Category Archives: Practice Makes Perfect

Practice and Procedure Notes

Defaults are Expensive, Emails are Free

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In an application for setting aside a default judgment, Master Mossop, considered an expanded test including what notice the Plaintiff notify the Defendant before filing for default judgment. Stormer Building Group v Johnson [2014] ACTSC 23 considered the implications of a hastily filed default application in instances where no correspondence had been received from the Defendant.

r1128 creates a general discretion for the setting aside and the Court generally follows Evans v Bartlam [1937] AC 473 at 480 which confirms that the discretion is unfettered. The Master continued to set out the usual test:

In Ryan v Adams (1993) 112 FLR 474 at 476, Miles CJ said of the relevant principles that, “As far as this Court is concerned, the most authoritative pronouncements are those in the Federal Court in Davies v Pagett (1986) 10 FCR 226.”
11. In that case, the Court noted that the trial judge had set out a summary of the principles from Lord Wright’s speech in Evans v Bartlam, and then adopted the trial judge’s summary of the relevant considerations as follows:
1. The length of the delay between the time for delivery of defence and the date of interlocutory judgment. On this aspect, the giving of notice of intention to apply for judgment may be a relevant factor.
2. The length of delay between the entering of such judgment and the application to set it aside.
3. The reasons for such delay. The defendant’s own contribution to the delay, as contrasted with the delay caused by his legal advisers, may fall for consideration.
4. The evidence as to whether or not the defendant may have a defence? The probability of a successful defence need not be demonstrated, and the fact that a defendant’s case may appear weak, will seldom be a bar.
5. Whether the plaintiff will be prejudiced by setting the aside the judgment, the nature of the prejudice being such that it cannot adequately be compensated by an order for costs.

Refshauge J in part of the Ezekial-Hart v Law Society saga tacked on the judgment of Wallace J in Pope v Aberdeen Transport Co Pty Ltd [1965] NSWR 1550 at 1551 where his Honour said:

I think that where the party signing judgment does so without giving warning of its intention to do so, such party will generally, though perhaps not invariably, be in difficulties on a summons to set aside the judgment where a defence on the merits is disclosed.

Long story short, this additional test has the effect of adding the impetus to the party seeking the apply for default to warn the other side before applying, especially when the application is made so soon to the expiry date for filing. The filling of a defence is not the same as the disclosure required by Ezekial-Hart. In these circumstances, where knowledge of a defence can be constructed, practitioners will have a harder time of explaining why no contact was made.

From a policy point of view, default judgments are relatively simple to have overturned. Hence a hastily applied for default creates more time and expense to the parties and the court as opposed to a simple email or even just allowing a bit of time to pass.

Despite the eagerness of the Plaintiff, there was still a delay on the part of the Defendant in filing to set aside the judgment, and for this the Plaintiff was awarded costs with a pretty accelerated timetable for the Defendant to file their defence, evidence etc.

Failing to communicate intended actions is also possibly a breach of solicitors rules, but in the case of Stormer it was definitely short of this, and frankly 99% of the time it will be too. That being said, it is difficult not to froth at the mouth when the time for filing passes, but do try to resist the temptation, and send a quick email clearly setting out the intended action and possible consequences, particularly when involved with a self-rep.

Possible High Court showdown over Barbaro

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A full bench Federal Court has set the stage for a showdown over whether regulatory or disciplinary bodies can submit on the appropriateness of a particular sentence.

In Barbaro v The Queen [2014] HCA 2 the Court reached the view that in criminal proceedings the prosecution should not nominate the specific sentencing result or the range within which it should fall.

Whilst binding on criminal proceedings, it was a point of contention whether this applied to quasi-criminal proceedings such as disciplinary or administrative matters. Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59, or as the much less clunky “the CFMEU case” found that many matters are often mistakenly classified as “civil”, because it is apparent they are not “criminal”.

The Court found that in reality, civil should be viewed as proceedings between private parties and any matters involving the state were bound by similar procedural rules. Citing Legal Services Commissioner v Nomikos [2014] VCAT 305 with approval:

‘Pecuniary penalties are sought by the State against its citizens, acting in and on behalf of the public interest (rather than as a litigant in its own interests). In investigating conduct that can result in a pecuniary penalty, State enforcement bodies are armed with intrusive investigative powers to identify and establish breach.  For the enforcement bodies in question, those powers are the same as, or may in some ways be more profound than, the powers they use in criminal investigations.

The various deals that are often struck between defendants and disciplinary bodies such as ASIC, ATO, AFMA, Legal Services Commissioner etc. are in fact a matter for the Court and it is inappropriate for a state body to comment on the appropriate penalty.

There are converse public policy considerations that point to the benefit of regulatory bodies being able to save time and money by facilitating cheap pleas of guilty, with a real benefit for the defendant, but the obvious flip side is that the Legislature have in fact already accounted for discounts for early pleas and other such items.

In a trifecta for Victoria, CFMEU relies on the Barbaro HC decision in contradiction of Matthew’s v R [2014] VSCA 291 in relation to non-criminal submissions.

It appears inevitable that the decision will go to the High Court and regulators and disciplinarians should be well aware of the possible implications.

“Without Prejudice”

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‘Without Prejudice’ offers are a vital part of litigation in the Territory and indeed throughout most of the Common Law world. In Simaan General Contracting Co v Pilkington Glass Ltd [1987] 1 All ER 345, Judge John Newey QC at 347, dealing with the question of without prejudice communication, said:

It is public policy to encourage litigants to settle their differences and, since they are most unlikely to negotiate satisfactorily if every word which they utter and every offer which they make can be quoted against them later, the general rule has long been that nothing which is written or said ‘without prejudice’ can be referred to in Court subsequently without the consent of all parties concerned.

‘Without Prejudice’ is a form of privilege claimed to essentially allow practitioners to discuss issues openly and for those discussions, whether written or oral, to be considered ‘without prejudice to the maker of the statement’. The history of ‘Without Prejudice’ has interesting origins and seems to have originally been adopted on the basis that the evidence relating to these types of discussions or correspondence hold minimal evidential value rather then the current view relating largely to public policy.

It is unclear from my readings whether the principles of “Salvis Juribus” were common in the ancient world, but the principle of comments being considered ‘Without Prejudice’ certainly came into popular use following the reformation, essentially allowing the largely academic discussion of ideas which could be considered revolutionary or heretical without bringing the maker of the comments under the wrath of the Church or State.

‘Without Prejudice’ is provided for three-fold in the Territory. The common law protections which exist were essentially codified under s131(1) of the Evidence Act 2011, which states that any communication between any of the parties to a dispute that occurs during the negotiation, or any document prepared in connection with the negotiation cannot be adduced as evidence in Court. Additionally, r 1006 of the Courts Procedures Rules 2006 provides essentially the same protections but also more specifically rules out references to such material.

‘Without Prejudice’ refers to the privilege that attaches to written or verbal statements made by a party to a dispute in a genuine attempt to settle that dispute. However ‘Without Prejudice’ is not an indiscriminate shield that can be used to protect material that would otherwise be admissible, and documents which make a demand or seek to assert rights will not generally be covered by the privilege.

It is not vital to include the words ‘Without Prejudice’ to establish this privilege and the courts will consider the inferred intention of the parties as opposed to the actual use of the words. Conversely, the inclusion of the words when the material is not indeed covered by the privilege can incur an adverse costs order. However, to avoid a potential argument in respect of the use of a document in Court, it is still recommended to clearly state the basis on which the offer is made. Additionally it is not vital to include the words on all subsequent correspondence provided they are part of the same ‘chain of correspondence’…but just include it to be sure.

‘Without Prejudice’ will generally not apply to letters of demand, correspondence for the purpose of finalising an agreement that is not a settlement or when litigation is not contemplated or the mere assertion of rights.

The privilege can apply only to parts of documents that are actually privileged and for this reason it is best to keep correspondence relating to settlement separate from other topics to ensure that the correspondence as a whole can have privilege applied to it.

For a discussion of Calderbank offers and “Without Prejudice Save as to Costs” check out the posts relating to Calderbank offers.

For a recent Territory decision, see the Master’s recent discussion for hints at the Supreme Court’s stance: Greenway v Teoh [2014] ACTSC 224 or read the case note on this site.

Alternatively McNicol’s Law of Privilege (1992) (around p480) or for a bit more flair Desiatnik Legal Professional Privilege in Australia.