letter. It is, of course, unlikely that a court would choose to so ignore such a properly made Calderbank offer, but it has happened, especially when there exists a formal regime for making offers to settle.50

43

See Leichhardt Municipal Council v Green [2004] NSWCA 341 at [39]; Anderson Group Pty Ltd v Tynan Motors Pty Ltd [No 2] (2006) 67 NSWLR 706 at 708; Commonwealth v Gretton [2008] NSWCA 117 at [44], [84]; Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [9]; George v Webb [2012] NSWSC 86 at [43], [55]; MM Constructions (Aust) Pty Ltd and Anor v Port Stephens Council (No 7) [2012] NSWSC 250 at [39]; and Stevenson v Regents Park Sporting and Community Club Ltd [2012] NSWSC 736 at [3].

44

Anderson Group Pty Ltd v Tynan Motors Pty Ltd [No 2] (2006) 67 NSWLR 706 at 708 per Basten JA. Also see Ying v Song [2011] NSWSC 618 at [26] per Ward J; Stevenson v Regents Park Sporting and Community Club Ltd [2012] NSWSC 736 at [3] per Fullerton J; George v Webb [2012] NSWSC 86 at [43] per Ward J; MM Constructions (Aust) Pty Ltd and Anor v Port Stephens Council (No 7) [2012] NSWSC 250 at [39]; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [20]. Hobartville Stud v Union Insurance Co (1991) 25 NSWLR 358 at 368 per Giles J. See also Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [57]. See Kermani v Gaylard (No 2) [2011] VSC 143 at [23]; Ying v Song [2011] NSWSC 618 at [23]-[24]; Mediterranean Olives Financial Pty Ltd v Gita Lederberger (No 2) [2011] VSC 333 at [9]; George v Webb [2012] NSWSC 86 at [47]; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [20]. Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 at 355 per Rogers CJ. Also see Leichhardt Municipal Council v Green [2004] NSWCA 341 at [36] per Santow JA. See Kermani v Gaylard (No 2) [2011] VSC 143 at [23]; Ying v Song [2011] NSWSC 618 at [23]-[24]; Mediterranean Olives Financial Pty Ltd v Gita Lederberger (No 2) [2011] VSC 333 at [9]; and George v Webb [2012] NSWSC 86 at [47]; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [21]. See George v Webb [2012] NSWSC 86 at [55] per Ward J; and Leichhardt Municipal Council v Green [2004] NSWCA 341 at [36] per Santow JA. See Biernacki v Klenka (1988) 80 ACTR 1, in which the court held that a party must follow the rules, and therefore the court could not consider a Calderbank letter in exercising its discretion.

45 46

47 48

49 50

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Calderbank offers versus rule sanctioned offers to settle [10.60] The main issue that has occupied the courts recently is this relationship between Calderbank offers and the new formal offers to settle under the rules. The question is whether a Calderbank letter may still be considered when there exists a formal regime for making an offer. Initially, it was thought that in such cases, where a formal option was available and appropriate, the Calderbank offer should not be considered in awarding costs.51 However, the weight of current authority seems to suggest that a Calderbank letter will be assessed on a case by case basis “according to its terms and … in all the circumstances”,52 and that the availability of an offer under the rules will not serve to disqualify the Calderbank offer from consideration.53 This seems the correct approach consistent with the courts’ discretion as to costs, because to assert that Calderbank letters could not be considered when a procedure for making formal offers was available would “operate as a fetter on that discretion ... which has no basis in principle”.54 Allowing the consideration of Calderbank offers irrespective of the availability of formal procedures for making offers is also perhaps a practical recognition of the fact that Calderbank letters provide a more flexible approach to making offers, and often this is required in particular matters that are not suited to the rule based procedure.55 This also makes sense in light of the fact that formal offers that do not completely comply with the rules may nonetheless be treated as informal Calderbank offers.56 Permitting the consideration of Calderbank offers in such circumstances is also consistent with the courts’ current policy of promoting settlement; it would seem strange, given that policy, to adopt a legal principle that would serve to preclude a settlement option from consideration.57 On the other hand, the courts are also eager to promote the use of the procedures available for making offers under the rules. Accordingly, parties should be cautious in adopting the Calderbank method when rule sanctioned procedures are available and appropriate, as courts have expressed concern with encouraging a regime that differs from the rules of court.58

51 52

See Cutts v Head [1984] Ch 290 at 309-312. Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [7] per Beazley JA.

53

See Morris v McEwen (2005) 92 SASR 281, especially at 289 per Besanko J, at 296 per White J; and Grbavac v Hart [1997] 1 VR 154 at 165 per Hayne JA. In addition, a party is not obliged to explain why it did not make a formal offer under the rules (see Messiter v Hutchinson (1987) 10 NSWLR 525, especially at 528; AMEV Finance Ltd v Artes Studios Thoroughbreds Pty Ltd (1998) 13 NSWLR 486; and Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97). Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [5] per Beazley JA. See Smith v Smith [1987] 2 Qd R 807 at 809-810 per Thomas J; Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 at 101; and Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 266-267 per Debelle J. See Sheahan v Hertz (1995) 181 LSJS 147; and Ying v Song [2011] NSWSC 618 at [20]-[22]. See Messiter v Hutchinson (1987) 10 NSWLR 525 at 529, in which Rogers J made the point that provided it may “fairly be done, the Court should do nothing which would dissuade or discourage a party from making bona fide offers of settlement”. Also see Morris v McEwen (2005) 92 SASR 281, especially at 289 per Besanko J. See Morris v McEwen (2005) 92 SASR 281 at 283-284 per Debelle J; Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 267 per Debelle J; and Messiter v Hutchinson (1987) 10 NSWLR 525 at 528 per Rogers J.

54 55

56 57

58

[10.60] 253

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On that point, courts have tended to take the line that, although the courts are likely to consider a properly drafted Calderbank letter irrespective of the existence of formal procedures for offers to settle, the Calderbank letter should, as far as “reasonably practicable”,59 conform to the rule based regime. Put another way, the courts are more likely to consider such a letter, and more likely to allow the presumptive costs principles under the rules to flow,60 the more closely the letter conforms to the rules for formal offers to settle.61 So, the closer the letter conforms to the formal procedures under the rules for offers to settle, the more weight the letter will have.62 [10.70] At the very least, the letter should be framed “in terms which are consistent with the spirit and intent” of the rules.63 Of course, the costs discretion still operates, so in cases in which this proves difficult, the court may still consider the Calderbank letter in exercising its discretion as to costs.64 However, in line with the promotion of the rule sanctioned procedures for making offers, courts are reluctant to allow much influence to Calderbank letters that serve to establish a regime more onerous than that under the rules.65 Thus, in drafting a Calderbank letter care should be taken not to create conditions under the letter that are more favourable to the offeror than the regime established under the rules for formal offers.66 For example, the Calderbank letter should not grant less time than under the rules for acceptance of an offer.67 As McColl JA stated in Elite Protective Personnel Pty Ltd v Salmon: I see no reason why litigants who choose not to avail themselves of the rules as to Offers of Compromise should be in a better position than those who do, if they radically foreshorten the period in which an offer is open for consideration.68

This seems the sensible approach, as otherwise there is less incentive to follow the rules. Certainly, a party should not be able to gain a benefit above that provided by the rules.69 59 60 61

62 63 64 65 66 67 68 69

Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 267 per Debelle J. Also see Morris v McEwen (2005) 92 SASR 281 at 290 per Besanko J. See Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 266-267 per Debelle J. The main case on this point is Pirrotta v Citibank Ltd (1998) 72 SASR 259. Indeed, if the Calderbank letter is framed in almost complete conformity to the rules, the Calderbank offer may be treated the same as the formal offers (see Bates v Nelson (1973) 6 SASR 149), but only if there is a good reason for not using the formal offers (see Re Vitch (No 2) (1988) 147 LSJS 279). See MGICA (1992) v Kenny & Good Pty Ltd [No 4] (1996) 140 ALR 707. Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 267 per Debelle J. See Morris v McEwen (2005) 92 SASR 281 at 290 per Besanko J. See Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 269-270 per Debelle J; and MGICA (1992) v Kenny & Good Pty Ltd [No 4] (1996) 140 ALR 707. See Pirrotta v Citibank Ltd (1998) 72 SASR 259; and Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322. See Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 266-267. Also see Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322. Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [117]. See Leichhardt Municipal Council v Green [2004] NSWCA 341 at [42]-[46] per Santow JA. Cf Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425, in which the court allowed indemnity costs in favour of the defendant (ie more than the rules may provide).

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Thus a relatively flexible approach currently holds sway, and the Calderbank offer and the formal rule based offer may coexist. The costs implications of both may serve to persuade the court to depart from the accepted rule that costs follow the event, and both may even be the basis for an indemnity costs order, if the court so finds. The fundamental theoretical difference between a Calderbank offer and an offer made under the rules is that the Calderbank offer may be considered as a factor influencing the court’s discretion as to costs,70 and is “but one of many factors which may be taken into account by the court in exercising its judicial discretion”,71 whereas a formal rule based offer must be considered by the court in exercising its discretion as to costs, and even raises a presumption that if the offer is not bettered at judgment, then certain costs orders will follow unless there exist exceptional circumstances to make a different costs order than the rules suggest.72 There is also a practical difference between the two types of offers in terms of which party bears the onus of proof in making the requisite costs argument. In the case of a Calderbank offer, the rejection of the offer must be deemed unreasonable, whereas with formal offers all that is required is that the offer is not bettered on judgment. So, in the case of a Calderbank offer, the onus is on the offeror to “satisfy the court that it should exercise the costs discretion in its favour”,73 by showing that the court should depart from the standard rule as to costs, by establishing that the rejection of the offer was unreasonable or imprudent.74 With a formal offer under the rules the onus shifts to the offeree to show that exceptional circumstances existed to depart from the costs implications that would normally flow under the rules when an offer is rejected but not bettered on judgment. As an appeal from a judicial exercise of the costs discretion is rarely successful,75 one may readily appreciate the significance of such practical distinctions. Of course, in any case the court retains discretion as to costs, so the issue remains relatively unpredictable. Nonetheless, it is correct to reiterate that, in the exercise of that discretion, a Calderbank offer is but one of many factors to consider in awarding costs, whereas a formal offer may be described as the major factor in the exercise of the courts’ discretion as to costs.76 This will become apparent when we study these rule sanctioned offers to settle. 70 71

72 73 74 75

76

See Messiter v Hutchinson (1987) 10 NSWLR 525 at 528 per Rogers J; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [14]. Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 266 per Debelle J. Also see John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 at 206 for an identical assertion. See Hillier v Sheather (1995) 36 NSWLR 414 at 422-423. Commonwealth v Gretton [2008] NSWCA 117 at [46] per Beazley JA. See Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at 9; and Commonwealth v Gretton [2008] NSWCA 117 at [114]-[117] per Hodgson JA. See Donald Campbell & Co Ltd v Pollack [1927] AC 732 for a discussion of how the courts view the exercise of the costs discretion. Courts are exceptionally reluctant to interfere with the trial court’s exercise of the costs discretion (see Morris v McEwen (2005) 92 SASR 281 at 294 per Besanko J; and Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 269 per Debelle J). For this reason (among others) it has been argued that formal offers to settle should be preferred to the Calderbank letter — see M J Rankin, “Calderbank Letters and Formal Settlement Offers: Is the Calderbank Offer a Dead Letter?” (2010) 21 Australasian Dispute Resolution Journal 242 at 250. [10.70] 255

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FORMAL OFFERS [10.80] We now turn to formal offers to settle. Such offers are governed by the various rules of court, which outline the procedures for properly making such offers. More importantly, the rules stipulate, or rather strongly suggest (as the courts’ discretion as to costs is not removed by the rules), the costs implications that flow from a rejection of a formal offer that is not bettered on judgment. These formal offers to settle are a relatively recent phenomenon, and have the ancient payment into court method as their template. This payment into court procedure is still available in some jurisdictions, so warrants some discussion before we move onto the more recent procedures for offers to settle.

Payment into court [10.90] This is the traditional rule sanctioned method for making an offer to settle a dispute.77 It is only available in the Northern Territory and Tasmania,78 and can only be accessed by the defendant (and the plaintiff in an action where the defendant makes a counterclaim).79 The payment into court procedure is relatively simple: The defendant makes the payment into court of a sum of money and then files and serves a notice of that payment,80 usually in prescribed form.81 The payment into court is not an admission of liability,82 but constitutes an offer to settle the dispute. If the offer is accepted by the plaintiff, then the dispute is resolved. If the offer is rejected, or ignored, then costs implications may flow if the plaintiff does not better the offer at judgment. If the matter contains more than one cause of action, then the notice must specify to which cause of the action the payment applies, and/or the amount apportioned to each cause of action.83 There needs to be this level of certainty about what the payment actually signifies because the court needs to be able to make the necessary comparison of judgment and payment in order to apply the cost penalties if the plaintiff does not accept the payment. The payment must be made by the defendant prior to trial,84 and cannot be withdrawn or modified without leave85 (although the payment may be increased without leave).86 Leave will usually only be granted when there is a change of circumstances such that it would be unjust to compel the defendant to leave the offer open. An example of when a defendant might seek such leave is when the original payment is made prior to evidence coming to light that suggests that 77

78 79 80 81 82 83 84 85 86

The practice dates back to the 17th century. For a brief discussion of the history of the procedure see M Ellis, “The Cost of Compromising: Offers of Compromise and Calderbank Offers” (2008) 17 Journal of Judicial Administration 253 at 256-259. See Supreme Court Rules (NT) rr 1.06, 26.12; and Supreme Court Rules 2000 (Tas) r 268. See Supreme Court Rules 2000 (Tas) r 274. See Supreme Court Rules (NT) r 26.17(1); and Supreme Court Rules 2000 (Tas) r 268(2). See Supreme Court Rules 2000 (Tas) r 268(4)(a). See Supreme Court Rules (NT) r 26.15. See Supreme Court Rules (NT) r 26.17(2). See Supreme Court Rules 2000 (Tas) r 268(2)(b). See Supreme Court Rules (NT) r 26.20(1); and Supreme Court Rules 2000 (Tas) r 268(4)(b). See Supreme Court Rules 2000 (Tas) r 268(5).

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the original payment is now excessive,87 or when the law subsequently changes so that the offer is now legally unsubstantiated.88 This refusal to allow withdrawal without leave is applied even after the time for acceptance has expired. So the defendant has theoretically no right to the money once paid into court. This would appear to discourage the use of this procedure,89 especially when the defendant may avail itself of the more recent offers to settle procedures that require no payment into court. Nonetheless, the payment into court option remains useful to some defendants, because if the payment is a reasonable one, considerable pressure is thereby exerted upon the plaintiff, not only in terms of the costs penalties that may apply if the plaintiff recovers less than the amount paid into court, but also due to the tantalising ‘money in the bank’ quality of a payment into court; that is, there is no need to chase the defendant for the settlement amount. The offer to settle is available for acceptance within a certain time period (usually within 14 days from service of the defendant’s notice of payment into court),90 and is effected by notice in writing.91 Upon payment to the plaintiff, the action is stayed.92 If the payment into court offer is rejected by the plaintiff, then the matter proceeds unabated, and no mention may be made of the payment, either in pleadings, or at trial, until all substantive issues have been finally determined.93 The payment may then be brought to the attention of the court in the exercise of the court’s discretion as to costs. The court must take into account the more favourable payment into court,94 but otherwise the court’s discretion is absolute,95 and no presumptive costs implications necessarily flow from the fact that the plaintiff did not better the payment into court on judgment. Nonetheless, a more favourable payment into court would present a strong case for the court to order that the plaintiff pay the defendant’s costs after the date of the payment. This aspect of the payment into court procedure — that there are no presumptive costs implications — is shared by the Calderbank letter option for making an offer to settle the dispute. This is not the case with the more recent offers to settle procedures, as the rules clearly indicate how costs should be awarded if an offer is not bettered at trial.

87 88 89 90 91 92 93 94

95

See Singer v Gilchrist Watt and Sanderson Pty Ltd (1950) 67 WN (NSW) 89. This was the case in Cumper v Pothecary [1941] 2 KB 58. See S Colbran et al, Civil Procedure: Commentary and Materials (6th ed, LexisNexis, 2015) p 890. See Supreme Court Rules (NT) r 26.21(2); and Supreme Court Rules 2000 (Tas) r 269(1). See Supreme Court Rules (NT) r 26.21(6); and Supreme Court Rules 2000 (Tas) r 269(2). See Supreme Court Rules (NT) r 26.22; and Supreme Court Rules 2000 (Tas) r 269(5). See Supreme Court Rules (NT) r 26.25; and Supreme Court Rules 2000 (Tas) r 275(1). See Supreme Court Rules (NT) r 26.26(6) (although the NT rules also suggest that the court may take the payment into account: see Supreme Court Rules (NT) O 26.26(5)); and Supreme Court Rules 2000 (Tas) r 275(2). See Supreme Court Rules 2000 (Tas) r 57(1). [10.90] 257

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Formal offers to settle/offers to compromise [10.100] All Australian jurisdictions have now developed procedures for making formal offers to settle. Under these systems, an offer to settle the dispute may be made in accordance with the rules by any party, in any proceeding, and on any terms.96 Such terms may not even mention a monetary amount, but rather may make an offer as a percentage of the claim.97 This is a significant improvement from the payment into court procedure that is only available to the defendant, and only applicable to claims of monetary relief.98 The exception to this is the Northern Territory, in which the offer of compromise procedure is only available to the plaintiff when the claim concerns damages arising from personal injury;99 in all other actions it is only the defendant that may serve an offer of compromise under the rules.100 This seems an awkward distinction to make, and given the courts’ desire to promote settlement of a dispute, appears at odds with current policy. The Northern Territory peculiarity of denying the plaintiff access to the offer to compromise procedure in all claims other than personal injury matters is difficult to rationalise, especially in light of the fact that the rules then go on to state that any offer made by a plaintiff in matters outside personal injury claims (which by virtue of the rules may only be made as informal offers) “shall” be taken into account by the court in exercising it discretion as to costs,101 and may even be the justification for awarding costs to the plaintiff on a solicitor-client basis.102 The formal offer to settle, or offer of compromise,103 is made by serving written notice of the offer to the other party.104 In some jurisdictions the formal offer is also lodged105 or filed106 with the court, whereas in others this is expressly forbidden 96

See Court Procedures Rules 2006 (ACT) r 1002(1); Federal Court Rules 2011 (Cth) r 25.01(1); Uniform Civil Procedure Rules 2005 (NSW) r 20.26(1); Uniform Civil Procedure Rules 1999 (Qld) r 353(1); Supreme Court Civil Rules 2006 (SA) r 187(1); Supreme Court Rules 2000 (Tas) r 280(1); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.02(1); and Rules of the Supreme Court 1971 (WA) O 24A, r 1.

97

See Henderson v Simon Engineering (Australia) Pty Ltd [1988] VR 867 at 870; and Davies v Fay [1995] 1 Qd R 509 at 510. To quote from the Tasmanian rules: a party may offer “any relief” that the party “contends is sufficient to dispose of the whole action or one or more causes of action” (see Supreme Court Rules 2000 (Tas) rr 280(3)(c), (4)(d)). See Supreme Court Rules (NT) r 26.02(1). See Supreme Court Rules (NT) r 26.02(2). See Supreme Court Rules (NT) r 26.11(2). See Supreme Court Rules (NT) r 26.11(3). The procedure is fundamentally the same, only the label is different. In Queensland it is an “offer to settle”; in SA it is an “offer of settlement”; and in the ACT, the Federal Court, NSW, the NT, Tasmania, Victoria, and WA it is an “offer of compromise”. Despite it only being utilised in Queensland, I will adopt the “offer to settle” moniker for the procedure as it is a more concise expression of what is actually being offered. See Court Procedures Rules 2006 (ACT) r 1002(1); Federal Court Rules 2011 (Cth) r 25.01(1); Uniform Civil Procedure Rules 2005 (NSW) r 20.26(1); Supreme Court Rules (NT) r 26.02(3); Uniform Civil Procedure Rules 1999 (Qld) r 353(3); Supreme Court Civil Rules 2006 (SA) r 187(1); Supreme Court Rules 2000 (Tas) r 281(a); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.02(3); and Rules of the Supreme Court 1971 (WA) O 24A, r 3A. See, eg, Supreme Court Rules 2000 (Tas) r 280(2).

98

99 100 101 102 103

104

105

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until the offer is accepted.107 Jurisdictions also differ as to when the offer may be made: for example, in Tasmania the offer may be served at any stage prior to the commencement of the trial of the matter to which the offer relates;108 in Western Australia the offer may be made at any time prior to either the court summing up (in a jury trial) or providing reasons for its decision;109 and in the Federal Court, the Northern Territory, Queensland, and Victoria the offer may be served at any time prior to verdict or judgment being given.110 Provided the offer is served within the appropriate time frame, a party may make as many offers as it desires.111 [10.110] As to the form of the offer, most jurisdictions dictate that it be in approved form,112 and that it bears a statement to the effect that the offer is made in accordance with the rules.113 Although the offer may be made on any terms the party sees fit, as the costs implications that may flow from the offer (which will be dealt with in due course) necessitate a finding that the offer was either more or less favourable to the offeree than the judgment, the offer needs to be stated with clarity and precision, so that the essential comparison between offer and judgment can be readily made.114 It would therefore be unwise to include complex conditions within the terms of the offer, as this might serve to cloud the court’s perception of what was actually being offered, and thereby make it less likely that the court will be able to evaluate whether the judgment was more or less favourable than the offer.115 For the same reason it is also best practice to make the offer exclusive of costs and interest,116

106 107

See, eg, Supreme Court Civil Rules 2006 (SA) r 187(5). See, eg, Federal Court Rules 2011 (Cth) r 25.01(2); and Uniform Civil Procedure Rules 1999 (Qld) r 357(2).

108 109 110

See Supreme Court Rules 2000 (Tas) r 280(6). See Rules of the Supreme Court 1971 (WA) O 24A, r 3(8). See Federal Court Rules 2011 (Cth) r 25.05(1); Supreme Court Rules (NT) r 26.03(1); Uniform Civil Procedure Rules 1999 (Qld) r 354(1); and Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.03(1).

111

See Court Procedures Rules 2006 (ACT) r 1002(8); Federal Court Rules 2011 (Cth) r 25.05(2); Uniform Civil Procedure Rules 2005 (NSW) r 20.26(10); Supreme Court Rules (NT) r 26.03(2); Uniform Civil Procedure Rules 1999 (Qld) r 353(2); Supreme Court Civil Rules 2006 (SA) r 188(3); Supreme Court Rules 2000 (Tas) r 280(5); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.03(2); and Rules of the Supreme Court 1971 (WA) O 24A, r 3(2). See, eg, Federal Court Rules 2011 (Cth) r 25.01(1); Supreme Court Civil Rules 2006 (SA) r 187(4)(a); and Supreme Court Rules 2000 (Tas) r 281. See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 20.26(2)(d); Supreme Court Rules (NT) r 26.02(3)(b); Uniform Civil Procedure Rules 1999 (Qld) r 353(3); Supreme Court Rules 2000 (Tas) r 281(b)(iv); and Rules of the Supreme Court 1971 (WA) O 24A, r 3A(2)(b). See White v Director of Housing [2003] VSC 124 at [17] per Gillard J. See White v Director of Housing [2003] VSC 124 at [17]. In the ACT and NSW the rules specifically state that the offer must be made exclusive of costs (see Court Procedures Rules 2006 (ACT) r 1002(2)(c); Uniform Civil Procedure Rules 2005 (NSW) r 20.26(2)(c)). In the Federal Court the offer must state whether or not it relates to costs (see Federal Court Rules 2011 (Cth) r 25.03(1)). In Tasmania the offer may include costs (see Supreme Court Rules 2000 (Tas) r 281(c)), but it must state whether or not it is made in addition to any payment into court (see Supreme Court Rules 2000 (Tas) r 281(e)).

112 113

114 115 116

[10.110] 259

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clearly indicate to which cause of action the offer is made,117 and to which party the offer relates.118 If the offer is made inclusive of costs, then the notice should specify the amount for costs contained within the offer,119 and if the offer is expressed inclusive of interest, then the notice should specify the amount set aside for interest,120 and probably (for the purpose of clarity) also how that interest was calculated. The offer may express a specific period in which the offer remains open for acceptance,121 but such period cannot be less than that stipulated in the rules. In most jurisdictions the offer must be open for a period not less than 14 days from service of the notice of the offer.122 In Western Australia the offer must remain open for no less than 28 days from service of the notice of the offer.123 In South Australia it would appear that the offer may be left open for any period the offeror desires, as the offer may be withdrawn at any time by the offeror, simply by filing notice of withdrawal.124 In all other jurisdictions the offer cannot be withdrawn during the relevant open period for acceptance without leave of the court,125 or unless the offer is replaced by a better offer from the offeree’s perspective.126 With the exception of South Australia, it would appear that the offer simply lapses once the time period for acceptance has expired.127 In South Australia, unless the offer is withdrawn by the offeror by filed notice,128 the offer remains open for acceptance up to seven days prior to the date fixed for trial.129

117 118

119 120 121

122

123 124 125

126 127 128 129

See, eg, Supreme Court Rules 2000 (Tas) r 281(d). If there are multiple defendants, and they are alleged to be jointly liable to the plaintiff, it would appear that the plaintiff may make an offer to just one party in Tasmania (see Supreme Court Rules 2000 (Tas) rr 280(5)(b), (8)), whereas in the Federal Court, the NT, Queensland, and WA the offer must be made to all such defendants (see Federal Court Rules 2011 (Cth) r 25.11(2); Supreme Court Rules (NT) r 26.09; Uniform Civil Procedure Rules 1999 (Qld) r 363(2); and Rules of the Supreme Court 1971 (WA) O 24A, r 9). See, eg, Supreme Court Civil Rules 2006 (SA) r 187(6)(b). See, eg, Federal Court Rules 2011 (Cth) r 25.03(2)(b). See, eg, Court Procedures Rules 2006 (ACT) r 1002(2)(e); Uniform Civil Procedure Rules 2005 (NSW) r 20.26(2)(f); Supreme Court Rules 2000 (Tas) r 280(7); and Rules of the Supreme Court 1971 (WA) O 24A, r 3(3). See, eg, Federal Court Rules 2011 (Cth) r 25.05(3); Supreme Court Rules (NT) r 26.03(3); Uniform Civil Procedure Rules 1999 (Qld) r 355(1); Supreme Court Rules 2000 (Tas) r 280(7); and Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.03(3). See Rules of the Supreme Court 1971 (WA) O 24A, r 3(3). See Supreme Court Civil Rules 2006 (SA) rr 188(4) – (5). See Court Procedures Rules 2006 (ACT) r 1002(9); Federal Court Rules 2011 (Cth) r 25.07(a); Uniform Civil Procedure Rules 2005 (NSW) r 20.26(11); Supreme Court Rules (NT) r 26.03(5); Uniform Civil Procedure Rules 1999 (Qld) r 355(1); Supreme Court Rules 2000 (Tas) r 283(2); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.03(5); and Rules of the Supreme Court 1971 (WA) O 24A, r 3(6). See, eg, Federal Court Rules 2011 (Cth) r 25.07(b). See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 355(2). See Supreme Court Civil Rules 2006 (SA) r 188(4). See Supreme Court Civil Rules 2006 (SA) r 188(1).

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If the offeree decides to accept the offer, this acceptance is effected by served written notice.130 In some jurisdictions, once the offer is formally accepted, any party may apply for judgment or court order in terms of the accepted offer.131 In any case, acceptance of a formal offer to settle concludes the action, as the claim is thereby satisfied. There may still be costs issues to be decided,132 but it is the end of the substantive matter in dispute. If a party fails to comply with the terms of an accepted offer, the aggrieved party retains liberty to apply to the court to have the proceedings dismissed,133 or the defence struck out,134 and/or judgment,135 as the case may be. [10.120] If the offer is not accepted, and the matter proceeds to trial, then the offer may be produced to the court when the court turns to the exercise of its discretion as to costs. As the offer constitutes a without prejudice communication (unless the offer otherwise provides),136 prior to the determination of all the substantive liability and relief issues in the matter, the fact of the offer and its terms cannot be disclosed, either at trial,137 or in any pleadings or affidavits.138 As to the costs implications that may flow as a consequence of not accepting a formal offer to settle, the first determination that the court must make is whether the offer was more or less favourable to the offeree than the subsequent judgment.

130

131 132

133

134

135

136

137

138

See Court Procedures Rules 2006 (ACT) r 1003(1); Federal Court Rules 2011 (Cth) r 25.08(3); Uniform Civil Procedure Rules 2005 (NSW) r 20.27(1); Supreme Court Rules (NT) r 26.03(4); Uniform Civil Procedure Rules 1999 (Qld) r 358(1); Supreme Court Civil Rules 2006 (SA) r 188C(3); Supreme Court Rules 2000 (Tas) r 283(1); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.03(4); and Rules of the Supreme Court 1971 (WA) O 24A, r 3(5). See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 20.27(3); Uniform Civil Procedure Rules 1999 (Qld) r 358(4); and Rules of the Supreme Court 1971 (WA) O 24A, r 3(9). In most jurisdictions, no matter what party makes the offer, upon acceptance by the other party, the rules indicate that the plaintiff will usually be entitled to party-party costs up to service of the offer. See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 42.13A(2); Supreme Court Rules (NT) r 26.03(7); and Rules of the Supreme Court 1971 (WA) O 24A, r 10(5). See, eg, Federal Court Rules 2011 (Cth) r 25.10(b); Uniform Civil Procedure Rules 2005 (NSW) r 20.29(1)(b); Supreme Court Rules (NT) r 26.07(1)(b)(i); and Supreme Court Rules 2000 (Tas) r 288(1)(b). See, eg, Federal Court Rules 2011 (Cth) r 25.10(c); Uniform Civil Procedure Rules 2005 (NSW) r 20.29(2)(b); Supreme Court Rules (NT) r 26.07(1)(b)(ii); Supreme Court Rules 2000 (Tas) r 288(1)(c). See, eg, Federal Court Rules 2011 (Cth) r 25.10(a); Uniform Civil Procedure Rules 2005 (NSW) rr 20.29(1)(a), (2)(a) ; Supreme Court Rules (NT) r 26.07(1)(a); Uniform Civil Procedure Rules 1999 (Qld) r 365(a); Supreme Court Rules 2000 (Tas) r 288(1)(a); and Rules of the Supreme Court 1971 (WA) O 24A, r 8(1)(b). See, eg, Court Procedures Rules 2006 (ACT) r 1002(7); Federal Court Rules 2011 (Cth) r 25.05(4); Uniform Civil Procedure Rules 2005 (NSW) r 20.26(9); Supreme Court Rules (NT) r 26.04; Uniform Civil Procedure Rules 1999 (Qld) r 356; Supreme Court Civil Rules 2006 (SA) r 188B; Supreme Court Rules 2000 (Tas) r 285; and Rules of the Supreme Court 1971 (WA) O 24A, r 6. See, eg, Federal Court Rules 2011 (Cth) r 25.06(2); Uniform Civil Procedure Rules 2005 (NSW) rr 20.30(2), (3)(c); Supreme Court Rules (NT) r 26.05(2); Uniform Civil Procedure Rules 1999 (Qld) r 357(3); Supreme Court Rules 2000 (Tas) r 286(2); and Rules of the Supreme Court 1971 (WA) O 24A, r 7(2). See, eg, Federal Court Rules 2011 (Cth) r 25.06(1); Uniform Civil Procedure Rules 2005 (NSW) r 20.30(1); Uniform Civil Procedure Rules 1999 (Qld) r 357(1); Supreme Court Rules 2000 (Tas) r 286(1); and Rules of the Supreme Court 1971 (WA) O 24A, r 7(1). [10.120] 261

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If the offer was less favourable to the offeree than the judgment, then that is really the end of the matter in terms of presumptive costs consequences. It is arguable that the court may still consider the offer in the exercise of its discretion as to costs, in much the same way that the court may consider a Calderbank letter, but given that the judgment is more favourable to the offeree, it is unlikely (although, as mentioned earlier in the Calderbank discussion, nonetheless possible) that the court would hold that the failure to accept the offer was unreasonable in all the circumstances. On this point it should be noted that the legal principles and authorities relevant to Calderbank offers are still relevant to any discussion of these formal offers to settle because an offer purportedly made in accordance with the rules, but that in fact did not comply with the rules, can still be considered as an informal offer.139 If the offer is made in accordance with the rules, and is not equalled or bettered at judgment by the offeree, then (unlike the case with Calderbank offers) the question of reasonableness in terms of rejecting the offer becomes largely irrelevant.140 The rules clearly indicate that certain costs orders should flow if the offeree does not accept the offer and fails to better the offer at judgment. Some exceptions to this exist: in New South Wales the costs implications may not apply if the offeror fails to provide enough information to the offeree to properly consider the offer;141 in Victoria, if quantum is agreed and only liability is in issue, then the costs implications do not flow “unless the Court is satisfied that the plaintiff’s offer was of a genuine compromise”;142 in most jurisdictions the rules specifically state that the costs implications will not flow unless the party making the offer was at all material times willing and able to carry out the offer;143 and in all jurisdictions it is arguable that the courts will demand, in line with the law applicable to Calderbank offers, that the offer must be a genuine one and represent some level of compromise.144 This last limitation on what will be deemed a proper offer is recognition that otherwise the costs implications that attach to a formal offer may be open to tactical abuse by the unethical litigant. For example, a plaintiff might simply serve a notice of offer that does no more than repeat the claim, but perhaps with a nominally smaller amount than the claim. In such a case the plaintiff is seeking to gain the benefit of the costs implications should the defendant reject the offer, yet stands to lose nothing by the defendant accepting the offer. Consequently, the courts demand an indication of compromise, and if the court determines that the

139 140 141 142 143

144

See Ying v Song [2011] NSWSC 618 at [20]-[22]. Also see Westpac v Commissioner of State Revenue [2004] QSC 19; and Grbavac v Hart [1997] 1 VR 154. See Shaw v Jarldorn (1999) 76 SASR 28 at 34 per Perry J; and Whitehead v Maas (1991) 56 SASR 362 at 365-367. See Uniform Civil Procedure Rules 2005 (NSW) r 20.26(4). Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.08(8). See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 42.17; Supreme Court Rules (NT) r 26.08(7); Uniform Civil Procedure Rules 1999 (Qld) rr 360(1)(b), 361(1)(b); Supreme Court Rules 2000 (Tas) r 289(3); and Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.08(7). See Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [20]; Castro v Hillery [2003] 1 Qd R 651; Council of the City of Liverpool v Turano [2009] NSWCA 176 at [57]; CSR Ltd v Amaca Pty Ltd (No 2) [2009] NSWCA 426 at [8].

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offer is made solely to “trigger a costs sanction”,145 then it will not be permitted to do so.146 It should, however, be noted that it is permissible to have the costs implications of making a formal offer in mind when making that offer. As Justice Ward of the NSW Supreme Court explains: All offers of compromise, it might be inferred (consistent with the rationale underlying the rules which visit special cost consequences upon them), are made with the potential consequence in mind that they may trigger costs sanctions if they are not accepted. This cannot of itself be a basis for refusing to apply the special costs sanctions that attend to such offers … If … [settlement of the civil dispute] … is achieved by a party taking into account the costs consequences that may follow from not accepting the offer, that does not suggest that the offer itself is any less a compromise on the part of the offeror. The real question in each case must be whether the offer so made amounts to a genuine compromise (even if it be made with the potential costs sanctions in mind).147

In other words, the paramount concern of the courts in this respect is whether the offer represented a genuine compromise. Accordingly, provided an offer constitutes a genuine compromise, it may be the case that the relevant costs implications will flow from an offer that represents nominally less than the claim. Similarly, it may be the case that a party’s offer is rejected and then not bettered by the offeree at trial, but because the offer was not genuine and indicative of compromise when it was made by the offeror, the court will refuse to apply the usual costs implications. As to the exact nature of those costs implications, they vary between jurisdictions, and depending on what party has made the offer. With the exception of Western Australia, all jurisdictions dictate that if the defendant fails to accept the plaintiff’s offer, and judgment is no less favourable to the plaintiff than the terms of the offer, then the plaintiff will be entitled to a costs order in its favour, taxed on a “solicitor and client” (the term used in the ACT and Tasmania) or “indemnity” basis (the term used in all other jurisdictions). In the Northern Territory, Queensland, and Tasmania costs are taxed from commencement of the action,148 whereas in most other jurisdictions, the plaintiff is only entitled to party-party costs up to the service of the offer (or soon thereafter), and costs on an indemnity basis after that date.149 In any case, all jurisdictions, by virtue of these

145 146 147 148 149

Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [21]. See Castro v Hillery [2003] 1 Qd R 651; and Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353. George v Webb [2012] NSWSC 86 at [55]. See Supreme Court Rules (NT) r 26.08(2); Uniform Civil Procedure Rules 1999 (Qld) r 360; and Supreme Court Rules 2000 (Tas) r 289(1). See Federal Court Rules 2011 (Cth) r 25.14(3); Uniform Civil Procedure Rules 2005 (NSW) r 42.14(2); Supreme Court Civil Rules 2006 (SA) r 188F(3); and Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.08(2)(b). In the ACT, the relevant date at which the plaintiff’s cost award may change from party-party to solicitor-client is not related to service of the offer but is the day on which the period of acceptance of the offer ends: Court Procedures Rules 2006 (ACT) r 1010(2)(b). Note also that in the ACT and Victoria, if the matter was a personal injury action, then the plaintiff may receive an order for costs on a solicitor and client or indemnity basis from the beginning of proceedings (see Court Procedures Rules 2006 (ACT) r 1010(2)(a); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.08(2)(a)). [10.120] 263

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presumptive costs principles,150 provide clear incentive for the defendant to accept the plaintiff’s reasonable offer. This threat of an adverse indemnity costs order against the defendant has been viewed by the courts as an acceptable “penalty” for failing to accept a reasonable offer from the plaintiff, and therefore wasting further court and party resources.151 This is not the case in Western Australia. In Western Australia if the plaintiff makes an offer that is rejected by the defendant, and the judgment is no less favourable to the plaintiff than the terms of the plaintiff’s offer to settle, then the plaintiff is still only entitled to an order for party and party costs,152 unless the plaintiff can also show that the defendant’s failure to accept the offer was “unreasonable”, in which case costs may be taxed on an indemnity basis.153 This regime creates less incentive for the defendant to accept the plaintiff’s offer (provided the defendant is not being unreasonable in failing to accept that offer), as the defendant will (under the ordinary rule that costs follow the event) be liable for the successful plaintiff’s party-party costs in any event. [10.130] If the defendant makes an offer that is rejected by the plaintiff, and judgment for the plaintiff is no more favourable to the plaintiff than the terms of the defendant’s offer, then most jurisdictions dictate that although the plaintiff is still entitled to costs on a “party-party” basis (other terms utilised in this respect are “ordinary” (in New South Wales), “standard” (in the Northern Territory and Queensland) and “ordinarily applicable basis” (in Victoria)) up to the date of service or notice of the defendant’s offer (or shortly thereafter), the defendant will be entitled to costs taxed on a party-party basis from the date of service or notice of the offer (or shortly thereafter).154 In the Australian Capital Territory and Western Australia this is also the default position, but in Western Australia if the defendant can show that the plaintiff’s failure to accept the offer was unreasonable, then the defendant is entitled to indemnity costs; and in the Australian Capital Territory, if the claim concerned personal injury, then the plaintiff is entitled to party-party costs up to the date of the offer, after which the parties bear their own costs.155 In the Federal Court and in New South Wales, if the defendant makes an offer that is rejected by the plaintiff, and judgment for the plaintiff is no more favourable to the plaintiff than the terms of the offer, then the plaintiff is entitled to an order for ordinary costs up to the date of service or notice of the defendant’s offer (or shortly thereafter), but the defendant is entitled to an order for costs on 150

151

152 153 154

155

There is no question that the rules express a “prima facie presumption” in this respect (see Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [28]; and Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 267 per Debelle J). See Whitehead v Maas (1991) 56 SASR 362 at 367 per King CJ; Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 263, 267 per Debelle J; and Shaw v Jarldorn (1999) 76 SASR 28 at 29 per Doyle CJ, at 37 per Perry J. See Rules of the Supreme Court 1971 (WA) O 24A, r 10(4). See Rules of the Supreme Court 1971 (WA) O 24A, r 10(5A). See Supreme Court Rules (NT) r 26.08(3); Uniform Civil Procedure Rules 1999 (Qld) r 361(2); Supreme Court Civil Rules 2006 (SA) r 188F(5); Supreme Court Rules 2000 (Tas) r 289(2); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.08(3). See Rules of the Supreme Court 1971 (WA) O 24A, rr 10(5) & 10(7A); Court Procedures Rules 2006 (ACT) rr 1011(2)(a) & 1011(2)(b).

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an indemnity basis after that date.156 In most jurisdictions, if the defendant makes an offer to the plaintiff, and the defendant succeeds on liability at trial, then the defendant is entitled to ordinary costs up to service or notice of the offer (or shortly thereafter), and then indemnity (or solicitor and client) costs thereafter.157 In terms of the exercise of the courts’ costs discretion, in Queensland the court “must” make the above mentioned costs orders (unless a party can show that there is a more appropriate order to be made),158 and in all other jurisdictions, unless the court otherwise orders, the parties are “entitled” to the above costs orders.159 Thus, in all jurisdictions, there exist presumptive costs implications. That is, although the court retains its discretion as to costs,160 and is free to operate inconsistently with the rules (although the discretion must be exercised judicially), it nonetheless must at least seriously consider the formal offer to settle made in the proceedings, and unless there is good reason to order otherwise, there is a clear expectation within the rules that the court will make costs orders in accordance with the rules. Consequently, the courts’ costs discretion is arguably no longer an absolute discretion in this respect,161 as the rules establish “presumptive” principles as to costs.162 This is in line with the Australian Law Reform Commission (ALRC) suggestion that the discretion as to costs should not be absolute, and should only operate in accordance with the rules, thus creating certainty, which would serve to encourage settlement.163 156 157

See Federal Court Rules 2011 (Cth) r 25.14(1); and Uniform Civil Procedure Rules 2005 (NSW) r 42.15. See Court Procedures Rules 2006 (ACT) r 1012; Federal Court Rules 2011 (Cth) r 25.14(2); Uniform Civil Procedure Rules 2005 (NSW) r 42.15A; Supreme Court Civil Rules 2006 (SA) r 188F(4); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.08(4).

158 159

See Uniform Civil Procedure Rules 1999 (Qld) rr 360, 361. See, eg, Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 26.08.

160

The point has been made that the power reserved for the court to “order otherwise” confers an unfettered discretion on the court (see Shaw v Jarldorn (1999) 76 SASR 28 at 29 per Doyle CJ). Also see Ritter v Godfrey [1920] 2 KB 47; Donald Campbell & Co v Pollak [1927] AC 732 at 811-812 per Viscount Cave LC; Latoudis v Casey (1990) 170 CLR 534 at 540 per Mason CJ, at 558 per Dawson J; Oshlack v Richmond River Council (1998) 193 CLR 72 at 88-89 per Gaudron & Gummow JJ, at 117-118, 121 per Kirby J; Board of Examiners v XY [2006] VSCA 190 at [13]; Federal Court of Australia Act 1976 (Cth) s 43; Civil Procedure Act 2005 (NSW) s 98; Supreme Court Act 1935 (SA) s 40; Supreme Court Civil Procedure Act 1932 (Tas) s 12; Supreme Court Act 1986 (Vic) s 24; and Supreme Court Act 1935 (WA) s 37. See M J Rankin, “Calderbank Letters and Formal Settlement Offers: Is the Calderbank Offer a Dead Letter?” (2010) 21 Australasian Dispute Resolution Journal 242 at 244-245. See MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 at 240 per Lindgren J; Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 267 per Debelle J; Anderson Group Pty Ltd v Tynan Motors Pty Ltd [No 2] (2006) 67 NSWLR 706 at 708; CGU Insurance Ltd v Corrections Corporations of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 at [75]; Council of the City of Liverpool v Turano [2009] NSWCA 176 at [52]; Vawdrey Australia Pty Ltd v Krueger Transport Equipment Pty Ltd [2009] FCAFC 156 at [187]; Blackman v Gant (No 2) (2010) 29 VR 29 at 78-79; George v Webb [2012] NSWSC 86 at [56]; Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [28]. Of course, framing the costs discretion as subject to the rules of the court is not a new phenomenon (see Cretazzo v Lombardi (1975) 13 SASR 4). See Australian Law Reform Commission, Costs Shifting — Who Pays for Litigation (ALRC Report No 75, 1995) pp 20, 61. Also see Commonwealth v Gretton [2008] NSWCA 117 at [113] per Hodgson JA.

161 162

163

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With an informal offer, the court has a more complete discretion, not only in terms of what costs orders to make on the basis of the informal offer, but even in terms of whether or not to consider the informal offer at all. With these formal offers, the court does not have that unfettered discretion: it must consider the formal offer in exercising its discretion, and unless there is good reason to order otherwise, the costs consequences prescribed by the rules should apply. In this sense, there is a presumed (if not automatic) outcome with respect to costs orders when a formal offer has been rejected and not bettered on judgment.164 If a party’s offer is rejected and not bettered by the offeree at trial, then the offeror is prima facie entitled to the costs orders under the rules. It is up to the offeree to convince the court that such presumptive costs principles should not apply in a particular case.165 Put simply, if the formal offer is rejected and not bettered, then there must exist “good reason” to order that the rules not have their usual effect.166 This will generally involve proving to the court that there existed special or exceptional circumstances such that the presumptive principles are thereby displaced.167 As to what might constitute such “special” circumstances, there is no set list of criteria,168 but the offeree might point to such matters as: the offeree had inadequate information at the time of the offer to make an informed decision on the offer;169 the offer was made at such a late stage that there was inadequate time to consider the offer prior to trial;170 a party’s case at the time of the offer was substantially different, in law or fact, to the case presented at trial;171 or there existed disentitling conduct by the offeror in the manner in which the litigation was conducted.172 [10.140] Although these factors are similar to those explored under the issue of reasonableness in rejecting a Calderbank offer, it must be emphasised that the

164 165

166

167

168 169

170 171 172

See Shaw v Jarldorn (1999) 76 SASR 28 at 29-30 per Doyle CJ; and George v Webb [2012] NSWSC 86 at [56] per Ward J. See Shaw v Jarldorn (1999) 76 SASR 28 at 31 per Doyle CJ; Clark v State of Tasmania (1999) 9 Tas R 54 at 60 per Underwood J; Smith v Deputy Commissioner of Taxation (1997) 37 ATR 314 at 316 per Mansfield J. See Shaw v Jarldorn (1999) 76 SASR 28 at 29 per Doyle CJ. Also see Commonwealth v Gretton [2008] NSWCA 117 at [114] in which Hodgson JA made the similar point that “the court is to make the order specified by the applicable rules unless sufficient reason is showing for ordering otherwise.” See Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 725; Smith v Deputy Commissioner of Taxation (1997) 37 ATR 314 at 316 per Mansfield J; Shaw v Jarldorn (1999) 76 SASR 28 at 29 per Doyle CJ, at 34 per Perry J. See New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100 at 102 per Gleeson CJ; Shaw v Jarldorn (1999) 76 SASR 28 at 31 per Doyle CJ. See Shaw v Jarldorn (1999) 76 SASR 28 at 34 per Perry J; and Vale v Eggins (No 2) [2007] NSWCA 12 at [22]. In NSW the rules specifically state that the presumptive costs principles do not apply in such cases (see Uniform Civil Procedure Rules 2005 (NSW) r 20.26(4)). See Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [117]. See Morris v McEwen (2005) 92 SASR 281 at 293 per Besanko J; Castro v Hillery [2003] 1 Qd R 651; Shaw v Jarldorn (1999) 76 SASR 28 at 30 per Doyle CJ, at 34 per Perry J. See Windbank v Bradley (1970) 4 ACTR 14 at 16 per Fox J; Humphries v TWT Ltd (1993) 113 FLR 422 at 427; Shaw v Jarldorn (1999) 76 SASR 28 at 34 per Perry J; Morris v McEwen (2005) 92 SASR 281.

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reasonableness of the rejection of the formal offer is irrelevant.173 The above factors are examples of what a party may point to in trying to convince the court that the presumptive costs principles should not flow. In any case, it is a heavy burden on the party wishing to displace the presumptive costs rules, and it “will only be in an extreme case that such considerations would avail”174 such a party. In fact, courts have emphasised that there would actually be “very few cases” in which the ordinary operation of the rules might be avoided.175 A party is only likely to succeed in convincing the court to displace the presumptive principles if it can prove a “significant” change of circumstance between the offer and judgment, such that it would be unjust to apply the presumptive costs principles.176 Courts have stressed that it would certainly not be enough for the offeree to merely argue that its assessment of the risk of litigation was inaccurate. As Doyle CJ of the South Australian Supreme Court explained: A defendant who does not accept an offer made by a plaintiff will, of necessity, only know after judgment if the defendant was right to fight on rather than to accept the offer. But once again, the rule operates on the premise that if an offer is made by the plaintiff, the defendant will weigh up the advantages and disadvantages of not accepting the offer. In weighing up those advantages and disadvantages, the defendant must take into account the ordinary risks of litigation, including the fact that in a damages claim in particular it is usually impossible to predict with any precision the amount of damages that will be awarded. And such a defendant must also bear in mind that if matters of fact that will affect the amount of damages are in issue, a decision on those matters can go one way or the other. For those reasons it will not usually be to the point, in submitting that the Court should order otherwise, for the defendant to submit that there were reasons why it might not have anticipated the Court awarding as much as it did.177

This was the main point in Shaw v Jarldorn:178 that a party is to “be assumed to anticipate the ordinary risks and vicissitudes of litigation,”179 and mere surprise at trial is not sufficient to supplant the presumptive costs principles “as it is symptomatic of litigation that the course taken by a trial will often be unpredictable”.180 As said, this means that it will only be the exceptional case in which the presumptive costs implications will not be applied when an offer is not bettered on judgment. As a consequence, the systems currently in place promote settlement of the dispute in a very persuasive manner, as the costs implications

173

174 175 176 177 178 179 180

See Shaw v Jarldorn (1999) 76 SASR 28 at 34 per Perry J. Note: this is not the case in WA, as the rules create different costs implications when the failure to accept the offer was unreasonable: see Rules of the Supreme Court 1971 (WA) O 24A, rr 10(5A) & 10(7A). Shaw v Jarldorn (1999) 76 SASR 28 at 34 per Perry J. Shaw v Jarldorn (1999) 76 SASR 28 at 34 per Perry J, at 31 per Doyle CJ. Morris v McEwen (2005) 92 SASR 281 at 294 per Besanko J; and Shaw v Jarldorn (1999) 76 SASR 28 at 34 per Perry J. Shaw v Jarldorn (1999) 76 SASR 28 at 29-30 per Doyle CJ. Also see Hillier v Sheather (1995) 36 NSWLR 414 at 422-423 per Kirby P. (1999) 76 SASR 28. (1999) 76 SASR 28 at 30 per Doyle CJ. (1999) 76 SASR 28 at 34 per Perry J. [10.140] 267

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are abundantly clear to all parties. This effectively serves the purpose of the presumptive costs principles: “to facilitate the proper compromise of litigation”.181 With informal offers and payments into court, the costs consequences are uncertain, and as a consequence there is less pressure on the offeree to accept an offer. Under the formal offer to settle systems, the costs consequences of failing to accept an offer that is not bettered by the offeree in court are relatively assured. The rationale behind the system is to shift the cost burden, and thereby stress the financial risk of further litigation. A party receiving a formal offer to settle is now in the position of knowing that, unless there exist exceptional circumstances, definite costs orders will be made if that party does not better the offer at trial. Provided the offer is reasonable (not as any legal precondition, but in the sense that the offer is such as to create doubt in the mind of the offeree as to whether or not they will better the offer on judgment), there is considerable financial pressure thereby placed upon a party to accept the offer, and to do so quickly.182

CONCLUSION: SOME DANGERS HIGHLIGHTED [10.150] If the dispute is really about quantum and liability is accepted, or at least not seriously in issue, then the system has undoubted merit.183 The problem with the system is encountered when liability is genuinely contested, as the costs presumptions attached to offers to settle may impact unjustly in such matters. In such a case, from the defendant’s perspective, any offer by the plaintiff may not be viewed as an offer of compromise, as the defendant may not believe that it is liable to provide the plaintiff with any relief. However, the rules may operate to compel the defendant to accept such an offer, as the defendant may not want to risk indemnity costs being awarded against it. In this way, the defendant is forced into making a business decision: it is a decision based entirely on avoiding the costs of litigation, and not on the merits of the case. It is questionable whether this constitutes ‘justice’. Of course, such issues may perhaps be ameliorated by further fine tuning of court procedures. For example, the rules of court might be amended such that the presumptive costs principles attached to formal offers to settle do not apply when liability is shown to be genuinely in issue. Alternatively, the courts themselves might recognise this danger, and exercise their discretion less in line with the presumptive principles of the rules when liability is disputed. The ALRC has always maintained that costs are a barrier to access to justice,184 and further that the cost of litigation may make a party reluctant to pursue or 181

182 183 184

Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724. Other objects of the rules were said to be: to save private costs; to avoid risks, delays and uncertainties of litigation; to save public costs; and to indemnify the party that makes a reasonable offer against the party that causes the necessity for further litigation by the unreasonable rejection of that offer (see Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724; and Pirrotta v Citibank Ltd (1998) 72 SASR 259 at 262-263). See Hillier v Sheather (1995) 36 NSWLR 414 at 420 per Kirby P. See Australian Law Reform Commission, Costs Shifting — Who Pays for Litigation (ALRC Report No 75, 1995) p 125. See Australian Law Reform Commission, Costs Shifting — Who Pays for Litigation (ALRC Report No 75, 1995) pp 5, 17, 132, 141.

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defend meritorious cases simply out of fear of the risk of having to pay the other party’s costs, or a portion of them.185 However, the ALRC also found that the old costs rule had “little influence on the rate of settlement”,186 so it recommended a strengthened link between the costs allocation rules and settlement of the dispute by the use of “disciplinary costs orders” for unreasonable refusal to settle.187 The courts have evidently done so, but by doing this too effectively, have the courts simply erected further costs barriers to access to justice? Rather than promoting just settlement of a dispute, the formal offers to settle regime may actually constitute an active discouragement to litigation.188 This raises a serious question: should litigants be discouraged from pursuing their rights in a court of law? An answer to that question necessitates a study of the more fundamental issue concerning the courts’ active promotion of settlement at the expense of litigation, which has already been discussed in Chapter 9.

185 186 187 188

See Australian Law Reform Commission, Costs Shifting — Who Pays for Litigation (ALRC Report No 75, 1995) pp 11, 53-54. Australian Law Reform Commission, Costs Shifting — Who Pays for Litigation (ALRC Report No 75, 1995) p 123. See Australian Law Reform Commission, Costs Shifting — Who Pays for Litigation (ALRC Report No 75, 1995) p 125. See M Ellis, “The Cost of Compromising: Offers of Compromise and Calderbank Offers” (2008) 17 Journal of Judicial Administration 253 at 267-268. [10.150] 269

CHAPTER 11 Trials [11.20] [11.30]

[11.150] [11.170] [11.180] [11.190]

The common law trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272 Mode of trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274 [11.40] Australian Capital Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275 [11.50] Federal Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275 [11.60] New South Wales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275 [11.70] Northern Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276 [11.80] Queensland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276 [11.90] South Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 [11.100] Tasmania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 [11.110] Victoria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278 [11.120] Western Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278 [11.130] Defamation cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278 [11.140] The practical reality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 The Trial process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 [11.160] Chronology of a trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280 Splitting trials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281 Verdicts and judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282 Current issues and possible developments . . . . . . . . . . . . . . . . . . . . . . . . . 283 [11.200] Orality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 [11.210] Single climatic trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 [11.220] Party control of process and issues . . . . . . . . . . . . . . . . . . . . . . . . 286

[11.10] For centuries, one of the key functions of civil procedure has been to prepare a case for trial. The trial, that dramatic set piece of confrontation between the parties,1 is both the high point and the end point of civil procedure. At common law, the essential features of the trial process are well recognised although the goals of the trial process remain an area of debate. Yet as we have already noted, trials are a relatively small component in the work involved in civil litigation.2 Few of the cases commenced in court reach the trial stage and even fewer are resolved by a judgment that brings the trial process to an end. Yet it is through the trial process that the most critical and unique role of the civil justice system is manifested — the recognition and enforcement of legal rules and the consequent rights and obligations that flow from them. In this chapter, we begin with an examination of the broad principles that define the trial process and outline some of the debate about the goals of the trial.

1

2

Or as then Justice Moynihan of the Supreme Court of Queensland put it — “A cataclysmic showpiece of a hearing”: see P Underwood, “The Trial Process: Does One Size Fit All?” (2006) Journal of Judicial Administration 164 at 167. See Chapter 1. [11.10] 271

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We then turn to examine one of the central aspects of the common law trial — the trial by jury and the rules governing their use. Much of the procedure during the trial is governed by the laws of evidence — who can give evidence, what questions can be asked of witnesses, what documents may be used as evidence … to list a few. While an overview of these matters is provided, detailed consideration is left to those works covering the law of evidence. The chapter also examines the law with respect to judgments before concluding with a discussion of the major areas of recent reform in trials and suggests directions for future change.

THE COMMON LAW TRIAL [11.20] The history of the evolution of the contemporary common law trial process is long and tortuous, reflecting the history of the different English courts over the ages. The struggle to control the exercise of judicial power brought the Crown, Parliament, the Church and the courts into conflict and from the waxing and waning of the different courts, civil procedure (including trial process) evolved. Over the thousand years of the common law, different methods of trial were recognised or used. The early forms involved testing the parties and relying on supernatural intervention (or lack of it) to determine the outcome. Hence, we have the notorious trial by ordeal, trial by battle and trial by oaths. The trial by ordeal (eg, the carrying of heated iron bars) fell into disuse after the Church banned clergy from participating in the process in 1215.3 Blackstone, writing in the middle of the eighteenth century, noted that the trial by battle had fallen into disuse by the late sixteenth century but was still available to disputants, and he provides a detailed description of the procedure.4 While trial by battle was said to be abolished in England in 1818,5 there are occasional idiosyncratic applications for such a trial.6 The trial by oath (also known as the trial by wager of law) involved the defendant swearing on oath the basis of his or her defence supported by a prescribed “number of compurgators, who swore they believed his oath”. This form of proof, based essentially on evidence of good character, was abolished in England in 1832.7 All these forms of trial were superseded by a trial process that required some form of investigation into the case, and a decision based upon evidence relevant to the facts of the case — the trial by jury. The initial use of juries was to bring together a group of individuals likely to have their own knowledge of the matters in dispute to answer a particular query. Over time this evolved into using the jury to determine the facts of the matter, not of their own knowledge, but on the

3 4 5 6

7

J Baker, An Introduction to English Legal History (3rd ed, Butterworths, 1990) p 6. W Blackstone, Commentaries on the Laws of England, Vol 3 (1st ed, 1768) reprinted by University of Chicago Press, 1979, pp 337-341. See J Baker, An Introduction to English Legal History (3rd ed, Butterworths, 1990) p 87. In 2002 an English magistrate refused an application by a defendant facing a £25 fine for a minor motoring offence for a trial by combat ( The Telegraph, 16 December 2002) and in 2015 a New York lawyer being sued for helping a client fraudulently transfer assets applied for a trial by battle (The Independent, 7 August 2015). A Carter, A History of English Legal Institutions (4th ed, Butterworths, 1910) p 223.

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evidence provided to the court by witnesses.8 The trial by jury has been seen as a distinguishing feature of the common law system and described as a “bulwark of popular rights”9 and so important that the right to a jury trial is the only personal right to be found in both the original Constitution of the United States and the Bill of Rights.10 Justice Evatt, in 1936, wrote “in modern times the jury system is to be regarded as an essential feature of real democracy.”11 So use of the jury was one of the defining aspects of common law trials, but as we will see, in Australia the use of juries in civil trials has been greatly curtailed, and in some jurisdictions, abolished altogether. That leaves the question open as to what then are the characteristics of the common law trial — clearly trial by jury is not a defining feature. Davies in 2003 suggested that there were three essential elements to the common law trial: a single climatic trial; party control of the process and issues; and orality.12 One of the leading procedural scholars in the United States, John Langbein, is more nuanced, listing five elements (described as defining traits): concentrated hearing; division between pre-trial and trial; bifurcation of functions (between judge and jury); orality (along with immediacy and public access); and party control of investigation and presentation.13 What is common to both these views is immediately obvious — a single continuous trial; party control; and orality. With closer examination, Langbein’s additional elements do not add a great deal to these basic three elements in the Australian context. Taking the division between pre-trial and trial first, this is a necessary consequence of the requirement for a single continuous trial. The other additional element added by Langbein, the bifurcation of functions (questions of law being matters for the judge and questions of fact being matters for the jury) rely on the continued use of juries. As we have noted, juries are very much a feature of civil procedure in the United States but much less so in Australia and England. In the latter jurisdictions, the judge in a civil trial is more commonly required to determine both questions of law and fact. There is much greater debate over the purpose of the trial. We have seen how the tension between the purposes of litigation continues to influence civil litigation reform. The question continually needs to be asked — how does any particular procedural reform affect the important roles litigation and the civil justice system play? Those ‘roles’ being the provision of a socially accepted means of resolving private civil disputes and/or the more public function of enunciating and operationalising the legal rules. Views on the function of trials tend to be more contradictory. Is the purpose of the trial to lead to a determination that is as accurate and close to the truth as is possible or is it to simply determine whether, after considering the competing

8 9 10 11 12 13

See F Maitland, The Constitutional History of England (University Press, 1919) p 211. F Pollock, “Continuity of the Common Law” (1897) 11 Harvard Law Review 423 at 428. The Australian Constitution requires those charged with indictable Commonwealth offences to be tried by jury, s 80. H Evatt, “The Jury System in Australia” (1936) 10 Australian Law Journal 49. G Davies, “The Reality of Civil Justice Reform: Why We Must Abandon the Essential Elements of Our System” (2003) 12 Journal of Judicial Administration 155 at 156-157. J Langbein, “The Disappearance of the Civil Trial in the United States” (2012) 122 Yale Law Journal 522 at 529-537. [11.20] 273

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evidence, the court is satisfied that the party with the burden of proof has established its case to the requisite standard? In the latter situation, the objective truth might be something entirely different to that presented by the parties.14 The traditional view, repeated in many judgments across the years, is that the function of the common law trial is the latter. As Lord Wilberforce held in the House of Lords: In a contest purely between one litigant and another, such as the present, the task of the court is to do, and be seen to be doing, justice between the parties — a duty reflected by the word “fairly” in the rule. There is no higher or additional duty to ascertain some independent truth. It often happens, from the imperfection of evidence, or the withholding of it, sometimes by the party in whose favour it would tell if presented, that an adjudication has to be made which is not, and is known not to be, the whole truth of the matter: yet if the decision has been in accordance with the available evidence and with the law, justice will have been fairly done.15

Arguing the opposite (in the same dispute), the trial judge, Bingham J (later Lord Chief Justice of England), held: The concern of the court must surely be to ensure that the truth is elicited, not caring whether the truth favours one party or the other but anxious that its final decision should be grounded on a sure foundation of fact. Justice is as greatly affronted where a plaintiff is wrongly awarded relief as where he is wrongly denied it. 16

As we discuss in the latter part of this chapter, how courts operate and in particular what the role of the judge is, depends greatly on which version of the function of the trial has been adopted.

MODE OF TRIAL [11.30] Earlier in this chapter, the evolution of trial by jury was described. By 1854 it had come to be the only form of common law trial.17 Since that high point, in the Anglo-Australian common law world, the civil jury trial has been in decline and has been replaced by trial by judge alone. Trial by judge alone is, of course, not foreign to English and Australian law. The law of equity was always a matter for the Court of Chancery and there trial by judge alone has been the prevailing mode of trial. So where and when is civil trial by jury possible in Australia? Across Australia, the different jurisdictions vary considerably, ranging from those where civil juries have been effectively abolished to those where civil juries are possible but used sparingly, to others where civil juries are only available for certain types of cases. The general provisions governing the mode of trial are outlined below followed by a discussion about defamation cases that across Australia are governed to a large extent by uniform legislation.

14 15 16 17

This is not to overlook the age-old philosophical inquiries about the nature of truth but they lie outside the scope of this book. Air Canada v Secretary of State for Trade [1983] 2 AC 394 at 438. Air Canada v Secretary of State for Trade (No 2) [1983] 1 All ER 161 at 167. See J Langbein, “The Disappearance of the Civil Trial in the United States” (2012) 122 Yale Law Journal 522 at 527.

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Australian Capital Territory [11.40] Juries were formally abolished in the Australian Capital Territory in 200218 as part of wide reforms in response to the apparent tort ‘crisis’ thought to be facing Australia. In reality, civil juries had never actually been used in the Australian Capital Territory even when they were legally possible.19

Federal Court [11.50] In the Federal Court, there is a strong presumption against jury trials. Section 39 of the Federal Court of Australia Act 1976 (Cth) provides that trials are to be by judge without jury unless otherwise ordered. This provision is similar to that which governs trials in the High Court and that has been held to require some “special reason” to justify departing from trial by judge alone.20 As a result, juries have been almost, if not entirely, non-existent in the Federal Court. One rare example of a successful application for a jury trial is Ra v Nationwide News Ltd.21 Here Rares J granted the defendant’s application for a jury in a defamation case reasoning that: In assessing whether or not a publication, first, is defamatory in the sense complained of and, secondly, has been defended under defences such as truth, honest opinion or fair report, a jury of ordinary reasonable people is able to evaluate the competing factual issues bringing to bear the moral and social standards that they share with the community at large. And, they are better placed than judicial officers to assess how ordinary reasonable people understand mass media publications.22

New South Wales [11.60] In New South Wales there is a presumption against trial by jury.23 In 2001, s 85 of the Supreme Court Act 1970 was amended to provide: (1)

Proceedings in any Division are to be tried without a jury, unless the Court orders otherwise.

(2)

The Court may make an order under subsection (1) that proceedings are to be tried with a jury if: (a)

(b)

18 19 20 21 22 23

any party to the proceedings: (i)

files a requisition for trial with a jury, and

(ii)

pays the fee prescribed by the regulations made under s 18 of the Civil Procedure Act 2005, and

the Court is satisfied that the interests of justice require a trial by jury in the proceedings. …

Civil Law (Wrongs) Act 2002 (ACT) s 149 and Sch 3. Bateman & Idameneo (No 123) Pty Ltd v Fairfax Media Publications Pty Ltd [2013] ACTSC 72 [35]. McDermott v Collien (1953) 87 CLR 154. See also Australian Securities and Investments Commission v Matthews [1999] FCA 706. (2009) 182 FCR 148. (2009) 182 FCR 154. Defamation cases are the exception where either party may elect for trial by jury — Defamation Act 2005 (NSW) s 21. [11.60] 275

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This has been held as creating a high threshold for parties seeking a jury trial. In Maroubra Rugby Football Club Inc v Malo,24 Mason P rejected earlier cases that had argued that juries could or should be used if the case raised questions of general community values or general community moral and ethical standards. He also rejected the argument that the interests of the party were sufficient to justify a jury trial: The Court must be positively satisfied that the disinterested interests of justice require departure from the general rule of trial by judge alone … . In light of the terms and structure of subs (2) it is clear that the “interests of justice” refer to considerations going beyond the private interests of the parties, a fortiori the private interests of one of the parties … . The standard required by s 85(2)(b) is high and absolute, namely that the judge must be satisfied that the interests of justice require trial by jury in the instant proceedings.25

Northern Territory [11.70] The Northern Territory is another of those jurisdictions that has a presumption against trial by jury. Section 7 of the Juries Act 1963 provides: (1)

The trial of a civil issue or a question of fact in a civil issue shall be by the Court without a jury unless the Court orders otherwise in accordance with this section.

As with the Federal Court, this provision has been interpreted as requiring there to be special reasons for departing from trial by judge alone.26 Should a trial be ordered, the jury is to consist of four members.27

Queensland [11.80] In Queensland, trial is by judge alone unless a party elects for trial by jury.28 The right to elect for a jury trial only exists if the proceedings have been started by way of a claim and if it has not been excluded by some other Act. Perhaps the most important example of this is s 73 of the Civil Liability Act 2001 (Qld) that requires any claim for damages for personal injury to be tried by judge alone. Even when a party is able to elect for a jury trial and does so, s 65A of the Jury Act 1995 (Qld) authorises the court to order trial by judge alone if the trial: (a)

requires a prolonged examination of records; or

(b)

involves any technical, scientific or other issue that cannot be conveniently considered and resolved by a jury.

The courts have been defenders of a party’s election for a jury trial.29 Attempts to give s 65A a broad interpretation, thereby overcoming a party’s election for a jury

24 25 26 27 28 29

(2007) 69 NSWLR 496. (2007) 69 NSWLR 499 at 502. See Nationwide News Pty Ltd v Bradshaw (1986) 41 NTR 1. Supreme Court Rules (NT) r 47.02. Uniform Civil Procedure Rules 1999 (Qld) r 472. “Although a procedural question, dispensing with a litigant’s right to trial by jury, even in civil cases, is no light matter”: Coronis v Jilt Pty Ltd [2013] 1 Qd R 104 at 115 per McMurdo P.

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trial have not been very successful. In Coronis v Jilt Pty Ltd,30 the trial judge’s reasoning supporting his decision to proceed by way of trial by judge alone was overturned. The party seeking a jury trial was unrepresented and the pre-trial process had been long and difficult. The pleadings were also long and confusing and the proposed opening contained many irrelevant matters. The trial judge believed the conduct of the trial would be complicated and confusing, making it difficult for a jury, and that having a jury involved would inevitably prolong the trial. The Queensland Court of Appeal held that simply because the party was a self-represented litigant whose case was unfocused and rambling did not bring it within the meaning of “other issues” in s 65A(b) so as to enable a court to order a trial by judge alone.31

South Australia [11.90] In South Australia, civil juries were abolished in 1927.32

Tasmania [11.100] The Tasmanian Supreme Court Rules 2000 provide that trial by judge alone is the default position,33 although a party is able to elect for a trial by jury for a matter that would have been an action prior to the commencement of the Supreme Court Civil Procedure Act 1932 (Tas). As with the other jurisdictions providing for a right to elect for trial by jury, this right is qualified in that the court has power to order trial by judge alone if “the action, question or issue requires prolonged examination of any document or account or any scientific or local investigation which it is not convenient for a jury to do.”34 While the language of this rule is slightly different, and on the face of it narrower than the Queensland provision, the Tasmanian Supreme Court has given it a more generous interpretation. In Gunston v Davies Pty Ltd, a defamation case, the Supreme Court ordered a trial by judge alone because: [T]rial by a judge with a jury would be much longer, much more expensive and much more prone to error than a trial by judge alone. In short, a trial by jury will not be conducive to the efficient administration of justice in comparison with a trial by judge alone.35

The general right to elect for a trial by jury may also be qualified by other statutory provisions. Most significantly the Motor Accident (Liabilities and Compensation) Act 1973 (Tas) provides that actions for damages for personal injuries are to be tried by judge alone.36

30 31

32 33 34 35 36

[2013] 1 Qd R 104. However the Court of Appeal found other grounds to support a trial by judge alone — the plaintiff had not paid the requisite jury fees and had proceeded with the trial without objecting or appealing the trial judge’s order. Juries Act 1927 (SA) s 5. Supreme Court Rules 2000 (Tas) r 556. Supreme Court Rules 2000 (Tas) r 558. (2010) TASSC 65 [9]. Motor Accident (Liabilities and Compensation) Act 1973 (Tas) s 22. [11.100] 277

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Victoria [11.110] In Victoria the default position is trial by judge alone. There is a right to elect for jury trial but it is limited to proceedings commenced by writ and founded on claims in contract or tort.37 Even where this right is exercised, the court has power to order that the trial proceed by way of judge alone if “in its opinion the proceeding should not in all the circumstances be tried before a jury”.38 This has itself been qualified by interpreting the provision as not interfering with the prima facie right to jury trial without “good reason”. The facts that trial by judge alone might be more efficient, quicker and cheaper are not of themselves “good reason” to justify ignoring a party’s choice of a jury trial.39

Western Australia [11.120] In Western Australia trial by judge alone is the default position.40 The opportunity to elect for trial by jury is limited by the Supreme Court Act 1935 (WA) to cases involving: (a)

a charge of fraud against that party; or

(b)

a claim in respect of libel, slander, malicious prosecution, false imprisonment, seduction, or breach of promise of marriage.41

Even where a party is entitled to apply for a jury trial that right is qualified in the same manner as Tasmania — if the case involves “prolonged examination of documents” or “any scientific or local examination” that could not be conveniently undertaken by a jury.42

Defamation cases [11.130] Defamation law in Australia is a matter for State law. As a result Australia had a patchwork of laws across the States and Territories. After much lobbying all jurisdictions agreed to enact uniform defamation legislation — the uniform Defamation Act. Under s 21 of this legislation, parties were given the power to elect for trial by jury subject to the qualification that a court could order trial by judge alone if the case: (a)

requires a prolonged examination of records; or

(b)

involves any technical, scientific or other issue that cannot be conveniently considered and resolved by a jury.43

There are minor variations to the uniform Defamation Act in some jurisdictions. Perhaps the most significant is that in three jurisdictions — the Australian Capital Territory, the Northern Territory, and South Australia — the right to elect for a jury 37 38 39 40 41 42 43

Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 47.02(1). Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 47.02(3). See Trevor Roller Door Shutter Services Pty Ltd v Crowe (2011) 31 VR 249. Rules of the Supreme Court 1971 (WA) O 32, r 3. Supreme Court Act 1935 (WA) s 42. Supreme Court Act 1935 (WA) s 42(2). Defamation Act 2005 s 21(3). This is, it will have been noticed, the same limitation on jury trials in Queensland and very similar to that found in Tasmania and Western Australia.

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trial is not part of their Defamation Acts. In these jurisdictions defamation cases are tried by judge alone.

The practical reality [11.140] From the discussion above it is clear that the default position in Australia is for civil trials by judge alone. To differing degrees, some jurisdictions allow parties to elect for trial by jury depending on the type of case. However, in many of those jurisdictions that do allow for trial by jury, the reality is that very few cases proceed by way of jury trial. • In Western Australia, for example, the Law Reform Commission of Western Australia noted in 2009 that no civil jury trial has been held in that State since 1994 and estimated that about a dozen jury trials had been held in the previous 40 years.44 • In 2013 a report for the New Zealand Law Reform Commission noted that jury trials were almost never used in Tasmania and were uncommon in Queensland.45 Statements made by the Queensland Government in 2010 supporting court reform reinforce this finding, as it was revealed that in the District Court of Queensland there had only been two civil jury trials in 2007 and one in 2008.46 • In New South Wales “the role of the civil jury has gradually been diminished almost to the point of extinction save in defamation cases.”47 • Victoria has been said to be the jurisdiction most likely to use civil juries.48 Yet even here civil juries are relatively rare outside defamation cases. In 2012-13 there were 584 jury trials in the Victorian Supreme Court and County Court. Of these 501 were criminal trials and 83 were civil trials.49

THE TRIAL PROCESS [11.150] As has already been alluded to, the law of evidence interacts with procedural provisions at trial. The underlying assumption governing trial process is that, unlike in civil law systems, it is to be one continuous event.50 While there is capacity to split a trial by dealing with certain issues before, and separately to, other issues, courts have traditionally shown a reluctance to do this. 44 45 46 47 48 49 50

Law Reform Commission of Western Australia, Selection, Eligibility, and Exemption of Jurors, Discussion Paper, Project 99 (2009) p 11. Law Commission (New Zealand), Review of the Judicature Act 1908: Towards a Consolidated Courts Act, Issues Paper 29 (2012) [9.22]. K Barlow, “Comments on changes to Queensland Courts’ Civil Jurisdiction”, Hearsay, Issue 45, November 2010. Judicial Commission of New South Wales, Civil Trials Bench Book, [3000]. See Law Reform Commission of Western Australia, Selection, Eligibility, and Exemption of Jurors, Discussion Paper, Project 99 (2009) , [9.23]. Victorian Law Reform Commission, Jury Empanelment Report, Report 27 (2014) [2.23]. It is not uncommon for trials to be interrupted with significant adjournments, especially when the trial takes longer than expected. The witnesses have to be rescheduled to a time when the court is next available to resume the case which can be weeks or months later. [11.150] 279

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In this section a brief outline of the trial process is provided focusing on the chronological order of a trial. The capacity to split trials is then discussed.

Chronology of a trial [11.160] Ordinarily the plaintiff begins. In most jurisdictions, this is provided for in the Rules.51 For those jurisdictions where the Rules are silent, the same principle applies.52 This is because the plaintiff usually carries the burden of proving their case. Where the only live issues in the case on the pleadings are to be proved by the defendant, the defendant may be made dux litis — the party under the obligation to commence the trial. Examples of this are where the defendant admits the plaintiff’s allegations but has a counterclaim or pleads confession and avoidance. The trial begins with an opening address from the party who is under the obligation to go first. The address outlines the nature of the case the party is going to establish and the evidence the party will be producing to prove it. In those few trials where there is a jury, particular care must be taken not to raise irrelevant matters or allude to inadmissible evidence. The party then calls its witnesses who are examined by the party calling the witness, cross-examined by the opposing party, and re-examined by the party calling the witness. The latter should only happen if there are matters raised for the first time in cross-examination that need explanation or clarification. When the witnesses called by the party commencing the trial have completed giving their evidence, the party closes its case. The opposing party then has the choice of making a submission to the court that there is no case to answer. If they choose to do so they are either precluded from then giving evidence or required to elect to give no evidence.53 In most cases, the opposing party will decide to call evidence in support of its case. They follow the same process as the opening party — an opening address followed by the calling of witnesses with the attendant examination, cross-examination and re-examination. The opposing party then closes its case. If the opposing party has called evidence it is then required to make its closing address.54 The party that opened the trial has the advantage of making the final closing address. This is seen by some as a particular advantage in jury trials as it gives that party the last word. Not quite the last word, as in a jury trial the judge will then address the jury. If the opposing party has not called any evidence the order of closing addresses is reversed.

51

52 53

54

See Court Procedures Rules 2006 (ACT) r 1508; Uniform Civil Procedure Rules 2005 (NSW) r 29.6; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 49.01; Rules of the Supreme Court 1971 (WA) O 34, r 5. See, eg, Fleming v Advertiser-News Weekend Publishing Pty Ltd [2014] SASC 145. See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 29.10; also Protean Holdings Ltd v American Home Assurance Co [1985] VR 187; Australian Securities and Investment Commission v Healey (2011) 196 FCR 291. Those jurisdictions with provisions governing who begins the trial include provisions outlining the order of addresses — see Court Procedures Rules 2006 (ACT) r 1508; Uniform Civil Procedure Rules 2005 (NSW) r 29.6; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 49.01; Rules of the Supreme Court 1971 (WA) O 34, r 5.

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If the trial is by judge alone, unless the case is relatively straightforward, the judge will reserve his or her judgment, which will be handed down at a later date when the judge has finished writing his or her reasons. Here, it is said, lies one of the advantages of the jury trial. The jury retires to consider its verdict and when it has decided, returns to the court to return its verdict — a far speedier process than waiting for written reasons from a judge.55

SPLITTING TRIALS [11.170] The importance common law procedure places on a continuous (and comprehensive) trial has already been highlighted. Nevertheless, the courts have long had the power to order that certain issues be tried before others.56 These may be questions of law or fact or a mixture of law and fact. However this power has been exercised sparingly. In Rogers v Baillieu Bullock Wilkinson Pty Ltd Walters J held: I repeat what I said at the beginning, that the course which this matter has taken emphasises, as clearly as any case in my experience has emphasised, the extreme unwisdom — save in very exceptional cases — of adopting this procedure of preliminary issues. My experience has taught me (and this case emphasises the teaching) that the shortest cut so attempted inevitably turns out to be the longest way round.57

Two main arguments are made against splitting trials. The first is that it runs the risk that evidence may need to be given twice, thus prolonging the trial and adding to costs and increasing the inconvenience for witnesses. The second is that unless the underlying facts are clearly established and accepted, there is the risk that answers to preliminary questions will become hypothetical or akin to an advisory opinion. This danger was highlighted by the High Court in Bass v Permanent Trustee Co Ltd: Courts have traditionally declined to state — let alone answer — preliminary questions when the answers will neither determine the rights of the parties nor necessarily lead to the final determination of their rights. The efficient administration of the business of courts is incompatible with answering hypothetical questions which frequently require considerable time and cause considerable expense to the parties, expense which may eventually be seen to be unnecessarily incurred.58

This situation is exacerbated where the parties try to contest the facts upon which the question of law is predicated after the preliminary question has been determined. The New South Wales Court of Appeal, when dealing with an appeal

55

56

57 58

“NSW Bar Association Push to Reintroduce Juries in Civil Trials in NSW”, The Sydney Morning Herald (16/02/2016) (http://www.smh.com.au/nsw/bar-push-to-reintroduce-juries-i n-civil-trials-in-nsw-20160216-gmveg6.html). Court Procedures Rules 2006 (ACT) r 1521; Federal Court Rules 2011 (Cth) r 30.01; Civil Procedure Act 2005 (NSW) s 62(2) and Uniform Civil Procedure Rules 2005 (NSW) r 28.2; Uniform Civil Procedure Rules 1999 (Qld) r 483; Supreme Court Rules 2006 (SA) r 211; Supreme Court Rules 2000 (Tas) r 559; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 47.04; Rules of the Supreme Court 1971 (WA) O 32, r 5. (1981) 28 SASR 594 at 600. See also Evans Deakin Industries Ltd v Commonwealth [1983] 1 Qd R 40. (1999) 198 CLR 334 at 357. [11.170] 281

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from a preliminary decision on the construction of the terms of the contract, would only allow the splitting of issues when the parties expressly accepted that they would not subsequently challenge any of the facts involved in the determination of the preliminary question.59 Despite these concerns about splitting trials, ordering the separate determination of issues can be extremely efficient, saving time and costs. This is particularly so when it becomes apparent that there are one or two issues that have become the major factors in the case. Resolution of those primary issues often leads to out of court resolution of the other aspects of the dispute and the whole case settles.

VERDICTS AND JUDGMENTS [11.180] Juries give verdicts, judges give judgment. In a jury trial, the verdict is the jury’s answers to the questions of fact it has been asked to determine. Questions of law are for the judge. In R v Snow this distinction was described as foundational: [O]ne of those principles that lie at the fondation of our law is the maxim that judges shall decide questions of law, and juries questions of fact — that is, of course where the Court sees there is evidence on which the question of fact can be decided.60

The verdict of the jury has no operative force. It gains effect from the decision delivered by the judge as the judgment of the court. In giving judgment, the High Court held, the court is [N]ot merely a recording of the jury’s answers. The answers themselves did not dispose of the action. The “verdict for the second defendant” pronounced by the trial judge was the legal equivalent of the dismissal of Dr Keramianakis’ action. Although that “verdict” was an inevitable outcome of the jury’s answers, the judge had to make the legal judgment, as he correctly did, that it was the inevitable result.61

The judgment carries finality, bringing the case to an end. Where the trial is by judge alone these issues do not arise. The judge does not deliver a verdict. The judge delivers a judgment along with the reasons for the judgment. The reasons will outline the findings of fact and the relevant legal principles that support the decision the judge has reached. It provides the justification for the result in the case. The actual judgment is the orders the court makes to give effect to its reasoning, or as Barwick CJ held in R v Ireland: In a proper use of terms, the only judgment given by a court is the order it makes. The reasons for judgment are not themselves judgments though they may furnish the Court’s reason for decision and thus form a precedent.62

The judgment has effect from when it is delivered.63 Judgment is entered when it is formally included in the court records. This is achieved by filing a sealed document outlining the “orders” the judge made disposing of the case. It does not include the judge’s reasoning.

59 60 61 62 63

HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342. (1915) 20 CLR 315 at 329 per Issacs J. Keramianakis v Regional Publishers Pty Ltd (2009) 237 CLR 237. (1970) 126 CLR 321. See Viteous v Tuohill [1964] VR 624; Trippe Investments Pty Ltd v Henderson Investments Pty Ltd (1990) 101 FLR 261.

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CURRENT ISSUES AND POSSIBLE DEVELOPMENTS [11.190] Trials are facing significant challenges. The first is an existential one — are they vanishing?64 If they are not vanishing they are certainly diminishing in number and importance as a means of finalising disputes. But for those trials that do run — how do they accommodate the growing numbers of self-represented litigants?65 The trial process is itself evolving to such an extent that its foundational principles are being undermined. Earlier in this chapter the three key principles suggested by Davies were described: orality; a single climatic trial; and party control of the process and issues. The extent to which these now hold true is examined below.

Orality [11.200] Evidence from witnesses at trial has traditionally been given as oral evidence. As Glasser noted “the adversary system and the principle of orality have been the dominant characteristics of the English system of civil litigation.”66 By contrast civil law systems emphasised the court file, and evidence was usually produced in written form for the file. Yet this emphasis on orality is being challenged. In the interests of saving time at trial, would it not be better for the witness to provide its evidence in written form in advance? After all, under the rules of evidence a party calling a witness can only ask the witness to describe what happened. It cannot ask leading questions. Unless a party can successfully apply to the court to have its witness declared hostile, only the opposing party can challenge the evidence and mount attacks on it through cross-examination and questioning credibility. In light of this, rather than having a party’s lawyer walk its witnesses through their evidence in chief, would it not be better to record the witnesses evidence in writing before the trial, providing it to the other side, and simply tendering it at trial? This has the additional advantage of diminishing the chance of ‘trial by ambush, thereby promoting the general move in procedural reform to require all ‘cards on the table’ as soon as possible. While courts have long had the power to order a trial to proceed by way of affidavits rather than oral evidence in certain cases,67 since the 1980s there has been significant expansion of this. Increasingly across the world of common law 64

65

66 67

D Spencer, “The Phenomenon of the Vanishing Civil Trial” (2005) 8 ADR Bulletin 1; M Galanter, “A World Without Trials” (2006) 1 Journal of Dispute Resolution 7; R Dingwall and E Cloatre, “Vanishing Trials An English Perspective” (2006) 1 Journal of Dispute Resolution 54; J Langbein, “The Disappearance of the Civil Trial in the United States” (2012) 122 Yale Law Journal 522. See also earlier discussion in Chapter 1. Australian Parliament, Legal Aid and Access to Justice, Senate Legal and Constitutional References Committee (2004) Ch 10; R Nicholson, “Can Courts Cope with Self-represented Litigants?” (2005) 8 Flinders Journal of Law Reform 139; R Stewart, “The Self Represented Litigant: A Challenge to Justice” (2011) 20 Journal of Judicial Administration 146. C Glasser, “Civil Procedure and the Lawyers — The Adversary System and the Decline of the Orality Principle” (1993) 56 Modern Law Review 307 at 307. This reflects the rules as to when pleadings are required: if the facts are not in issue, courts will usually proceed by way of affidavit evidence. [11.200] 283

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civil procedure, parties are required to prepare and file witness statements before trial. This was expanded in England in 1986 and then extended to cover all civil cases following the recommendations of the English Civil Justice Review in 1988.68 At the time, Lord Donaldson MR, in the context of the seachange in parliamentary and judicial attitudes to civil litigation then taking place said the “most important change has been the requirement that, save in exceptional cases, witness statements be exchanged prior to the trial.”69 In Australia one of the early proponents was Andrew Rodgers, who in the early 1980s, as judge of the Commercial List and then Chief Judge of the Commercial Division of the Supreme Court of New South Wales, began ordering the preparation of witness statements. Initially this did not replace oral evidence-in-chief but that step soon developed. That practice has evolved to such an extent that it is nowadays an expectation in much civil litigation in Australia that written statements will be exchanged and that the statements will stand as the evidence-in-chief of the witness. Sometimes the practice is varied to require affidavits rather than written statements.70

Written witness statements are not without their problems. Included amongst the criticisms of them are: how accurately do they reflect the evidence the witness would have given; they may include irrelevant and inadmissible material that would not have reached the court if given orally; it reduces the opportunity to view the demeanour and manner in which the witness gives evidence, affecting the court’s capacity to assess the credibility of the witness; and, the preparation of witnesses statements has added significantly to the costs of litigation. The first of these points reflects the fact that the witness statement is prepared by lawyers. They either interview the witness and reduce what the witness has said to writing or review and rewrite the written statement the witness has provided. This process carries with it the risk that, consciously or unconsciously, the statement will be crafted to suit the party’s case. As one senior judge wrote: Each statement is carefully constructed to create a certain impression or convey a certain message. The witness’s own words are only used when convenient and the witness’s recollection is presented in a potentially misleading way. There have been times when I have doubted whether a witness statement as a truth telling document is worth the paper it is written on.71

As for the second criticism, another senior judge, Justice Marks of the Victorian Supreme Court noted: It must be conceded that witness statements tend to be more detailed and discursive than would be allowed in evidence-in-chief. Also, statements are often contaminated by inadmissible material. These things must be controlled.72

68 69 70 71 72

J Jolowiscz, “Comparative Law and the Law of Civil Procedure” (1988) 8 Legal Studies 1 at 7. Mercer v Chief Constable of the Lancashire Constabulary (1991) 2 All ER 504 at 508. A Emmett, “Towards the Civil Law?: The Loss of ‘Orality’ in Civil Litigation in Australia” (2003) University of New South Wales Law Journal 447 at 447. R Finkelstein, “The Adversary System and the Search for the Truth” (2011) 37 Monash University Law Review 135 at 140. K Marks, “The Interventionist Court and Procedure” (1992) 18 Monash University Law Review 1 at 12.

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This leads to time being spent on arguments about whether the material should be allowed or not, with attendant costs consequences. It also means that the judge gets to read or hear information that would have been successfully objected to in oral testimony before it had been led in court. This is not thought to be a major issue with trials by judge alone because judges are said to be able to ignore information that they cannot use in their decision-making process; something that juries are thought less capable of doing. Where juries are used, replacing evidence-in-chief with written statements becomes more problematic in this respect. The third criticism is the impact on the assessment of credibility from the reduced time in the witness box. This is exacerbated by the fact that the only time the judge gets to hear the witness give evidence is in cross-examination and re-examination. This is when the witness is being placed under the greatest pressure and in what they may perceive to be a very hostile environment. The risk is that this may lead to an unbalanced or unfair assessment of the witness’s credibility.73 Finally the practice of written witness statements is said to lead to increased costs: Substantial costs are incurred in the preparation of statements or affidavits in relation to matters that are genuinely in dispute in the proceeding. The affidavits and statements are then parsed and analysed in detail by the opposing legal team and vast numbers of objections are reduced to writing and served on the tendering party. The court’s time is then occupied in sterile argument about whether particular words, phrases or sentences should be allowed.74

Single climatic trial [11.210] Common law procedure has required a single climatic trial — ‘the main event’. Traditionally it divided the litigation into pre-trial and trial. The pre-trial stage was left almost entirely up to the parties to manage and the court only became involved when the case was ready for trial. The trial itself was, up until relatively recently, conducted before a jury. The practical difficulties in summoning and managing a jury meant that once the trial began it was much easier if the jury were kept together until it was completed. This necessitated a single continuous trial. As we have seen there are almost no civil jury trials in Australia (except for defamation cases in some States) so the initial need for a single climatic trial no longer exists. Furthermore, with the advent of modern case management, courts have taken on the responsibility for managing the pre-trial process. In those jurisdictions with individual docket systems the trial judge is often intimately involved with the case from the very beginning. The judge, during the early stages, may be involved in determining, amongst other things, what the real issues in dispute are, what documents need to be discovered and what expert evidence will be allowed. As a consequence, the judge is forming opinions about the case from the very beginning, and when the trial commences, it is only another step in the judge’s decision-making process. For practical purposes, the decision-making process starts with the very first directions hearing soon after the

73 74

See A Emmett, “Towards the Civil Law?: The Loss of ‘Orality’ in Civil Litigation in Australia” (2003) University of New South Wales Law Journal 447 at 461. A Emmett, “Towards the Civil Law?: The Loss of ‘Orality’ in Civil Litigation in Australia” (2003) University of New South Wales Law Journal 447 at 460. [11.210] 285

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case commences. The reality is that the pre-trial and trial distinction is breaking down, and in some jurisdictions it has already completely done so. The implications of this are yet to be fully appreciated. One implication is that while we maintain the pre-trial and trial distinction, the decisions made by judges during what is currently characterised as pre-trial are for the most part regarded as being interlocutory decisions. These decisions may fundamentally affect the eventual outcome of the case but the court in making them is far less accountable. Appealing from interlocutory decisions is difficult, requiring both leave and the need to overcome appellate courts reluctance to interfere with procedural decisions. There are good reasons for this reluctance — courts seek to avoid creating more opportunities for parties to engage in tactical appeals holding up litigation and jamming up the appeal courts. Another implication arises for the court’s current approach to splitting trials. We have seen how courts have been traditionally reluctant to split trials by holding hearings on preliminary issues. If we no longer need to have single climatic trials (or indeed have already moved away from them in some jurisdictions) then the strength of the arguments against splitting trials may be reduced. If in some jurisdictions we are already holding in effect discontinuous trials as argued above, then rather than using the early hearings to prepare for a single climatic trial (which on the statistics is unlikely to happen in any event) these hearings might be better used by identifying the key issues in the case and addressing them early rather than allowing a case to proceed with preparation for a trial on all the issues. In some ways, the need or utility of allowing split trials falls away if the tenets of modern case management are properly met. We have already seen how the traditional model of the trial, where the judge commences the trial with almost no knowledge of the case, has been departed from in jurisdictions where the trial judge is involved in case management. Furthermore, prior to the ‘all the cards on the table’ approach, parties had to prepare as best they could for every eventuality that might arise. Often it was not clear what the live issues would be until the defendant cross-examined the plaintiff’s witnesses and in some cases until the defendant commenced its case. To deal with that situation one of the functions of case management is identify the key issues in dispute and focus the litigation around them. That could reduce the number and scope of the issues in the litigation and likewise reduce the need for split trials.

Party control of process and issues [11.220] We have noted in the last section the impact of case management on party control of the trial process. To date that loss of party control has been limited to what has been characterised as the pre-trial process. The courts have continued to insist that trials are different and the right of parties to run the trial as they think best suits their case remains. However, this too is beginning to be challenged. Increasingly, courts across Australia are taking the opportunity when rewriting their rules to clarify their powers to manage trials. Courts have always enjoyed extensive powers to manage trials within their inherent jurisdiction. These powers were to be exercised to assist the court in ensuring proper conduct of litigation and addressing conduct that hindered or interfered with that objective. In one of

286 [11.220]

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the most frequently cited articles in Australia on the inherent jurisdiction Keith Mason wrote “[t]he inherent jurisdiction is frequently involved to facilitate the judicial process by ensuring the convenient, expeditious and fair conduct of legal proceedings.”75 Amongst the specific matters listed by Mason as matters the court had power over was “[c]ontrol of participation and conduct of proceedings.”76 To this must now be added the growing number of provisions in court rules and legislation spelling out the power of courts to manage litigation.77 Sections 47 and 49 of the Victorian Civil Procedure Act 2010 illustrate this: Section 47 (3)

Without limiting subsection (1) or (2), a court may actively case manage civil proceedings by — (a)

giving directions to ensure that the civil proceeding is conducted promptly and efficiently; …

(c)

deciding the order in which the issues in dispute in the civil proceeding are to be resolved including —

(e)

(i)

deciding promptly which issues need full investigation and a hearing; and

(ii)

disposing summarily of other issues; …

controlling the progress of the civil proceeding, including, but not limited to — (i)

fixing timetables;

(ii)

dealing with as many aspects of a civil proceeding as it can on the same occasion;

(iii)

dealing with the civil proceeding without the parties needing to attend court;

(iv) (f)

making use of technology;

limiting the time for the hearing or any other part of a civil proceeding, including, but not limited to — (i)

limiting the number of witnesses at the hearing;

(ii)

limiting the time for the examination or cross-examination of any witness;

(iii)

limiting the issues or matters that may be the subject of examination or cross examination;

Section 49 Court’s power to order and direct trial procedures and conduct of hearing (1)

75 76 77

In addition to any other power a court may have, a court may give any direction or make any order it considers appropriate to further the K Mason, “The Inherent Jurisdiction of the Court” (1983) 57 Australian Law Journal 449 at 499. K Mason, “The Inherent Jurisdiction of the Court” (1983) 57 Australian Law Journal 449 at 450. See, eg, Federal Court Rules 2011 (Cth) r 5.04; Civil Procedure Act 2005 (NSW) s 62; Uniform Civil Procedure Rules 1999 (Qld) r 363; Supreme Court Rules 2006 (SA) rr 117, 209; Rules of Court 1971 (WA) O4A, rr 2 (p) – (u). [11.220] 287

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overarching purpose in relation to the conduct of the hearing in a civil proceeding. (3)

Without limiting subsection (1), a court may give any direction or make any order it considers appropriate with respect to — (a)

the order in which evidence is to be given and addresses made;

(b)

the order in which questions of fact are to be tried;

(c)

limiting the time to be taken by a trial, including the time a party may take to present the party’s case;

(d)

witnesses, including — (i)

limiting the time to be taken in examining, cross-examining or re-examining witnesses;

(ii)

not allowing cross-examination of particular witnesses;

(iii)

limiting the number of witnesses, including expert witnesses, that a party may call;

(e)

limiting the issues or matters that may be the subject of examination or cross-examination;

(f)

limiting the length or duration of written and oral submissions;

(g)

limiting the numbers of documents to be prepared or that a party may tender in evidence;

(h)

the preparation by the parties of an agreed bundle of documents for use in the proceeding or a schedule summarising business records or other documents;

(i)

the place, time and mode of trial;

(j)

evidence, including, but not limited to whether evidence in chief should be given orally, by affidavit or by witness statement;

What needs to be stressed is that these powers enable the court to manage how a party presents its case. They go to the order and manner in which evidence is to be given, and what time will be allowed to a party to present its evidence. While the use of time limits is not yet widespread, those jurisdictions where they are expressly permitted may see increased pressure to use them. Judicial attitudes to increased judicial management of trials show similar divisions as occurred in the 1990s with the introduction of pre-trial case management. Some judges were strong proponents of judicial supervision of the pre-trial process; others had major reservations. While the latter group gained some support from the High Court decision in Queensland v JL Holdings Pty Ltd,78 this issue was finally resolved in favour of pre-trial case management in Aon Risk Services Australia Ltd v Australian National University.79 Pre-trial case management helps overcome one of the reasons why judges have been so reluctant to actively manage or intervene in the trial process. Before case management, the trial judge had almost no knowledge of the merits of the case nor the history of the case. There was a real concern that the judges were not in a position to fully anticipate the consequences of their intervention. It was much safer to leave it to the parties. 78 79

(1997) 189 CLR 146. (2009) 239 CLR 175.

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Where the trial judge has been managing the litigation through the pre-trial stage, the judge is fully informed about the history of the litigation as well as its content. They are well positioned to make decisions about the conduct of the trial and should exercise their powers to ensure the trial is conducted expeditiously and efficiently. There is increasing judicial authority for this new approach. Often it arises in the context of claims that judicial intervention in the trial process has led to an apprehension of bias on the judge. Dealing with such a situation, in Johnson v Johnson, a unanimous High Court held that: Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx.80

Examples of a more accepting approach to judicial management of trials can be found in most jurisdictions. In Victoria, for example, Forrest J, when dealing with complex class actions arising from the devastating 2009 bushfires, had cause to remind the legal profession of the new approach to trial management. In Matthews v SPI Electricity Pty Ltd (Ruling No 31) he held: Finally, there is the role of the Court in modern trial management. When asked whether Maurice Blackburn had considered notifying the Court that Mrs M was contemplating this application, Mr W said that he did not feel this was necessary. Nor did he accept the proposition that making the application at this time would “interrupt the orderly flow of the trial”. I regard both responses as extraordinary and completely out of touch with the manner in which trials are conducted in this State.. The Civil Procedure Act makes it abundantly clear that the Court has a fundamental role to play in modern trial management. A number of the obligations imposed upon parties and lawyers by the Civil Procedure Act relate directly to cooperation in ensuring that trials are managed efficiently – that is the very point of the obligations to cooperate and to narrow the issues. … To treat the Court as a mere observer of a forensic contest is, simply put, wrong and, in the context of this trial, foolhardy.81

Support for judicial management of trials is also found in Helou v Shaya, where Beach J held in an appeal claiming inappropriate judicial intervention: Fourthly, any suggestion that the Magistrate somehow improperly entered the arena and became an advocate must be rejected. At worst, the transcript discloses that the Magistrate was endeavouring to make the conduct of the trial before him more efficient by hastening counsel towards the issues that were disclosed in the material put before him. In modern trial management, such an approach is to be lauded.82

In New South Wales this trend can also be discerned. In Botany City Council v Rethman Environmental Services Pty Ltd, Tobias JA (whose judgment the other members of court agreed) held:

80 81 82

(2000) 201 CLR 488 at 493. [2013] VSC 575 (30 October 2013). [2013] VSC 297. [11.220] 289

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[A]ppellate supervision (particularly in appeals limited to questions of law such as the present) will show restraint and respect for the primacy of the judicial officer conducting the trial. Amongst other matters, considerations relevant to the approach which would be taken by the appellate court to a complaint of excessive judicial intervention in the conduct of a civil trial include the increasing realisation of the significance of the public costs involved in the conduct of court proceedings and of the obligation of judicial officers, at least to some extent, to take an active part to prevent injustices which may occur to parties and to the public as a result of the inefficient conduct of trials.83

Most of the cases claiming inappropriate judicial intervention arise from judicial participation in the elucidation of evidence. While a judge is entitled to clarify ambiguities with a witness, the judicial questioning is not to interfere with the capacity of the parties to run their case. Nor are they to denigrate, criticise or otherwise impeach a witness. But these are interventions of a totally different nature from those normally associated with trial management. Nevertheless, as active judicial management of trials increases, the appellate courts will gain increased opportunities to set the limits for this form of judicial intervention. So what future is there for the traditional common law trial? The inertia of the civil justice system, the innate conservatism of the legal profession and the lack of rigorous research to support procedural change suggest that the common law trial will continue in its traditional form for some time. But as we have seen, each of the fundamental principles underlying the traditional common law trial is facing significant challenge. Added to this is the reality that the costs of trial have placed them beyond the reach of all but the wealthiest, increasing pressure for substantial reform. There are strong advocates for more judicial intervention in the trial process amongst some of the judiciary84 and models from elsewhere in the world are influencing Australian civil procedure generally. Our civil trial process has already started to change and the combination of these factors suggests the momentum will only increase.85

83 84

85

[2004] NSWCA 414 at [40]. See, for example, the articles by Finkelstein, Emmett and Marks listed in the footnotes at [11.200]. Also see R Sackville “Mega-litigation: Towards a New Approach” (2008) 27 Civil Justice Quarterly 244. And it must be remembered, most civil trials in the Australian civil justice process already take place with an extremely interventionist judge who actively controls the whole process: the magistrates in the small claims jurisdictions.

290 [11.220]

CHAPTER 12 Litigation Costs Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 Legal costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293 [12.30] Costs allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 [12.40] Comparative approaches to calculating costs . . . . . . . . . . . . . . . 295 [12.50] Court costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 [12.60] Making costs orders — who pays? . . . . . . . . . . . . . . . . . . . . . . . . . 298 [12.70] Quantum of costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 [12.80] Costs include disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303 [12.90] Costs and non-parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303 [12.100] Costs against lawyers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304 [12.110] Awarding costs against other non-parties . . . . . . . . . . . . . . . . . 305 [12.120] Assessing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 [12.130] Solutions to the litigation costs crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 [12.140] Curtailing legal work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 [12.150] Limiting procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 [12.160] Limiting legal costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309 [12.200] Alternative sources of funding for litigation costs . . . . 311 [12.10] [12.20]

OVERVIEW [12.10] In June 2012 a complex group of class actions arising out the collapse of the Centro property development group in 2008, due in part to the global financial crisis, was settled for $200 million. The three class actions were brought by share holders who were said to have lost an estimated $1 billion — two by Maurice Blackburn and one by Slater Gordon. From the $200 million settlement, the two litigation funding companies involved received $69 million and the two law firms received $30 million.1 There was no suggestion that the legal costs were anything other than proper, and a court approved them, but it does indicate the level of expense in major commercial class actions. The Centro class action was not an isolated case; one might also point to the Bell Group litigation, which commenced in 1995, was conducted over a number of jurisdictions, and ostensibly settled in 2013, but that still generates spot fire litigation.2 There are also instances of litigation involving private individuals that generate legal costs in the millions of

1 2

S Danckert, “Half the $200m Centro Judgment will go in Costs”, The Australian (20/6/12); Slice of the Action, Lawyers Weekly (4/12/12). See, eg, Re Bell Group Ltd (in liq); Ex Parte Geoffrey Frank Totterdell as liquidator of Bell Group Ltd (in liq) [2014] WASC 298. Another example of litigation across jurisdictions would be the bank fee cases – see, eg, Paciocco v ANZ [2016] HCA 28. Such “metalitigation” is not a recent phenomenon – see, eg, Seven Network Ltd v News Ltd [2007] FCA 1062. [12.10] 291

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dollars.3 On the other hand most civil litigation takes place in the Magistrates Court and in the small claims division where lawyers are not entitled to appear and resulting legal costs are minimal. In between these two poles is the complete range of civil cases. Very little published empirical research into Australian litigation costs exists. The most recent has been a small study of reported cases arising under ‘family provisions’ legislation enabling eligible parties unsatisfactorily provided for under a will to seek court orders making provision for them from the estate. There had been judicial expressions of concern that the litigation costs are disproportionate to the amounts in dispute. Vines studied over 100 cases in New South Wales and Victoria, and adopted a threshold whereby litigation costs over 25% of the size of the estate were regarded as being disproportionate. Some 50% of the New South Wales cases and 35% of cases in Victoria had litigation costs that exceeded this threshold.4 Not all of the high litigation costs are due to complexity, or scale of the case — parties themselves may end up making irrational decisions about the litigation that lead to wasted or unnecessary legal costs. As Lord Justice Patten in the English Court of Appeal said in the course of making consent orders in a fence dispute that left the fence where it was after five years of litigation between two neighbours costing £140,000: “This is the most absurd piece of litigation we have seen for a very long time.”5 While properly conducted litigation can be very expensive, making matters worse are media reports of overcharging by lawyers in the course of litigation. In a relatively recent example, one law firm engaged in plaintiff personal injury work was alleged to have engaged in overcharging — including charging their client $600 to travel 1.8 kilometres in Sydney; one solicitor charging 33 hours of work in one 24 hour period; charging $130 to read an email which simply said ‘Rcvd’; and in a case settled before trial for $3.5 million, the firm charged $557,000 for legal costs and $281,000 for disbursements. At the subsequent disciplinary hearing it was agreed that the appropriate amount for legal costs should have been $273,000, although it has been suggested that even this was perhaps generous.6 All this reflects the fact that one of the greatest challenges to civil justice reformers is that the most important influence on litigation behaviour — legal costs — is largely uncontrolled by courts. Indeed, the most significant barrier to access to civil justice is costs, particularly legal costs. The ability of lawyers to

3

4

5

6

For example, it has been recently alleged that legal costs of $40 million have been incurred in divorce proceedings (see S Fewster, “SA Woman in Australia’s Most Expensive Divorce”, The Advertiser (10/02/2016)). More than half the cases involved estates of more than $500,000. See P Vines, Bleak House Revisited? Disproportionality in Family Provision Litigation in New South Wales and Victoria (Australian Institute of Judicial Administration, 2011) pp 22-23. G Finigan, “‘Most Absurd Piece of Litigation’: £140,000 Squandered over Land the Size of a Stroke of Mont Blanc Pen, and a Fence”, Daily Mail (2/4/13) (http://www.dailymail.co.uk/new s/article-2124103). “Law Firm Under Fire”, LateLine (Australian Broadcasting Commission, broadcast 15/3/12) (http://www.abc.net.au/lateline/content/2012/s3454644.htm); R Ackland, “Small Cases, Big Bills: Keddies Working Overtime to Kill Complaints”, Brisbane Times (18/11/11); R Ackland, “Blame the System, but it will take a Lawyer to Prove its Guilt”, Brisbane Times (8/6/12).

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generate costs also generates the largest number of complaints by the community about civil justice. In addition to the costs charged by lawyers there are the costs charged by government on those using courts. Court fees have themselves become a significant impost, particularly in the higher courts. Historically, court fees played an extremely important role in the civil justice system. Up until the early 19th century, English judges and court officials received the court fees paid by litigants in addition to any salary. This led to a scramble for litigation and much of the history of English courts reflects this competition between courts for ‘business’ and explains their opposition to alternative forms of dispute resolution like arbitration.7 More recently, government policy has led to significant increases in court fees and charges with the adoption of the neo-liberal principles of ‘user pays’ and ‘costs recovery’. These increases have been almost prohibitive for much of the Australian community.8 This chapter begins with an examination of the different approaches that can be taken to how lawyers charge for their work in litigation and the different components of court costs. It then moves on to examine in more detail the current approach to legal costs in Australia. It concludes with an analysis of the different reform strategies adopted to deal with the problem of costs — limiting the capacity to create legal work and searching for alternative funding sources for legal costs.

LEGAL COSTS [12.20] Regulation of legal costs generally is primarily a function of the professional conduct rules and the ethical obligations of legal practitioners. This regulates the manner and the nature of the costs lawyers can charge their clients. At the core of the solicitor-client relationship is the contract or retainer between the client and the solicitor that sets out the terms of engagement. The content, timing, and to a degree, the content of these agreements are increasingly regulated by rules and requirements set by the bodies regulating legal practice.9 In Victoria and New South Wales, the comprehensive Legal Profession Uniform Law has been adopted (see, eg, Legal Profession Uniform Law Application Act 2014 (Vic)), which mandates that: lawyers cannot charge “more than fair and reasonable amounts for legal costs”;10 such costs must be proportional and “reasonably incurred”;11 lawyers are under a duty not to act in a manner that unnecessarily

7

8 9

10 11

See M Beloff, “Paying Judges: Why, Who, Whom, How Much” (2006) 18 Denning Law Journal 1 at 8-11; D Klerman, “Jurisdictional Competition and the Evolution of the Common Law” (2007) 74 University of Chicago Law Review 1179; Raguz v Sullivan [2000] NSWCA 240 at [47] (joint judgment of Spigelman CJ and Mason P quoting Lord Campbell). “Courts Fee Hike Limits Access to Justice”, Lawyer’s Weekly (21/9/12); M Legg, “Court Fees Erode Right to Justice”, Australian Financial Review (8/2/13). Each State has an act regulating the profession (eg. Legal Practitioners Act 1981 (SA)) and professional conduct rules (eg, Australian Solicitors Conduct Rules 2015 (SA)) prescribing the content and form of costs agreements between solicitors and their clients. Legal Profession Uniform Law Application Act 2014 (Vic) Sch 1, s 169(b). Legal Profession Uniform Law Application Act 2014 (Vic) Sch 1, s 172. [12.20] 293

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increases legal costs;12 and a failure to comply with these requirements may constitute unsatisfactory professional conduct or professional misconduct.13 Clearly, such provisions are designed to address the perceived inordinate costs of legal representation, but it is too early to suggest whether that objective might be achieved via this legislation. For lawyers engaged in litigation, a separate regulatory scheme co-exists — the provisions relating to litigation costs contained in legislation and court rules. Civil procedure governs costs questions arising upon the finalisation of litigation — the question of costs allocation (who pays) and the question of quantum (how much). It is these questions that this chapter considers.

Costs allocation [12.30] Across the world different costs allocation systems exist. For most of the world, procedural regimes provide for cost shifting, that is, the costs are shifted to the loser in the case. A survey of costs rules in 50 countries by law firm, Lovells, revealed that 87% of them had adopted the cost-shifting rule.14 The most significant jurisdiction that stands out against this trend is the United States. There, the general rule for almost all jurisdictions is that each side bears their own costs. Japan and Taiwan were identified as also having limitations on the ability of the successful party to recover costs from the unsuccessful party. Given how widespread the cost-shifting rule is, it is perhaps a little unfair to call it ‘the English rule’, but that is how it is often described. Amongst the rationales for the English rule are that it is said to be fairer and more compensatory. The party suffering the wrong is not required to bear the costs of establishing that they were wronged. The wrongdoer is compensating the successful party for both the wrong, and the fact they have had to sue over it. With each side bearing their own costs, the wronged party has to use some of its compensation to pay for its own lawyers.15 Which particular cost allocation regime exists affects litigation behaviour. The problem is that litigation is so variable that it is difficult to quantify the effects accurately. As Kritzer recounts, the considerable theoretical literature reveals contradictory findings — some studies find ‘loser pays’ costs regimes promote settlements, other studies find that more cases would go to trial; some studies suggest it would promote litigation, others suggest it would discourage litigation.16 Nevertheless, the English rule is generally thought to discourage weak cases because of the potentially ruinous consequences that flow from losing a case. The

12 13 14

15 16

Legal Profession Uniform Law Application Act 2014 (Vic) Sch 1, s 173. Legal Profession Uniform Law Application Act 2014 (Vic) Sch 1, s 207. Lovells, “At What Cost? A Lovells Multi-jurisdictional Guide to Litigation Costs” (http://www .hoganlovells.com [http://www.hoganlovells.com/files/Publication/c940bb4b-a67f-4e63-a5 b8-ced6198b2125/Presentation/PublicationAttachment/fff33267-29d5-4230-a140-cf2eeb7d4 a05/LitigationCostsReport.pdf]). T Rowe Jr, “The Legal Theory of Attorney Fee Shifting: A Critical Overview” [1982] Duke Law Review 651 at 653. H Kritzer, “Lawyer Fees and Lawyer Behaviour in Litigation: What Does the Empirical Literature Really Say?” (2002) 80 Texas Law Review 1943 at 1948.

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United States rule, on the other hand, may facilitate greater access to justice because plaintiffs do not run the risk of adverse costs orders, especially when this is coupled with no win, no fee contingency agreements.17 Evidence to suggest that the cost-shifting rule is to be preferred is also found in research into the choices that corporations make when they have a choice. Eisenberg and Miller studied 2347 public securities contracts filed by public companies in New York to see what the contracts said about litigation costs in the dispute resolution clauses. Sixty percent of the contracts adopted costs shifting if a dispute arises rather than the United States approach.18 In an attempt to overcome the disadvantages of each of these costs regimes, hybrid costs regimes have been suggested. Sometimes described as one-way cost shifting these tend to be plaintiff friendly. A successful plaintiff would be able to recover legal costs from the unsuccessful party but if the defendant was successful the rule would provide that each side would bear their own costs. This would at first glance seem contrary to principles of procedural equality. It would mean defendants were being treated differently to plaintiffs. However, the reality is that legal costs will be borne by someone, so why not design the rule around capacity to pay. This approach is thus predicated on the assumption that the defendants are better able to carry the cost of litigation. In many types of litigation, the defendant is insured or has significant financial resources and so is better able to recover or pass on legal costs. This would, for example, be true for most personal injury cases. As a variant to this rule, a further refinement has been suggested to protect those defendants who are unable to pass on the costs. In that situation, it is suggested that each side bear their own costs.19 The idea of one-way cost shifting has attracted support. One of the recent reforms arising out of Lord Justice Jackson’s inquiry into costs in England and Wales is the recommendation of the adoption of one way cost shifting for personal injury, defamation and judicial review matters. This has been first implemented for personal injury litigation.20

Comparative approaches to calculating costs [12.40] As with costs allocation, there are two different approaches to this around the world — activity costing and event costing. With activity costing, the amount recovered from the losing party is determined by the amount of work actually undertaken. The claim for legal costs sent to the losing party will be based on how many pages have been prepared in the course of the litigation, how many hours

17

18 19 20

T Rowe Jr, “The Legal Theory of Attorney Fee Shifting: A Critical Overview” [1982] Duke Law Review 651 at 653. It should be noted that a recent report by the Law Council of Australia has provided some support for such percentage based contingency fee arrangements – see Law Council of Australia, Final Report of the Working Group: Percentage Based Contingency Fee Arrangements (May, 2014). T Eisenberg & G Miller, “The English versus the American Rule on Attorney’s Costs: An Empirical Study of Public Company Contracts” (2013) 98 Cornell Law Review 327. See E Knutsen, “The Costs of Costs: The Unfortunate Deterrence of Everyday Litigation in Canada” (2010) 36 Queens Law Journal 113. A Sedgwick, “There are More Ways than One to Allocate Legal Costs” (2013) 32 Civil Justice Quarterly 300. [12.40] 295

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have been spent in preparation of the case, and how many days were spent in court. With event costing, the costs recoverable are based on outcomes or events. There may be an agreed or prescribed fee that is to be paid on a specific outcome or on certain events — for example, on commencing the proceedings, on listing for trial, or after trial. The fee may be linked to the value of the dispute, or may be based on what is regarded as reasonable remuneration for the work done to get to that event. As Kritzer noted: The basis on which any service provider’s fee is calculated affects incentives vis-à-vis the service provider’s efficiency. For lawyers this incentive is very clear: payment by the hour creates incentives for extra care and extra work; as one observer noted, looking under every stone makes sense if you are being paid by the stone.21

Where the fee is event based, the incentive is to be as efficient as possible. The lawyer is paid the same irrespective of the amount of work that has actually been undertaken. However, one disadvantage is that lawyers might be tempted to cut corners, or not do all they could to advance their client’s case. The answer to this, in part, is that the lawyers’ ability to do all they could has always been limited by the client’s capacity to pay. As Cannon points out: As a matter of policy, cost scales that reward lawyers’ activity, an adversary system that leaves control of the process in the lawyers’ hands, and the risk to lawyers of being sued if they miss some point, are a combination of incentives that have driven up the cost of litigation so that it is out of the reach of any but very rich individuals or corporate funding (including insurance).22

While Australian superior courts generally use activity based costing, there are examples of event based costing. The South Australian Magistrates Court, for example, adopted a costs scale whereby the legal costs recoverable were tied to both the stage of the litigation and the value in dispute. Legal costs recoverable on commencing proceedings and up to the first directions hearing are 4.4% of the judgment sum; from first directions hearing to the setting of the trial date 10% and so on. This cost regime reflects the approach to costs used in German civil litigation — the Rechtsanwaltsvergütungsgesetz (RGV).23 The court sets the quantum of recoverable costs in both systems. In Australia the Supreme Court Rules often contain a schedule setting out the costs. Known as ‘scale’ costs, these are largely activity based with amounts per hour prescribed for various activities ranging from interviews and client conferences to telephone calls. Looking at the Victorian Supreme Court Scale of Costs as an example,24 for work performed after 1st January 2017, a legal practitioner exercising legal skill or 21 22 23

24

H Kritzer, “Fee Regimes and the Cost of Civil Justice” (2009) 28 Civil Justice Quarterly 344 at 357 (footnote omitted). A Cannon, “Alternatives to Activity Based Costing” (2008) 17 Journal of Judicial Administration 178. A Cannon, “Alternatives to Activity Based Costing” (2008) 17 Journal of Judicial Administration 178 at 178-180. In Tasmania the Magistrates Court has adopted a similar approach to costs. See Supreme Court (General Civil Procedure) Rules 2015 (Vic) Appendix A — Supreme Court Scale of Costs.

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knowledge can recover $39.30 for every six minutes or part thereof or $393 per hour. Barristers can charge maximum recoverable costs of $561 per hour for preparation and incidental work in addition to a daily appearance in court fee of $5614 if junior counsel, and $842 per hour and $8421 for court appearances if senior counsel. Costs for preparing documents is $58 per folio (in Victoria, a folio is 100 words).25 Perusing documents costs $58 each for the first three folios and thereafter $19.50 per folio. Scanning a document creates a cost of $7.90 per folio. The Rules also provide scales for witnesses and interpreters. Expert witnesses who are professional persons are able to recover between $271 and $540.90 per hour. For an ordinary witness, the Rules prescribe an amount of $161.80 per day, although if employed, but not being paid for the time spent as a witness, that amount increases to up to $756.20 per day. The total amounts incurred in a case are rarely ascertainable by the public. The court, when making an order for costs, will usually only determine who is liable to pay the costs and then will leave it to the parties to agree on the amount, otherwise it is ‘taxed’. In this context a taxation is in effect a costs dispute brought before a court official who reviews the bills and determines the amount. Taxing, in itself, can be a costly exercise. The costs payable by a losing party to a winning party (party-party costs) are to be distinguished from the actual amount a client has to pay their own solicitor (solicitor-client costs). The latter is determined by the costs agreement between the client and the solicitor and governed by professional ethics and conduct rules. This is usually greater (often 30% to 60%) than what is recoverable from the opposing party should the client achieve a successful outcome in the litigation.26

Court costs [12.50] For much of the last hundred years the concerns about the costs of litigation in Australia were almost entirely focused on legal costs. Court fees always existed but have been a relatively small component of the cost of litigation. The act of commencing proceedings always incurred a fee. This fee, the filing fee, is payable when the originating process is filed at the court registry. Various courts have provisions whereby indigent plaintiffs can apply for waiver of the fees.27 Increasingly, court fees discriminate between plaintiffs, with corporate plaintiffs having to pay higher fees. In Queensland, for example, the filing fees for the Supreme Court in 2017 for general litigation is $1784 if at least one of the plaintiffs was a corporation and $889.30 if otherwise.28 Similarly, in the Federal Court, court

25 26

27

28

Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.74. Queensland and Tasmania also charge per 100 words. In South Australia the charge is per A4 page. C Cameron, “Australia” in C Hodges et al, The Costs and Funding of Civil Litigation: A Comparative Perspective (Hart, 2010) p 201; D Vines, “Present Difficulties with the Assessment Scheme” (2004) 27 University of NSW Law Journal 206 at 207. See, eg, Civil Procedure Regulation 2012 (NSW) reg 11; Uniform Civil Procedure (Fees) Regulation 2009 (Qld) regs 10–10C; Supreme Court Act 1935 (SA) s 130; Supreme Court (Fees) Regulations 2002 (WA) reg 7. Uniform Civil Procedure (Fees) Regulation 2009 (Qld) Sch 1. [12.50] 297

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fees vary depending upon whether the party is a publicly listed company, public authority, corporation, or “any other case”.29 Transcripts are another significant cost. In New South Wales, the court fee in 2017 for a transcript under three months old is $87 for the first eight pages and $11 per page thereafter.30 As a rough guide, a full day’s hearing could generate 60 to 70 pages of transcript. Traditionally, transcript was provided by court reporters who were part of the court’s administrative services. More recently, a number of jurisdictions have been outsourcing court-reporting services. A private company, Auscript, provides transcript for all the Federal courts, and from 2013 for the Queensland courts. Same day transcript for the Federal Court would cost between $1,690 and $1,875 per full day, and purchasers are reminded that Auscript prohibits sharing of transcript.31 What is apparent is that court costs are rapidly becoming a significant contributor to litigation costs. A case with a four day hearing in the Federal Court for a corporate plaintiff may give rise to court costs in the order of $20,000 or more. The implications for access to justice are plain. The attempt to distinguish between individuals and corporations is an attempt to ameliorate the impact of the move to ‘user pays’ and ‘cost recovery’ principles. However, it is not a very adequate response — many corporations are small businesses, or are those without significant financial resources. At least the Federal Court distinguishes between publicly listed companies and other corporations in an attempt to address this concern. In 1989 Brennan J observed: In a society governed by law no barrier can be erected against reasonable access to the courts against vindication and protection of legal rights. To ensure that litigation is not frivolously commenced, modest fees have traditionally been exacted but the courts have reserved a dispensing discretion to ensure that, where litigation can be seen to be justifiable, poverty is no bar to the operation of the law.32

It would be hard to describe the current court costs regimes as ‘modest’ and they have become a barrier to reasonable access to courts. This suggests that courts may need to be more receptive to applications for exemptions from fees. While courts may be willing to do this, Treasury or Departments of Finance may not share this perspective, and this will continue to become an increasing issue for courts and litigants.

Making costs orders — who pays? [12.60] Courts, at common law, had no power to make costs orders. Any power to award costs was derived from statute. Courts exercising jurisdiction in equity had long enjoyed the power to make costs orders as part of its discretion to do justice. Part of the reforms associated with the Judicature Acts 1873-75 in England was to confer by statute a general power on courts to award costs.33 Similarly, in

29 30 31 32 33

Federal Court and Federal Circuit Court Regulation 2012 (Cth) Sch 1. Civil Procedure Regulation 2012 (NSW) Sch 1. See http://www.auscript.com/justice/courts-and-tribunals/federal-court-of-australia/. Re Citizen Limbo (1989) 92 ALR 81 at 82. See Oshlack v Richmond River Council (1998) 193 CLR 72 at 84-86 per Gaudron & Gummow JJ.

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Australia, legislation establishing or governing a court usually empowers a court to award costs.34 Section 24(1) of the Victorian Supreme Court Act 1986, for example, simply provides: Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.

Most jurisdictions have similar provisions, although in Queensland the equivalent provision is much shorter and found in separate legislation. Section 15 of the Civil Proceedings Act 2011 provides: A court may award costs in all proceedings unless otherwise provided.

The statutory provisions are often supplemented by court rules that create a presumption as to who will be ordered to pay costs. The fundamental presumption is that costs follow the event; that is, the loser pays the winner’s costs. So, in Queensland for example, r 681 of the Uniform Civil Procedure Rules 1999 provides: Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise.35

Even where such a statutory presumption does not exist, courts have in effect created such a presumption: “civil courts act on the basis that a successful party has a reasonable expectation of obtaining an order for costs”.36 In so doing, as noted earlier, Australian jurisdictions join most of the world in adopting the costs shifting approach, or the ‘English’ costs rule. However, as the High Court has often repeated, a statutorily conferred discretion is not to be fettered by a rigid or mechanical application of rules.37 This means, in exercising its discretion, a court is to take into account all relevant circumstances. The cases abound with examples of costs arguments seeking departure from the presumption when: • the litigation involves some form of public interest; • a party has succeeded on some issues and not others; • in the course of the trial tactical or strategic decisions have been made by a party that have unnecessarily prolonged the trial; • judgment has been less than informal offers made to settle the litigation; or • only nominal damages have been awarded.38 34

35 36 37 38

See, eg, Federal Court of Australia Act 1976 (Cth) s 43; Civil Procedure Act 2005 (NSW) s 98; Civil Proceedings Act 2011 (Qld) s 15; Supreme Court Act 1935 (SA) s 40; Supreme Court Act 1986 (Vic) s 24; Supreme Court Act 1935 (WA) s 37. Other examples include: Uniform Civil Procedure Rules 2005 (NSW) r 42.1; Supreme Court Civil Rules 2006 (SA) r 263(1). Latoudis v Casey (1990) 170 CLR 534 at 568 per McHugh J. Latoudis v Casey (1990) 170 CLR 534 at 558 per Dawson J; Oshlack v Richmond River Council (1998) 193 CLR 72 at 86 per Gaudron & Gummow JJ. See, eg: Atwell v Atwell (No 2) [2003] TASSC 10; Kitching v Commissioner of Police [2010] QSC 443; Roe v Director General, Department of Environment and Conservation [2011] WASCA 57; Levy v Watt (No 2) [2012] VSC 580; Copper and Gold Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 345. [12.60] 299

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The wide discretion conferred on the court over costs means that the court can craft orders to do justice between the parties in these situations. These can include ordering only a proportion of the costs be paid, or costs incurred up to a certain stage in the litigation, or more rarely, that the cost of certain issues be paid by the otherwise successful party. While the traditional approach favoured a ‘winner takes all’ order, there are signs courts are more willing to engage in a more discriminating approach to allocation of litigation costs. In Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) the Full Court of the Federal Court held that the traditional approach was: [Q]uite unfair. Its effect is that a winner is entitled to all of his costs even if he raises a plethora of issues on which he is unsuccessful … Costs are in the court’s discretion. Fairness should dictate how that discretion is to be exercised. So, if an issue by issue approach will produce a result that is fairer than the traditional rule, it should be applied. It is not suggested that such an approach requires a precise arithmetical apportionment of the costs as between the winner and loser of discrete issues. No doubt the assessment will often be rough and ready. But it will have the virtues of both fairness and reasonableness, which are often lacking in the application of the traditional rule.39

A common complexity that faces courts when considering applications for costs is where there are multiple parties in the litigation, or multiple issues. As noted above, the broad ranging discretionary power conferred on courts to order costs provides it with complete flexibility in fashioning costs orders. In so doing the court is limited only by the need to act judicially, which includes following established principles. Where costs orders are made against joint parties the presumption is that the parties are liable jointly and severally but this can be departed from when the circumstances require it.40 Where multiple defendants have been sued and one or more have successfully defended the claim, but one or more of the other defendants have been found liable, the plaintiff will be ordered to pay the costs of the successful defendant and the unsuccessful defendant ordered to pay the plaintiff’s costs, which include the costs the plaintiff has to pay the successful defendants. This occurs where the joinder of the successful defendants by the plaintiff in the first place is regarded as reasonable in the circumstances. This is often called a Bullock order after one of the early cases to clearly articulate this principle.41 Where the plaintiff has unreasonably joined the successful defendants then the plaintiff will carry the burden of their costs and not be able to pass that on to the unsuccessful defendant. A variant of this order, the Sanderson order (likewise named after one of the early cases)42 has been described as having a more direct effect — the unsuccessful defendant is ordered to pay the costs of the successful plaintiff, and by separate order, that of the successful defendants. The liability to pay the successful defendant falls on the unsuccessful defendant. The utility of this is most often found if the unsuccessful defendant is not in a financial position to meet the costs orders. With a Bullock order the plaintiff ends up carrying the costs of the 39 40 41 42

Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 at [3]-[4] per Finkelstein & Gordon JJ. Probiotec Ltd v University of Melbourne [2008] 166 FCR 30. Bullock v London General Omnibus Co [1907] 1 KB 264. Sanderson v Blyth Theatre Co [1903] 2 KB 533.

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successful defendant; with a Sanderson order the successful defendant ends up carrying its own costs should it not be able to recover from the unsuccessful defendant. The power conferred on courts is so wide that it enables a court to award costs against non-parties. In Knight v FP Special Assets Ltd43 the High Court held that cost orders could be made against non-parties where it was just and appropriate to do so, and upheld an order made against the receivers who had unsuccessfully engaged in litigation on behalf of companies in liquidation. Mason CJ and Deane J in a joint judgment also identified some other categories where orders against non-parties might be made — where a party was insolvent or a person of straw; where the non-party has played an active role in the litigation; and where the litigation involves the interests of the non-party.44 In making orders as to costs, courts have stressed that the purpose for ordering of costs is compensatory, not punitive. As Mason CJ held in Latoudis v Casey: If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.45

However, as discussed in the next section, some costs orders can appear to have a punitive element — when a court is ordering solicitor-client or indemnity costs. As indicated earlier the actual amount a client has to pay their solicitor is determined by the costs agreement between the client and the solicitor and governed by professional ethics and conduct rules. This is usually considerably greater than what is recoverable from the opposing party should the client achieve a successful outcome in the litigation.

Quantum of costs [12.70] In addition to determining who is to pay the costs of the litigation, courts also have to determine the basis on which they are calculated. Traditionally courts have distinguished between two categories of costs — party-party costs and solicitor-client costs. Party-party costs are the costs the unsuccessful party is usually ordered to pay the successful party. These are the legal costs the successful party has incurred that are necessary or proper for “the attainment of justice or for maintaining and defending the rights of any party”; this excluded costs arising from “over-caution, negligence or mistake”.46 Thus, the professional fees and expenses incurred in the litigation are recoverable from the losing party only if they were necessary for the conduct of the litigation or, as it turned out, unnecessary but reasonable in the circumstances of the litigation. In some jurisdictions the term “party-party” costs have been replaced with the term “standard basis” costs.47 In Victoria standard

43 44 45 46 47

(1992) 174 CLR 178. (1992) 174 CLR 178 at 193. Latoudis v Casey (1990) 170 CLR 534 at 543. Supreme Court Rules 2000 (Tas) r 859. For example: Uniform Civil Procedure Rules 1999 (Qld) r 702. [12.70] 301

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costs are defined as “all costs reasonably incurred and of reasonable amount”.48 In Victoria and New South Wales the Legal Profession Uniform Law also requires that: lawyers cannot charge “more than fair and reasonable amounts for legal costs”,49 and that such costs must be proportional and “reasonably incurred”.50 In practice, the difference between the “necessary or proper” or the “reasonably incurred” formulations of the costs payable by the losing party is not great. It is hard to conceive of “necessary” work not being regarded as reasonable. Similarly, “proper” work which turned out to be unnecessary would only be regarded as “proper” if it were reasonable to undertake the work in all the circumstances, taking into account prevailing standards of practice. Less commonly, a losing party may be ordered to pay costs on a ‘solicitorclient’ basis. Growing differences in nomenclature and definition across Australian jurisdictions means that in some jurisdictions these are described as ‘indemnity’ costs. In general terms, these are all of the costs incurred by the successful party unless unreasonably incurred or of an unreasonable amount. They are usually made in circumstances where the unsuccessful party has conducted the litigation in such a way as to justify the successful party receiving full indemnity for its costs. However, it should be noted that the discretion: [T]o order indemnity costs must be exercised on ground connected with the actual litigation; and, conduct in circumstances leading up to the litigation as opposed to the litigation itself is not a relevant type of connection unless it bears upon the conduct as litigant.51

Commencing proceedings which are unarguable, baseless, or which the plaintiff should have known could not succeed, have been grounds for full indemnity costs.52 Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd outlined the history of the power to order indemnity costs and outlined some of the conduct that might justify such an order.53 Nonetheless, party-party costs are the norm. Information about the extent to which party-party costs reimburse a successful party is limited. The Victorian Law Reform Commission in its report on reforming Victorian civil litigation noted that anecdotal evidence suggested that, historically, parties could expect to recover about 60% to 70% of their costs under a party-party costs order. Anecdotal evidence to the Commission suggested that more recently this had declined to 50%. The Commission’s own limited research found the recoveries under such orders ranged from 44% to 88%.54 With increases in the costs of litigation and decreases in the proportion recovered under a party-party costs order, a growth in applications for solicitor-client or indemnity costs is expected. It may be time to reconsider the usefulness of party-party costs as a concept. If a costs shifting rule is to continue to underpin our approach to litigation costs, why should a successful party not be 48 49 50 51 52 53 54

Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.30. Legal Profession Uniform Law Application Act 2014 (Vic), Sch 1, s 169(b). Legal Profession Uniform Law Application Act 2014 (Vic), Sch 1, s 172. Toyota Finance Australia Ltd v Easy Dollar Pty Ltd (No 2) [2011] NSWSC 879. Amos v Monsour Legal Costs Pty Ltd [2008] 1 Qd R 304. Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225. VLRC, Civil Justice Review: Report (2008) pp 648-650.

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fully indemnified for those costs, unless they are established to be unreasonable? If deterring misconduct in litigation is justification for the current approach, other remedies seem preferable rather than imposing what is, in effect, a financial penalty on the successful party. Where the misconduct is by a party, remedies might include increasing costs payable to the successful party. As an alternative, if this was thought to create an unwarranted windfall for that party, the financial ‘penalty’ could be paid to the court to compensate for the increased costs incurred by the public purse where the conduct has lengthened the litigation or created increased demands on court or judicial resources. Where the misconduct arises from the conduct of a party’s lawyers, costs orders can be made against the lawyers personally.

Costs include disbursements [12.80] Disbursements are those expenses incurred by a solicitor in the course of the litigation payable to third parties. Where those expenses are related to the conduct of the litigation, for example, barristers’ fees, court fees, or fees for expert witnesses, they are called ‘professional disbursements’ and are included in the costs orders made by a court.55 These are litigation expenses that the solicitor is liable to meet if not met by the client. In practice, solicitors may require a client to lodge in the solicitor’s trust fund a significant proportion of, or all, of these expenses before proceeding to incur that expense. These expenses are to be distinguished from non-professional expenses which are those matters paid by the solicitor for the client, but for which the solicitor is not personally bound to pay. These include any taxes and other statutory payments. Interest paid on litigation loans has, for example, been regarded as a non-professional expense.56 Non-professional expenses are not included in the bill of costs, although they are included in the general financial statement provided to the client outlining all receipts and payments.

COSTS AND NON-PARTIES [12.90] We have noted the general rule that costs follow the event so that the losing party is usually ordered to pay the costs of the successful party on a party-party basis. This is because the party has been directly involved and has ultimately controlled the conduct of the litigation and therefore should carry the

55

56

In some jurisdictions costs are defined as including disbursements: see, eg, Uniform Civil Procedure Rules 1999 (Qld) r 679; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.01; Supreme Court Rules 1971 (WA) O1, r 4). See also Potter v Dickenson (1905) 2 CLR 668 at 778 per Griffiths CJ: “But in a Court of law the term ‘costs’ includes not only payments for proceedings in Court, and other matters which can only be done by a solicitor, but also payments out-of-pocket, such as for Court fees, and for securing the attendance of witnesses. All these are ‘costs’.” See Legal Services Commissioner v Dempsey [2007] QSC 270. As a matter of policy, why should a person who is forced to take out a litigation loan because they are unable to finance their litigation personally not recover the interest on that loan from the losing party if successful? The current position advantages those with the financial capacity to fund their own litigation. [12.90] 303

Principles of Civil Litigation

consequences of that litigation. They are before the court and have the opportunity to argue their case on all matters including costs. Yet in some circumstances, non-parties can also be subject to costs orders. We look at two circumstances where this arises — in both circumstances what is common is that the non-party has had direct involvement in the litigation, and their conduct has been held to be unreasonable or improper. The first of these is the special situation applying to lawyers with regards to awarding costs orders against them personally; and the second is the situation of non-parties more generally.

Costs against lawyers [12.100] Where a lawyer has engaged in conduct in the litigation that has led to undue delay, or created costs to the parties as a result of unreasonable or improper conduct, a court has power to makes costs orders against the lawyer. As officers of the court, lawyers have recognised duties to the court and are subject to sanctions for breaches of those duties. In addition, the court’s inherent jurisdiction to prevent abuse of its procedure and ensure proper exercise of the court’s function can encompass costs orders against lawyers. However, attempts to create a duty to opposing parties to conduct litigation appropriately have not been accepted.57 Complementing, and perhaps replacing these powers, is the statutory power to make such costs orders found in all Australian jurisdictions.58 Sometimes described as ‘wasted costs orders’, costs orders against lawyers include not only reimbursement to the lawyer’s client of costs for which the client is liable but the payment of costs that the client would otherwise be liable for. The costs order is said to be intended to compensate the client or the other parties who have incurred costs arising from misconduct or negligence; it is not imposed as a punishment. This must depend, in part, on the source of the power being exercised — if the court is purporting to act in its capacity to discipline officers of the court, the orders could be punitive. The overlapping sources of power can contribute to a lack of clarity about the application of the power. Older cases required a higher standard of misconduct before the power was enlivened. The conduct needed to be gross or serious misconduct but not so gross or serious as to warrant being struck off.59 Where the power is based on statutory provisions, a lower threshold has been adopted. This would suggest that the traditional exhortations that accompany the exercise of the power in this situation — that is, that it should be ‘exercised sparingly’; in ‘exceptional situations’ — is less justified. In recent years one of the more controversial issues in this area has been the propriety of commencing litigation that has no prospects of success.60

57 58

59 60

See Orchard v South Eastern Electricity Board [1987] 1 QB 565. See, eg, Court Procedures Rules 2006 (ACT) r 1753; Federal Court of Australia Act 1976 (Cth) s 37N, Federal Court Rules 2011 (Cth) r 40.07; Civil Procedure Act 2005 (NSW) s 99(1); Uniform Civil Procedure Rules 1999 (Qld) r 690; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.23. See, eg, Myers v Elman [1940] AC 282. See, eg, White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169.

304 [12.100]

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Traditionally this was not thought to amount to improper conduct,61 but this view has been subject to challenges. In some cases, courts have held that the contemporary values underpinning civil procedure now mean that such conduct would either be improper or sufficient to support costs orders against lawyers.62 In other jurisdictions, statutory reform has made explicit that commencing litigation without a reasonable prospect of success exposes the lawyer to costs sanctions.63 Courts have struggled to determine the bounds of such provisions in keeping with the traditional reticence to award costs against lawyers. As with so many areas of civil procedure, the attempt to balance competing public interests continues to evolve as attitudes change. Dal Pont’s summary of some of the reasons for adopting a cautious approach to the exercise of the power to award costs against lawyers includes:64 • the reputational damage of such a finding; • the fact that the court may not be aware of the instructions the lawyer has received nor have the full circumstances of the matter before it; and • the chilling effect on lawyers either by exposing them to threats to use the wasted costs procedure in the course of litigation or by inhibiting the full and fearless representation of the client’s interests. However, the modern direction of procedural reform with its emphasis on the efficiency and effectiveness of the civil justice system has prioritised minimising undue delay and unnecessary expense. This warrants a more relaxed approach to awarding costs against lawyers where unreasonable conduct has caused delay and expense. If this becomes the accepted approach, courts will need to ensure lawyers subject to such claims receive due process. This includes proper notice of the basis upon which the claim is brought against them, the ability to provide all relevant information to the court, and a right to be heard. This will need to take place while at the same time minimising the potential for such claims to develop into complex parasitical litigation.

Awarding costs against other non-parties [12.110] Courts have long held the view that they had power within their inherent jurisdiction to order a non-party to pay costs where the non-party was in fact the real party in the litigation. This was only to be exercised in exceptional cases where the non-party, by its actions, had demonstrated an involvement in the litigation, and could be regarded as the ‘real’ party. Longstanding examples include litigation guardians or next friends commencing proceedings when not entitled to do so; claimants to beneficial interests in estates; and relators in a relator action brought by the Attorney-General.65

61 62 63 64 65

Myers v Elman [1940] AC 282. Carson v Legal Services Commissioner [2002] NSWCA 308; Steindl Nominees Pty Ltd v Laghaifar (2003) QCA 157. See Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300. G Dal Pont, The Law of Costs (3rd ed, LexisNexis, 2013) Part V, Ch 23. See Knight v FP Special Assets Ltd (1992) 174 CLR 178. [12.110] 305

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The enactment of statutory provisions providing courts with the power to make costs orders was initially thought not to make much difference to the traditional view. Despite the generality of the language of the statutory provisions empowering courts to make costs being very wide, for many years this was read down to limit the power to only empowering costs between parties. In Knight v FP Special Assets Ltd66 the High Court by majority decided that, in keeping with the prevailing approach of giving statutes their full meaning and avoiding implicit limitations, the Queensland costs provisions enabled the making of costs orders against non-parties. The exercise of this power, the Court suggested, would only arise in limited circumstances. Examples of where the non-party is the real party include company directors, liquidators and receivers who have sued in the company name, and the company is not in a position to meet any adverse costs orders. To establish the non-party liability for costs, some form of improper conduct needs to be demonstrated — simply bringing and losing litigation does not found an adverse costs order against a non-party. So far our discussion of non-party costs has been in the context of making adverse costs orders against non-parties. Once the jurisdiction to make such orders is accepted, the possibility of making costs orders in favour of non-parties arises. In Life Therapeutics Ltd v Bell Investments Ltd (No 2)67 the Full Court of the Federal Court ordered the respondent to pay the costs of three non-party directors against whom the respondent had threatened to seek non-party costs orders had the court dismissed the appeal. More recent formulations of the court’s power to order costs clearly support the broader approach. In Victoria, for example, s 24(1) of the Supreme Court Act 1986 simply indicates that “costs … [are] … in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid”.

ASSESSING COSTS [12.120] When costs orders are made, a court rarely determines the quantum of the costs. Often the order will be “costs to be agreed or taxed”. ‘Taxed’ in these circumstances has traditionally meant the quantum of costs will be determined by a court officer. A number of jurisdictions have adopted more contemporary expressions — New South Wales and Queensland use the expression “costs assessment”; South Australia uses the term “adjudication”. A more significant innovation has been the effective outsourcing of the costs assessment process by the courts in Queensland and New South Wales. Instead of costs assessment being carried out by court officials, approved private lawyers undertake the costs assessment for a fee. A court can fix the costs and award a lump sum. This may occur when the court believes the circumstances of the litigation are such that any taxation will unreasonably add to costs. Where a taxation will greatly protract the litigation post-judgment, thereby incurring further expenses, such an order might be 66 67

(1992) 174 CLR 178. (2008) 170 FCR 595.

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considered. Should the party liable under the costs order not have the financial resources to meet any order, the case for granting a lump sum becomes stronger. Nevertheless the difficulty the court faces is that it does not want to engage in a close scrutiny of the legal costs claimed, as otherwise it would result in the incurring of the very costs the court is seeking to avoid by making the lump sum order. Yet the court needs to be confident that the costs ordered are appropriate. Where a successful party seeks to have the court fix costs, it is expected to provide evidence of those costs. This may be in the form of affidavits from lawyers experienced in costing cases along with external ‘expert’ opinion from costs assessors or equivalent.68 When costs need to be taxed, the party’s lawyer prepares a bill of costs that itemises all the work undertaken in the litigation, including disbursements, that the other party is liable to pay. As noted earlier, the presumption is that costs ordered by a court are on a party-party basis — those costs necessary or proper for the attainment of justice.69 In most jurisdictions courts produce a scale of costs, usually a Schedule attached to the Rules of Court, which sets out the maximum amount that will be allowed on a taxation for the range of legal work undertaken in litigation. If the party liable for the costs does not agree with the bill of costs, the claiming party seeks a taxation by commencing what in effect is fresh litigation. Precise practice varies across the jurisdictions, but what is most common is service of the bill of costs on the party liable to pay it and the provision of a limited time for that party to file its objections to the bill of costs. The taxing officer or costs assessor then usually holds a hearing to determine whether to uphold the objections and review the bill of costs.70 Where the costs assessment process has been outsourced (for example, in Queensland), the costs assessors are given considerable latitude in determining how to conduct the assessment (including on written submissions alone) and they are not bound by rules of evidence or procedure.71 The Federal Court differs from this in that it provides for a three pronged process — when a bill of costs is filed with the court, the taxation officer examines it and makes an estimate of what the bill would be on full taxation; if not accepted by parties the taxation officer can undertake a provisional taxation in which the officer reviews the bill in the absence of the parties after receiving submissions; alternatively, or after provisional taxation, a full taxation whereby the parties attend and, in effect, a hearing is conducted.72 In most jurisdictions, parties can seek a further review by the taxation officer of its decision before it is finalised, but ultimately all jurisdictions allow parties to seek a review of the taxation decision by the court.

68 69 70

71 72

See Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 and Hamod v New South Wales (2011) NSWCA 375. See [12.70]. See, eg, Supreme Court Rules (NT) O 63; Supreme Court Civil Rules 2006 (SA) r 271; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 63; Rules of the Supreme Court 1971 (WA) O 66. Uniform Civil Procedure Rules 1999 (Qld) r 720. Federal Court Rules 2011 (Cth) r 40. [12.120] 307

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SOLUTIONS TO THE LITIGATION COSTS CRISIS [12.130] Litigation costs are usually the most significant barrier to access to justice. Reforms like case management have provided tools for dealing with delay, one of the other barriers, but the civil justice system has struggled to develop effective solutions to the problem of escalating and unaffordable litigation costs. Currently two main strategies seem to be developing. First are the attempts to curtail the amount of legal work undertaken in litigation; second are attempts to create alternative sources to fund litigation. Yet in developing reform strategies what needs to be avoided is to develop system-wide responses based largely on the experience of higher courts, where a minor proportion of the work of the civil justice system takes place. This is not to suggest that the issue of litigation costs does not arise in the Magistrates Courts, but that when it does, it is of a different order of magnitude.

Curtailing legal work [12.140] Over the last 20 years one trend in Australian procedural reform has been a reduction in the availability of procedural steps. This is achieved by limiting procedural work (that is, limiting a litigant’s access to the full range of procedural tools available or limiting the scope of the procedural tools which are available) and by trying to limit the amount of money that can be spent on litigation.

Limiting procedure [12.150] One of the best examples of a reduction in the availability and scope of procedural tools is in the area of discovery. In some jurisdictions interrogatories were available as of right to parties, now in many jurisdictions leave of the court is required before interrogatories can be delivered. In South Australia, for example, this process took place in stages. Interrogatories were available as of right and were common in litigation until 1992 when the requirement for leave to administer interrogatories was introduced for personal injury cases. Then in 2000 the requirement of leave was extended to all cases. In so doing a litigant’s access to a procedural tool has been increasingly restricted. An example of the limitation of the scope of procedural rules can be discerned in the changes to disclosure or discovery by way of the list of documents. The longstanding approach in Australian is based on the old English approach encapsulated in Compagnie Financiere du Pacifique v Peruvian Guano Co,73 where disclosure was required of all documents directly relevant to the case, or that may give rise to a train of enquiry, or as one South Australian case recast it — “throws light on the case”.74 In a number of jurisdictions the test has become narrower, requiring only the discovery of documents “directly relevant” to an issue raised by the pleadings.75

73 74 75

(1882) 11 QBD 55. Donaldson v Harris (1973) 4 SASR 299. See, eg, Federal Court Rules 2011 (Cth) r 20; Uniform Civil Procedure Rules 1999 (Qld) r 211; Supreme Court Civil Rules 2006 (SA) r 136.

308 [12.130]

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A more radical, more general, but less developed strategy has been the introduction of proportionality to procedure. In the last 20 years provisions have been introduced in some jurisdictions requiring courts to ensure that procedural decisions are “proportionate to the value, importance, and complexity of the subject matter in dispute”.76 The Legal Profession Uniform Law provides that legal costs must be fair and reasonable in all the circumstances, and further that such costs should be “proportionately and reasonably incurred; and proportionate and reasonable in amount” with regard to, amongst other factors, “the level of complexity, novelty or difficulty of the issues involved, and the extent to which the matter involved a matter of public interest.”77 The introduction of proportionality, along with case management, provides courts with new powers whereby the court can fashion a procedural regime for cases to ensure that the costs are not disproportionate to the dispute. A court could order, for example, that there be no discovery in a case and only one day will be allowed for the trial. So far courts have not acted in this way, so the practical effects of such provisions are yet to be fully developed. Nevertheless, it is clear courts are beginning to explore the role of proportionality in procedure.78

Limiting legal costs [12.160] A more indirect method of curtailing legal work has been to attempt to influence the quantum of legal costs arising from litigation. Innovations in some courts include: • setting maximum amounts that can be recovered in a case early in the litigation process; • introducing litigation plans and budgets; and • increasing the awareness of the legal costs by requiring more disclosure of legal costs by solicitors to their clients during the litigation process.

Maximum costs orders [12.170] Both the Federal Court and New South Wales courts have the power under their Rules to determine maximum amounts of costs that can be recovered.79 Also known as ‘protective costs orders’, attempts have been made to use the broad general power to award costs to support such orders.80 The developing case law suggests that these are more likely to be awarded in public interest litigation where the applicant for the order has no private interest in the litigation, and the litigation would be unlikely to proceed without the order.81

76 77 78 79 80 81

Rules of the Supreme Court 1971 (WA) O 1, r 4B(1). Also see Civil Procedure Act 2005 (NSW) s 60; Civil Procedure Act 2010 (Vic) s 9. Legal Profession Uniform Law (NSW) s 172. See, eg, Shield Mercantile v Citigroup [2013] NSWSC 287; Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263. Federal Court Rules 2011 (Cth) r 40.51; Uniform Civil Procedure Rules 2005 (NSW) r 42.4. Aitken v Victoria [2013] VSCA 28; Bare v Small [2013] VSCA 204. Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263. [12.170] 309

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Litigation plans and budgets [12.180] Litigation plans have been adopted in some jurisdictions.82 These assist with case management but can also serve as a check on the nature and scale of legal work in litigation. Their utility remains to be evaluated but their existence is evidence of the courts’ desire to control legal costs. England and Wales have taken a further step to this end by introducing litigation budgets. From April 2013, litigation costs budgets are to be filed by the parties early in the proceedings with the likelihood that unapproved expenditure in excess of the budget would not be recoverable. In Henry v News Group Ltd83 the costs judge had refused to approve an increase in the amount allocated to witness preparation. The plaintiff’s budget allowed for £12,487 but in fact £228,891 was spent. The costs judge refused to allow the budget to be varied but on appeal the Court of Appeal found “good reasons” to depart from the budget. The Court of Appeal indicated that this set no precedent as the litigation had been conducted under a pilot program for defamation cases and that the final rules on litigation budgets, as implemented by Jackson LJ, were more flexible. More-Bick LJ went on to hold: The primary function of the budget is to ensure that the costs incurred are not only reasonable but proportionate to what is at stake in the proceedings. If, as is the intention of the rule, budgets are approved by the court and revised at regular intervals, the receiving party is unlikely to persuade the court that costs incurred in excess of the budget are reasonable and proportionate to what is at stake.84

Increasing transparency [12.190] The final strategy for curtailing legal work is to increase client awareness of the costs of litigation. Both the quality and quantity of costs information lawyers are required to provide to their clients has been improved. This approach has been implemented in two ways — by increasing costs disclosure requirements in the professional conduct rules governing lawyers in all jurisdictions and in some jurisdictions by incorporating similar requirements in legislation and rules governing civil procedure. The regulation of the Australian legal profession remains, to use a non-legal term, muddled. The National Legal Profession Project remains only partially developed and most State jurisdictions have retained State control of the profession. Nevertheless there is considerable consistency across Australia when it comes to the content of the professional rules governing costs, and all jurisdictions have adopted rules that reflect the Model Professional Conduct Rules. These require, amongst other things, lawyers to disclose as soon as practicable the basis on which legal costs will be calculated, estimates of the total legal costs, and if litigation is involved, the costs which the client might recover from the opposing party if successful, as well as the costs which the client will have to pay if unsuccessful.85 82 83 84 85

See, eg, Supreme Court Civil Rules 2006 (SA) r 130G. [2013] EWCA Civ 19. [2013] EWCA Civ 19 at [28]. See, eg, Legal Profession Uniform Law (NSW) s 174; Legal Practitioners Act 1981 (SA) Sch 3, cl 10; Legal Profession Act 2008 (WA) s 260.

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The regulatory framework governing courts and civil litigation can also include provisions requiring disclosure of costs. The Federal Court now has, for example, in keeping with its mandate to ensure litigation is conducted within its overarching objectives, the power to: [R]equire the party’s lawyer to give the party an estimate of: (a)

the likely duration of the proceeding or part of the proceeding; and

(b)

the likely amount of costs that the party will have to pay in connection with the proceeding or part of the proceeding, including: (i)

the costs that the lawyer will charge to the party; and

(ii)

any other costs that the party will have to pay in the event that the party is unsuccessful in the proceeding or part of the proceeding.86

Victoria, in 2012, amended the Civil Procedure Act 2010 to enable a court, at any time during the litigation process, to order a lawyer to prepare a memorandum on estimated length of trial and costs and disbursements for its client, the court, the other parties, or any one of these.87

Alternative sources of funding for litigation costs [12.200] As well as attempts to reign in legal costs, a complementary strategy has been to look at providing litigants with sources of funding other than their own resources. These include the provision of legal aid for civil litigation; the use of legal insurance schemes; the introduction of contingency fee arrangements; and most recently, litigation funding companies.

Legal aid and pro bono work [12.210] Unlike jurisdictions in many other developed countries, Australia has almost no history of providing legal aid for civil litigation. Legal aid is almost entirely used to fund criminal cases and a small category of family law cases. Legal aid also suffers the complications of a federal system with funding coming from both Commonwealth and State Governments. The Commonwealth Government’s proportion of legal aid funding declined from 49% to 28% between 1997 and 2009. The States have reluctantly increased their share of the funding but overall funding remains at relatively low levels. In 2009 the United Kingdom provided per capita legal aid funding of approximately $68, and this after 30 years of introducing great limitations on the availability of legal aid. The equivalent amount in Australia was $28.88 With almost no legal aid for civil matters available from the State legal aid authorities, the most likely source of assistance is from community legal centres. Funded by Commonwealth and State Governments, around 200 centres across Australia engage in a range of activities including community education, developing law reform ideas, as well as advice and representation. The demand is

86 87 88

Federal Court of Australia Act 1976 (Cth) s 37N(3). Civil Procedure Act 2010 (Vic) ss 65A – 65B. See R Clark, “Civil Procedure and Commercial Arbitration Reforms in Victoria” (2012) 1 Journal of Civil Litigation and Practice 175 at 178. PriceWaterhouseCooper, Legal Aid Funding: Current Challenges and Opportunities for Co-operative Federalism, Final Report (2009) pp 4-6. [12.210] 311

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so great that only a very small proportion of those seeking assistance can be helped in this way.89 Along with community legal centres has been the growing interest in pro bono services. There are now dedicated sites co-ordinating pro bono work and a growing number of firms that have made commitments to providing pro bono services. The Australian Pro Bono Centre (previously the National Pro Bono Resource Centre) was created in 2002 and surveys by it show an increase in pro bono work, but that law firms likely to have structured pro bono programs were the large commercial law firms. Perhaps unsurprisingly 56% of the recipients of the pro bono services were organisations rather than individuals, and the sorts of matters receiving the most pro bono assistance were employment law and commercial agreements.90 These firms were most likely to turn down requests for assistance if the matters involved family law and criminal law.91 This is not to overlook the reality that many law firms and lawyers do provide free or discounted services to clients in an unstructured way,92 and the area of practice that currently receives the third highest pro bono assistance (after employment law and commercial agreements) is immigration.93 In addition, many community legal centres and law societies run free advice services using volunteers from the legal profession. Nevertheless, the reality is that in Australia most civil litigants unable to afford the legal costs involved are either prevented from using the civil justice system or have to represent themselves. The growth in unrepresented litigants is a consequence of the costs crisis and proving a difficult challenge for courts.94

Contingency fees [12.220] Unlike the United States, Australian courts and, perhaps to a lesser degree, Australian lawyers have viewed contingency fees with suspicion. In a contingency fee arrangement, the solicitor undertakes not to charge her or his fees if the case is unsuccessful, that is, ‘no win, no fee’. It is the return for taking this risk that is controversial. In the United States, a lawyer can demand a share of the damages recovered in return for conducting the litigation under a contingency fee arrangement. Proportions in the order of 30% to 50% are not uncommon.

89 90 91 92 93

94

Senate Standing Committee on Legal and Constitutional Affairs, Inquiry into Legal Aid and Access to Justice (2004) ch 11. Australian Pro Bono Centre, Fifth National Law Firm Pro Bono Survey, Report (March, 2017) pp 34-36. Australian Pro Bono Centre, Fifth National Law Firm Pro Bono Survey, Report (March, 2017) p 38. It should also be noted that the Legal Profession Uniform Law (NSW) s 8 defines “pro bono” more in line with the traditional access to justice objectives of pro bono work. Australian Pro Bono Centre, Fifth National Law Firm Pro Bono Survey, Report (March, 2017) p 36. Somewhat surprisingly, immigration is also the third most likely practice area to be rejected for pro bono assistance (p 38). E Richardson et al, Self Represented Litigants: A Literature Review (Australian Centre for Court and Justice Innovation, 2013).

312 [12.220]

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The High Court had in Clyne v New South Wales95 accepted the principle of contingency fees but prevented lawyers’ fees being linked to the amount recovered in the litigation. Up until recently such a scheme would also have run up against the torts of maintenance and champerty which barred a third party from supporting financially and sharing in the proceeds of litigation. A number of Australian jurisdictions (eg, the Australian Capital Territory, New South Wales, South Australia, and Victoria) have abolished these torts. Legal profession regulators in all jurisdictions have since introduced provisions that enable a lawyer to enter into a contingency fee arrangement. The return for accepting that risk is that the lawyer can recover in addition to the normal costs a success fee that is up to 25% of the normal costs the lawyer would have charged the client.96

Legal insurance schemes [12.230] Legal insurance is relatively undeveloped in Australia. Home insurance usually includes cover for public liability arising from the property and in the ordinary course of events the insurer would conduct and pay for any litigation should a claim be made. Other forms of insurance usually result in the insurer meeting the costs of any claims arising under that policy, for example, professional indemnity insurance for professional persons and company director insurance. There is no government legal insurance or other scheme that operates in a similar way to Medicare, which provides cover for medical and hospital expenses. There is no large scale private legal insurance market in the same way as there is an active government subsidised private health insurance market in Australia. It is then with some surprise that Australian lawyers learn that legal expense insurance markets are long standing and well-developed in other parts of the world. Two types of insurance exist — before the event (BTE) insurance and after the event (ATE) insurance. France was the first country to develop modern legal insurance in 1905 and Germany followed in 1928. The United Kingdom followed in 1974.97 Before the event insurance is much more common — it is found in many of the civil law jurisdictions. It can be either added to other types of policies, for example, home or motor vehicle insurance, or it can be a standalone policy. Germany is a good example of a jurisdiction with a standalone BTE insurance system. Around 43% of the population are covered by standalone BTE insurance, which usually covers a wide range of claims including motor vehicle accidents. Insurers may decide to limit the types of claims they will cover, as can the insured. Standalone policies are rare in the United Kingdom where before the event 95

96 97

(1960) 104 CLR 186. Also see Legal Profession Uniform Law (NSW) s 183 that prohibits lawyers charging a percentage of the claim amount. However, it should be noted that a recent report by the Law Council of Australia has now provided some support for such percentage based contingency fee arrangements – see Law Council of Australia, Final Report of the Working Group: Percentage Based Contingency Fee Arrangements (May, 2014). See, eg, Legal Profession Uniform Law (NSW) s 182(2)(b); Legal Profession Act 2007 (Qld) s 324; Legal Practitioners Act 1981 (SA) Sch 3, cl 26; Legal Profession Act 2008 (WA) s 283. M Kilian, “Alternatives to Public Provision: The Role of Legal Expenses Insurance in Broadening Access to Justice — the German Experience” (2003) 30 Journal of Law and Society 31 at 32. [12.230] 313

Principles of Civil Litigation

insurance is usually purchased as an ‘add-on’ to a home or motor vehicle policy. However, the take up rate of this option in the United Kingdom has been relatively low.98 After the event insurance developed in England and Wales in the 1990s. It was associated with the introduction of conditional fee arrangements, a form of contingency fee, in which the client’s lawyer agreed to take on the case on a ‘no win, no fee’ basis and the client obtained insurance to meet any adverse costs order if they lost and to cover any disbursements. As part of the Woolf reforms in 1999 both the success fee the lawyer could claim if the client’s case was successful, and the insurance premium, were recoverable from the losing party as part of the costs of the case. This spurred growth in the ATE market but recent changes following the Jackson inquiry into costs of litigation have seen the recovery of success fees and insurance premiums from the losing party reversed. The successful party has to fund this themselves. ATE insurances are not limited to contingency fee situations and can be purchased to cover the costs a client owes its own solicitor. The reasons explaining why legal insurance markets have developed where, and in the way, they have are not clear. Part of the answer seems to lie in the degree to which legal costs are predictable. The European civil law systems, where costs are more regulated and often event rather than activity based, are better placed in this regard.99

Litigation funders [12.240] One area where Australia has led the world has been the development of a new sector in the financial services industry — litigation funding. There are now at least five litigation funding companies, some of which are public companies listed on the stock exchange. These companies not only fund litigation but also run the litigation on behalf of the plaintiffs. They only take large cases100 and have funded a number of shareholder or investor class actions following the global financial crisis. They are not subject to the same regulations as the legal profession, so are able to enter into contingency agreements and demand a proportion of the damages recovered in the action (one third to two thirds is common).101 The repeal of the torts of maintenance and champerty in several Australian jurisdictions removed one of the traditional restraints on litigation funding. Along with this, in 2006, the previous views that third party litigation funding of cases in this form would amount to an abuse of process were overturned by the High Court, enabling third party litigation funding to thrive.102 More recently, courts in New Zealand103 and Singapore104 have taken a different view and the torts and limits

98 99 100 101 102 103

M Faure and J De Mot, “Comparing Third Party Financing of Litigation and Legal Expense Insurance” (2012) 8 Journal of Law, Economics and Policy 743 at 749. C Hodges et al, The Costs and Funding of Civil Litigation: A Comparative Perspective (Hart, 2010) p 21. IMF Ltd has a minimum claim size of $5 million. M Legg et al, “The Rise and Regulation of Litigation Funding in Australia” (2011) 38 North Kentucky Law Review 625 at 631. Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386. Waterhouse v Contractor Bonding Ltd [2013] NZSC 89.

314 [12.240]

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on non-parties controlling litigation continue to survive in those jurisdictions with implications for the fledgling litigation funding industry in those regions. The regulation of the litigation funding industry is a matter of considerable debate. A Federal Court judgment105 holding that litigation funders were a managed investment scheme, and thus subject to the regulatory requirements of corporations law, was quickly overcome by legislative and administrative actions by the Commonwealth. Third party litigation funding creates a series of competing interests — the interests of the shareholders or investors of the litigation funders, the interests of the clients, and the interests of the lawyers are all involved. Should litigation funding agreements be disclosed? Can the litigation funding agreement only meet the solicitor-client costs of the party it is funding; that is, can it avoid having to pay any adverse costs orders its client is required to pay? The ethical and regulatory issues become even more pronounced if the litigation is a representative or class action. This has been the area of greatest interest for litigation funding given the size of the potential awards. The involvement of litigation funding has in fact distorted elements of the Australian class action regimes. Most Australian class action regimes are ‘opt out’ schemes — a person is bound unless they opt out. Litigation funders have relied on the individual agreements with parties as the basis for their involvement in the case. With a large class made up of unidentifiable individuals, litigation funders will only be able to recover from those class members they sign up. To overcome this litigation funders have resorted, with some success, to effectively creating an ‘opt in’ class action regime by persuading courts to define the class to those who have signed funding agreements.106 Litigation financing has proved a profitable industry. IMF, the largest ligation funder, had in the 14 years up to 2017 funded 157 completed cases, which had resulted in damages awards of approximately $2 billion, of which the plaintiffs had received $1.258 billion and IMF approximately $742 million, giving IMF a declared net return on investment of 160%.107 While this analysis has focused on those litigation funders who are in effect part of the financial services industry, litigation funding can come from other sources. Legal firms can fund litigation through a combination of no win, no fee agreements, and meeting the disbursements of the litigation themselves. The huge cost of major litigation has meant that law firms have become increasingly reluctant to take on that risk. In addition, other investors have financed litigation — the key case of Campbells Cash and Carry Ltd v Fostif Pty Ltd was funded by a firm of accountants.108 Finally, and more controversially, one of the major plaintiff firms, Maurice Blackburn, appears to have created a litigation funding company, Claims Funding Australia, that is funding a class action that it is involved in.

104 105 106 107 108

Law Society of Singapore v Kurubalan [2013] SGHC 135. Brookfield Multiplex Ltd v International Litigation Funding Partners Pty Ltd [2009] FCAFC 147. J Kalajdzic et al, “Justice for Profit: An Analysis of Australian, Canadian, and US Third Party Litigation Funding” (2013) 61 American Journal of Comparative Law 93 at 102-103. IMF Australia, Track Record (http://www.imf.com.au/about-us/track-record). J Kalajdzic et al, “Justice for Profit: An Analysis of Australian, Canadian, and US Third Party Litigation Funding” (2013) 61 American Journal of Comparative Law 93 at 105. [12.240] 315

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Claims Funding Australia is set up as a discretionary trust whose beneficiaries are senior partners in the firm. As a separate entity not caught by the regulations governing the legal profession it will be able to receive a share of the damages — an option prohibited to lawyers. The Federal Court has expressed concern about the implications of this development. While litigation funding is promoted as facilitating access to justice by providing a source of funding, litigation funders are only prepared to fund a very small group of cases in the civil justice system. For most cases, commercial litigation funding is not an option. Even for those that might be attractive to litigation funders, there remain large questions about the regulation of the industry and the protection of litigants.

316 [12.240]

CHAPTER 13 Appeals Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 The right to appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Security for costs and stays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 Final and interlocutory judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 Powers of appellate courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 [13.60] Applications for new trials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 [13.70] Types of appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 [13.80] Strict appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 [13.90] Ordinary rehearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 [13.100] Fresh evidence and new arguments on appeal . . . . . . . 330 [13.110] Rehearing de novo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 [13.120] Grounds for appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 [13.130] Errors of law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333 [13.140] The exercise of discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333 [13.150] Inferences from facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335 [13.160] Findings of fact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336 [13.170] Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340 [13.10] [13.20] [13.30] [13.40] [13.50]

INTRODUCTION [13.10] No discussion of civil litigation is complete without an analysis of appeals. Although very few civil disputes would ever proceed to the appeal stage, the possibility of appeal is crucial within the civil justice system. Not only must a competent civil litigation practitioner understand that there exist avenues to pursue a client’s case that has failed at first instance, but, more importantly, appeals serve to establish consistent standards for, and thereby maintain the quality of, our judicial system. There are a number of specific procedural steps involved in lodging and making an appeal, such as filing a notice of appeal, preparing, collating and indexing an appeal book, drafting outlines of argument, and preparing and categorising materials.1 This chapter will not discuss these (and other) procedural requirements pursuant to an appeal, or an application for leave to appeal. The objective of this chapter does not require such an exposition; what we are concerned with here are the applicable principles.

1

It should be noted that the documentary material required can be quite extensive — see, eg, High Court Rules 2004 (Cth) Ch 4, Pt 42; Federal Court Rules 2011 (Cth) Ch 4, Pt 36, Div 36.5; Uniform Civil Procedure Rules 2005 (NSW) rr 51.16 – 51.44; Supreme Court (Court of Appeal) Rules 2005 (WA) rr 29 – 41. [13.10] 317

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The first issue that comes to mind in this respect is one of definition. It has been said that an appeal is “the right of entering a superior Court, and invoking its aid and interposition to redress the error of the Court below”.2 This is an adequate fundamental definition but the mention of a right to appeal requires clarification: although such a right presently exists in all Australian jurisdictions, this right is conditional and purely legislative. There is no inherent common law right to appeal.3 Appeals are creatures of statute.4

THE RIGHT TO APPEAL [13.20] Legislation in each jurisdiction has established that an appeal generally lies from final orders and judgments as a matter of right.5 However, if the order or direction constitutes an interlocutory order, there is no right to appeal and leave to appeal is required.6 It should be noted that the exceptions to this are the High Court, in which special leave to appeal must usually be sought,7 and the Victorian 2

3

4

5

6

7

Attorney-General v Sillem (1864) 11 ER 1200 at 1209 per Lord Westbury LC; CDJ v VAJ (1998) 197 CLR 172 at 202 per McHugh, Gummow and Callinan JJ; and Eastman v The Queen (2000) 203 CLR 1 at 33 per McHugh J. See Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 578 per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. Indeed, Mason makes the point that appellate jurisdiction was “practically unknown to the common law”: K Mason, “The Distinctiveness and Independence of Intermediate Courts of Appeal” (2012) 86 Australian Law Journal 308 at 310. For a discussion of the common law tradition in this respect, see South Australian Land Mortgage and Agency Co Ltd v The King (1922) 30 CLR 523 at 552-553 per Isaacs J. See Paterson v Paterson (1953) 89 CLR 212 at 218-219 per Dixon CJ & Kitto J; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616 at 619 per Mason J, with whom Barwick CJ & Stephen J agreed; CDJ v VAJ (1998) 197 CLR 172 at 196-197 per McHugh, Gummow & Callinan JJ; DJL v Central Authority (2000) 201 CLR 226 at 245-246 per Gleeson CJ, Gaudron, McHugh, Gummow & Hayne JJ; Allesch v Maunz (2000) 203 CLR 172 at 179-180; Eastman v The Queen (2000) 203 CLR 1 at 11 per Gleeson CJ; Fox v Percy (2003) 214 CLR 118 at 124 per Gleeson CJ, Gummow & Kirby JJ; and Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 578 per French CJ, Gummow, Hayne, Crennan, Kiefel & Bell JJ. See the Constitution s 73 and Judiciary Act 1903 (Cth) ss 34 – 35AA; Supreme Court Act 1933 (ACT) s 37E(2); Federal Court of Australia Act 1976 (Cth) s 24; Supreme Court Act 1970 (NSW) s 101(1); Supreme Court Act (NT) s 51(1); Supreme Court of Queensland Act 1991 (Qld) s 62; Supreme Court Act 1935 (SA) s 50(1); Supreme Court Civil Procedure Act 1932 (Tas) ss 40(1), 42(1)(a); Supreme Court Act 1986 (Vic) s 10; Supreme Court Act 1935 (WA) s 58(2). See Supreme Court Act 1933 (ACT) s 37E(4) and Court Procedures Rules 2006 (ACT) r 5310(2); Federal Court of Australia Act 1976 (Cth) s 24(1A); Supreme Court Act 1970 (NSW) s 101(2)(e); Supreme Court Act (NT) s 53(1); Supreme Court of Queensland Act 1991 (Qld) s 62(2); Supreme Court Act 1935 (SA) s 50(4) and Supreme Court Civil Rules 2006 (SA) r 288(1)(a); Supreme Court Civil Procedure Act 1932 (Tas) s 43; and Supreme Court Act 1935 (WA) s 60(1)(f). Note that in the Federal Court, although there is a need to make application for leave to appeal interlocutory orders, such application may be made orally at the time of the pronouncement of the order that is the subject of the application seeking leave to appeal, and this oral application may be made directly to the judge pronouncing that order — see Federal Court Rules 2011 (Cth) r 35.01. See Judiciary Act 1903 (Cth) ss 35(2), 35AA(2). For the procedural requirements of leave to appeal applications to the High Court — see High Court Rules 2004 (Cth) Pt 41. Such leave is sought from the High Court itself (see Judiciary Act 1903 (Cth) s 21 and Federal Court of Australia Act 1976 (Cth) s 33), except when seeking to appeal a costs order, in which case leave must be sought from the court that made that order (see Judiciary Act 1903 (Cth) s 27).

318 [13.20]

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Court of Appeal, in which leave to appeal is required in all civil appeals.8 The crucial distinction between final and interlocutory orders will be discussed in further detail below. It is arguably self-evident that an appeal can only be made when a court has made a formal decision capable of being reviewed in a higher court,9 but it should nevertheless be emphasised that an appeal does not lie from the findings of a primary judge unless those findings are reflected in an order of the Court.10 This point is explained by King CJ of the South Australian Supreme Court: A judgment or order is a judicial act which decides the question or one of the questions which is raised for decision in the particular proceedings then before the court or judge. The question decided may be the substantive question or one of the substantive questions raised in the action; or it may be the question or one of the questions raised in interlocutory proceedings taken in the course of the progress of the action. Judgments and orders on the one hand are to be distinguished from incidental rulings given in the course of hearing and determining such questions. Examples of such incidental rulings are those which relate to adjournments, the time and place of hearing, admissibility of evidence and the exclusion or otherwise of witnesses from the hearing, as well as decisions upon submissions as to matters of fact law or procedure made during the course of a hearing. Such incidental rulings are not judgments or orders and are therefore not appealable even by leave.11

Any rights to appeal derive from statute, and the right to appeal is itself subject to the legislation or rules that create that right.12 Similarly, the nature and process of the appeal, the conferral of appellate jurisdiction upon a court, and the creation of powers necessary to exercise the appellate jurisdiction, are all determined by the relevant statutory provisions.13 The various rights to appeal (and rights to apply for leave to appeal) may be statutory in nature, but “the right of a person affected by a court decision to appeal, or to apply for leave to appeal, from that decision is a very fundamental right”.14 As a consequence, such rights can only be abolished or amended by statutes expressing clear words to do so.15 However, it would appear that if the appeal is from a judgment of the High Court itself exercising original jurisdiction, then an appeal exists as a matter of right, except in the case of an interlocutory judgment, in which case leave is required — see Judiciary Act 1903 (Cth) s 34(1), (2). 8

9 10

11 12 13 14 15

See Supreme Court Act 1986 (Vic) s 14A(1). “Civil Appeal” is defined as “an appeal from a judgment or order made in exercise of civil jurisdiction” (Supreme Court Act 1986 (Vic) s14A(3)), and leave may only be granted when the appeal “has a real prospect of success” (Supreme Court Act 1986 (Vic) s 14C). For a discussion of what may constitute a “real prospect of success”, see Kennedy v Shire of Campaspe [2015] VSCA 47 at [6]-[14]. See R v The Commonwealth Court of Conciliation and Arbitration [No 1]; Ex parte Brisbane Tramways Co Ltd (1914) 18 CLR 54 at 65 per Barton J. See Gibson Motorsport Merchandise Pty Ltd v Forbes (2006) 149 FCR 569 at 598-599 per Sundberg & Emmett JJ. It should be noted that a decision not to make an order or direction may also be a judgment — see, eg, Supreme Court Act 1935 (SA) s 50(6)(b). Legal Practitioners Complaints Committee v A Practitioner (1987) 46 SASR 126 at 127. See, eg, Supreme Court of Queensland Act 1991 (Qld) s 62(2) and Supreme Court Civil Procedure Act 1932 (Tas) s 40(2). See Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 578 per French CJ, Gummow, Hayne, Crennan, Kiefel & Bell JJ. Talbot v NRMA Ltd (2000) 50 NSWLR 300 at 309 per Hodgson CJ in Eq. See Talbot v NRMA Ltd (2000) 50 NSWLR 300 at 309 per Hodgson CJ in Eq. In addition, these rights are substantive statutory rights, and not merely procedural statutory rights (for a [13.20] 319

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In terms of the appeal courts themselves, this chapter will limit its analysis to the superior appellate courts in each jurisdiction. The ultimate or ‘final’ appellate court is the High Court of Australia,16 from whose decision no appeals are possible.17 Although most jurisdictions possess a designated Court of Appeal,18 in some jurisdictions the ultimate appellate court is the Full Court of the Supreme Court.19 Whether the final appellate court is a specifically designated Court of Appeal, or the Full Court of the Supreme Court, the various statutory regimes generally grant such courts the power to hear all appeals,20 cross-appeals, applications for new trials,21 applications to set aside decisions, and questions of law.22 Any party to the proceedings at first instance has standing to appeal;23 including third parties.24 Any party to the judgment or order under appeal automatically becomes a party to the appeal, unless that party has no interest in discussion of whether a statutory right should be classified as substantive or procedural, see Managing Director of New South Wales Technical and Further Education Commission v Fines (1993) 32 NSWLR 385 at 387-389 per Mahoney JA) thus, any legislation purporting to amend rights to appeal is not interpreted so as to operate retrospectively unless the statute expressly provides for retrospective operation (see Skorpos v Development Assessment Commission (1995) 64 SASR 51 at 61-62 per Debelle J). 16

See R Sackville, “Appellate Judging: Onwards and Outwards Towards Mid-Century” (2012) 86 Australian Law Journal 249 at 252. Note: The High Court also possesses original jurisdiction with respect to a number of matters. For example, all matters arising under the Constitution or involving its interpretation (Judiciary Act 1903 (Cth) s 30, and the Constitution s 76(i)); trials of indictable offences against the laws of the Commonwealth (Judiciary Act 1903 (Cth) s 30); suits involving the Commonwealth (see Judiciary Act 1903 (Cth) s 56, and the Constitution s 75(iii), (v)); matters between the States, or between residents of different States, or between a State and a resident of another State (the Constitution s 75(iv)); matters involving representatives of other countries (the Constitution s 75(ii)); or arising under any treaty (the Constitution s 75(i)).

17

This is not absolutely the case as appeals may lie from the High Court to the Queen in Council if the High Court grants special leave to do so. If the matter does not involve a question of constitutional powers then the Queen exercising royal prerogative may also grant such leave — see the Constitution s 74.

18

A Court of Appeal exists in the ACT, NSW, the NT, Queensland, Victoria, and WA. For legislation creating such a court see Supreme Court Act 1933 (ACT) s 37E; Supreme Court Act 1970 (NSW) s 42; Supreme Court Act (NT) s 51; Supreme Court of Queensland Act 1991 (Qld) s 28; Supreme Court Act 1986 (Vic) s 10; Supreme Court Act 1935 (WA) s 57. See Federal Court of Australia Act 1976 (Cth) s 25; Supreme Court Act 1935 (SA) s 48 and Supreme Court Civil Rules 2006 (SA) r 280; and Supreme Court Civil Procedure Act 1932 (Tas) ss 39 – 40. It should also be noted that in those jurisdictions that possess a Court of Appeal, the Full Court of the Supreme Court may still exercise appellate jurisdiction; it is just that in such jurisdictions it is not the final appellate court — see, eg, Court Procedures Rules 2006 (ACT) rr 5050 – 5052. See, eg, Supreme Court Act 1935 (SA) s 48(2)(a)(ii). See, eg, Supreme Court Act 1970 (NSW) s 102(b); and Supreme Court Act 1935 (SA) s 48(2)(a)(i). See, eg, Supreme Court Act 1986 (Vic) s 10(1) and Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 64.01(1). See Krishell Pty Ltd v Nilant (2006) 32 WAR 540 at 557 per McLure JA. See Helicopter Sales (Australia) Pty Ltd v Rotor-Work Pty Ltd (1974) 132 CLR 1 at 13-15 per Stephen J. Standing has even been suggested for non-parties (provided they obtain leave of the court) — see Krishell Pty Ltd v Nilant (2006) 32 WAR 540 at 558 per McLure JA.

19

20 21 22 23 24

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the subject-matter of the appeal.25 If a person may be directly affected by the relief sought in a notice of appeal, or is interested in maintaining the judgment or order under appeal, they must usually be joined as an appellant or respondent to the appeal.26 The appeal court has the power to order the addition or removal of any person as a party to an appeal,27 but generally a person cannot be made an appellant or applicant without that person’s consent.28 The time in which to appeal varies between jurisdictions, but, with respect to appeals by way of right, an appeal must usually be lodged within 21 or 28 days after the date of the judgment or order that is the subject of the appeal.29

SECURITY FOR COSTS AND STAYS [13.30] The courts are granted power to order that security be given for the costs of an appeal.30 The making of such an order is an exercise of judicial discretion, so there is no exhaustive list of circumstances in which an application for an order for security for costs with respect to an appeal might be successful.31 Indeed, the discretion has been described as “unfettered”32 and even “absolute”.33 However, it is also the case that certain matters may be significant in the exercise of that discretion.34 For example, there appears to be a lesser tendency for courts to order security for costs in appeals than in litigation at first instance,35 especially if such an order may serve to stifle the appeal.36 Conversely, if the appeal has little prospect of success, then this may be a reason to make the order for security for

25 26 27 28 29

30

31 32 33 34 35 36

See, eg, Supreme Court Civil Rules 2006 (SA) r 283(1). See, eg, Federal Court Rules 2011 (Cth) r 36.31(1); Uniform Civil Procedure Rules 2005 (NSW) r 51.4(1); and Uniform Civil Procedure Rules 1999 (Qld) r 749(1). See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 51.4(3); and Supreme Court Civil Rules 2006 (SA) r 283(2). See, eg, Federal Court Rules 2011 (Cth) r 36.31(2); and Uniform Civil Procedure Rules 2005 (NSW) r 51.4(4). In the ACT, NSW, the NT, Queensland, and Victoria it is generally 28 days — see Court Procedures Rules 2006 (ACT) r 5405(1)(b); Uniform Civil Procedure Rules 2005 (NSW) r 50.3(1)(a); Supreme Court Rules (NT) r 85.12(1)(a); and Uniform Civil Procedure Rules 1999 (Qld) r 748(a); Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 64.05(1)(a). In the Federal Court, SA, Tasmania, and WA it is generally 21 days — see Federal Court Rules 2011 (Cth) r 36.03(a); Supreme Court Civil Rules 2006 (SA) r 281(1); Supreme Court Rules 2000 (Tas) r 659; and Supreme Court (Court of Appeal) Rules 2005 (WA) r 26(2). See, eg, Judiciary Act 1903 (Cth) s 77S; Federal Court Rules 2011 (Cth) r 36.09(1); Uniform Civil Procedure Rules 2005 (NSW) r 50.8; Supreme Court Rules (NT) r 85.13; Uniform Civil Procedure Rules 1999 (Qld) rr 772 – 774; Supreme Court Civil Rules 2006 (SA) r 295(1)(g). See Lucas v Yorke (1983) 50 ALR 228 at 228-229 per Brennan J. KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 196 per Beazley J. King v Commercial Bank of Australia Ltd (1920) 28 CLR 289 at 292 per Rich J. Also see Lucas v Yorke (1983) 50 ALR 228 at 228-229 per Brennan J. For a discussion of the major factors in this respect see KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197-198 per Beazley J. See Fubilan Catering Services Ltd (Incorporated in Papua New Guinea) v Compass Group (Australia) Pty Ltd [2007] FCA 2111 at [10]-[13] per Siopis J. See, eg, Ballard v Brookfield Australia Investments Ltd [2012] NSWCA 434 at [29]-[50] per Ward JA. [13.30] 321

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costs.37 If a party to an appeal resides outside Australia, one might argue that the discretion is properly exercised in order “to provide a fund within Australia so as to avoid the risks and uncertainties associated with attempting to enforce a judgment”38 in that external jurisdiction. The inability of the appellant to meet the costs of an unsuccessful appeal is also a relevant factor,39 and may constitute a good reason to make such an order.40 On the other hand, if the appeal raises an important question of law, then this goes against such an order, even if the appellant is impecunious.41 Applications for appeals (or applications seeking leave to appeal) do not automatically stay the existing proceedings or affect any consequences of the judgment appealed, but the court possesses the power to make such an order.42 A party making an application to stay proceedings until determination of the appeal bears a considerable burden, as the ordinary rule is that the successful party at first instance is entitled to the benefits or ‘fruits’ of that judgment despite the lodgment of an appeal by the unsuccessful party.43 The exercise of the discretion to stay proceedings will be done in light of “the balance of convenience and the competing rights of the parties”,44 but the “onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties”,45 and accords with “justice in all the circumstances”.46 Courts will normally exercise their discretion in favour of granting a stay “where it is apparent that unless a stay is granted an appeal will be rendered nugatory”.47 It is arguable that an applicant must, at the very least, show that there is a “reasonably arguable ground of 37 38

See KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197 per Beazley J; and Bell v Bay-Jespersen [2004] 2 Qd R 235 at 242 per McPherson JA. Fubilan Catering Services Ltd (Incorporated in Papua New Guinea) v Compass Group (Australia) Pty Ltd [2007] FCA 2111 at [12] per Siopis J.

39 40 41

See Lucas v Yorke (1983) 50 ALR 228 at 228 per Brennan J. See Mitropoulos v Hancock Corporation Pty Ltd [2006] SASC 379 at [7]-[8] per Layton J. See Lucas v Yorke (1983) 50 ALR 228 at 230 per Brennan J.

42

See, eg, Judiciary Act 1903 (Cth) s 77U and High Court Rules 2004 (Cth) r 42.09; Federal Court of Australia Act 1976 (Cth) s 29 and Federal Court Rules 2011 (Cth) r 36.08(2); Court Procedures Rules 2006 (ACT) r 5301(1); Uniform Civil Procedure Rules 2005 (NSW) r 50.7; Supreme Court Act (NT) s 57, and Supreme Court Rules (NT) r 84.14; Uniform Civil Procedure Rules 1999 (Qld) r 761. See Cassegrain v Gerard Cassegrain & Co Pty Ltd (in liq) [2012] NSWCA 435 at [45] per Ward JA; Eastland Technology Australia Pty Ltd v Whisson (2003) 28 WAR 308 at 310 per Murray & Parker JJ; Enterprise Gold Mines NL v Mineral Horizons NL (1988) 91 FLR 403 at 406-409 per Kearney J; and Hackney Tavern Nominees Pty Ltd v McLeod (1983) 33 SASR 590 at 594-595 per White J. Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 694 per Kirby P, Hope & McHugh JJA. Also see Cassegrain v Gerard Cassegrain & Co Pty Ltd (in liq) [2012] NSWCA 435 at [44]-[45] per Ward JA; and Eastland Technology Australia Pty Ltd v Whisson (2003) 28 WAR 308 at 311 per Murray & Parker JJ. Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 694 per Kirby P, Hope & McHugh JJA. Also see Griffiths v Australian Postal Commission (1987) 87 FLR 139 at 141 per Miles CJ. Griffiths v Australian Postal Commission (1987) 87 FLR 139 at 141 per Miles CJ. Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 695 per Kirby P, Hope & McHugh JJA. Also see Cole Skopov v Kane Constructions Pty Ltd [2009] VSCA 216 at [52] per Mandie JA & Beach AJA.

43

44

45

46 47

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appeal”.48 In that respect, the court may look to the basis of the appeal itself and make a preliminary observation about whether the appellant has an arguable case or the appeal has reasonable prospects of success.49 Such an investigation is arguably necessary in any case so that the judgment creditor is sufficiently protected from the unethical litigant, who may lodge an appeal without any real prospect of success simply to delay execution of the judgment at first instance.50 It is also arguable, given the above principles favouring the application and enforcement of the judgment at first instance, that there is an implicit requirement for the applicant to show special or exceptional circumstances in order to successfully stay proceedings until determination of the appeal.51 In New South Wales the applicant no longer needs to show any such special or exceptional circumstances;52 rather, “[i]t is sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour”.53 Whether this attitude will be followed in other jurisdictions remains to be seen.54

FINAL AND INTERLOCUTORY JUDGMENTS [13.40] As indicated above, there exists a statutory right to appeal a final judgment, but leave must be sought to appeal an interlocutory order.55 Consequently, a determination as to whether a particular court order is final or interlocutory has significant implications. Often it will not be readily clear whether a particular court order is final or interlocutory,56 and the distinction may 48

Griffiths v Australian Postal Commission (1987) 87 FLR 139 at 141 per Miles CJ.

49

See Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 695 per Kirby P, Hope & McHugh JJA. Also see Eastland Technology Australia Pty Ltd v Whisson (2003) 28 WAR 308 at 311 per Murray & Parker JJ. It should be noted that this is only a very rudimentary assessment of the case and that all the court decides is whether there is an arguable case; the court does not speculate further as to the prospects of success — see Jowett v Kelly [2008] NSWSC 1009 at [16] per Brereton J. See Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 695 per Kirby P, Hope & McHugh JJA.

50 51

52 53

54

55 56

See Cole Skopov v Kane Constructions Pty Ltd [2009] VSCA 216 at [52] per Mandie JA & Beach AJA; and Eastland Technology Australia Pty ltd v Whisson (2003) 28 WAR 308 at 311 per Murray & Parker JJ. See Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 693-694 per Kirby P, Hope & McHugh JJA. Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 694 per Kirby P, Hope & McHugh JJA. Also see Cassegrain v Gerard Cassegrain & Co Pty Ltd (in liq) [2012] NSWCA 435 at [45] per Ward JA; Treloar Constructions Pty Ltd v McMillan [2016] NSWCA 302 at [35]-[38] per Beazley ACJ. The principles from Alexander have been applied or followed in the ACT (see Hughes v Janrule Pty Ltd (2011) 252 FLR 397 at 411-413 per Penfold J; Davey v Herbst [2011] ACTCA 27 at [10]-[12] per Burns J) and the Federal Court (see Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 at [24] per Kenny J). See, eg, Federal Court of Australia Act 1976 (Cth) s 24(1A); Supreme Court Act 1970 (NSW) s 101(2)(e); Supreme Court Act 1935 (WA) s 60. See Licul v Corney (1976) 180 CLR 213 at 225 per Gibbs J; Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248 per Gibbs CJ; Legal Practitioners Complaints Committee v A Practitioner (1987) 46 SASR 126 at 127 per King CJ. [13.40] 323

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be “productive of much difficulty”.57 The test established by the High Court is whether the judgment or order “finally determines the rights of the parties”.58 A succinct explanation of this distinction is as follows: A final order determines the underlying matter, or some part of it, and for that reason will generally dispose of the action or an element of it. An interlocutory order, on the other hand, determines an aspect of the forensic procedure in accordance with which the matter will be adjudicated. For that reason it will generally direct the course of further proceedings rather than determine any part of the subject matter of the dispute.59

In determining whether a judgment or order “finally disposes of the rights of the parties”,60 the practical outcome of the judgment or order is not relevant.61 The issue is solely “whether the legal effect of the judgment is final or not”.62 Judgments are not final if it is theoretically possible to make a fresh or further application for the same relief, “even where such application would have little realistic prospect of success”.63 For example, it has been held that disposal of proceedings via default judgment constitutes an interlocutory order as it is not determinative of finality because an application to set aside the default judgment may yet be made.64 It has also been held that an order for summary dismissal may be either interlocutory65 or final (if, for example, the summary judgment is in respect to all claims).66 To complicate matters further, the refusal of an application for summary judgment may be an interlocutory order,67 but an order refusing leave to appeal may be a final order.68

57 58

Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248 per Gibbs CJ. (1981) 147 CLR 246 at 248 per Gibbs CJ. Also see Bienstein v Bienstein (2003) 195 ALR 225 at 230-231 per McHugh, Kirby & Callinan JJ.

59

Hardel Pty Ltd v Burrell & Family Pty Ltd (2009) 103 SASR 408 at 418 per Kourakis J, Nyland & David JJ agreeing. SZAJB v Minister for Immigration and Citizenship (2008) 168 FCR 410 at 416 per French J. Also see Legal Practitioners Complaints Committee v A Practitioner (1987) 46 SASR 126 at 135 per Olsson J; and Licul v Corney (1976) 180 CLR 213 at 225 per Gibbs J. See Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248 per Gibbs CJ; and Hardel Pty Ltd v Burrell & Family Pty Ltd (2009) 103 SASR 408 at 419-421 per Kourakis J, Nyland & David JJ agreeing. Re Luck (2003) 203 ALR 1at 2 per McHugh ACJ, Gummow & Heydon JJ. Also see SZAJB v Minister for Immigration and Citizenship (2008) 168 FCR 410 at 417 per French J; and Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248 per Gibbs CJ. Puttick v Fletcher Challenge Forests Pty Ltd (2007) 18 VR 70 at 95 per Chernov JA. Also see SZAJB v Minister for Immigration and Citizenship (2008) 168 FCR 410 at 418-419 per French J. See Hardel Pty Ltd v Burrell & Family Pty Ltd (2009) 103 SASR 408 at 419 per Kourakis J, Nyland & David JJ agreeing. See Wickstead v Browne (1992) 30 NSWLR 1 at 11 per Handley & Cripps JJA. See Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd in which it was held that a partial summary dismissal (that is, one which disposes of some of the claims) is an interlocutory order (with the result that any appeal required leave), while a summary judgment that disposes of all claims is a final judgment — Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 246 ALR 465 at 466 per Finkelstein J. See Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 246 ALR 465 at 469 per Finkelstein J. See, eg, Supreme Court Act 1935 (WA) s 60(2).

60

61

62

63 64 65 66

67 68

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One may readily note that many interlocutory orders constitute significant findings for a particular civil dispute, and although not constituting ‘final’ orders as such, may practically end the matter as between the parties. It might thus be suggested that the current approach should be abandoned in favour of studying the practical effect of an order.69 However, this would create further problems as determining the practical effect of an order would involve “detailed inquiry as to the facts of the matter and the course of the proceedings already taken – an inquiry quite inappropriate when the only issue is whether a right of appeal exists”.70 In any case, the consequences of a determination as to whether an order is final or interlocutory are mitigated to some extent by the fact that an interlocutory order may still be appealed — it is only that leave to appeal must first be acquired.71 Once an order has been assessed as interlocutory (or is obviously so), and thereby may only be appealed by leave, in deciding whether to grant leave to appeal, the court must maintain a balance between “the competing objectives of promoting finality in litigation and promoting the interests of justice”.72 Consequently, not only must there be sufficient doubt as to the correctness of the interlocutory order, but it should also be shown that substantial injustice would flow from a refusal to grant leave to appeal.73 A consideration in this respect is whether the interlocutory judgment relates to practice and procedure, or to substantive rights. Interlocutory orders do not usually directly affect substantive rights, but leave is more likely to be granted if it can be shown that the interlocutory order relates to substantive rights.74 As leave is generally required for an appeal to the High Court (irrespective of whether the order under appeal is final or interlocutory), the relevant legislation provides further criteria that the court is required to assess. Specifically, in exercising the discretion as to whether to grant leave to appeal, the High Court: [M]ay have regard to any matters that it considers relevant but shall have regard to: (a) whether the proceedings in which the judgment to which the application relates was pronounced involve a question of law: (i) that is of public importance, whether because of its general application or otherwise; or (ii) in respect of which a decision of the High Court, as the final appellate court, is required to resolve differences of opinion between different courts, or within the one court, as to the state of the law; and (b) whether the interests of the administration of justice, either generally or in the particular case, require consideration by the High Court of the judgment to which the application relates.75

69

70 71 72 73 74 75

Another suggested approach is “the reformulation of the interlocutory/final dichotomy by reference to the concept of procedural or adjectival orders on the one hand, and orders determining substantive rights and obligations on the other” — Hardel Pty Ltd v Burrell & Family Pty Ltd (2009) 103 SASR 408 at 421 per Kourakis J, with whom Nyland & David JJ agreed. Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248 per Gibbs CJ. Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248 per Gibbs CJ. Equuscorp Pty Ltd v Wilmoth Field Warne (A Firm) (2007) 18 VR 250 at 259 per Full Court. See Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400 per Full Court. Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400 per Full Court. Judiciary Act 1903 (Cth) s 35A. [13.40] 325

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POWERS OF APPELLATE COURTS [13.50] In deciding an appeal, the appellate court not only has all the powers of the Court of first instance,76 but also extensive powers to give such judgment or make such order as it deems fit,77 or that the “justice of the case requires”.78 Appellate courts have power to affirm, confirm, amend, set aside (in whole or in part), vary, modify or reverse any final or interlocutory orders appealed from.79 Appeal courts may also order a new trial, either wholly, or with respect to specific issues.80 When ordering a new trial, the appeal court may “give all necessary directions” for that trial,81 including imposing any conditions, demanding specific testimony or submissions,82 or even directing that certain admissions be made by a party.83 It should be noted that there is a clear distinction between an appeal and a new trial. An appeal is the review of a lower court’s judgment, while a new trial is generally a re-trial of the entire matter.84 However, applications for a new trial and appeals (founded on other grounds) function in a similar fashion.85 In both processes the appellant is aiming to convince the appeal court that there was an error in the judgment or verdict at first instance.

Applications for new trials [13.60] Although an appellate court may order a new trial, it should be reluctant to do so, as it runs counter to the principle of the finality of litigation, and certainly involves the expenditure of additional resources.86 Consequently, an appellate court will only order a new trial if it cannot provide the necessary judgment itself (or is unable to make the order sought on appeal),87 and the

76 77

See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 766(1)(a). See, eg, Federal Court of Australia Act 1976 (Cth) s 28(1); Supreme Court Act (NT) s 55(1)(b).

78 79

Supreme Court Civil Rules 2006 (SA) r 286(3)(b). See, eg, Judiciary Act 1903 (Cth) s 37; Federal Court of Australia Act 1976 (Cth) s 28(1); Supreme Court Act 1933 (ACT) s 37O(1); Supreme Court Act 1935 (WA) s 58(1)(a). See, eg, Judiciary Act 1903 (Cth) ss 20, 36, 77C; Federal Court of Australia Act 1976 (Cth) s 30; Supreme Court Act 1970 (NSW) s 106. Uniform Civil Procedure Rules 1999 (Qld) r 770(4). Also see, eg, Federal Court of Australia Act 1976 (Cth) s 28(1); Supreme Court Act 1935 (WA) s 59. See, eg, Judiciary Act 1903 (Cth) s 77C(1); Federal Court of Australia Act 1976 (Cth) s 30(2)(b); Supreme Court Act 1933 (ACT) s 37P. See, eg, Federal Court of Australia Act 1976 (Cth) s 30(1); Supreme Court Act (NT) s 56(1). That is, although the appellate court has the power to order a new trial with respect to only some issues, the High Court has stressed the difficulties that may arise when ordering a retrial limited to particular questions, and that the default position should be to order a retrial of the case as a whole if a new trial is deemed necessary — see CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 21-23 per Kirby J, with whom Gleeson CJ agreed. See CDJ v VAJ (1998) 197 CLR 172 at 198-200 per McHugh, Gummow & Callinan JJ. See CDJ v VAJ (1998) 197 CLR 172 at 202 per McHugh, Gummow & Callinan JJ. See Lackovic v Insurance Commission (WA) (2006) 31 WAR 460 at 484 per Buss JA, with whom Steytler P & Pullin JA agreed.

80 81 82 83 84

85 86 87

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interests of justice demand it.88 For example, a new trial may be ordered upon the discovery of crucial new evidence. Of course, in such a case most appellate courts could simply hear that evidence and make the necessary judgment.89 A new trial is more commonly ordered with respect to a verdict by a jury because juries do not provide reasons for their verdict, so it is difficult for the appellate court to determine the exact nature of the error of law and/or fact, as it is not always clear on what perception of law and/or fact a jury was basing its verdict. One might attempt to convince an appeal court of such errors of law or fact by showing that the trial judge misdirected the jury as to appropriate law, or that the trial judge incorrectly admitted or rejected evidence. Of course, jury trials in civil cases are now extremely rare,90 and in some jurisdictions no longer permitted,91 so one might reasonably expect the number of applications for a new trial to correspondingly diminish. Not all errors will support a new trial. Even in cases of established misdirection, or the improper admission or rejection of evidence, the appellate court is cautioned not to order a new trial “[u]nless the Court of Appeal considers some substantial wrong or miscarriage happened”.92 Thus, procedural errors will generally not be a sufficient basis for a new trial because such errors will not normally result in injustice or unfairness. Indeed, it has even been held that “not every departure from the rules of natural justice at a trial will entitle a party to a new trial”.93 Granting a new trial is viewed as a course of last resort,94 and the legislation generally encourages the appellate court to simply pass its own judgment, rather than order a new trial.95 The High Court has also expressed this point: that in the interests of the finality of litigation, if an appellate court is able to provide judgment, it should do so rather than order a new trial. It is arguable that very few matters actually require a new trial.96 That is, as the process of hearing an application for a new trial necessitates (to varying degrees) determining whether the judgment or verdict was in error, which, in turn, can only be achieved by coming to a de facto conclusion as to the correct (or just and reasonable) judgment or verdict, it would seem to be in the interests of both resource efficacy and justice to simply declare and substitute the correct judgment for the erroneous judgment or verdict, rather than order a new trial with attendant further costs.

88 89 90 91 92 93 94 95 96

See Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 39 per Mason CJ, Deane, Toohey & McHugh JJ. As the High Court functions according to the principles of a strict appeal it cannot admit fresh evidence, so may order a new trial in such circumstances. See B Cairns, Australian Civil Procedure (11th ed, Thomson Reuters, 2016) p 659. See, eg, Juries Act 1927 (SA) s 5. Uniform Civil Procedure Rules 1999 (Qld) r 770(2). Krix v Citrus Board of SA (2003) 87 SASR 229 at 235 per Mullighan J. See CDJ v VAJ (1998) 197 CLR 172 at 199 per McHugh, Gummow & Callinan JJ. See, eg, Supreme Court Act 1935 (WA) ss 59(4)-59(5). See Fox v Percy (2003) 214 CLR 118 at 132-133 per Gleeson CJ, Gummow & Kirby JJ. [13.60] 327

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TYPES OF APPEALS [13.70] An appeal may take various forms,97 and there is “no definitive classification of appeals”.98 Nonetheless, there are four types of appeals commonly operating within Australia: (i) an appeal stricto sensu, where the issue is whether the judgment below was right on the material before the trial court; (ii) an appeal by rehearing on the evidence before the trial court; (iii) an appeal by way of rehearing on that evidence supplemented by such further evidence as the appellate court admits under a statutory power to do so; and (iv) an appeal by way of a hearing de novo.99

This is not, however, an exhaustive list,100 as legislation may confer different appeal powers as the case may be,101 and “it is the proper construction of the terms of any particular statutory grant of a right of appeal which determines its nature”.102 In this chapter the appeal types (ii) and (iii) above are amalgamated under the label ’ordinary rehearing’, as in all jurisdictions the appeal court functioning by way of a rehearing has power to receive further evidence in any case. Thus, in this chapter, three types of appeals will be considered: a strict appeal (appeal stricto sensu); an ordinary rehearing; and a rehearing de novo. As to what type of an appeal functions in a particular court of appeal, one must look to the legislation or rules that create that specific appellate jurisdiction.103

Strict appeal [13.80] Such an appeal limits the appellate court to a consideration of whether the judgment appealed from was correct at the time of that judgment.104 Thus, the appellate court must “determine whether the decision appealed against was rightly decided upon the facts and the law existing at the time of the decision”.105 Accordingly, new law and new evidence is not considered in an appeal stricto 97 98

99

100 101 102

103 104 105

A comprehensive (but not exhaustive) list of such forms may be found in Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281 at 297-298 per Glass JA. Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203 per Gleeson CJ, Gaudron & Hayne JJ; Eastman v The Queen (2000) 203 CLR 1 at 40 per McHugh J; and Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 at 128 per Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ. Fox v Percy (2003) 214 CLR 118 at 124 per Gleeson CJ, Gummow and Kirby JJ. Also see Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 619-622 per Mason J; and Eastman v The Queen (2000) 203 CLR 1 at 40-41 per McHugh; and Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 at 128 per Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ. See Eastman v The Queen (2000) 203 CLR 1 at 40 per McHugh J; and Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 at 128 per Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ. See Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 at 128 per Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ. (2008) 234 CLR 124 at 129 per Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ; and Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203 per Gleeson CJ, Gaudron & Hayne JJ. See Fox v Percy (2003) 214 CLR 118 at 124-125 per Gleeson CJ, Gummow & Kirby JJ. See Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 619 per Mason J, with whom Barwick CJ & Stephen J agreed. Eastman v The Queen (2000) 203 CLR 1 at 35 per McHugh J.

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sensu, and the appeal court may only take account of the material (facts and law) which the lower court had before it in assessing whether there was an error on the part of the court below.106 The role of the appellate court that functions by way of a strict appeal “is simply to determine whether the decision under appeal was or was not erroneous on the evidence and the law as it stood when the original decision was given”.107 It is now established that the High Court hears and determines appeals in a strict sense.108 New material cannot be considered as this would involve the exercise of original jurisdiction, but a party to the appeal may put forward a new argument, point, or question of law, provided that this question may be decided upon the evidence already admitted at trial.109 However, although theoretically permissible on a strict appeal, leave to appeal on the basis of such new grounds will only be granted in the “exceptional case”.110 If the court functioning by way of a strict appeal finds that the judge at first instance has made an error, such that the judgment is wrong, then the appeal court will substitute its own judgment.111 If the judgment subject to appeal is determined to be correct as at the date of that judgment, then it must stand and cannot be varied. Presently, the High Court is the only superior appellate court that functions by way of an appeal stricto sensu.112

Ordinary rehearing [13.90] In all Australian jurisdictions (other than the High Court) an appeal is by way of rehearing.113 In an ordinary rehearing, as with any appeal, the appellant must show that a legal, factual or discretionary error has been made by the

106 107 108

109 110

111 112

113

Eastman v The Queen (2000) 203 CLR 1 at 13 per Gleeson CJ; and Keramianakis v Regional Publishers Pty Ltd (2009) 237 CLR 268 at 282 per French CJ, with whom the Full Court agreed. Allesch v Maunz (2000) 203 CLR 172 at 180 per Gaudron, McHugh, Gummow & Hayne JJ. See Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203 per Gleeson CJ, Gaudron & Hayne JJ; and Eastman v The Queen (2000) 203 CLR 1 at 23-26 per Gaudron J and 35 per McHugh J. An appeal to the High Court may be distinguished from the removal of a matter to the High Court. In such a case the High Court hears the matter instead of the court from which it was removed — see Judiciary Act 1903 (Cth) s 40. See Crampton v The Queen (2000) 206 CLR 161 at 170-174 per Gleeson CJ. Giannarelli v The Queen (1983) 154 CLR 212 at 221 per Gibbs CJ. Also see National Australia Bank Ltd v KDS Construction Services Pty (In Liq) (1987) 163 CLR 668 at 679-680 per the Court; Crampton v The Queen (2000) 206 CLR 161 at 170-174 per Gleeson CJ; and Fingleton v The Queen (2005) 227 CLR 166 at 193 per McHugh J. See Allesch v Maunz (2000) 203 CLR 172 at 181 per Gaudron, McHugh, Gummow and Hayne JJ. The High Court may hear and determine appeals on a wide range of matters. For a comprehensive list of the judgments from which the High Court may hear and determine appeals, see the Constitution s 73; and Judiciary Act 1903 (Cth) ss 20, 34(1), 35(1), 35AA(1). See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 765(1); Supreme Court Civil Rules 2006 (SA) r 286(1); Supreme Court (Court of Appeal) Rules 2005 (WA) r 25. Also see Warren v Coombes (1979) 142 CLR 531 at 537 per Gibbs ACJ, Jacobs & Murphy JJ; and Fox v Percy (2003) 214 CLR 118 at 125 per Gleeson CJ, Gummow & Kirby JJ, for comments concerning the NSW Court of Appeal; and Hawker v Miller (2011) 110 SASR 206 at 220-221 per Sulan J, for comments concerning SA appeals. It is now settled that the Full Court of the Federal Court is [13.90] 329

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inferior court.114 It is not enough that the appeal court may have decided the matter differently to the court of first instance: the appellate court must be convinced that the original judgment was in error. If this were not the case the appeal process would run counter to the principle of the finality of litigation. As explained by the South Australian Supreme Court: [I]t is not appropriate to invite an appellate court simply to revisit the relevant evidence and then contend that the court should reach a different conclusion. As this is an appeal by way of rehearing, error must be demonstrated for the court to be entitled to disturb the decision of the primary decision-maker. It is not for the court to merely substitute its own view, as if it were again performing the function of the trial judge. Rather, it is the court’s duty to consider whether the findings were incorrect.115

In a rehearing the appeal court applies the law as operative at the time of the rehearing.116 Any changes in the law after the date of the initial judgment may therefore be considered. As a consequence of being able to consider both new law, and in exceptional cases new facts (this will be discussed below), an appeal court functioning by way of rehearing is not merely correcting the errors of the court of first instance, but rather re-determining the rights of the parties anew,117 and substituting “its own decision based on the facts and the law as they then stand”.118 In this sense, an appeal by way of rehearing requires the appeal court to exercise both appellate and original jurisdiction.119

Fresh evidence and new arguments on appeal [13.100] An appeal by way of rehearing is usually conducted solely on the evidence taken at the original hearing,120 so the appeal court tends to rely entirely upon the transcript of the evidence taken at the trial.121 Indeed, the various statutes dictate that the appellate court “shall have regard to the evidence given in the proceedings out of which the appeal arose”.122 However, this obligation to conduct a thorough examination of the record does not serve to confine the court to the record. This is the crucial difference between a rehearing and a strict appeal: in a strict appeal the appellate court is limited to providing the decision that

114

115 116 117 118 119 120 121 122

empowered to hear and determine appeals by rehearing — see State of Western Australia v Ward (2002) 213 CLR 1 at 87 per Gleeson CJ, Gaudron, Gummow & Hayne JJ. See Norbis v Norbis (1986) 161 CLR 51 at 518-519 per Mason & Deane JJ; Allesch v Maunz (2000) 203 CLR 172 at 180 per Gaudron, McHugh, Gummow & Hayne JJ, and 187 per Kirby J; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203-204 per Gleeson CJ, Gaudron & Hayne JJ. Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd (2010) 108 SASR 120 at 121 per the Court. See CDJ v VAJ (1998) 197 CLR 172 at 202 per McHugh, Gummow & Callinan JJ. See Allesch v Maunz (2000) 203 CLR 172 at 180-181 per Gaudron, McHugh, Gummow & Hayne JJ; and CDJ v VAJ (1998) 197 CLR 172 at 200-202 per McHugh, Gummow & Callinan JJ. Allesch v Maunz (2000) 203 CLR 172 at 181 per Gaudron, McHugh, Gummow & Hayne JJ. See CDJ v VAJ (1998) 197 CLR 172 at 202 per McHugh, Gummow & Callinan JJ. See Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 109 per Dixon J. See Warren v Coombes (1979) 142 CLR 531 at 537 per Gibbs ACJ, Jacobs & Murphy JJ; and Fox v Percy (2003) 214 CLR 118 at 125 per Gleeson CJ, Gummow and Kirby JJ. Federal Court of Australia Act 1976 (Cth) s 27. Also see, eg, Supreme Court Act 1933 (ACT) s 37N(1); and Supreme Court Act (NT) s 54.

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should have been given at first instance, whereas an appeal by way of rehearing allows the court to substitute its own decision, based on the facts and law currently before that court.123 Accordingly, the appeal court functioning by way of rehearing has both the power to draw inferences of fact from the evidence given at first instance, and, in its discretion, to receive further or fresh evidence on questions of fact (including hearing oral testimony).124 Nonetheless, although the power to take fresh evidence exists,125 appeal courts are reluctant to do so because when an appeal court reaches its decision by reference to fresh evidence it is thereby exercising original jurisdiction.126 Consequently, if the power to allow the consideration of new evidence was exercised too liberally or frequently, the distinction between original and appellate jurisdiction would be dangerously diluted.127 Thus, in exercising this discretion, the court should have regard “to the general public interest in the finality of litigation”.128 In addition, as the “power to admit the further evidence exists to serve the demands of justice”,129 appellate courts are concerned to ensure that the raising of new evidence on appeal does not result in injustice to the other party.130 As a consequence of the above considerations, the discretion to admit new evidence is always exercised with caution,131 and it is only in the exceptional case that the appellate court will allow fresh evidence on appeal.132 For similar reasons of justice and the public interest in the finality of litigation,133 an appellant cannot generally raise arguments or points of law not taken at trial. However, provided no injustice will thereby be done, appellate courts do have the power to hear such arguments, and may determine the appeal on such points.134 In common with the reception of further evidence, the appellant must show that the ‘exceptional’ nature of the case demands that the court hear a new argument.135 Appeal courts tend to be even more reluctant to hear new points

123 124

125

126 127 128 129 130 131 132 133 134 135

See Allesch v Maunz (2000) 203 CLR 172 at 181 per Gaudron, McHugh, Gummow & Hayne JJ. See Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 619 per Mason J, with whom Barwick CJ & Stephen J agreed; and Warren v Coombes (1979) 142 CLR 531 at 537 per Gibbs ACJ, Jacobs & Murphy JJ. See, eg, Federal Court of Australia Act 1976 (Cth) s 27 and Federal Court Rules 2011 (Cth) r 36.57(1); Supreme Court Act 1933 (ACT) s 37N(3); Supreme Court Act (NT) s 54; Uniform Civil Procedure Rules 1999 (Qld) r 766(1)(c); Supreme Court Civil Rules 2006 (SA) r 286(3)(a). See Eastman v The Queen (2000) 203 CLR 1 at 24 per Gaudron J; and Mickelberg v The Queen (1989) 167 CLR 259 at 298 per Toohey & Gaudron JJ. See CDJ v VAJ (1998) 197 CLR 172 at 202-203 per McHugh, Gummow & Callinan JJ. Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 296 per Gleeson CJ, with whom Meagher & Handley JJA agreed. CDJ v VAJ (1998) 197 CLR 172 at 202 per McHugh, Gummow & Callinan JJ. See Branir Pty Ltd v Owston Nominees Pty Ltd (No 2) (2001) 117 FCR 424 at 439-440 per Allsop J, with whom Drummond & Mansfield JJ agreed. See CDJ v VAJ (1998) 197 CLR 172 at 203 per McHugh, Gummow & Callinan JJ. See Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 296-297 per Gleeson CJ, with whom Meagher & Handley JJA agreed. See Crampton v The Queen (2000) 206 CLR 161 at 172 per Gleeson CJ. See, eg, Supreme Court Civil Procedure Act 1932 (Tas) s 47(3). See Crampton v The Queen (2000) 206 CLR 161 at 173 per Gleeson CJ. [13.100] 331

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of law than receive fresh evidence, as new arguments on appeal run completely counter to the principle of the finality of litigation and the due administration of justice.136 It is generally felt that “the appeal arena is not the appropriate forum to raise new arguments”,137 and that parties should be confined to the arguments presented at trial. As forcibly stated by the majority in Coulton v Holcombe: It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise.138

Rehearing de novo [13.110] Although an appeal court functioning by way of ordinary rehearing has the power to receive fresh evidence and consider new legal arguments and developments, it is not a retrial of the issues.139 This is the distinguishing factor with a rehearing de novo, in which the appellate court essentially hears the matter anew. It is, in every sense, a “fresh hearing”,140 and the appellate court may consider whatever law and facts are relevant at the time of the rehearing de novo. Accordingly, a court functioning by way of a rehearing de novo is simultaneously exercising both appellate and original jurisdiction and conducting a retrial of the entire matter.141 This is not a common form or type of appeal. As mentioned earlier, in most jurisdictions superior appellate courts function by way of ordinary rehearing.

GROUNDS FOR APPEAL [13.120] In bringing an appeal the appellant bears the onus of proving to the satisfaction of the appellate court that the decision at first instance is in some manner erroneous.142 Theoretically, this may be achieved through myriad arguments, as there is no exhaustive list in this respect. However, as the trial court generally decides questions of law and fact, draws appropriate inferences from

136

137 138 139 140 141 142

See University of Wollongong v Metwally [No 2] (1985) 59 ALJR 481 at 483 per Gibbs CJ, Mason, Wilson, Brennan, Deane & Dawson JJ; and Coulton v Holcombe (1986) 162 CLR 1 at 7-8 per Gibbs CJ, Wilson, Brennan & Dawson JJ. Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd (2010) 108 SASR 120 at 121-122 per the Court. Coulton v Holcombe (1986) 162 CLR 1 at 7-8 per Gibbs CJ, Wilson, Brennan & Dawson JJ. See Edwards v Noble (1971) 125 CLR 296 at 304 per Barwick CJ; and Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd (2010) 108 SASR 120 at 121 per the Court. Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 620 per Mason J, with whom Barwick CJ & Stephen J agreed. See B Cairns, Australian Civil Procedure (11th ed, Thomson Reuters, 2016) pp 751-752. See Norbis v Norbis (1986) 161 CLR 51 at 518-519 per Mason & Deane JJ; Allesch v Maunz (2000) 203 CLR 172 at 180 per Gaudron, McHugh, Gummow & Hayne JJ, and at 187 per Kirby J; and Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203-204 per Gleeson CJ, Gaudron & Hayne JJ.

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those facts, and exercises judicial discretion, in practice one may point to four conventional grounds (or categories) of appeal: 1) the trial judge erred in law; 2) the trial judge’s exercise of a discretion was in error; 3) the trial judge’s inferences of fact were incorrect; and 4) the trial judge’s findings of fact were incorrect.

Errors of law [13.130] When a trial judge is purported to have made an error of law, the appellant is essentially contending that the trial judge applied incorrect legal principles to the matters in issue. In such an appeal, the appellant must persuade the court that the appropriate and applicable law is different (as to content, application, and/or interpretation) to that upon which the trial judge founded his/her decision. When an appeal only involves a question of law, the facts are often not seriously in dispute, and no new evidence is generally required: the trial court record will usually suffice.143 Compared to the other grounds of appeal, an appeal argued solely on the basis of an error of law is consequently relatively straightforward, and certainly ordinarily the least complex in terms of documentation.144

The exercise of discretion [13.140] Endeavouring to persuade the appeal court of an error in the trial judge’s exercise of discretion is commonly a difficult task, as appellate courts are notoriously reluctant to interfere with the exercise of discretion.145 When invited to review an exercise of discretion, the approach of the appellate court is “one of caution and restraint”.146 The rationale underlying the courts’ reticence to vary a trial judge’s exercise of discretion is that the discretion is presumed to have been appropriately exercised. This has been described as a “strong” presumption,147 and consequently the appellant has much to do in order to convince the appeal court that this presumption is rebutted, and that the exercise of discretion was incorrect.148 In Tasmania, the appellate court’s power to vary or reverse an exercise of discretion is expressly limited by legislation: A Full Court, on the hearing of any appeal from any judgment, order, or other determination (whether final or otherwise) of a judge, shall not reverse or vary any adjudication of the judge which is, or purports to be, only the exercise of a discretion which the judge was entitled by law to exercise, unless it appears to the Full Court that — (a) the judge has, in fact, declined or failed to exercise the discretion; (b) the judge has proceeded on a wrong principle or otherwise contrary to law, or on irrelevant or insufficient materials, or has misapprehended the facts or has failed to 143 144 145 146 147 148

See R Sackville, “Appellate Judging: Onwards and Outwards Towards Mid-Century” (2012) 86 Australian Law Journal 249 at 254. See R Sackville, “Appellate Judging: Onwards and Outwards Towards Mid-Century” (2012) 86 Australian Law Journal 249 at 254. See, eg, Lovell v Lovell (1950) 81 CLR 513 at 519 per Latham CJ. Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 223 per Kirby J. Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627 per Kitto J. See Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627 per Kitto J. [13.140] 333

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consider any material fact; (c) the adjudication is founded wholly or in part on an erroneous finding of fact or an erroneous determination in point of law; or (d) by reason of further evidence received by the Full Court ... or some special circumstance, the adjudication should be reversed or varied.149

It is arguable that the above provision is also a useful guide to how appeal courts in other jurisdictions might go about considering the merits of such an appeal. Certainly, similar ideas have been expressed by the courts.150 Simply put, the appellant must show that a clear mistake as to law or fact permeates, and thereby invalidates, the exercise of discretion under review. However, it is not enough to merely argue that the exercise of discretion was unpersuasive or unimpressive, or that the trial judge has given excessive weight to some factors,151 or that “the appellate court, considering the matter de novo, would itself have arrived at a different result”.152 The appellant must prove that “some error has been made in exercising the discretion”153 such that the exercise of discretion was “clearly wrong”,154 or “plainly unjust”.155 In other words, the appellant must show that there has been a failure to properly exercise the discretion,156 and “the appellate court must be persuaded that the order stands outside the limits of a sound discretionary judgment before it intervenes”.157 Appellate courts are even less likely to interfere with the exercise of a trial judge’s discretion if it relates to an interlocutory application, as “appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure”.158 The concern is that too liberal an approach to appeals against exercises of discretion on points of practice and procedure would transfer those exercises of discretion from courts of first instance to courts of appeal, thereby running counter to the finality of litigation principle, and disrupting the proper 149 150

151 152

153 154

155 156 157 158

Supreme Court Civil Procedure Act 1932 (Tas) s 45. For example, Kitto J felt that: “A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts” (Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627). Also see Dixon, Evatt and McTiernan JJ: “If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so” (House v The King (1936) 55 CLR 499 at 504-505). See Gronow v Gronow (1979) 144 CLR 513 at 534 and 537-538 per Aickin J. Gronow v Gronow (1979) 144 CLR 513 at 537-538 per Aickin J. Also see House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ; and Lovell v Lovell (1950) 81 CLR 513 at 519 per Latham CJ. House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt & McTiernan JJ. Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627 per Kitto J. Also see House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt & McTiernan JJ; and Gronow v Gronow (1979) 144 CLR 513 at 534 and 537-538 per Aickin J. House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt & McTiernan JJ. See House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt & McTiernan JJ; and Lovell v Lovell (1950) 81 CLR 513 at 519 per Latham CJ. Norbis v Norbis (1986) 161 CLR 51 at 520 per Mason & Deane JJ. Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 per Gibbs CJ, Aickin, Wilson & Brennan JJ.

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administration of justice by creating delays and increasing costs.159 As Gibbs CJ and Aickin, Wilson and Brennan JJ explain: [I]f a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.160

This reluctance to vary such exercises of discretion should arguably be even more severe now that we have extensive case management schemes operating throughout the Australian civil justice systems. That is, effective case management requires the exercise of discretion on an ongoing basis, and it would be inconsistent with the fundamental principles underlying case management — namely, to ensure the just, economical, and efficient resolution of civil disputes161 — to allow parties too much liberty to question those instances of discretion.

Inferences from facts [13.150] Appellate courts have no similar reluctance in reviewing the trial judge’s inferences drawn from established facts. The rationale for this approach is that an appellate court is in as good a position as the trial judge to draw inferences from facts.162 Provided the facts are undisputed or decided (that is, having been disputed, are now established by the findings of the trial judge),163 this seems a logical position to take as both the trial judge and the appeal court would have identical material from which to draw such inferences. Although the trial judge may have an advantage in determining the facts (especially when that determination may hinge upon the credibility of witnesses), no such advantage exists when it comes to extracting appropriate inferences from those facts.164 Nonetheless, appeal courts have historically treated the trial judge’s inferences with the utmost respect, and appeal court judges have in the past adopted the position that, provided the trial judge’s inferences were open to him or her on the evidence, an appellate court should not disturb a trial judge’s inferences from facts merely on the basis that the appeal court would have made a different decision in

159 160

161

162

163 164

See In re the Will of Gilbert (dec'd) (1946) 46 SR (NSW) 318 at 323 per Jordan CJ. Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 per Gibbs CJ, Aickin, Wilson & Brennan JJ. Also see Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400 per Full Court. See, eg, Supreme Court Civil Rules 2006 (SA) r 3; Rules of the Supreme Court 1971 (WA) O1, rr 4A, 4B. In some jurisdictions this policy of facilitating the “just, efficient, timely and cost-effective resolution of the real issues in dispute” (Civil Procedure Act 2010 (Vic) s 7) expressly applies to appeals — see Civil Procedure Act 2010 (Vic) s 11(b); Supreme Court (Court of Appeal) Rules 2005 (WA) r 47(2). See CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 8-9 per Kirby J, with whom Gleeson CJ agreed; Warren v Coombes (1979) 142 CLR 531 at 537-551 per Gibbs ACJ, Jacobs & Murphy JJ; and Mann v Mann (1957) 97 CLR 433 at 440 per Dixon CJ & Williams J. See Warren v Coombes (1979) 142 CLR 531 at 551 per Gibbs ACJ, Jacobs & Murphy JJ. See Warren v Coombes (1979) 142 CLR 531 at 541-542 per Gibbs ACJ, Jacobs & Murphy JJ. [13.150] 335

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that respect.165 This is probably no longer good law, and currently the established principle is that if the appeal court would have decided differently in terms of an inference from undisputed or decided facts, then it should do so and substitute its own inferences for those of the trial judge.166 In Warren v Coombes the High Court justified this approach by reference to an appeal court’s judicial obligation or duty to reach its own decision,167 and “form an independent judgment about the proper inferences to be drawn from established facts”.168 There remains a commitment to both the public interest in the finality of litigation,169 and to respecting the conclusions of the trial judge,170 but once an appeal court has deemed that the primary judge was in error, and has reached a different view as to the appropriate inference from facts, it should “not shrink from giving effect to it”.171

Findings of fact [13.160] There is a clear distinction between inferences from facts and findings of fact; a distinction that has been described as “fundamental and almost always decisive”.172 It is essentially a distinction between perception and evaluation.173 It is arguably self-evident that the trial judge is in the best position to assess the evidence presented at trial. This is especially the case when scrutinising witness credibility. Appellate courts have long recognised the advantage the trial judge has in this respect, as it is the trial judge that views the witness providing their testimony.174 The appeal court, on the other hand, is “limited to the sterility of a transcript”,175 and thereby subject to the “‘natural limitations’ that exist in the case of any appellate court proceeding wholly or substantially on the record”.176 As Isaacs J explained over a century ago: The mere words used by the witnesses when they appear in cold type may have a very different meaning and effect from that which they have when spoken in the witness box. A look, a gesture, a tone or emphasis, a hesitation or an undue or unusual alacrity in giving evidence, will often lead a Judge to find a signification in words actually used by a witness that cannot be attributed to them as they appear in the mere reproduction in type. And therefore some of the material, and it may be, according to the nature of the particular case, some of the most important material,

165 166 167 168 169 170 171 172 173 174 175 176

See, eg, Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192 at 199-200 per Barwick CJ; and Edwards v Noble (1971) 125 CLR 296 at 318 per Walsh J. See Warren v Coombes (1979) 142 CLR 531 at 541 per Gibbs ACJ, Jacobs & Murphy JJ. See (1979) 142 CLR 531 at 546-551 per Gibbs ACJ, Jacobs & Murphy JJ, for an in-depth discussion of this issue of judicial obligation. (1979) 142 CLR 531 at 538 and 541 per Gibbs ACJ, Jacobs & Murphy JJ. (1979) 142 CLR 531 at 552 per Gibbs ACJ, Jacobs & Murphy JJ. (1979) 142 CLR 531 at 551-552 per Gibbs ACJ, Jacobs & Murphy JJ. (1979) 142 CLR 531 at 551 per Gibbs ACJ, Jacobs & Murphy JJ. Also see CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 8-9 per Kirby J, with whom Gleeson CJ agreed. Fox v Percy (2003) 214 CLR 118 at 146 per McHugh J. See Warren v Coombes (1979) 142 CLR 531 at 540 per Gibbs ACJ, Jacobs & Murphy JJ. See SS Hontestroom v SS Sagaporack [1927] AC 37 at 47 per Lord Sumner; and Fox v Percy (2003) 214 CLR 118 at 126 per Gleeson CJ, Gummow & Kirby JJ. B Cairns, Australian Civil Procedure (11th ed, Thomson Reuters, 2016) p 769. Fox v Percy (2003) 214 CLR 118 at 125-126 per Gleeson CJ, Gummow & Kirby JJ.

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unrecorded material but yet most valuable in helping the Judge very materially in coming to his decision, is utterly beyond the reach of the Court of Appeal.177

In other words, the trial judge’s advantage largely consists of being able to assess the reliability of the evidence by observing the demeanour of the witness throughout their testimony.178 The trial judge also possesses the advantage of having “the opportunity to consider, and reflect upon, the entirety of the evidence as it is received at trial and to draw conclusions from that evidence, viewed as a whole”.179 Although the appeal court has access to the entire transcript of the trial, “the appellate court does not typically get taken to, or read, all of the evidence taken at the trial”.180 The combination of such factors has been described as “the ‘feeling’ of a case which the trial judge has, and is not observed, explained or experienced by the appellate court”.181 All of these considerations serve to place the appellate court “in a position of real disadvantage compared with the trial judge”.182 Consequently, appellate courts have traditionally been extremely reluctant to interfere with a trial judge’s findings of fact, especially if those findings appear to be based, to any substantial degree, on an assessment of witness credibility.183 Although appellate courts continue to recognise that judges at first instance are in the best position to assess the credibility of witnesses,184 courts have also “cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses”.185 In Fox v Percy, the majority cited a number of demeanour studies that emphasised the uncertain implications of witness behaviour in giving evidence.186 Indeed, an

177

Dearman v Dearman (1908) 7 CLR 549 at 561. Also see Paterson v Paterson (1953) 89 CLR 212 at 220 per Dixon CJ & Kitto J; CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 7 per Kirby J, with whom Gleeson CJ agreed; and Hawker v Miller (2011) 110 SASR 206 at 220 per Sulan J.

178

180

See CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 7 per Kirby J, with whom Gleeson CJ agreed; and Devries v Australian National Railways Commission (1993) 177 CLR 472 at 478-479 per Brennan, Gaudron & McHugh JJ, and at 480 per Deane & Dawson JJ. CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 7 per Kirby J, with whom Gleeson CJ agreed. Also see Fox v Percy (2003) 214 CLR 118 at 126 per Gleeson CJ, Gummow & Kirby JJ. Fox v Percy (2003) 214 CLR 118 at 126 per Gleeson CJ, Gummow & Kirby JJ.

181

Hawker v Miller (2011) 110 SASR 206 at 220 per Sulan J.

182

Devries v Australian National Railways Commission (1993) 177 CLR 472 at 480 per Deane & Dawson JJ. Also see Fox v Percy (2003) 214 CLR 118 at 127 per Gleeson CJ, Gummow & Kirby JJ. See Paterson v Paterson (1953) 89 CLR 212 at 219-224 per Dixon CJ & Kitto J; Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 62 ALR 53 at 57 per Gibbs CJ, Wilson, Brennan, Deane and Dawson JJ; Warren v Coombes (1979) 142 CLR 531 at 537-540 per Gibbs ACJ, Jacobs and Murphy JJ; Gronow v Gronow (1979) 144 CLR 513 at 538 per Aickin J; Devries v Australian National Railways Commission (1993) 177 CLR 472 at 478-479 per Brennan, Gaudron and McHugh JJ; CDJ v VAJ (1998) 197 CLR 172 at 182 per Gaudron J; and Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598 at 1614-1615 per Kirby J. See Fox v Percy (2003) 214 CLR 118 at 126-127 per Gleeson CJ, Gummow & Kirby JJ. Fox v Percy (2003) 214 CLR 118 at 129 per Gleeson CJ, Gummow & Kirby JJ. See (2003) 214 CLR 118 at 129 per Gleeson CJ, Gummow & Kirby JJ. Also see Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326 at 348 per Samuels JA. For a discussion of such research see D Ipp, “Problems with Fact-Finding” (2006) 80 Australian Law Journal 667.

179

183

184 185 186

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analysis of similar studies led Kirby J (in CSR Ltd v Della Maddalena) to refer to “the scientific unreliability”187 of assessing witness credibility by reference to witness demeanour. Deane and Dawson JJ (in Devries v Australian National Railways Commission) provide dramatic illustration of this point in stating that “the habitual liar may be confident and plausible, and the conscientious truthful witness may be hesitant and uncertain”.188 In Fox v Percy, the majority summarised this new judicial approach as follows: [J]udges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical.189

The majority in Fox v Percy also emphasised the statutory duty of the appellate court to conduct a real review of the matter before it,190 and explained that the necessary respect for a trial judge’s findings of fact could not “derogate from the obligation of courts of appeal … to perform the appellate function as established by Parliament”.191 Thus, an appeal court is “required to consider suggested errors of fact-finding”,192 and if an error has been shown with regard to a primary judge’s findings of fact, the appeal court is under an obligation to perform its appellate function and rectify that error.193 Clearly, there is tension here between making ‘due allowance’ for the advantages possessed by the primary judge,194 especially if decisions appear to be affected by impressions concerning witness credibility,195 and fulfilling the statutory obligations of an appellate court “to perform its statutory functions of appellate review by way of rehearing, in a real and substantive way as the enacted law mandates”.196 As a result of Fox v Percy (and cases that followed),197 one would expect contemporary appellate courts to 187 188

CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 14 per Kirby J, with whom Gleeson CJ agreed. Devries v Australian National Railways Commission (1993) 177 CLR 472 at 480 per Deane & Dawson JJ.

189 190

(2003) 214 CLR 118 at 129 per Gleeson CJ, Gummow & Kirby JJ. See (2003) 214 CLR 118 at 126-127 per Gleeson CJ, Gummow & Kirby JJ. Also see Warren v Coombes (1979) 142 CLR 531 at 553 per Gibbs ACJ, Jacobs & Murphy JJ; and CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 8 per Kirby J, with whom Gleeson CJ agreed. (2003) 214 CLR 118 at 127 per Gleeson CJ, Gummow & Kirby JJ. CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 7 per Kirby J, with whom Gleeson CJ agreed. See Fox v Percy (2003) 214 CLR 118 at 127-128 per Gleeson CJ, Gummow & Kirby JJ; Warren v Coombes (1979) 142 CLR 531 at 553 per Gibbs ACJ, Jacobs and Murphy JJ; and Edwards v Noble (1971) 125 CLR 296 at 309 per Menzies J. Fox v Percy (2003) 214 CLR 118 at 132 per Gleeson CJ, Gummow & Kirby JJ. See Fox v Percy (2003) 214 CLR 118 at 127 per Gleeson CJ, Gummow & Kirby JJ. CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 8 per Kirby J, with whom Gleeson CJ agreed. Also see Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow and Kirby JJ; and Devries v Australian National Railways Commission (1993) 177 CLR 472 at 480-481 per Deane and Dawson JJ. See, eg, CSR Ltd v Della Maddalena (2006) 224 ALR 1; Lackovic v Insurance Commission (WA) (2006) 31 WAR 460; Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd (2010) 108 SASR 120;

191 192 193

194 195 196

197

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tend to resolve this tension in favour of satisfying appellate duties, and thus exhibiting less reluctance to interfere with a primary judge’s findings of fact.198 Indeed, in a case heard soon after Fox v Percy, that of CSR Ltd v Della Maddalena, Kirby J felt that the previous appellate practice of deference to the findings of fact of the primary judge “frustrated the performance by those courts of their statutory obligation to conduct an appeal by rehearing”,199 and was consequently “a serious impediment to the performance of the jurisdiction and powers of intermediate appellate courts in Australia”.200 There is certainly no question that the appellate court possesses the power to reverse such findings of fact, or substitute its own findings of fact,201 even those founded upon the demeanour of a witness.202 Of course, in order to reverse or vary a trial judge’s findings of fact, or substitute its own findings of fact, an appeal court must be convinced that the trial judge’s findings of fact were wrong.203 The trial judge’s findings of fact must be shown to be erroneous before an appeal court may interfere with those findings.204 It is not enough for the appellate court to conclude that it would not have made the same finding of fact, as merely “differing views do not establish that either view is wrong”.205 Provided the trial judge’s findings of fact were open on the evidence before the court, there must be a strong case against such findings of fact if they are to be overturned.206 Indeed, it has been stated that if a finding of fact is based on the credibility of a witness, then that finding should not be set aside simply “because an appellate court thinks that the probabilities of the case are against — even strongly against — that finding of

Hawker v Miller (2011) 110 SASR 206; and Baira v RHG Mortgage Corporation Ltd [2012] NSWCA 387; Nalbandian v Commonwealth of Australia [2017] FCA 45. 198

199

See, eg, (2006) 224 ALR 1 at 8 per Kirby J, with whom Gleeson CJ agreed; Lackovic v Insurance Commission (WA) (2006) 31 WAR 460 at 478-483 per Buss JA, with whom Steytler P & Pullin JA agreed; Hawker v Miller (2011) 110 SASR 206 at 220-221 per Sulan J; and Lane v Lane (2011) 249 FLR 86 at 89-90 per Refshauge J. (2006) 224 ALR 1 at 9 per Kirby J, with whom Gleeson CJ agreed.

200

(2006) 224 ALR 1 at 9 per Kirby J, with whom Gleeson CJ agreed.

201 202 203

See Edwards v Noble (1971) 125 CLR 296 at 304 per Barwick CJ. See Fox v Percy (2003) 214 CLR 118 at 146 per McHugh J. See Edwards v Noble (1971) 125 CLR 296 at 304 per Barwick CJ, and at 318 per Walsh J. Also see Dearman v Dearman (1908) 7 CLR 549 at 553 per Griffith CJ, in which it was suggested that the trial judge must be “manifestly wrong”; and Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 62 ALR 53 at 57 per Gibbs CJ, Wilson, Brennan, Deane & Dawson JJ in which it was suggested that the trial judge must be “clearly wrong”. See Devries v Australian National Railways Commission (1993) 177 CLR 472 at 483 per Deane & Dawson JJ; Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow & Kirby JJ, and at 147 per McHugh J; CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 8 per Kirby J, with whom Gleeson CJ agreed; and Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd (2010) 108 SASR 120 at 121-122 per the Court. Edwards v Noble (1971) 125 CLR 296 at 304 per Barwick CJ. Also see Cashman v Kinnear [1973] 2 NSWLR 495 at 499 per Jacobs P; Warren v Coombes (1979) 142 CLR 531 at 545-551 per Gibbs ACJ, Jacobs & Murphy JJ; and Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 per Brennan, Gaudron & McHugh JJ. See Devries v Australian National Railways Commission (1993) 177 CLR 472 at 478-479 per Brennan, Gaudron & McHugh JJ.

204

205

206

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fact”.207 In other words, a mere preference for a different view is not sufficient to overturn the assessment at first instance. Given the trial judge’s advantages with respect to assessing the reliability or credibility of sworn testimony,208 in order to demonstrate that the trial judge’s conclusions are erroneous, appellate courts need to be persuaded that the trial judge “failed to use or has palpably misused his advantage”.209 The High Court has now established that this may be achieved by showing that the trial judge’s findings of fact were: inconsistent with incontrovertibly established facts;210 or otherwise “glaringly improbable”;211 or “contrary to compelling inferences”.212 Such stringent legal tests indicate that, although appellate courts seem recently to be less reluctant to interfere with findings of fact based upon assessments of credibility by the trial judge,213 it remains the case that “findings of fact, based on credibility or demeanour, can only be reversed by an appellate court in exceptional cases”.214

CONCLUSION [13.170] Appellate courts have indicated that they will now more readily review both the trial judge’s inferences from facts, and findings of fact. In the past the advantage that the primary judge possessed in being able to observe the demeanour of a witness was almost sacrosanct; now this advantage is considered just another (albeit significant) factor for the appeal court to contemplate in coming to its decision. The current emphasis is upon an appeal court’s statutory duty to rehear the case. This point is forcibly made by the majority in Fox v Percy: [I]n every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial

207 208

Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 per Brennan, Gaudron & McHugh JJ. See Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow & Kirby JJ.

209

Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 per Brennan, Gaudron & McHugh JJ; CDJ v VAJ (1998) 197 CLR 172 at 182 per Gaudron J; and CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 8 per Kirby J, with whom Gleeson CJ agreed.

210

See Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 per Brennan, Gaudron & McHugh JJ; Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow & Kirby JJ; and CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 8 per Kirby J, with whom Gleeson CJ agreed. Note that uncontested evidence may constitute incontrovertible facts — see Fox v Percy (2003) 214 CLR 118 at 132 per Gleeson CJ, Gummow & Kirby JJ. Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 per Brennan, Gaudron & McHugh JJ; Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 62 ALR 53 at 57 per Gibbs CJ, Wilson, Brennan, Deane & Dawson JJ; CDJ v VAJ (1998) 197 CLR 172 at 182 per Gaudron J; Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow & Kirby JJ; and CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 8 per Kirby J, with whom Gleeson CJ agreed. Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow & Kirby JJ. See Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow & Kirby JJ; and especially CSR Ltd v Della Maddalena (2006) 224 ALR 1 at 9 per Kirby J, with whom Gleeson CJ agreed. Fox v Percy (2003) 214 CLR 118 at 147 per McHugh J. Also see R Sackville, “Appellate Judging: Onwards and Outwards Towards Mid-Century” (2012) 86 Australian Law Journal 249 at 254.

211

212 213 214

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reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.215

There are some issues with this approach. For example, appeal courts reviewing findings of fact are thereby effectively exercising original jurisdiction. Perhaps more disturbingly, the appellate courts’ willingness to review findings of fact based upon assessments of credibility may inadvertently advantage the unethical party. For instance, if a party that intends to lie at trial cannot be confident of persuading the trial court otherwise under cross-examination, such a party might simply provide the necessary words during their testimony, and then exercise their right to appeal. Those words then appear on the transcript in the appeal court devoid of other human behaviour signifiers, and the words themselves may be the basis for a successful appeal. Most significantly in terms of long-term effects, the current readiness of appellate courts to review both inferences from facts and findings of fact may also tempt unethical parties into presenting entire cases at trial with an eye to establishing a solid transcript for the basis of appeal. As a consequence, the crucible of the civil justice system moves away from trial and into the appellate jurisdiction. This is problematic, as it runs counter to the basic premise of the finality of litigation.216 The more litigants regard the trial as simply one step in the civil litigation process, rather than the final, conclusive moment of a civil dispute, the more business appeal courts will be burdened with. Perhaps the answer to these issues is to abolish the right to appeal, and compel all litigants to seek leave to appeal.217 Such a reform would not affect the appeal courts’ ability, and expressly stated desire, to fulfil their legislative obligation to fully rehear matters presented before them. It would also serve to remove the significance of any distinction between final and interlocutory orders: a distinction that does not presently possess the clarity that the repercussions of the distinction demand. Finally, such an amendment to the right of appeal would discourage trivial, unreasonable, unethical and routine appeals, and thereby reassert the trial court as the final arbiter of civil disputes, which would operate to reduce the resource pressure on the appellate jurisdiction. As any right to appeal is purely statutory, the above reform agenda might be achieved in all jurisdictions with the stroke of a pen. Thus far only Victoria has done so.218

215 216 217

218

(2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow & Kirby JJ. A basic premise that was recognised and reiterated in Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow & Kirby JJ. This is a suggested legislative reform strongly argued for by Mason — see K Mason, “The Distinctiveness and Independence of Intermediate Courts of Appeal” (2012) 86 Australian Law Journal 308 at 327-328. See Supreme Court Act 1986 (Vic) s 14A. [13.170] 341

CHAPTER 14 Enforcement of Judgments Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343 [14.30] Imprisonment for debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 [14.40] What is a judgment and when can it be enforced . . . . . . . . . . 347 [14.60] Who enforces the judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348 [14.70] Monetary judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348 [14.80] Warrants of sale (of personal or real property) . . . . . . . . . . . . . 348 [14.90] Periodic instalments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349 [14.100] Garnishment or attachment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350 [14.120] Charging orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 [14.130] Receivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 [14.140] Non–monetary judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 [14.150] Contempt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 [14.160] Substitute performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 [14.170] Sequestration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 [14.180] Warrants for possession or delivery . . . . . . . . . . . . . . . . . . . . . . . 354 [14.190] Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 [14.10]

INTRODUCTION [14.10] Enforcement of judgments is an undervalued but critically important component of civil litigation. Public confidence in the civil justice system depends, to a large degree, on its effectiveness. For successful litigants, the joy of success can soon turn to anger and disappointment if the losing party does not comply with the judgment and orders of the court, and they are then faced with another round of procedural steps, incurring expense and taking further time, while attempting to enforce the judgment. The undervaluing of the importance of enforcement procedures can be demonstrated in several ways. First, there is very little academic scholarship on enforcement of judgments. Second, despite the last 20 years being a period of significant procedural reform with major inquiries into civil justice and civil litigation, very little attention has been paid to enforcement of judgments. The 2000 Australian Law Reform Commission’s Report, Managing Justice1 has almost no references to enforcement of judgments. This was no doubt influenced by the fact that litigants in the federal courts need, for the most part, to rely on State and Territory civil enforcement procedures to enforce judgments from federal courts,

1

Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System, No 89 (Canberra, 2000). [14.10] 343

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but some consideration of the issue would have been useful.2 Likewise, the 2008 Victorian Law Reform Commission’s Civil Justice Review also contains very little discussion of enforcement of judgments, noting it was an issue on which submissions had been made, but deciding to leave the issue to any subsequent enquiry.3 However, there have been some specific enquiries into enforcement of judgments. The Law Reform Commission of Western Australia conducted such an enquiry in 1995 as part of its reference into Local Courts.4 One indicia of the practical importance of enforcement of judgments is the frequency in which enforcement procedures are utilised. Empirical data in this field is rare but the Australian Law Reform Commission reported in its 1987 report on debt recovery the findings of a survey of NSW District and Local Courts in which it was found that the 101,738 judgments included in the survey were followed by up to 10 enforcement procedures over a subsequent three year period. Approximately two thirds of judgments required at least one enforcement step, and 22% required at least two enforcement steps.5 In South Australia, in the Annual Report 2015-16, the Magistrates Court reported it had received 27,220 civil lodgments (which extend beyond general civil litigation to include drivers licence appeals, applications relating to the register of births, deaths and marriages and other miscellaneous matters). In the same period some 29,301 civil enforcement processes had been sought from the court.6 Andrew Cannon7 sheds some light on the effectiveness of enforcement of judgments procedures. His survey of enforcement of judgment procedures in the Adelaide Magistrates Court on one day in 1999 involved judgments going back to 1994. In most cases the judgment debt had increased over time (although in many cases some payments had been made). This was because fees and interest were charged on the judgment debt. This is consistent with a submission made by the Western Australian Ministry of Justice to the Law Reform Commission of Western Australia, quoted in the 1995 Report, that stated “creditors are totally disillusioned with the court system because of inefficiencies in the present system of enforcement”.8 [14.20] The traditional approach, which prevails in most of the common law world, is to leave it to the successful party (the judgment creditor) to enforce any orders in any lawful manner it chooses. This can be via the coercive powers of the 2

3 4 5 6 7 8

See Federal Court of Australia Act 1976 (Cth) s 53. The Australian Law Reform Commission did, however, examine enforcement procedures in its 1987 report on Debt Recovery and Insolvency: Australian Law Reform Commission, Debt Recovery and Insolvency, No 36 (Canberra, 1987). Victorian Law Reform Commission, Civil Justice Review, Report 14 (Melbourne, 2008) pp 715, 721. Law Reform Commission of Western Australia, Enforcement of Judgments in the Local Court, Report 16 (Perth, 1995). Australian Law Reform Commission, Debt Recovery and Insolvency, No 36 (Canberra, 1987) Figure 1, p 51. Courts Administration Authority, Annual Report 2015-16 (2016) p 21. See A Cannon, “Improving Debt Collecting in Courts” (2007) 18 Journal of Judicial Administration 18 at 23-25. See Law Reform Commission of Western Australia, Enforcement of Judgments in the Local Court, Report 16 (Perth, 1995) p 5.

344 [14.20]

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court, but the judgment creditor may also use other legal measures. For example, the judgment creditor may enter into some form of repayment agreement with the judgment debtor; or a judgment creditor may use the judgment debt to seek the bankruptcy or liquidation of a judgment debtor; or a judgment creditor can register the judgment with credit agencies and the debt is included in public databases that can have significant consequences for the judgment debtor.9 Another option is to make enforcement of judgments a public service with a statutory agency, or a division in a court, created to enforce judgments on behalf of successful litigants. Northern Ireland is the example most often given of this approach, as an Enforcement of Judgments Office was established in 1969. It collects data about the judgment debtor by its own statutory processes, or from other government databases, and seeks to use the most appropriate enforcement measure. It also seeks to reduce the problems that can arise if there are multiple creditors with conflicting interests.10 While such an approach has been suggested in Australia, concerns exist that the fees charged by such an Office might not cover its costs. This, at a time when governments are attempting to reduce expenditure, has acted as a brake on such recommendations. South Australia enacted a Debt Repayment Act 1978 which had a statutory office for assisting with recovery of debts but it was never proclaimed, and has since been repealed.11 The onus in Australia, generally speaking, remains on the successful litigant to initiate and pay for any enforcement procedures.

Imprisonment for debt [14.30] For much of the history of the common law, imprisonment was a common remedy for debt. Debtors could be committed to a debtors prison until they had paid their debts. Imprisonment was available both pre-trial and post-trial. As these were private prisons, they also had to pay the gaolers during their stay. The conditions in these prisons varied depending on capacity to pay and debtors’ families were able to join them in some cases. Of course, being in prison meant it was difficult for the debtor to earn money to pay his or her debts unless they were able to secure some form of day leave. English literature has many examples of the deprivations of debtor’s prisons. Charles Dickens, whose father was committed to a prison (Marshalsea) for debtors in 1824, based his novel Little Dorritt on Marshalsea. The reality of imprisonment for debt features in his other novels as well. An early description of the hardships of debtors prisons can be found referred to in the Manchester Times in 1862:12 What barbarity can be greater than for gaolers (without provocation) to load prisoners with irons, and thrust them into dungeons, and manacle them, and deny their friends to visit them, and force them to pay excessive fines for their chamber rent, their victuals and drinks; to open their letters and seize the charity that is sent to them!

9

10 11 12

See, eg, Trust Online at http://www.trustonline.org.uk, part of the Registry Trust run for the Ministry of Justice (England) recording judgments, orders and fines and searchable by the public. See A Cannon, “Improving Debt Collecting in Courts” (2007) 18 Journal of Judicial Administration 18 at 25-26. This was accompanied by the Enforcement of Judgments Act 1978 (SA). “In Prison for Debt”, Manchester Times (22 October 1862) citing Samuel Byrom from 1729. [14.30] 345

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And when debtors had succeeded in arranging with their creditors, hundreds are detained in prison for chamber-rent and other unjust demands put forward by their gaolers, so that at last, in their despair, many are driven to commit suicide ... gaolers should be paid a fixed salary and forbidden, under pain of instant dismissal, to accept bribe, fee or reward of any kind ... law of imprisonment for debts inflicts a greater loss on the country, in the way of wasted power and energies, than do monasteries and nunneries in foreign lands, and among Roman-Catholic peoples ... Holland, the most unpolite country in the world, uses debtors with mildness and malefactors with rigour; England, on the other hand, shows mercy to murderers and robbers, but of poor debtors impossibilities are demanded.

Bruce Kerscher13 has shown how, in Australia, the abolition of imprisonment for debt was not so much an ‘abolition’ but a transformation. Imprisonment was restricted to specific situations — where a court was satisfied that a debtor was likely to abscond or there was some form of dishonest conduct. For much of Australia this transformation happened in the last half of the 19th century, although Cannon suggests that this did not take place in South Australia until 1936.14 While Australian jurisdictions allow for arrest and imprisonment for civil contempt of court (which ignoring court orders can amount to), fewer jurisdictions have retained the power to arrest debtors thought to be absconding or likely to abscond to avoid paying their debts. As an example, the South Australian Enforcement of Judgments Act 1991, s 14 provides that: (1)

If — (a)

a plaintiff has brought an action in a court for recovery of a monetary sum; and

(b)

there are grounds for believing — (i)

that the defendant is about to leave the State; and

(ii)

that the defendant’s absence from the State would seriously prejudice the plaintiff’s prospects of enforcing a judgment that has been, or may be, given in that plaintiff’s favour,

the court may issue a summons requiring the defendant to appear for examination before the court, or issue a warrant to have the defendant arrested and brought before the court, for examination. (2)

If, after examination of the defendant, the court is satisfied that there is good reason for doing so, it may require the defendant to give security for the satisfaction of any judgment that has been or may be given in the plaintiff’s favour.

(3)

If a defendant fails without proper excuse to comply with a requirement under subsection (2), the defendant commits a contempt of the court by which the requirement was imposed.

Jurisdictions with broadly similar provisions include Queensland, Tasmania, Victoria and Western Australia.15

13 14 15

B Kercher, “Imprisonment for Debt in the 1980s” (1987) 17 Western Australia Law Review 3. See A Cannon, “Improving Debt Collecting in Courts” (2007) 18 Journal of Judicial Administration 18 at 18. Civil Proceedings Act 2011 (Qld) s 100; Debtors Act 1870 (Tas) s 5; Supreme Court Act 1986 (Vic) s 87 (where the debt is greater than $50,000); Restraint of Debtors Act 1984 (WA) s 5.

346 [14.30]

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When imprisonment for debt was effectively abolished, courts were given increased powers to seize and sell the property of the judgment debtor. The scope of the old writs of fieri facias (fi fa), now called warrants for sale or execution, increased, and real property became vulnerable to attack by judgment creditors. Where some form of specific conduct other than payment of damages or monies was ordered by the court following judgment, the possibility of sequestration, and/or civil contempt proceedings, usually ensured compliance by the losing litigant. This, to a large degree, reflects the historical distinctions between common law and equitable remedies, but for the purpose of this chapter we will distinguish between enforcement of monetary judgments and the enforcement of non-monetary judgments.

What is a judgment and when can it be enforced [14.40] The judgment is the final decision of the court that concludes the case. It usually consists of orders that provide relief to the successful party. In most civil cases in Australia the judgment is accompanied by reasons for the judgment. In practice the reasons for judgment and orders are often referred to as the judgment of the court but it is only the orders that can be enforced. While a judge may in some cases give an ex tempore judgment at the conclusion of the hearing, in most cases the judge will “reserve judgment”, which enables the judge to deliberate and write a judgment to be delivered at a later date. One issue that sometimes arises is that there can be a considerable period between the hearing and handing down of the judgment. The extension of case management, with timelines to the judgment phase, may provide some solution to this response. Some courts have introduced an expectation that judgments will be delivered within three months. As a party may feel uncomfortable about raising the issue of a delayed judgment, most courts have protocols whereby a party may approach either the President of the local Law Society or Bar Association, or the relevant Chief Justice. The above discussion applies to most civil cases. It does not apply to those few trials involving a civil jury. In those cases the jury will determine the facts of the matter by rendering a verdict, following upon which the judge will pronounce judgment — the final orders disposing of the case. [14.50] The judgment becomes operative from the moment it is pronounced or delivered.16 However it is not “perfected” until it has been drawn up by the parties, settled by the court, and entered in the court “record”. It is not usually enforceable until these formalities have been completed. Where the order requires a party to perform some specific task the order will contain a date by which that task is to be done and the order is not enforceable until the expiry of that time.

16

This is true at common law see Dalton v State of South Australia (2010) 106 SASR 279 and has been codified in most jurisdictions: see, eg, Federal Court Rules 2011 (Cth) r 39.01; Uniform Civil Procedure Rules 2005 (NSW) r 36.4; Uniform Civil Procedure Rules 1999 (Qld) r 660; Supreme Court Rules 2000 (Tas) r 807; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 59.02; Civil Judgments Enforcement Act 2004 (WA) s 11. [14.50] 347

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In most jurisdictions enforcement can be commenced as of right within six years of the judgment. After that the leave of the court must be obtained before any warrant or other process for enforcement is issued.17

Who enforces the judgment [14.60] In most jurisdictions a court official is responsible for enforcing judgments at the request of the parties. The parties apply to the court seeking use of a specific enforcement procedure, and on payment of the prescribed fee, the relevant document is issued. This is usually a warrant of some sort authorising the court official to take certain acts to enforce judgment: for example, a warrant of sale, or a warrant of possession. The court official responsible for the execution of the warrant is in most jurisdictions the sheriff. The sheriff is under a duty to execute the warrant, report the outcome to the court, and to account for any monies raised to the judgment creditor and debtor. Should the sheriff or his or her officers exceed the warrant, or in other ways act inappropriately, they may be liable to the judgment debtor. They are usually indemnified by the state if the acts are done in good faith.18

MONETARY JUDGMENTS [14.70] The most common remedy in civil litigation is damages, so enforcement of monetary judgments is of great importance. There are two main categories of enforcement procedures available — seizure and sale of real and personal property to meet the judgment debt under warrants of sale or execution; and instalment orders whereby the judgment debtor is ordered to pay the judgment by way of periodic instalments.

Warrants of sale (of personal or real property) [14.80] Traditionally, real property was given special protection from enforcement provisions. This protection had ended by the mid-19th century and warrants of sale (or execution as they are sometimes called) became executable against the personal or real property of the judgment debtor. As with most court processes, the rules of court provide the relevant form. For example, in South Australia Form 86 provides: WARRANT OF SALE (Enforcement of Judgments Act 1991 s 7) To the Sheriff of South Australia In this action the (role of party), (name) of (address) is, pursuant to a judgment or order dated (date), indebted to the (role of party), (name) as follows:

17 18

Balance of judgment sum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (amount)

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (amount)

Judgment debt interest under rule 261 to date of warrant . . . . . . .

$ (amount)

See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 799; Supreme Court Civil Rules 2006 (SA) r 348. In NSW it is 12 years: Civil Procedure Act 2005 (NSW) s 134. See, eg, Sheriff Act 2005 (NSW) s 15.

348 [14.60]

Enforcement of Judgments

Costs and expenses of this warrant . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (amount)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (amount)

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YOU ARE DIRECTED: 1. To sell the personal and real property of the (role of party), (name) as is within the State of South Australia in order to satisfy the unsatisfied judgment, interest and costs and further interest accruing under rule 261 after the date of this warrant, until you receive payment of the monies the subject of this warrant and all of your expenses and fees relating to its execution. 2. To report to this Court concerning your execution of this warrant and the results.

The sheriff in executing the warrant is empowered to enter land, search, seize and sell property to meet the judgment debt. Not all property is amenable to seizure and sale. A range of necessities are exempted — in South Australia, for example, the sheriff cannot seize any property that would be protected under bankruptcy legislation.19 In New South Wales and Western Australia the relevant legislation specifies particular goods that are exempt from the procedure: for example, clothes, bedroom and kitchen furniture, and tools of trade.20 The sheriff need not physically seize the property to gain possession of it. A notice affixed to the property indicating the sheriff has seized it will suffice to constitute seizure. Generally, personal property will be seized and sold before real property is seized.21 In selling the property the sheriff is required to act reasonably in all the circumstances. The sheriff is under a duty to sell the property by public sale, and only by private sale if there are no bids or it would be unreasonable to accept the bid. However, there remains a need to act fairly in so far as the judgment debtor is concerned. In Zou v Khousal22 there was an auction of real estate seized under a warrant of seizure and sale for a judgment debt of $100,000. The property was valued at $630,000 but after mortgage and other debts the judgment debtor was left with an equity of $170,000. The sheriff (or an agent of the sheriff) accepted a bid of $1000 from Khousal. This was the second auction held by the sheriff — the first attracted no bids; the second only one bid. The Court set aside the sale as not being reasonable in the circumstances.23

Periodic instalments [14.90] In most jurisdictions courts can order the payment of the judgment debt by way of periodic instalments. This often involves an investigation of the judgment debtor’s financial position. This usually follows the production of relevant financial information by the judgment debtor, or the issuing of an investigation or examination summons requiring the judgment debtor to attend court to give

19 20 21 22 23

Enforcement of Judgments Act 1991 (SA) s 7(2). Similar provisions apply in the ACT, Queensland, and Victoria. Civil Procedure Act 2005 (NSW) s 106; Civil Judgments Enforcement Act 2004 (WA) s 76. See, eg, Enforcement of Judgments Act 1991 (SA) s 7; Civil Judgments Enforcement Act 2004 (WA) s 64. [2012] VSC 187. See also Anderson v Liddell (1968) 117 CLR 36. In Western Australia court approval is required for sales at less than fair value — Civil Judgments Enforcement Act 2004 (WA) s 69(2). [14.90] 349

Principles of Civil Litigation

evidence about their asserts, liabilities, income and financial position more generally. In most jurisdictions the judgment creditor or debtor can apply for such an order; in New South Wales only the judgment debtor;24 in South Australia and Western Australia only the judgment creditor.25 One advantage for the judgment debtor is that in some jurisdictions other enforcement procedures are not available to the judgment creditor while the instalment order is in place.26 Sanctions for failure to comply with the instalment order are limited in most jurisdictions. It may enable the judgment creditor to use other enforcement procedures. It may provide grounds for compulsory examination of the judgment debtor, and in some jurisdictions, where the default has been egregious, lead to imprisonment of the debtor. In Victoria “wilful and persistent” default; in South Australia failure to pay “without proper excuse”; and in Western Australia without “reasonable excuse” — can lead to imprisonment for up to 40 days.27

Garnishment or attachment [14.100] A particularly attractive enforcement procedure for judgment creditors is the use of garnishee or attachment orders. These enable a judgment creditor to have a debt owed by a third party to the judgment debtor ‘redirected’ to the judgment creditor. This is particularly useful where the judgment creditor has reason to believe the judgment debtor is being deliberately unco-operative or unwilling to pay the judgment debt. This procedure effectively removes the judgment debtor from the process with the service of the order requiring the third party to pay the debt it owes to the judgment debtor to the judgment creditor. For a garnishee order to be made there must clearly be a debt in existence. The judgment creditor applies to the court, usually ex parte, and the order is usually made without a hearing. The third party when served with the garnishee order has the right to object. The judgment debtor is usually not involved in the hearing that results from the objection.28 Garnishment of debts did not exist at common law and was introduced by statute in the middle of the 19th century. One of the difficulties that arose related to funds held in bank accounts. These could be characterised as debts owing to the customer and the issue arose as to whether those funds could be garnished if the customer was a judgment debtor. The courts distinguished between what were essentially cheque accounts from those that were deposit accounts. The former were susceptible to garnishment, the latter were not. These distinctions have been largely overcome by legislative amendment or rule changes making monies in accounts at financial institutions subject to garnishment.29 24 25 26 27 28 29

Uniform Civil Procedure Rules 2005 (NSW) r 37.2. Enforcement of Judgments Act 1991 (SA) s 5; Civil Judgments Enforcement Act 2004 (WA) s 33. See, eg, Civil Procedure Act 2005 (NSW) s 107; Judgment Debt Recovery Act 1984 (Vic) s 9. Judgment Debt Recovery Act 1984 (Vic) s 19; Enforcement of Judgments Act 1991 (SA) s 5; Civil Judgments Enforcement Act 2004 (WA) s 90. See, eg, Uniform Civil Procedure Rules 2005 (NSW) Pt 39 Div 4; Enforcement of Judgments Act 1991 (SA) s 6; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 71. See, eg, Civil Procedure Act 2005 (NSW) s 117; Enforcement of Judgments Act 1991 s 6; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 71.03.

350 [14.100]

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[14.110] A subset of garnishee situations is where a judgment debtor’s future earnings are attached. All jurisdictions provide for some form of such attachment.30 Clearly there is a balancing act to ensure the judgment debt is paid without reducing the judgment debtor to such poverty that the basic needs of life for him or her and their family cannot be met. There are also the indirect consequences that can flow from attaching wages — it can, for example, detrimentally affect the relationship with the employer who may resent being involved in the private affairs of the employee or whose view of the employee might be altered. As a result some jurisdictions place social security and veterans pensions outside the reach of garnishee orders.31 In determining the amount to be garnished courts take into account the reasonable living and other expenses of the judgment debtor.32 In South Australia further protection is provided to the judgment debtor by requiring the prior consent of the judgment debtor to the making of the order before any attachment of salary or wages can occur.33

Charging orders [14.120] All jurisdictions provide for some form of charging order as an enforcement procedure. Charging orders are most commonly available for use against stocks and shares or similar types of securities. In New South Wales they are also available against money held on deposit in any financial institution or for any form of equitable interest.34 In South Australia, the scope of the charging order is much wider — it is available against the “property” of a judgment debtor.35 As with garnishee or attachment orders the initial application to the court for an order is made ex parte and served on the judgment debtor and any relevant third parties. The effect of a charging order is to prevent any dealing with the property so charged.

Receivers [14.130] The appointment of a receiver is an extreme remedy.36 It effectively grants control of a person’s business or property to a person appointed by the court. This could involve running the business or managing property so as to pay the judgment debt out of any earnings. Not only does this amount to a massive intervention in the affairs of the judgment debtor but also the costs of the receiver can involve significant expense.

30

31 32 33 34 35 36

See, eg, Civil Procedure Act 2005 (NSW) s 119; Uniform Civil Procedure Rules 1999 (Qld) r 855; Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 72; Civil Judgments Enforcement Act 2004 (WA) s 35. See, eg, Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 72.01. See, eg, Uniform Civil Procedure Rules 1999 (Qld) r 856 which also requires the court to avoid “unreasonable hardship”. Enforcement of Judgments Act 1991 (SA) s 6(2). Civil Procedure Act 2005 (NSW) s 126. Enforcement of Judgments Act 1991 (SA) s 8. See Chapter 7. [14.130] 351

Principles of Civil Litigation

Receivers were originally an equitable remedy and in most jurisdictions are only available after all other legal remedies have been tried.37 Australian authority, albeit about the appointment of receivers in other situations, suggests that the appointment of receivers is “extraordinary and drastic” and will only occur in pressing circumstances.38 Whether such a high threshold needs to exist when enforcing judgment is questionable. With judgment debtors the entitlement to the debt has been determined by a court so a more flexible approach to the appointment of receivers may be warranted. In some circumstances, for example, they may be appropriate without requiring the exhausting of other legal remedies.39

NON–MONETARY JUDGMENTS [14.140] As noted earlier in this chapter, most judgments are of a monetary nature. However where the relief sought in litigation is performance or non-performance of an act or task, other enforcement procedures come into play. The most significant is the use of the courts’ powers to punish for contempt of court. Failure to comply with a court order to perform a specific task can amount to contempt of court. Sanctions for contempt of court include fines and imprisonment and it also supports the granting of sequestration. This is an order authorising the seizure of the defaulting party’s real and personal property until the act or task is performed. Such measures are not available for failure to pay a judgment debt. A monetary judgment is usually an order that the plaintiff is entitled to recover the judgment sum, not an order that the defendant must pay it. Nor does it usually include a time by which the judgment debt is to be paid. This means the judgment creditor is limited to the enforcement remedies discussed earlier in this chapter under “Monetary judgments”.

Contempt [14.150] Historically different remedies existed for breach of a court’s order — attachment applied if the party had failed to perform an act ordered by the court; committal applied if they had been ordered to refrain from acting in certain ways but continued to so act. The practical effect was the same with both remedies — the arrest and imprisonment of the defaulting party — and in many jurisdictions the distinction is no longer observed. In Victoria, for example, both breaches give rise to possible committal.40 In some jurisdictions neither term is used, and a party disobeying a judgment is simply guilty of contempt of court.41 The use of penal sanctions is limited to clear and necessary cases. Before contempt can arise, the orders must be explicit as to what is to be done or what

37 38 39 40 41

Morgan v Hart [1914] 2 KB 183. National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386. See, eg, Soinco SACI v Novokuznetsk Aluminum Plant [1997] 3 All ER 523. Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 66.05. See, eg, Civil Judgments Enforcement Act 2004 (WA) s 98; Enforcement of Judgments Act 1991 (SA) s 12.

352 [14.140]

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the party is restrained from doing; the party has to have notice of the order, and if required to perform an act or task, the party must be given time in which to comply. The failure to comply with the orders must be deliberate.42 There has long been a conceptual distinction between criminal and civil contempt, with the former being contempt in the face of the court or interference with the administration of justice. Civil contempt was said to arise from failure to comply with court orders in civil litigation. In Witham v Holloway the High Court held that any such distinction was unhelpful, and that the standard of proof for all contempts should be the same — “beyond reasonable doubt”.43

Substitute performance [14.160] An alternative or complement to contempt provisions are processes in all jurisdictions that enable a court to appoint another person to undertake the act or task. For example, r 899 of the Uniform Civil Procedure Rules 1999 (Qld) provides: (1)

(2)

If a non-money order requires a person to perform an act and the person does not perform the act, the court may — (a)

appoint another person to perform the act; and

(b)

order the person liable under the order to pay the costs and expenses caused by the failure to perform the act.

Subrule (1) does not affect the court’s power to — (a)

appoint a person to execute a document by order of the court; or

(b)

punish for contempt.44

Sequestration [14.170] Sequestration is the seizure of a defaulting party’s real and personal property until they have complied with the court order. Some form of sequestration for non-compliance is provided for in New South Wales, Northern Territory, Queensland, Tasmania and Victoria.45 In Western Australia it appears to be only available when the defaulting party is a corporation.46 In some jurisdictions47 sequestration is also available for monetary judgments but given the power to exercise warrants of seizure and sale, the scope for use of sequestration for monetary judgments would seem limited.

42

43 44

45

46 47

Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 438; Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; Microsoft Corporation v Marks (1996) 69 FCR 117. (1995) 183 CLR 525. See also, eg, Uniform Civil Procedure Rules 2005 (NSW) r 40.8; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 66.11; Supreme Court Rules 2000 (Tas) r 877; Civil Judgments Enforcement Act 2004 (WA) s 99. Uniform Civil Procedure Rules 2005 (NSW) r 40.6; Supreme Court Rules (NT) r 66.05; Uniform Civil Procedure Rules 1999 (Qld) r 917; Supreme Court Rules 2000 (Tas) r 883; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 66.05. Rules of the Supreme Court 1971 (WA) O 55, r 7.03. See, eg, Uniform Civil Procedure Rules 2005 (NSW) r 40.2. [14.170] 353

Principles of Civil Litigation

Sequestration only provides rights of possession — those in possession of the property are not able to dispose of the property. They may collect rents and other payments that would otherwise go to the defaulting party until the defaulting party complies with the judgment or the court orders an end to the sequestration.

Warrants for possession or delivery [14.180] Where the remedy sought in the litigation is gaining possession of real or personal property, the successful party can seek warrants whereby the sheriff or his or her agents takes possession of the real property, expelling those occupying the land, or takes possession of the personal property and delivers it to the successful party.48

Conclusion [14.190] As has been noted in this chapter, various procedural mechanisms exist to enforce judgment, and the effect of such orders upon the judgment debtor may be significant, and often coercive and highly intrusive. However, without the ability to enforce judgments the entire civil justice system would be rendered largely meaningless. The Australian civil justice system has its problems (many highlighted within this book), but such issues would pale into insignificance if court judgments could not be effectively enforced. The power to enforce judgments is essential to any justice system that aspires to stability, public respect and confidence, certainty and, indeed, “justice”.

48

See, eg, Civil Procedure Act 2005 (NSW) s 105; Uniform Civil Procedure Rules 1999 (Qld) rr 913–920; Enforcement of Judgments Act 1991 (SA) s 11; Supreme Court Rules 2000 (Tas) r 874; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 66.03, O 66.04; Civil Judgments Enforcement Act 2004 (WA) Pt 5 Div 1.

354 [14.180]

INDEX A

Abuse of process case involving, [3.100] categories, [6.105] frivolous claims, [6.100] illegitimate purpose, [6.105] inherent jurisdiction, [6.100] oppression and injustice, [6.100] overview, [6.100] principles, application of, [6.100]–[6.105] sanctions, [6.105] vexatious pleadings, [6.105] Administrative tribunals courts, alternatives to, [1.180] lower-level civil litigation, role in, [1.180] Alternative dispute resolution advisory, [9.20] arbitration — see Arbitration case appraisal — see Case appraisal court annexed effectiveness, [9.180] justness, [9.180], [9.190] most popular, [9.30] success, [9.180] court’s referral to, [9.70] determinative, [9.20] traditional adjudication, distinguished from, [9.20] facilitative, [9.20] forms of, [9.20] justice and, [9.190], [9.200] community standards, [9.190] public accountability, [9.190] justification, [9.190] mediation — see Mediation neutral evaluation — see Neutral evaluation overview, [9.10] processes, [9.20] settlement, [9.200] adjudication and, balance between, [9.200] promotion, [9.10], [9.200] value, [9.190] Amendment to pleadings, [5.120] defects, correction of, [5.140] documents, [5.120] limitation period, conflict with, [5.130] New South Wales, [5.120] problems with, [5.125], [5.130] South Australia, [5.120]

traditional approach, [5.125] Weldon v Neal, rule in, [5.130] different jurisdictions, in, [5.130] Anshun estoppel, [2.200], [2.210] Anton Piller orders, [3.60], [7.140] — see also Search and seizure orders Appeal appellate courts’ powers, [13.50] discretion, against exercise of, [13.140] errors of law as grounds for, [13.130] fact, findings of, [13.160], [13.170] facts, inferences from, [13.150], [13.170] final judgment, [13.40] fresh evidence and new arguments on, [13.100] grounds, [13.120] discretion, error in exercise of, [13.140] errors of law, [13.130] fact, findings of, [13.160] facts, inferences from, [13.150] High Court as highest appellate court, [2.40], [13.20] interlocutory judgment, [13.40] leave, [13.10], [13.20], [13.170] interlocutory judgment, [13.40] new trial, [13.60] application, [13.60] distinction from appeal, [13.50] grant of, [13.60] overview, [13.10] powers of appellate courts, [13.50] rehearing de novo, [13.70], [13.110] ordinary, [13.70], [13.90] fresh evidence and new arguments, [13.100] statutory duty, as, [13.170] right, [13.20] abolition, [13.170] security for costs, [13.30] standing to, [13.20] stay of proceedings, [13.30] courts’ discretion, [13.30] requirements for, [13.30] special or exceptional circumstances, [13.30] strict appeal, [13.70], [13.80] stricto sensu, [13.70], [13.80] types, [13.70] Appellate courts High Court as highest, [2.40], [13.20] powers, [13.50]

355

Principles of Civil Litigation

Appellate courts — cont rehear, statutory duty to, [13.170] Appointment mediators, [9.30] receivers — see Receivers Arbitration agreement, [9.140] commercial disputes, [9.130] conduct, [9.140] court ordered, [9.140] courts, alternative to, [1.180] decision, binding nature of, [9.130] definition, [9.130] determinative nature, [9.130] flexibility, [9.130] industry standards, use of, [9.130] quasi-judicial process, [9.130] referral order, [9.140] rules of evidence, not bound by, [9.140] traditional litigation, distinguished, [9.130] uniform commercial arbitration legislation, [9.130] Asset preservation orders breadth, [7.155] Corporations Act 2001 (Cth), under, [7.150] criteria for, [7.160] effect, [7.155] historical background, [7.150] Mareva order, [3.70] Australian Law Reform Commission costs as barrier to access to justice, [10.150] 2007 inquiry into client legal privilege, [8.330]

B

Bankruptcy capacity to sue, [2.120] Bill of costs taxation of costs, [12.120] Bullock order, [2.220], [12.60]

C

Calderbank offers admissibility, [10.20] costs arguments, onus of proof in, [10.70] costs implications, [10.40] courts’ discretion as to costs and, [10.70] criteria for, [10.30] drafting, [10.70] genuine compromise, requirement of, [10.50] 356

history, [10.20] overview, [10.20] precision and clarity, requirement for, [10.30] principle, [10.20] reasonable rejection, assessment of, [10.40]–[10.50] rejected, costs implications, [10.40] rule sanctioned offers to settle, versus, [10.60]–[10.70] coexistence, [10.70] costs arguments, onus of proof in, [10.70] differences, [10.70] unreasonable rejection, [10.40], [10.50] costs penalty, [10.40] Capacity to sue bankruptcy, effect of, [2.120] corporations, [2.120] mental incapacity, [2.120] minors, [2.120] public interest litigation, [2.130] unincorporated entities, [2.130] Case appraisal arbitration, advantages over, [9.150] assessment of each party’s case, [9.150] benefits, [9.170] disadvantages, [9.170] facilitation of settlement, [9.150] non-binding determinations, [9.150] overview, [9.150] Queensland, in, [9.160] costs, [9.170] process, [9.160] referred dispute, [9.160] Case appraiser (Qld) powers, [9.160] role, [9.160] written decision and accompanying certificate, filing of, [9.160] dissatisfied parties’ election to proceed to trial, [9.170] weight of, [9.160] Case management approaches to, [4.40] Australia, introduction in, [4.30] civil justice system, implications for, [4.250] concept, [4.25] costs and, [4.170] court lists general list, [4.60] general list with limited specialist lists, [4.95] no separate lists, [4.70] specialist lists, [4.60], [4.80], [4.85] cultural change among legal practitioners, [4.250] delay and, [4.160], [6.110] differential, [4.60], [4.80]

C

Index

Case management — cont Australian Capital Territory, [4.80] complexity-based streaming, [4.90], [4.95] general list with limited specialist lists, [4.95] Northern Territory, [4.90] Queensland, [4.95] South Australia, [4.95] specialist lists, [4.60], [4.80], [4.85] Victoria, [4.85] Western Australia, [4.95] directions hearings, [4.50] duty to do justice, [1.90] effectiveness, assessing, [4.150] evolution, [4.20], [4.25] framework, [4.60] identifying who manages case, [4.130] impact, [4.140] individual case management, [4.120] introduction in Australia, [4.30] issues raised by, [4.140] judges, changing role of, [4.50], [4.250] judges as “litigation managers”, [4.50] “justice versus efficiency” debate, [4.140], [4.190]–[4.240], [4.250] master calendar (or list) system, [4.110] objectives, [4.150] overview, [1.90], [4.10], [4.50], [4.260] pleading and, [5.120], [5.125] practice, [4.100] pre-trial process, [4.20], [4.25] procedural requirements, sanctions for noncompliance with, [4.50] role of, [1.90] rules and practice directions, [4.40] “sanction” power, [4.190] judicial attitudes towards, [4.200] schemes, [4.55] settlement rates and, [4.180] specialist lists, [4.60] standardised, [4.60], [4.70] general list, [4.60] no separate lists, [4.70] statutory provisions, [4.280] structures, [4.60] timetables for litigation, [4.50] trial process, in, [1.130] Cause of action pleadings, [5.10], [5.80] pleading in the alternative, [5.90] statutory basis of cause of action, [5.80] Civil courts appellate courts — see Appellate courts capacity to delivery justice reduced, [7.10] federal courts — see Federal courts national court system, [1.70] State courts — see State courts structure of, [1.40] Civil justice system case management’s implications, [4.250]

definition, [1.20] inquiry into, [1.80] overview, [1.10] procedural reform — see Reform Civil litigation economic conditions and litigation rates, [1.170] finalisation of cases, [1.190] inaccessibility of courts, [1.140] lawyers’ ethics, [3.100], [3.110] assessment of risks, [3.110] legal aid, [12.210] management, [4.50] over-litigiousness, [1.140] United States, [1.140] procedural reforms — see Reforms statistical data, publication of, [1.150] civil lodgments, general pattern of, [1.150]–[1.170] Magistrates Courts, primacy of, [1.160] tort crisis, [1.140], [3.20], [3.30] Class action, [2.240] representative action procedure, [2.250] Client legal privilege — see Legal professional privilege Commencement of proceedings discovery — see Discovery ethical rules, [3.100] improper purpose, for, [3.100], [3.110] no prospect of success, with, [3.110] statutory prohibition, [3.110] overview, [3.10] professional conduct rules and, [3.110] urgent applications, [3.40] Community legal centres, [12.210] Compelling or restraining acts contempt of court, [14.140], [14.150] sequestration, [14.140], [14.170] substitute performance, [14.160] warrants for possession or delivery, [14.180] Consent judgments methods, [6.180] overview, [6.160], [6.180] recalled, [6.180] setting aside, [6.180] Contempt of court, [14.140], [14.150] Corporations capacity to sue, [2.120] Costs activity costing, [12.40] 357

Principles of Civil Litigation

Costs — cont allocation regimes, [12.30] assessment, [12.120] award against non-party, [12.60] bill of costs, [12.120] budgets for litigation, [12.180] calculation, [12.40] common law courts, [12.60] “cost recovery” principle, [12.10], [12.50] costs-shifting, [12.30] court fees, [12.50] corporations, [12.50] courts of equity, in, [12.60] disbursements — see Disbursements discovery reduction to reduce costs, [12.150] discretion as to, [12.60] event costing, [12.40] indemnity costs — see Indemnity costs inherent jurisdiction, [12.60] interveners, [2.140] limitation, [12.160] litigation plans and budgets to reduce costs, [12.180] lump sum, [12.120] mitigation, [12.130] discovery reduction, [12.150] litigation plans and budgets, [12.180] maximum costs orders, [12.170] proportionality of procedure, [12.150] transparency of costs, increase, [12.190] non-parties — see Non-parties overview, [12.10] party-party costs — see Party-party costs plans for litigation, [12.180] proportionality of procedure – reducing costs, [12.150] recovery percentage, [12.70] regulation, [12.20] shifting, [12.30] solicitor-client costs — see Solicitor-client costs statutory presumption as to, [12.60] taxation, [12.120] transparency, increase, [12.190] “user pays” principle, [12.10], [12.50] Costs order Bullock order, [2.220], [12.60] case appraisers decision, following, [9.170] compensatory not punitive, [12.60] formal offers to settle, rejection indemnity for costs, [10.130] informal offers to settle — see Informal offers of settlement legal practitioners, imposed on, [12.100] no reasonable prospect of success, [12.100] lump sum, [12.120] maximum, [12.170] non-party, against, [12.60] non-party, in favour of, [12.110] rules, [2.200] Sanderson order, [2.220], [12.60] 358

security for costs — see Security for costs settlement offers, failure to accept, [10.10] Court fees, [12.50] corporations, [12.50] Court lists general list, [4.60] limited specialist lists, with, [4.95] no separate lists, [4.70] specialist lists, [4.60], [4.80] Courts of appeal High Court as highest, [2.40], [13.20] powers, [13.50] rehear, statutory duty to, [13.170] Cross-vesting legislation, [1.70], [2.70], [2.80] transfer of proceedings, [2.70], [2.80]

D

Damages default judgment liquidated damages, [6.35] unliquidated damages, [6.35] undertakings for — see Undertakings for damages Debt imprisonment for, [14.30] abolition, [14.30] South Australia, [14.30] transformation in Australia, [14.30] Default judgment affidavit in support, [6.60] appearance, failure to file, [6.30] case finalisation method, [1.190] damages liquidated, [6.35] unliquidated, [6.35] defective pleadings — see Defective pleadings defend, failure to, [6.30], [6.60] importance of, [6.60] justification for, [6.30] notice requirement, [6.50] overview, [6.10], [6.20] setting aside, [6.40]–[6.50] delay, effect of, [6.50] Evans v Bartlam, principles in, [6.45] Defective pleadings adequate particulars, failure to provide, [5.145] amendment, [5.140] case management, [5.145] cause of action, failure to disclose, [5.140], [6.70]

E

Index

Defective pleadings — cont challenges to, [5.140] default judgment, [6.75] defence, failure to disclose, [5.140] remedy failure, [6.70] striking out, [5.140], [6.70] grounds, [5.140], [6.70] technical defects, [5.145]

non-parties, by, [8.180] commencement of proceedings, after, [8.180] equitable discovery, [8.180] prior to proceedings, [8.180] possession, [8.130] relevancy, [8.140] restricted use, [8.220] duty on parties and their lawyers, [8.190] commencement of proceedings, after, [8.210] pre-action obligation, [8.200] failure to comply with requirements, [8.260] sanctions, [8.260] form, [8.100] information-gathering tool, [8.40] initiating, [8.80] modify, discretion to, [8.150] overview, [8.10], [8.40] parties, between, [8.60] principles, [8.50] procedural tools, limiting availability and scope, [12.150] procedure, [8.50] process, expense of, [8.30] public interest immunity — see Public interest immunity reform and, [1.110] starting, [8.80] timing, [8.90]

Delay dismissal for, [6.120] efficiency in litigation and, [6.120] Federal Court Rules, [6.120] “inactive cases” procedure, [6.120] Disbursements non-professional expenses, [12.80] overview, [12.80] professional, [12.80] Disclosure — see also Discovery costs, [12.190] experts’ reports — see Experts’ reports information gathering — see Information gathering personal injury claims, [3.90] pre-action, [3.90] civil litigation, effect on, [3.90] pre-litigation, [3.80] letter of demand, [3.85] pre-action protocols, [3.85] requirement to exchange information, [3.85] Queensland interrogatories, [3.80] pre-action requirements, [3.90] civil litigation, effect on, [3.90] requirements, [8.15] Air Canada v Secretary of State for Trade, [8.20] Esso Australia Resources v Commissioner of Taxation, [8.20], [8.330] South Australia experts’ reports, [8.280] pre-action requirements, [3.90] Discovery availability, [8.70] beginning, [8.80] civil litigation problem, as, [1.110] client legal privilege common law principle, [8.20] dominant purpose test, [8.20] sole purpose test, [8.20] compliance failure, [8.260] sanctions, [8.260] content of, [8.110] continuing, [8.160] costs reduction by limitation of, [12.150] documents, [8.10], [8.50] inspection, [8.230] list, adequacy of, [8.170] meaning of, [8.120]

Dismissal delay, for, [6.120] efficiency in litigation and, [6.120] Federal Court Rules, [6.120] “inactive cases” procedure, [6.120] want of prosecution, for Birkett v James, principle, [6.110] discretion, [6.110] factors, [6.110] inherent jurisdiction, [6.110] rationale for, [6.110] rules of court, [6.110] Dispute resolution courts and tribunals — see Civil courts mechanisms, [1.20] courts and tribunals, [1.20] ombudsman schemes, [1.20] organisations, [1.20] private services, [1.30] arbitration, [1.180] mediation, [1.180]

E Enforcement of judgments by, [14.60] compelling or restraining acts — see Compelling or restraining acts contempt of court, [14.140], [14.150] 359

Principles of Civil Litigation

Enforcement of judgments — cont court official, by, [14.60] debt, imprisonment for, [14.30] abolition, [14.30] South Australia, [14.30] transformation in Australia, [14.30] importance, [14.10] judgment meaning, [14.40] perfection, [14.50] methods of, [14.20] monetary — see Monetary judgments non-monetary — see Non-monetary judgments overview, [14.10], [14.190] procedures, [14.20] time, [14.50] who enforces judgement, [14.60] Estoppel Anshun, [2.200], [2.210] Ethics assessment of risks, [3.110] overview, [3.100], [3.110] Expert witnesses duties, [8.280] role of, [1.110], [1.130] Experts’ reports “hot-tubbing”, [8.280] pre-trial disclosure, [8.280] court order, by, [8.280] growth of, [8.280] States with extensive requirements, [8.280] privilege, and claims of, [8.280] role of, [8.280]

federation, [1.70] High Court — see High Court overlapping jurisdiction, [1.70] Federal Magistrates Court — see Federal Circuit Court Formal offers of settlement acceptance, [10.110] contents, [10.100] evaluation of, [10.150] form, [10.110] Northern Territory, [10.100] overview, [10.100] payment into court, [10.90] rejection of offer, [10.120] costs implications, [10.120]–[10.140] rules of court, [10.80] specified period, open for, [10.110] withdrawal, [10.110] written notice of offer, service of, [10.100] Freezing orders — see Asset preservation orders

H

High Court appellate court, highest, [2.40], [13.20] creation, [1.70] establishment allowed, [1.70] oldest existing federal court, [2.40] original jurisdiction, [2.40]

I

F

Indemnity costs offer of settlement, rejection of, [10.130] solicitor-client costs, [12.70]

Federal Circuit Court, [2.40] Federal Magistrates Court renamed, [2.40]

Informal offers of settlement courts’ costs discretion, [10.130] consideration of offer, [10.130] costs, as to, [10.130] failure to accept, costs consequences of, [10.140]

Federal Court commencement of proceedings via application, [3.140] creation, [2.40] jurisdiction, [2.40] accrued and associated, [2.40] limited subject matter, [2.40] Federal courts development, [1.70] Federal Circuit Court — see Federal Circuit Court Federal Court — see Federal Court federal jurisdiction, exercise of, [1.70] State courts, vested in, [2.40] federal/State jurisdictional structure, [1.70] 360

Information gathering adversarial principles, [8.10] client legal privilege — see Legal professional privilege disclosure — see Disclosure discovery — see Discovery documentary information, [8.50] litigating parties, by, [8.10]–[8.15] oral testimony, [8.10] overview, [8.10] procedural tools for, [8.10], [8.30], [8.40] discovery, [8.40]

J

Index

Information gathering — cont litigation process, efficiency of, [8.30] outcome, accuracy of, [8.30] party control of dispute, [8.30] procedural equality, [8.30] process, [8.10]–[8.15] expense, [8.30] Injunctions interim — see Interim injunctions interlocutory — see Interlocutory injunctions mandatory — see Mandatory injunctions overview, [7.10], [7.15], [7.20] pre-trial — see Pre-trial injunctions Inspection and testing of property courts’ power, [8.300] concomitant powers, [8.300] fishing prohibited, [8.300] limitations, [8.300] orders, [8.300] Insurance — see Legal insurance schemes Interim injunctions criteria for, [3.50] ex parte application, [7.20] nature of, [3.50], [7.20] Interlocutory injunctions assessment of merits, alternative approach, [7.70] overview, [7.20] Interlocutory orders appeal, [13.40] applications process, [4.270] definition, [4.270] final and, distinction, [13.40] overview, [4.270] power to make, [7.15] Interrogatories answers departing from, [8.250] time limit for, [8.240] use of, [8.250] availability, [8.240] courts’ attitude towards litigation, as barometer of, [8.240] failure to comply with requirements, [8.260] sanctions, [8.260] inquiries, duty to make, [8.245] jurisdictions, different rules in different, [8.240] limitations, [8.245] material facts in dispute, [8.245] New South Wales, [8.240] objection to answering, [8.245]

overview, [8.10], [8.240] Queensland, [3.80], [8.240] pre-action requirements, [3.90] scope, [8.245]

J

Joinder Anshun estoppel, [2.200], [2.210] causes of action, of, [2.170] considerations affecting, [2.200] consolidation and joint trials, [2.230] criteria for grant of, [2.230] contribution notices, [2.190] cost rules, [2.200] Bullock order, [2.220] Sanderson order, [2.220] counterclaims, [2.180] criteria for, [2.150] multiplicity of proceedings, avoidance of, [2.150], [2.230] overview, [2.150] parties, of, [2.160] set-offs, [2.180] third party claims, [2.190] Joint Rules Advisory Committee, [1.130] Judgments compelling or restraining acts — see Compelling or restraining acts enforcement — see Enforcement of judgments final, definition, [13.40] final and interlocutory, distinction, [13.40] monetary — see Monetary judgments perfection, [14.50] what is, [14.40] Jurisdiction of courts federal courts — see Federal courts legislation, conferred by, [2.20] overview, [2.10] State courts — see State courts subject matter inherent jurisdiction, [2.30] legislation, conferred by, [2.20] limited by, [2.20] State and Territory courts, of, [2.30] territorial, [2.50] choice of forum, [2.80] common law principles, [2.20], [2.50] extended jurisdiction, [2.60] initiating process, [2.70] reach, limited by, [2.20] service ex juris, [2.60] service outside Australia, [2.60], [2.90] rules of court, [2.100] when possible, [2.100] transfer of proceedings, [2.70], [2.80]

361

Principles of Civil Litigation

States and Territories, in, [3.20] statutory provisions, [3.20]

L

Lawyers adversarialism, excessive, [3.100] business orientation, increasing, [3.100] clients, obligation to clear and competent advice, [3.110] model Legal Profession Acts, [3.110] contingency fees, [12.220] costs orders against, [12.100] reasonable prospect of success, [12.100] court officer role, [3.100] discovery process and, [8.190] duties, [8.200]–[8.210] duty to the court, [3.100] ethics, [3.100], [3.110] assessment of risks, [3.110] legal aid, [12.210] legal work, curtailing, [12.130], [12.140] discovery reduction, [12.150] litigation plans and budgets, [12.180] maximum costs orders, [12.170] proportionality of procedure, [12.150] transparency of costs, increase, [12.190] “no win, no fee”, [12.220] pro bono work, [12.210] professional misconduct, [8.210] Legal aid, [12.210] Legal costs — see Costs Legal insurance schemes, [12.230] after the event insurance, [12.230] before the event insurance, [12.230] Legal professional privilege common law principle, [8.20], [8.330] communications client and lawyer, between, [8.320] confidential information protection, [8.320] dominant purpose test, [8.20], [8.330] inquiry into, [8.330] mediation — see Mediation rationale, [8.320] scope, [8.330] sole purpose test, [8.20], [8.330] Esso Australia Resources v Commissioner of Taxation, [8.20], [8.330] Limitation period claims, times for various, [3.20] commencement of, [3.20] Commonwealth, in, [3.20] delay, effect of, [3.20] equitable claims, [3.20] laches, [3.20] extension of time, [3.20], [3.30] long stop and short stop, [3.30]

362

Litigation costs — see Costs Litigation funding alternate sources, [12.130], [12.200] community legal centres, [12.210] contingency fees, [12.220] legal aid, [12.210] legal insurance schemes, [12.230] litigation funders, [12.240] overview, [12.240]

M Mandatory injunctions additional criteria, [7.80] characterisation, [7.80] ongoing conduct, [7.80] undertakings for damages — see Undertakings for damages Mareva injunctions — see Asset preservation orders Mediation advantages, [9.90] compulsory referral to, [9.80] confidentiality, requirement of, [9.60] court compelled mediation, [9.70] extent of, [9.60] identical information obtained by other means, [9.60] limitations, [9.60] limited confidentiality, issues stemming from, [9.60] other rules of evidence, interaction with, [9.60] public policy, [9.60] court annexed, [9.70]–[9.120] court annexed ADR process, most popular, [9.30] court compelled, [9.70]–[9.80] confidentiality requirement, [9.70] evaluation of, [9.110] voluntary and, distinction between, [9.70] courts, alternative to, [1.180] definition, [9.30] disadvantages, [9.100] power imbalances, [9.100], [9.110] evaluation of, [9.110], [9.120] flexibility, [9.30] initiation, [9.30] institutionalisation of, [9.80], [9.110] legal professional privilege and, [9.60] mandatory, [9.80]–[9.90], [9.110] benefits to society, [9.90] mediator — see Mediator overview, [9.30]

O

Index

Mediation — cont party inequality, [9.100] phases, [9.40] process of, [9.40] purpose of, [9.30] referral to, [9.70] compulsory, [9.80] settlement negotiation privilege and, [9.60] identical information obtained by other means, [9.60] limitations, [9.60] other rules of evidence, interaction with, [9.60] stages, [9.40] voluntary and compelled, distinction between, [9.70] Mediator appointment of, [9.30] facilitative, [9.40] interventionist, [9.50] powers of, [9.30] role of, [9.40]–[9.50] Medical examination concept, expansive view of, [8.290] overview, [8.290] request for, [8.290] refusal consequences, [8.290] what constitutes, [8.290] Mentally incapable persons capacity to sue, [2.120]

overview, [9.150] what constitutes, [9.150] New trial appeal, distinction from, [13.50] application, [13.60] grant of, [13.60] overview, [13.60] Non-monetary judgments contempt of court, [14.140], [14.150] sequestration, [14.140], [14.170] substitute performance, [14.160] warrants for possession or delivery, [14.180] Non-parties costs and, [12.90] award against, [12.60] costs order in favour of non-party, [12.110] real party, where non-party is, [12.110] lawyers, costs against, [12.100] Notices to admit authenticity of documents, [5.150] availability, [5.150] costs, effect on, [5.150] number, [5.150] purpose of, [5.150] response, [5.150] specified facts, [5.150]

O Minors capacity to sue, [2.120] Monetary judgments, [14.70] attachment order, [14.100] future earnings, attachment of, [14.110] charging orders, [14.120] enforcement, [14.70] garnishee order, [14.100] bank accounts, [14.100] future earnings, attachment of, [14.110] pensions, [14.110] instalments, paid in periodic, [14.90] receiver appointment, [14.130] extraordinary remedy, as, [14.130] warrants — see Warrant

N

Neutral evaluation advantages of, [9.150] arbitration, advantages over, [9.150] evaluator’s role, [9.150] meaning of, [9.150] non-binding determinations, [9.150]

Offers to compromise — see Formal offers of settlement Offers to settle adverse costs order, [10.10] Calderbank offers — see Calderbank offers failure to accept, [10.10] costs penalties, [10.10] formal — see Formal offers of settlement informal — see Informal offers of settlement unreasonable rejection, [10.10] Ombudsman schemes, [1.20] Orality, [11.20], [11.200] Originating process appearance or notice of address, [3.210] causes and matters, for, [3.130], [3.140] causes and matters, historical distinction, [3.130] Federal Court “application” for commencement of proceedings, [3.140] 363

Principles of Civil Litigation

Originating process — cont forms, [3.120] history, [3.130] overview, [3.120] procedural rules, [3.120] service, [3.140] summons (SA), [3.140]

P

Parties amicus curiae, [2.140] capacity to sue, [2.120] bankruptcy, effect of, [2.120] corporations, [2.120] mental incapacity, [2.120] minors, [2.120] public interest litigation, [2.130] unincorporated entities, [2.130] class action, [2.240] representative action procedure, [2.250] contribution notices, [2.190] cross-claims, [2.190] discovery, duty related to, [8.190] commencement of proceedings, after, [8.210] pre-action obligation, [8.200] identification of, [2.10], [2.110] interveners, [2.140] joinder — see Joinder legal personality, [2.120] multiplicity of proceedings, avoidance of, [2.150] representative action procedure, [2.250] representative proceedings, [2.240] service on particular, [3.180] third party claims, [2.190] Party-party costs costs recovered, [12.70] meaning of, [12.70] standard costs, [17.70] Performance substitute, [14.160] Pleadings abolition, [5.170] alternative, pleading in the, [5.90] alternative mechanisms, [5.170] amendment to, [5.120] defects, correction of, [5.140] documents, [5.120] limitation period, conflict with, [5.130] New South Wales, [5.120] problems with, [5.125], [5.130] South Australia, [5.120] traditional approach, [5.125] Weldon v Neal, rule in, [5.130] different jurisdictions, in, [5.130] 364

approaches to, [5.30] case management and, [5.120], [5.125] cause of action, [5.10], [5.80] alternative, pleading in the, [5.90] statutory basis of, [5.80] content, [5.50] brevity, requirement of, [5.70] facts not law, [5.80] level of generality, [5.60] material facts evidence, as not, [5.60] evidence, distinguished, [5.60] particulars, distinguished, [5.65] particulars, [5.65] material facts, distinguished, [5.65] sufficiency of, [5.65] core functions, [5.20] Banque Commerciale SA (in Liq) v Akhil Holdings Ltd, [5.30] cost and delay, issues of, [5.160] defective — see Defective pleadings disputes, [5.160] factual and notice pleading, [5.165] formal requirements, [5.110] certification, [5.110] disclosure statement, [5.110] layout, [5.110] signing, [5.110] States and Territories, in, [5.110] verifying affidavit, [5.110] foundation, as, [5.20] function, [5.30] core, [5.20] importance, [5.30] legal conclusions, [5.80] live issues, [5.10], [5.150], [5.165] necessity, [5.170] notices to admit, [5.150] authenticity of documents, [5.150] specified facts, [5.150] overview, [5.10] points of law, [5.80] pre-action requirements, [5.170] process, [5.20], [5.40] defence, filing and service of, [5.40] statement of claim, filing, [5.40] timeframes, [5.40] reform, [5.170] role, rethinking, [5.170] rules for specific matters, [5.100] summary judgment, [6.130] “triumph of form over substance”, [5.160] United States abbreviated process, [5.160] discovery, [5.160] pre-trial process, [5.160] used, where, [5.20] Power to inspect — see Inspection and testing of property Pre-trial injunctions criteria for, [7.30] balance of convenience, [7.30], [7.60]

R

Index

Pre-trial injunctions — cont inadequacy of damages, [7.30], [7.50] serious question to be tried, [7.30], [7.40] interlocutory injunctions as alternative, [7.70] “just and convenient”, [7.25] statutory provisions, [7.25] when to order, [7.25] Pre-trial termination of proceedings — see also Termination of proceedings categories, [6.10] default judgment — see Default judgment defective pleading — see Defective pleading discontinuance, [6.170] unilateral, [6.170] dismissal for want of prosecution — see Dismissal judicial, [6.15] party-based, [6.10], [6.160] procedural failings, for, [6.20] scope, [6.10] summary judgment — see Summary judgment Preservation orders asset preservation breadth, [7.155] Corporations Act 2001 (Cth), under, [7.150] criteria for, [7.160] effect, [7.155] historical background, [7.150] Mareva order, [3.70] interim distributions of property/income, [7.120] overview, [7.100] property, preservation of, [7.110] property, what is, [7.110] purpose of rule, [7.110] receivers — see Receivers sale of property, [7.130] search and seizure orders, [3.60] Anton Piller order, [3.60], [7.140] Canada, [7.146] criteria for, [7.144] exceptional nature of, [7.140] overview, [7.140] Practice Note, [7.144] undertakings for damages, [7.144] Privilege categories, [8.310] experts’ reports — see Experts’ reports legal professional privilege — see Legal professional privilege overview, [8.40], [8.310] pre-trial process and, [8.310] public interest immunity — see Public interest immunity scope, [8.310]

self-incrimination — see Privilege against self-incrimination settlement negotiation — see Settlement negotiation privilege Privilege against self-incrimination corporations, claimed by, [8.350] origin, [8.350] overview, [8.350] scope, [8.350] Pro bono work, [12.210] Procedural orders non-compliance with, [6.80] obtaining, [4.270] Property, power to inspect — see Inspection and testing of property Public interest immunity balancing public interests, [8.360] Cabinet documents, [8.360] controversial matters, [8.360] high level government information, [8.360] conclusive certificates, issuance of, [8.360] national security, [8.360] overview, [8.360] Public interest litigation capacity to sue, [2.130]

R

Receivers appointment of, [7.170], [7.175] criteria, [7.175] enforcement of monetary judgment, for, [14.130] ex parte application, [7.175] extraordinary measure, as, [7.170] powers of, [7.175] Reform adjudication, alternatives to, [1.100] industry based schemes, [1.170] case management — see Case management civil jury trials, limited role of, [1.110]–[1.120] civil justice system, inquiry into, [1.80] Access to Justice report, UK, [1.80] Australia, [1.80] United Kingdom, [1.80] United States, [1.80] discovery — see Discovery European civil law systems, convergence with, [1.130] expert witnesses, role of, [1.110], [1.130] future directions, [1.130] harmonisation, [1.130] 365

Principles of Civil Litigation

Reform — cont judge driven process, [1.130] juries, limitation of use, [1.110]–[1.120] oral evidence, minimisation of, [1.110] pleadings, [5.170] pre-action procedural obligations, [1.130] pre-trial settlement, [1.100] “proportionality” in litigation, concept of, [1.130] summary judgment reform proposals, [6.150] trial procedure, revisiting continuous trial, common law requirement of, [1.120] discontinuous trial, advantages of, [1.120] Rehearing de novo, [13.70], [13.110] ordinary, [13.70], [13.90] fresh evidence and new arguments, [13.100] Representative proceedings, [2.240] representative action procedure, [2.250] Rules Committee, [1.130] Rules of court case management, [4.40] want of prosecution, dismissal for, [6.110]

extended jurisdiction, [2.60] Hague Service Convention, [2.100] initiating process, [2.70] ordinary, [3.200] originating process time of service, [3.140] out of State, [2.70] outside Australia, [2.60], [2.90] rules of court, [2.100] when possible, [2.100] particular parties, on, [3.180] personal service, [3.160] methods, [3.160] proof of, [3.170] rules, [3.150] substituted, [3.190] within Australia, [2.70] Settlement negotiation privilege coverage, [8.340] mediation — see Mediation rationale, [8.340] scope, [8.340] “without prejudice” communications, [8.340], [9.60] importance of use of phrase, [8.340] Settlement offers — see Offers to settle Single climatic trial, [11.210] Single continuous trial, [11.20]

S

Sanderson order, [2.220], [12.60] Search and seizure orders Anton Piller order, [3.60], [7.140] Canada, [7.146] criteria for, [7.144] exceptional nature of, [7.140] overview, [7.140] Practice Note, [7.144] undertakings for damages, [7.144] Security for costs appeals, for, [13.30] Corporations Act 2001 (Cth), under, [7.185] foreign plaintiffs, [7.185] impecunious plaintiffs, [7.185] overview, [7.180] principles, [7.180] rules, [7.185] Sequestration, [14.140], [14.170] Service cross-vesting legislation, [2.70] documents, of, [3.150] ex juris, [2.60] 366

Solicitor-client costs disbursements, [11.80] indemnity costs, [12.70] overview, [12.70] Splitting trials, [11.170] State courts federal jurisdiction, exercise of, [1.70] historical development, [1.50]–[1.60] specialist courts, [1.60] structure of, [1.50] subject matter jurisdiction, [2.30] Supreme Courts, [1.60] Stay of proceedings appeals and, [13.30] courts’ discretion, [13.30] requirements for stay, [13.30] special or exceptional circumstances, [13.30] Striking out defective pleadings, [5.140], [6.70] grounds, [5.140], [6.70] pleadings, [6.130] Subpoena attendance at trial, [8.270]

Index

Australian Capital Territory, [11.40] chronology of, [11.160] common law trial, [11.20] current issues and possible developments, [11.190] defamation cases, [11.130] Federal Court, [11.50] function of, [11.20] judgments, [11.180] mode of, [11.30] New South Wales, [11.60] Northern Territory, [11.70] orality, [11.20], [11.200] overview, [11.10] party control, [11.20] process and issues, [11.220] process, [11.150] Queensland, [11.80] single climatic trial, [11.210] single continuous trial, [11.20] South Australia, [11.90] splitting trials, [11.170] Tasmania, [11.100] trial by jury, parties allowed to elect, [11.140] verdicts, [11.180] Western Australia, [11.110]

Subpoena — cont conduct money, [8.270] disadvantages, tactical, [8.270] early return, [8.275] forms, [8.270] function of, [8.270] grounds for, [8.275] non-compliance, sanctions for, [8.275] objection, [8.275] production of documents, [8.270] setting aside, [8.270] trial, returnable prior to, [8.270] Substitute performance, [14.160] Summary judgment application for, [6.140] cases with no real prospect of success, [6.135] caution using, [6.130] efficiency in litigation and, [6.135] expansion of use, [6.135] historical background, [6.130] overview, [6.10] prevalence of, [6.140] purpose, [6.130] reform, proposals for, [6.150] restrictions, relaxation of, [6.140] striking out pleadings, [6.130] United States, [6.140] weak cases, [6.135] Supreme Courts civil jurisdiction, [2.30] inherent jurisdiction, [2.30] State courts, [1.60]

W

U

Undertakings for damages dispensing with, [7.90] enforcement, [7.90] overview, [7.90] search and seizure orders, for, [7.144]

T Unincorporated entities capacity to sue, [2.130] Termination of proceedings consensual — see Consent judgments default judgment — see Default judgment defective pleading — see Defective pleading dismissal for want of prosecution — see Dismissal power to stay proceedings, [6.100] pre-trial — see Pre-trial termination of proceedings procedural orders, non-compliance with, [6.80] self-executing orders, [6.90] defaulting parties, safeguards for, [6.90] springing orders, [6.90] summary judgment — see Summary judgment Tort crisis, [1.140], [3.20], [3.30] Trial — see also New trial

W

Want of prosecution dismissal for Birkett v James, principle, [6.110] discretion, [6.110] factors, [6.110] inherent jurisdiction, [6.110] rationale for, [6.110] rules of court, [6.110] Warrant possession or delivery, for, [14.180] sale, of, [14.80] seizure and sale, for, [14.80] Weldon v Neal rule in, [5.130] different jurisdictions, in, [5.130]

367