TOPIC 1

SEMINAR 1
Process, Open Justice and Fairness
Adversarial System of Civil Litigation
AIMS:
Consider what procedural law is and the sources of it.
Appreciate the principles of open justice and fairness.
Identify the features of an adversarial system of litigation.
Appreciate and critique the shortcomings of an adversarial system.
Consider the reforms to the adversarial system.
Discuss the central themes that recur throughout and bind the sessions
and parts of the course.
1.1
Procedural law
KLV: 1-9 [1.10-1.80]:
Procedural law is rules which are directed to governing or regulating the mode
or conduct of court proceedings; McKain v RW & Co (SA) (1991) per Mason CJ. It
is described as adjectival law which regulates how substantive rights and
obligations are claimed and enforced. Substantive law is governed by lex loci
delicti which means the applicable law is the law of the place where the wrongful
act took place. Procedural law is governed by lex fori which means the applicable
laws of procedure and evidence will be the laws of the forum.
Dame Hazel Genn:
The purpose of procedural law is to facilitate dispute resolution. The basis of the
rules lies in procedural fairness, due process, promoting access, delays and
costs. No system can be without delay or costs, but there must strike a balance
between procedural fairness. It is a ritual of extreme significance that
characterises a civilised society drawing a link between accuracy and evidence.
It provides even-handedness in opportunities of both parties to participate.
Though giving too much opportunity will incur most costs and increase delays,
thus the question is how much justice can we forego?
Powers provided by Statute:
The sources of procedural law are found in the Civil Procedure Act 2005 (NSW)
(CPA) and the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). The CPA and
UCPR apply in the Supreme, Local and District Courts. Other jurisdictional rules
are found in the Supreme Court Rules 1970 (SCR), District Court Rules 1973
(DCR) and Local Court Rules 2009 (LCR). Rules regulating the information
admissible as evidence of the substantive cause of action are provided by the
common law and the Evidence Act 1995 (NSW) (EA).
Inherent and implied jurisdiction:
There is inherent jurisdiction in the superior courts of record to regulate their
processes and prevent an abuse of process. The lower District and Local Courts
have limited jurisdiction expressly under statute or by implication from statutory
provision conferring particular jurisdictions. That is, superior courts have the

inherent power to punish summarily contempt or any interference with due

justice.
Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435:
The following case involved P and his partner taking out a loan from R. Later, R
issued a Statement of Liquidated Claim at the DC for a sum of $92,000 plus
interest from P. In the proceedings, the DCJ issued a limited order or restraint
order until further order or payment of the verdict preventing P from selling the
house and thus incurring a greater debt from the interest. This had the effect of
being stayed indefinitely. On appeal to NSWCA, the court held that the lower
court had unlawfully used an implied power outside its jurisdiction.
1.2
Open justice
KLV: 16-17 [1.150-1.160]:
Cards on the table approach:
Promotion of cooperation will greatly reduce expenses and promote efficient and
quick disposal of cases. It does this by identification of the dispute, clarity,
precision and openness in the conduct of litigation. Moreover, there is still
statutory duty on the party to follow these case management principles, as well
as powers by the court to assist and punish those who fail to follow the rules.
Principles of Open Justice:
Open justice is one of the most fundamental aspects of justice for it is not justice
done, but justice seen to be done. It invites the public to its forum so that anyone
can see how justice is done. This promotes impartiality as it is performed in
public and exposed to the cathartic glare of publicity and is the greatest defence
against arbitrary power and ensures that justice is administered fairly and
impartially.
Rinehart v Rinehart [2014] FCA 1241 (para 21-31)
1.3 Fair trial
KLV: 51-58 [1.320-1.380]:
The truth can cost too much: J Spiegelman
The principles of a fair trial are reflected in the numerous rules and procedures
which are itself continually changing and adapting. In Australia, the right to a fair
trial is not enshrined in the constitution, but instead it is reflected in the
jurisprudence as a standard or an inherently flexible character as a principle. The
principle is exercised by the courts which are have inherent power to control the
processes of the court and prevent the abuse of its own power and process, thus
preventing it from becoming an instrument of unfairness. The courts have an
overriding duty to administer justice with fairness and impartiality and to
maintain public confidence.
The constitution is amendable although any attempt by the legislature to do so
would act contrary to the manner of natural justice prescribed by chapter 3. In

saying so, the constitution is difficult to amend and provides some form of right
as inherent in other jurisprudence systems.
The obligation to obey the rules of natural justice applies with force in judicial
proceedings. These are fair hearings, reasonable notice of case, opportunity to
present case, the imposition of onus of proof, the differential standards of proof
etc. Moreover, the detailed rules regarding to evidence admission, such as crossexamination, disclosure and notice.
Stead v State Government Insurance Commission [1986] HCA
In this case, the plaintiff sustained neural injuries from the negligence of the
defendant in a motor vehicle accident. The defendant at trial relied on a doctors
report that the neural injuries were not caused in relation to the accident. To this
the trial judge held that he would not consider this evidence and did not allow
the plaintiff to develop a submission to counter it. In the judgement, the trial
judge specifically referred to that evidence and gave judgement for the
defendant. The appeal to the SAFC held that the enquiry whether a miscarriage
of justice has occurred involves asking whether the event said to cause a
miscarriage could have made any difference to the result.
At the HCA (Mason, Wilson, Brennan, Deane and Dawson JJ held that all its
citizens are entitled to a fair trial and that no cause is lost until the judge has
found it, thus no appellate court can affirm it. For this reason, any departure from
the rules of natural justice will entitle the aggrieved party to a new trial.
The HCA held that the FC judges have all the powers of a primary judge,
including the power to draw inferences of fact: SCR O 58, rr 6 and 14. However,
courts are reluctant to use this power to order a new trial sought to remedy a
denial of natural justice relevant to finding of fact if it could make no difference
to the result already reached. Regardless, the denial of justice is an entitlement
to a new trial and thus the appeal was allowed and new trial was ordered.
Mastronardi v New South Wales [2007] NSWCA 54:
M was seriously assaulted in his prison cell. He gave evidence that he was
attacked because he was recognised as a former security guard. He alleged that
the state failed to provide protection against the threat of a physical attack. His
claim was rejected and he appealed from the decision.
In the NSWCA, Basten, Ipp and Campbell JJA held that there was a substantial
miscarriage of justice and that he was entitled for a retrial pursuant to UCPR
51.53. In grappling this issue, their honours held that the rule held that a new
trial could rarely be obtained because it turns on whether the ultimate outcome
of the case would change. This demeanour-based assessment is difficult to
discern whether a different result would have occurred. This is particularly
prevalent in trial alone judges where the assessment process is less clear, but
identified in reasons of their judgements. Following from earlier cases, their
honours held that for procedural fairness, a hearing where the evidence given is
to be given proper, genuine and realistic consideration in the decision
subsequently made.
1.4
Adversarial system of litigation
KLV: 10-16 [1.90-1.140]:

Adversarial system of civil litigation:

A party controlled dispute that define the dispute, present evidence and
argument.
Precedent, procedural rules and laws of evidence.
Reactive, impartial judge as an umpire.
Reliance on oral testimony adduced from witnesses and is subject to crossexamination. Advocates use oral argument in the presentation of their
case.
Trial is climatic end of the litigation process (distinct from pre-trial stages)
Use of trial transcript in the appeal
Inquisitorial system:
Judges role is proactive and inquisitive
Codes with commentary from legal scholars
Minimal rules for courtroom practice
Emphasis on documentary proof and not on cross-examination
No rigid separation between trial and pre-trial phases
No use of transcript to record court proceedings
Review of adversarial system:
The common and civil law system dominate western legal systems due to the
proliferation of their respective empires. It is a political or social ideology which
focuses on the objectives, source of law and the legal method. Australia derives
its law from the common law of England, though may contain some hybrid
characteristics of the civil law system. Important defining features include:
Judge-made case law rather than general statements of principle
Source of law in texts of individualised judgements and the primary
statute law
Applies to all legal persons including the state
No division between private and public law
Inductive form of legal reasoning
Litigation is the climax
Courtroom practice is strict and rigid
Reactive judges and controlled by the party
Judiciary separate from adjudicate
Expense falls largely on the parties
Reforms of the adversarial system: Victorian Law Reform Commission 2008
Funding is the critical factor, and these are affected by levels of remuneration,
pension periods, although one must remember its effect on the calibre of judicial
candidates. Increases in court fees will help address the funding concerns.
Access to justice is a qualified right. To aid in reducing backlog, the system must
be efficient, simple, fair and effective.
1.5
Revision of institutional justice court systems
KLV: 64-69 [1.460-1.650]:
NSWSC:

The NSWSC is the highest State court in NSW and it operates under the SCR and
the CPA. The court has unlimited civil jurisdiction and deals with the most serious
criminal matters. It can hear all matters that are not of exclusive federal
jurisdiction. It is divided into the common and equity divisions. The common law
deals with civil, criminal, and administrative matters where more than $750,000
is claimed. The equity division is commercial, corporation, equity, trusts, probate
and family law. It has two appellate divisions: civil and criminal. It can hear
matters arising from some tribunals, the DC and LC.
NSWDC:
The DC is an intermediate court with both civil and criminal jurisdictions. It has a
civil jurisdictional limit of $750,000. It can deal with larger amounts if both
parties agree. It also has unlimited jurisdiction in claims for damages for personal
injuries arising out of a motor vehicle accident.
NSWLC:
The civil jurisdiction is divided into the small claims division with up to $10,000
limit and the general claims division from $10,000 to $100,000 limit. It has a
$60,000 limit for personal injury or death claims (s 29 LCA). It also has
jurisdiction to hear criminal summary prosecutions, committal hearings, mental
health issues and some family law matters, childs criminal proceedings, juvenile
prosecutions and care matters, licensing issues and coronial matters.
HCA:
The HCA was created in 1901 as provided for in s 71 of the constitution. It
provides that Cth judicial power can only be exercised by the HCA, or any such
federal court created by the jurisdiction. The HCA has original jurisdiction
pursuant to the ss 75 and 76 of constitution, involving all matters arising out a
treaty, consuls, of which the Cth is party, residents of different states, injunctions
sought on a Cth officer. Section 77 provides that it can invest any court of a State
with federal jurisdiction pursuant to s 38 also known as cross-vesting. Section 73
provides the HCA with an appellate division. Appeals from judgements that are
interlocutory or final from a state must be granted special leave as per s 35A.
1.6
Case management
KLV: 72-75, 76 [2.60]:
Jackamara v Krakouer (1998) 195 CLR 516:

Gummow and Hayne JJ held that delays are a major disquiet among those who
use the courts and the judges themselves. The delay impedes proper disposition
of cases where memories fade and records may be lost. The impediments will be
overcome but it adds a burden to litigants as delays will add costs. It takes
longer to prepare, and try because events are no longer fresh in the minds of
those who will give evidence.
Case management in NSW: Spiegelman J
Backlogs have been substantially reduced from 5 years to one year within filing
of notice of motion to completion. This was done by increasing the jurisdiction of
the local and district courts allowing for the transfer of many cases to disposed of
in the more expeditious methods of the lower courts. Simple cases of the SC
were transferred to the DC. The DC has unlimited jurisdiction in motor vehicle
accident claims. Many judges of the SC would file lower complexity issues to the
DC.
The employment of additional judges from acting barristers and retired judges
allowed for clearance. It helps to clear cases when there is a shortage and thus
there is no longer any need to vacate a trial. Furthermore, a considerable
number of personal injury cases were disposed of by referring them to
arbitration. The complaints were few.
The next mechanism was the conducting of blitz in which hundreds of cases were
heard in a single sitting within the week. As soon as a number of cases with
similar issues were dealt with, the next case would be invited to begin
immediately. These days only mini-blitz are conducted if filings build up.
Delay is no longer an issue for civil justice in NSW, but the issues of cost have
yet to be managed. Moreover, case management has increased costs due to the
more comprehensive steps required to be undertaken than what was once done
before. It is important to address this issue because access to justice may be
barred by costs. Wealthier litigants can employ costs measures as a weapon by
causing lower resourced litigants to discontinue proceedings or accept lower
settlement through the threat of court determination. Moreover, a lawyer
revenue is generated by billable hours, which places an emphasis to extend and
complicate litigation instead of following case management principles. It is an
ongoing area of change that is being investigated for reformative measures each
day.
KLV: 107-110
Aon Risk Services Australia Ltd v ANU (2009) 239 CLR 175
ANU commenced proceedings against their insurance company ARS for a
building damaged by fire earlier. On the third day of a four week trial, the parties
came to a settlement. However, ANU sought an adjournment to the trial
foreshadowing a new claim that it sought to amend and add to the new claim.
Gummow, Hayne, Crennan, Kiefel and Bell JJ revised UCPR r 21 which contained
the overriding principles of the just, quick and cheap case management aspects.
This overriding principle must be balanced by the principles of a fair trial for the
parties to be given the time to for the conclusion of the correct substantive
justice. To balance these two competing issues, the court is vested with the
discretion as to allow leave for discretion. Historically, costs orders were applied

to a party applying for an amendment seen as a way of relieving the aggrieved

party. This, however, empowers the party with greater resources and prejudices
the other party. These issues arise from stress, increased costs outside of the
costs order, time spent and is particularly magnified in personal litigants,
although have its role in disappointment of the employees in corporations. As a
result, the court may require an explanation, especially when an adjournment
disadvantages the other party. In this case, ARS was completely unprepared for
having just settled with ANU, and further must begin from scratch for believing
that the case was settled not requiring litigation.
KLV: 85-86
Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146
KLV: 87-89
Civil Procedure Act 2005 (NSW), ss 56-59
TOPIC 1
SEMINAR 2
AIMS:
Consider the limitations of litigation and competitive negotiation.
Consider the adversarial culture and its impact on litigation.
Understand that the practice of law is broader than the practice of
litigation.
Provide an introduction to alternative dispute resolution in civil process.
Understand the differences between arbitration and mediation.
Appreciate the Courts role in mediation.
Understand the intersections between ADR and litigation.
Understand the various costs orders that can be made.
Appreciate the ethical obligations of lawyers to the process of justice.
1.7
Alternative dispute resolution
KLV: 206-211, 217 [4.140], 218 [4.170], 220-224, 224-228, 233-240 [4.250], 242243 [4.304], 249 [4.340].
Introduction to alternative dispute resolution:
ADR is more aptly described as appropriate dispute resolution as in recent times
it has become increasingly used as the preferred method to resolving legal
issues. The LPULASCR 2015 r 7.2 and the Legal Profession Uniform Conduct
(Barristers) Rules 2015 r 36 provide that a practitioner must inform the client of
instructing solicitor about alternatives to a fully contested adjudication which are
reasonably available to the client.
Review of the adversarial system: ALRC The New Lawyer: How settlement is
transforming the practice of law Julie Macfarlane
In the adversarial system, the costs of litigation fall largely on the parties and
thus promotes the use of ADR. Moreover, the adversarial process is detrimental
to relationships, hence ADR would be preferred in ongoing commercial ventures.
However, the adversarial system also fosters some negative approaches to ADR.

The final point of dispute resolution is litigation. This causes many legal
practitioners to adopt a mind set to be prepared for the eventuality that is
litigation. The clients also expect this. The issue is that there is an automatic
default to rights in litigation facilitated by a zero sum approach. That is, the
courts will resolve disputes over substantive rights which results in a judgement
for only one party. With this mindset, lawyers will become less cooperative as
information becomes valuable to gain leverage over the other party. Issues of
non-disclosure arise. To overcome this, the parties and their representative
lawyers must foster open communication, facts sharing and share what interest,
mutual gains can be divided in a negotiation. This is because in ADR, there is no
objective moral right which is indivisible or partisan, thereby allowing lawyers to
focus on the clients goal and approach situations allowing for compromise.
Types of ADR processes:

Facilitative dispute resolution processes: Dispute resolution practitioner

(DRP) assists the parties to identify issues, develop options, consider
alternatives and reach an agreement: facilitation and facilitated
negotiation.
Advisory dispute resolution processes: DRP considers and appraises the
dispute and provides advice to the facts, the law, and how to achieve
desirable outcomes: expert appraisal, case appraisal, case presentation,
mini-trial and early neutral evaluation.
Determinative dispute resolution processes: DRP evaluates the dispute
and makes a determination: arbitration, expert determination and private
judging.
Combined or Hybrid dispute resolution processes: DRP deals in conciliation
and conferencing, facilitating discussions, provides advice and merits of
dispute. In hybrid, one uses mediation followed by arbitration.

Negotiation:
The distinguishing feature of negotiation is that it involves no third party to
facilitate resolution. The advantages of this are that it is really flexible, cost
effective, limited amount or preparation, quick and the client conduct the
process themselves. On the other hand, success depends on how extensively
research is the party, the skill of the negotiator, poor exploitation of strengths,
informality and unrealistic expectations.
In this way, parties want to avoid positional or distributive bargaining which
focuses on the zero sum approach. This is because parties in a dispute usually
have multiple interests and hence there are more innovative solutions then
merely distributive bargaining. This allows parties to express why they want
certain outcomes rather than what they want. Overall, communication is
facilitated to achieve a more suitable outcome which cannot be achieved on
positional bargaining. However, in a single-issue negotiation, positional
bargaining may be more affective.
Mediation:
Mediation is the most widely used ADR because it contains a more structure
approach than negotiations. It allows parties to mediate by law or contract, and
is faster and cheaper than litigation. If litigation is unsuccessful, then the issues
are narrowed for litigation. The process is confidential and allows parties to

maintain relationships, thus allows them to seek more flexible remedies. Overall,
there is a greater satisfaction through increased involvement and ability to
communicate directly to an opponent.
The role of the facilitator is to ask questions testing the weakness and strengths
of each case. They explore each partys situation and help identify goals to
achieve. Encourage parties to think about the outcomes and costs of litigations
to avoid it. Help parties find a creative resolution and assist overall in negotiation
by progressing parties and facilitating settlement. Usually, these roles are
assumed by former judges which gives an authoritative finality to the end of
mediation.
The role of the lawyer in mediation is to assist the clients to protect or further
their interests. Importantly, they close the power gap between wealthier and
smaller parties to a dispute. There several levels of participation a lawyer may
assume, but in general, the lawyers will provide research and seek to come to a
conclusion that best serves their clients interest. The involvement can be
divided into: the absent advisor, advisor observer, expert contributor, supportive
professional participant and spokesperson. Depending on the client needs and
knowledge, a higher or lesser involvement may be required of a lawyer.
Compulsory court ordered mediation: Civil Justice Review, Report No 14 (2008) VLRC
The VLRC per Spigelman CJ and Hamilton J expressed views supporting the court
authority to order compulsory mediation. It was originally thought to be counterintuitive due to having already proceeded to the litigation stage that parties
would be unwilling to cooperate in mediation. This has now been proven wrong,
where reluctant starters have become willing participants. His Honour describes
that the parties were possibly unaware of alternatives, or were not informed of
the weakness of their case, and thus were negotiating from an infallible position.
One factor that is believe to assist the post mediation process is that all
information has been brought to light, and thus there is no positional bargaining
in which information is kept non-disclosed as leverage over the opposition.
Statute powers:
Section 26 of the CPA empowers a court to refer suitable proceedings to
mediation at the courts discretion. Section 25 defines mediation as a process
facilitated by a neutral independent party to resolve a dispute. This is
empowered by the UCPR r 20.2 which allows courts to make directions regulating
the practice and procedure to be followed.
When referred to mediation, the parties have an obligation to participate in good
faith under CPA s 27 (considered in Waterhouse v Perkins). And, as per UCPR r
20.6, the neutral party attending the mediation has the authority to settle
proceedings.
Statements made in the course of mediation are protected from defamation
action: CPA s 30. Unlike court, mediation is conducted under full confidentiality
which helps facilitate that notion. The mediator cannot disclose information from
these sessions due to privilege unless under special circumstances: CPA s 31.
Mediators are also granted the same protections and immunities in court: CPA s

33. Lastly, a court can enforce any agreement or arrangement arising out of
mediation: CPA s 29.
Higgins v Higgins [2002] NSWSC 455:
Austin J came before a case involving a dispute over possession of a property in
Camden. The plaintiff is a 76 year old woman, and the defendants are her son
and daughter in-law. There is evidence that the elderly womans health has
declined significantly over the last year since the proceedings begun and that
there is an expressed wish to have the matter finalised for reconciliation. His
Honour referring to the traditional stance of unwillingness of judges to prescribe
mediation orders to unwilling parties were distinguished. His Honour states that
mediation is suitable for cases unduly influenced by emotional or irrational
considerations, which can be minimised by a skilled mediator. Using his Honours
discretion, a pro bono mediation session was ordered for a single day in the
future to solve the dispute which was in his Honours opinion the most suitable
alternative to a fully contested court hearing.
The right balance between trial and mediation: Visions, experiences and
proposals
Bergin J in a report described the cloak of confidentiality as a protection measure
to a party that fails to negotiate in good faith. There is a statutory obligation by
parties to negotiate in good faith, thus any contravention which stymies and
stalls progression can be considered as negotiating in bad faith. Examples
include, failure to organise meeting, no proposals or to respond to requests.
Other active indicia are a failure to do what a reasonable person would do. In
such circumstances, legal representatives may assist by informing a mediator of
their clients bad faith. There are procedures requiring parties to reach a
resolution and procedures that courts can undertake to enforce the agreement
finalised at mediation.
Besides arbitration (Commercial Arbitration Act 2010 (NSW)), there is no
legislative basis for enforcing a dispute resolution clause in agreements.
However, if the contract is prima facie clear that there is agreement to enter
conciliation or mediation of their dispute, then courts can in principle give effect
to these by a court order. Nonetheless, enforcement of dispute resolution clauses
is a matter of contractual construction. Either they are void for uncertainty, or
obligated by a good faith provision.
1.8
Costs of litigation
KLV: 130-140 [3.10-3.160]
Introduction:
Cost is an important issue in the administration of justice because it affects
access to those who lack resources and cannot afford, or afford the risks
associated in resolving disputes. To deal with this, CPA s 56 imposes the
overriding cost minimisation in case management. Furthermore, s 98 provides
power on the court to exercise s 99 to impose liability on any practitioner who
fails to adhere to the overriding principles. Providing an incentive to comply with
the CPA, UCPR, court directions and practice notes. Moreover, the disputed sum
must be proportional to the legal costs involved as per s 60 applied to ss 56-59.

Access to Justice and Access to Lawyers Spigelman CJ:

The proportionality of costs is recognised more as an ambition than as a
description of the courts. Its function is to limit disputes to litigation in a
sustainable manner so as not to overburden the legal system with unnecessary
costs. Section 60 of the CPA still allows for some flexibility as described in the
words importance and complexity. To resolve this matter, the courts have
mandated statutory requirement for collaboration between parties, costs tables,
efforts to confine issues, discovery phase of commercial disputes and referral of
person injury claims to alternative dispute resolutions. The common flag-fall for
discovery in commercial disputes is $2,000,000, and the other major concern lies
in disputes over the Family Provision Act.
Zanella v Madden [2007] NSWSC 559:
Young CJ in the equity division came before a case in which the issue was that
the co-tenant of a property was unable to be located. He had an interest of a
value of $37,500 for a quarter of the property. The plaintiff paid off the remaining
three quarters when the defendant left the country. His Honour having regard to
s 60 and s 56, decided that it was unnecessary to appoint an executor for what
was disproportional to the legal costs that would incurred on the courts and the
plaintiff. As such, his Honour declared the defendant as dead on the balance of
probabilities, and gave judgement for the plaintiff.
Vella v ANZ Banking Group [2008] NSWSC 209
Young CJ in the equity division was dealing with a commercial dispute that would
cost $100,000 per day in court about allegations of V receiving disputed funds by
way of a bank cheque. The solicitor for V wanted to adjourn the hearing to allow
for admission of new evidence. His Honour having regards to s 56 and s 60 did
not allow the adjournment deciding the disputed funds were disproportionate to
the legal costs that is imposed to the innocent party.
The purpose of costs: Dr Bronte Douglas v Lawton (No 2) [2007] NSWCA 90
Beazley JA 9Hodgson and Basten JJA agreeing) considered a summons for leave
to appeal against an order made by Gibson J in trial. The appellant wished to
make amendments to the claim at the day of trial which would include five more
witnesses. It was a four day trial and much of the first day was attended to
whether an amendment should be allowed. As such, it was in her Honours
opinion that there would not be ample time to be heard and decided to adjourn
the hearing to next week having regard to the courts policy that hearings should
not be part heard, against the belief that the parties could complete the hearing
within the remaining 3 days.
The appeal focused on the accompanying cost order for which her Honour
described in a punitive fashion, employing the words nasty, punished and
painful. His Honour express regret at the unfortunate words used by her
Honour, however, held that it was not contravening any practical principles with
respect to s 56 and s 60. His Honour continued to clarify that the true purpose of
a costs order is to indemnify the successful partys costs and not to be employed
punitively.
Duties of Litigants and Costs: Priest v New South Wales [2007] NSWSC 41

The parties per s 56(3) have statutory obligations to assist the courts to further
the overriding principles of just, quick and cheap resolution of the real issues: s
56(1). In addition, all practitioners have duty per she 56(4) not cause his client to
breach that duty of assisting the courts. The courts may take into account any
failure of these principles in the assessment of cost orders.
Johnson J in the NSWSC came before a case before the state which discussed the
considerations courts take into account when issuing a cost order. His Honour
held that in disputes between parties in which one is the state, the conduct of
the parties must be assessed as according to the crown as model litigant. In this
case, when issued a discovery notice, the crown provided 37 large boxes of file
with no valid description, hence breached the overriding principles of s 56. The
courts may take into account any failure to comply, per s 56(3) or s 56(4), the
court may use its discretion to impose a cost order: s56(5). His Honour being
satisfied that the state breached its statutory requirement of complying with s
56(1), used the powers conferred by s 98 or UCPR Pt 42 to order indemnity cost
against the party in breach.
1.9
Lawyers ethical obligations to the process
KLV: 119-120 [2.270], 58-60 [1.390]
The crown as the model litigant: New South Wales Model Litigant Policy for
Civil Litigation
The Crown must observe a fair standard of play recognising the differences in
resources between the parties, whilst endorsing fair pleading as opposed to a
purely technical point of pleading. The state has obligations to the public interest
and thus all conduct should be made pursuant and consistent to that obligation.
The state should always act honestly and conduct itself at a higher ethical
standard that private lawyers. Such examples include the dealing with claims
promptly, fairly and reducing delays. Consistently handle all claims of that type.
Payments be made without litigation with respect to clear liability. Avoid litigation
by not requiring proof of what is known by the state and contesting liability for
an issue of quantum meruit. No taking advantage of a claimant lacking
resources. Not relying on technical defences. Not pursuing appeals unless it is
justified in the public interest. Apologising when aware the lawyers acting on its
behalf have conducted themselves improperly.
The overriding purpose is reinforced by the duty of practitioners to the court as
described in the Legal Profession Uniform Law Australian Solicitors Conduct
Rules 2015:
3. Paramount duty to the court and the administration of justice
prevails over any inconsistency with other duties.
4. Other fundamental ethical duties:
Act in the best interests of the client
Be honest and courteous in all dealings
Deliver legal services competently, diligently and as prompt as reasonably
possible
Avoid any compromise to integrity and professional independence
17. Independence avoidance of bias:

17.1 After appropriate consideration of the client and instructing solicitor,

the barrister must exercise forensic judgement during the case independently.
17.2 A barrister has not breach its duty by acting contrary to their
instructions when he (1) confines hearing to the real issues, (2) presents the case
quickly and simply with robust advancement, and (3) informs the court of any
persuasive authority against the clients case.
57. A barrister: (a) must be sufficiently briefed for compliance of court orders,
rules, directions or practice notes of the court; and, (b) if the he believes that he
is unprepared he must promptly inform the client and instructing solicitor.
58. A barrister must: Confine the case to identifiable issues genuinely in
dispute in a clear and succinct manner. He should have the case ready to be
heard as soon as practicable. Limit evidence, including cross-examination, to
what is necessary to advance the clients interest. Occupy as short a time as
possible in court.
59. A Barrister must: inform the opponent as soon as possible when there is
reasonable grounds to believe the client will seek an adjournment, and with
consent of the opponent inform the court promptly of the application.

TOPIC 2
SEMINAR 3
Matters Preceding Litigation and Commencing Proceedings
AIMS:
To understand that limitation periods exist, expire and may be extended in
certain circumstances
To examine the purpose and the way that applications for preliminary
discovery are made
To appreciate the use of search and freezing orders
To appreciate the way proceedings are commenced the under UCPR
To understand the difference between a Summons and a Statement of
Claim
To understand the way an originating process is served in NSW under the
UCPR
To examine how an appearance is entered under the UCPR
2.1 Matters Preceding Litigation
(a) Jurisdiction
KLV: 306-314 [6.20-6.50]

(b) Preliminary Discovery

KLV: 653-657 [12.20-12.80]

(c) Limitation periods in New South Wales (an introduction)

KLV: 314-329 [6.70-6.120]

Limitation Act 1969 (NSW), ss 50C, 50D, 60C and 60E

KLV: 323
Baker-Morrison v State of New South Wales [2009] NSWCA 35
(d) Preservation orders
KLV: 347-391
KLV: 364
Supreme Court of NSW, Practice Note No. SC Gen 14 Freezing Orders
KLV: 381
Supreme Court of NSW, Practice Note No. SC Gen 13 Search Orders
2.2 Originating process Summons or Statement of Claim
KLV: 512-516 [9.10-9.55]

KLV: 1045 Summons sample

KLV: 1047 Claim sample

2.3 Service
KLV: 603-624 [11.10-11.280]
KLV: 616
Flo Rida v Mothership Music Pty Ltd [2013] NSWCA 268
KLV: 620
Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822
KLV: 1053-1054 Affidavit sample
2.4 Appearance
KLV: 516-517

KLV: 1056 Appearance sample

TOPIC 3
SEMINAR 5
Pleadings and Particulars

Gathering Evidence in Civil Cases

AIMS:
To appreciate the purpose of a system of pleadings
To identify the general rules of pleading
To understand the requirement of particulars
To understand the obligation that a claim has reasonable prospects of
success
To understand what are defective pleadings
To understand how to amend pleadings
To examine some of the different ways to gather evidence in civil cases
To appreciate the collateral use of evidence rule
Pleadings and Particulars:
3.1 Pleadings
KLV: 517-518
KLV: 527-531
KLV: 532-535
KLV: 536
KLV: 1057 Defence sample
3.2 Particulars
KLV: 536-542 [9.260-9.370]
3.3 Requirement of reasonable prospects of success
KLV: 145-150 [3.220-3.270]
Legal Profession Act 1987 (NSW), s 347
3.4 Defective pleadings
KLV: 542-551 [9.380-9.440]
3.5 Amendment of pleadings
KLV: 553-565 [10.10-10.110]
Civil Procedure Act 2005 (NSW), ss 64-65
Markisic v State of New South Wales & Ors (No 2) [2012] NSWSC 1353
Gathering Evidence
3.6 Discovery
KLV: 689-704
KLV: 704
Practice Note No. SC Eq 11, Disclosure in the Equity Division, 22 March 2012

KLV: 705-707
In the Matter of Mempoll Pty Ltd, Anakin Pty Ltd and Gold Kings (Australia) Pty
Ltd [2012] NSWSC 1057
KLV: 707
Graphite Energy Pty Ltd v Llyod Energy Systems Pty Ltd [2014] NSWSC 1326
KLV: 710-729
KLV: 1061 Sample
KLV: 1063 Sample
3.7 Subpoena
KLV: 729-735 [12.360-12.370]
KLV: 743-748
KLV: 949 Sample
KLV: 955 Sample
3.8 Notice to produce
KLV: 685-689 [12.110-12.140]
KLV: 1079 Notice sample

TOPIC 4
SEMINAR 7
Privilege
Opening Disclosure
Objecting to Production and Access
AIMS:
Understand the elements of client legal privilege
Appreciate how client legal privilege can be waived
Take note that you will focus on client legal privilege and the ethical
obligations that it places on lawyers when you study the unit The legal
Profession
Understand claims for non-production of documents based on public
interest immunity
Understand negotiation privilege
Appreciate that privileges can arise in criminal and civil cases
Understand the context in which claims for privilege arise
Develop familiarity with the Evidence Act (which will be looked at in more
detail in the unit Evidence)
Develop skills in statutory interpretation
4.1 Introduction to privileges
KLV: 868-880 [14.10-14.85]

KLV: 879
Singtel Optus Pty Ltd v Weston [2011] NSWSC 1083
Evidence Act 1995 (Cth), s 131A
4.2 Client legal privilege
KLV: 880-909
KLV: 901
Waugh Asset Management v Merrill Lynch [2010] NSWSC 197
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management
and Marketing Pty Ltd [2013] HCA 46
Evidence Act 1995 (Cth), ss 117-126 and ss 131A
KLV: 884
Mitsubishi Electric v Victorian Workcover Authority (2002) 4 VR 332
KLV: 886
Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 74 ALJR
339
4.3 Public Interest Immunity
KLV: 915-934 [14.280-14.330]
KLV: 919-920
Evidence Act 1995 (Cth), ss 129-130
KLV: 921
New South Wales v Public Transport Ticketing Corporation [2011] NSWCA 60
Plaintiff M47-2012 v Director General of Security [2012] HCA 46
Plaintiff M46 of 2013 v Minister for Immigration and Border Protection [2014] FCA
90
4.4 Negotiation privilege
KLV: 947-960 [14.370-14.410]
Evidence Act 1995 (Cth), ss 131 and 131A
Civil Procedure Act, ss 25-31
KLV: 950
Field v Commissioner for Railways (1957) 99 CLR 285
KLV:954
Azzi & Ors v Volvo Car Australia Pty Ltd (2007) 71 NSWLR 140
4.5 Waiver of privilege
KLV: 878-880 [14.80-14.85]

KLV: 903
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management
and Marketing Pty Ltd [2013] HCA 46
Evidence Act 1995 (Cth), ss 122 and 131A
Uniform Court Procedure Rules 2005 (NSW) r 1.9

TOPIC 5
SEMINAR 9
Trial or No Trial
Aims:
Appreciate that cases may not proceed to final hearing
Examine the way a matter proceeds to the High Court through a detailed
examination of a case where proceedings were stayed
Understand the basic principles relating to the conduct of civil hearings
5.1 Adjournments
KLV: 595-600
Review:
Section 66 of the CPA provides the courts with discretion of granting an
injunction in accordance to principles of case management and the facilitation of
just, quick and cheap under CPA s 56(1), with specific reference of adjournments
from s 58(1)(a)(ii).
Bank of Western Australia v Callipari [2011] NSWSC 138

Facts: C borrowed $630,000 in 2007 from the bank under a home loan
facility and as the sole director and shareholder of his company advanced
$2,500,000 from a business loan. The home loan and the business loan
were guaranteed by each other as mortgages across a portfolio of
properties. Both loans went into default in 2008. The bank claims
judgement for possession of each of the secured properties and for a
monetary sum of $3,200,000. In Dec 2010, Kirby J allowed an adjournment
for an amended statements supported by affidavits and establish that it
was a clear final opportunity to the defence. On Mar 2011, Latham J
declined a grant for adjournment for maters listed on the 8 th. C failed to
file affidavits in support of a defence on the 8 th. He appeared in person
without legal support and finally on the 9 th judgement was brought.
Matters of fact about the arrears were relied on by the bank and the
continuing trend of non-payments.
Issues: Adjournments justified? When can the courts oppose an
adjournment with respect to the CPS s 56?
Held: Latham J dismissed a grant for adjournment on the basis of
repetitive defiance of court instructions despite ample time given. On the
basis of the trend of non-payments and the outstanding debt owed, it

would be prejudice against the bank for allowing the debt to incur further
with almost no chance ever of being repaid. The fact that the defence has
failed to provide security demonstrates the lack of financial resources to
provide the remedy the bank seeks, thus management of these
commercial cases was reasoned to require hastened conclusions. The
arguments relied on by the defence for losing confidence in the bank
under s 51 Trade Practices Act 1974 (Cth) allowing relief to set aside a
transaction in part or whole was dismissed, and other trivial claims of lack
of consideration of certain facts. Her Honour held that these did not
enliven defence submissions, but are more akin to a counter-claim. In
conclusion of the strong case by the bank, the repeated failure by the
defendant and the overriding principles of CPA s 56, the application for
adjournment was refused.
Principle:

5.1(a) Abuse of Process and the Doctrine of Finality

KLV: 413 [7.130]
KLV: 505-510 [8.1040]
5.2 Default judgement
KLV: 963-967
Review:
Default judgements apply to proceedings commence by a statement of claims
(UCPR r 16.1). The judgement is entered by court rules than one ordered by the
court. A default judgement is entered when a defendant is in default (r 16.2).
The default judgements are to comply with time measures within 28 days (r
14.3) according to principles of CPA s 56 and 57. Instances of r 16.2 applying
include: failure to provide affidavit verifying defence; failure to file a defence;
filing a defence that has been struck out.
For unliquidated claims to be determined by the courts, the court will consider
the complexity of the matter for time to file a defence. A defendant in default
through r 16.7, the courts require leave to enter a judgement of default. A
liquidated claim goes through r 16.6 requiring affidavit support and an affidavit
of the originating process to the application (r 16.3). The default judgement is
sealed when the plaintiff files a notice of motion accompanied by the relevant
affidavits, which is then recorded by the registry or registrar of the court.
The effect of a default judgement is the same as a judgement after trial, where
enforcement processes may be invoked. No appeal allowed, but the default
judgement may be set aside by application by the defendant through r 36.16(2)
(a) and (b). This regulation provides the court power to set aside default
judgements given explanation of the delay to filing a defence and that there is
merit in the claim.

5.3 Summary judgement

KLV: 971-975 [15.70-15.90]

Review:
The application of UCPR r 13.1 allows a plaintiff to seek summary judgement
against a defendant who has filed a defence that does not reveal a valid defence
to the plaintiffs claim, or whose only defence is in regard to the amount of
damages claimed. This rule may only be invoked if the defence is described as
so obviously untenable that it cannot possibly succeed, manifestly
groundless or so manifestly faulty that it does not admit argument.
An application under r 13.1 can made for whole of part of the judgement claimed
by the plaintiff. It must be supported by an affidavit verifying the facts on which
the application is based (r 35.3), which are regarded as evidence in chief of
witnesses in interlocutory hearings (r 31.2). The plaintiff must also depose a
belief rather than an opinion that the defendant does not have a valid defence. A
judgement pursuant to r 13.1 may be set aside by a claim under rr 36.15 and
36.16.
Cosmos E-C Commerce v Bidwell [2005] NSWCA 81

Facts: Bs company entered into an agreement with CC for the provision of

consulting services by B. B claimed $221,700 of unpaid consultancy
services. CC denied these allegations in the statement of claim having no
knowledge of the assertions and allegations by B. One of the directors of
CC, N, explained there was a proposal to exchange 282,000 fully paid
shares of CC for forgiveness of the debt. B claimed he had no knowledge
of any such conversion of debt to shares in the capital of CC. In the
NSWDC, no triable issues were found and pursuant to r 13.1 entered
summary judgement in favour of B. CC sought appeal from the
interlocutory judgement.
Issues: Were there any triable issues to which the trial judge erred in
granting summary judgement?
Held: Pearlman AJA (Hodgson and Ipp JJA agreeing) divided the issues into
whether there were triable issues and the evidence of belief on part of the
plaintiff to dismiss the appeal. The defendants listed 8 issues in
contention, the main issues being the party identification, knowledge of
the proposal, the breach of contract and the validity of the explanatory
notes admitted into evidence. The standard in the cases of General Steel v
Commissioner Railways; Dey v Victorian Railways were not met to allow a
summary judgement. The plaintiff in submitting that in his opinion no
issues were found and the trial judges judgement was correct, his Honour
held that the deponent did not establish an unequivocal actual belief, thus
does not enliven [11A r 2(1)(b): now r 13.1(1)(b)].
Principle:

5.4 Summary dismissal

KLV: 975-981 [15.100-15.140]
Review:
Like summary judgements, summary dismissals are designed to counter frivolous
of vexatious claims. Claims that have no reasonable cause of action disclosed,

that is an abuse of process or is initiated to waste time or cause delay. Such

examples include:
a) Proceedings which involve a deception of the court, or are fictitious or
constitute a mere sham;
b) Proceedings where the process of the court is not being fairly or honestly
used but is employed for some ulterior or improper purpose or in an
improper way;
c) Proceedings which are manifestly groundless or without foundation or
which serve no useful purpose;
d) Multiple or successive proceedings which cause or are likely to cause
improper vexation or oppression;
e) Proceedings where it is impossible for the defendant to obtain a fair trial in
the circumstances of the case, for example due to plaintiffs delay in
brining proceedings.
Van Der Lee v NSW [2002] NSWCA 286

Facts: The State was the defendant in eight proceedings initiated by

companies and their employees who suffered damages in a Thredbo
landslide. The State cross-claimed damages, contribution and/or
indemnity. The claimants filed notices seeking a summary dismissal. It was
alleged that the predominant purpose of the proceedings was not as
described above, but to compel the company to make a contribution to the
settlement of the claims.
Issues: Is the State abusing the process for another motive?
Held: Hodgson JA was not satisfied by the evidence given by the plaintiffs
in sought of a summary dismissal. This is outlined by the fact that
although the company is not obliged to make any contribution, the State
may sue one financially incapable party in sought of recovering damages
through a third party with responsibilities to the original party. Such a
matter may be compelled through moral obligations, which is perfectly
legal. As such, the claimants have failed to discharge the onus of the
states interest in gaining a collateral advantage or benefit unrelated to
the judgement.
Principle:

*Facett v Cannon [2007] NSWSC 1267

Facts: C placed a firework inside a mortar tube and lit it, expecting it to
launch into the sky and explode. The firework did not launch, but exploded
on the ground causing serious injuries to F. F sues C, the occupiers of the
land and the Schofield interest, to denote 8 parties owned by S to the
proceedings. S sought summary dismissal under the reason the plaintiff
was in doubt of which party is ultimately liable. Furthermore, he provided
evidence that some companies do not deal in, import or have other
purposes outside the topic of fireworks. They sought to strike out certain
aspects of the statement of claim too.
Issues: Is suing every company owned by S vexatious, for being uncertain
of liability for injuries F sustained, an abuse of process?
Held: Rothman J held that it was not abuse of process for the S interests
could trade interests between each other making the companies

appropriately liable. Importantly, the facts the S relies on are not accepted
which is itself sufficient to warrant proceedings to continue. The reasons
are outlined through the principles. The court has inherent power via the
UCPR and statute powers via the Supreme Court Act to summarily dismiss
a case when it fulfils the description of vexatious and frivolous abuse of
process. These include weak causes of action, the true forensic value of
evidence, actions which would already lie upon one plaintiff and in
accordance to the strength of the defendants defence (i.e. complete
defence). In general, the courts will not grant a summary dismissal for the
plaintiff has a prima facie entitlement to have his case brought to trial,
where applications depriving him of his right will succeed only in the
clearest if cases.
Principle:

5.5 Dismissal for want of prosecution

KLV: 981-984 [15.150-15.200]
5.6 Discontinuance
KLV: 1007-1009 [15.270-15.280]
Review:
Discontinuance is a procedure that allows a plaintiff to terminate proceedings
against a defendant for lack for want to continue litigation. Reasons include lack
of resources, forbearance of failure or resolution by some alternative dispute
resolution, Calderbank letter or offer of compromise. The party who discontinues
must ordinarily pay the other partys costs of the discontinued claim, unless the
court orders otherwise. When disputes are resolved by negotiations then
generally each party will bear their own costs.
It does not car subsequent proceedings unless there were terms specifying such
exclusion. If subsequent proceedings are engaged, then may be asked to secure
the costs of discontinued proceedings.
UCPR r 12.1 allows the plaintiff with consent of the other party to file a for a
discontinuance. A plaintiff will not usually be forced to litigate pending any
injustice that would occur to the defendant if they gain any advantage. The
Courts will preserve any advantaged gained by the defendants by issuing the
appropriate orders.

5.9 Incentives to settle

KLV: 984-1007 [15.210-15.266]
Offers of compromise under the UCPR:
Offers of compromise provide a mechanism by which either the plaintiff or
defendant can offer to resolve the substantive claims in litigation. This is
facilitated by coupling cost consequences to the rejection of the offer where a
party fails to achieve a better result at trial. They are designed to:

Encourage proper compromise of litigation, in the private interest of

individual litigants and the public interest of the prompt and economic
disposal
Instil a heightened sense of realism in the negotiation between parties
Oblige the offeree to give serious consideration to the risk of nonacceptance

One can disclose the offer by writing in relation to some or all the claims in
dispute. The court may become aware of the rejection via r 20.30. The offer must
not express to be inclusive of costs, amount for costs unless the offer proposes a
judgement in favour of the defendant: r 20.26(2)(a), (3)(a). The valid offer cannot
exclude, modify or restrict the operations of rr 42.14 or 42.15 dealing with costs
of non-acceptance (r 20.26(12)). However, the offers may reference to payment
of costs by the offeror as agreed or assessed: r 20.26(3)(b).
A plaintiff may not make an offer unless the defendant has been given sufficient
necessary documentation to enable a fully considered offer. However, no offer
may be made in favour of the defendant on the ground that the plaintiff has not
supplied sufficient documentation without inform the plaintiff within 14 days of
receiving the offer of that issue or as ordered by the court.
The offer must be made in accordance to the rules stating r 20.26(2). It must be
left reasonably open if made within two months before the trial, and open for at
least 28 days if made outside two months before trial. During that time the offer
cannot be withdrawn. Acceptance is made by written notice of acceptance and
the offer must be forthcoming within 28 days. If not, the court will grant leave
and the party can withdraw its acceptance by serving a written notice.
UCPR Pt 42 Div 3 provides the cost consequences. Generally, the costs follow the
event or the loser pays the winners cost. These costs are payable on an
indemnity basis. Unless the court, by discretion vested through CPA s 98, orders
otherwise, unaccepted offers are governed by rr 42.14, 42.15 and 42.15A.
Leach v The Nominal Defendant [2014] NSWCA 391:

Facts: L was a passenger in a car, when another stolen car struck them.
Gunshots were fired from the other car which caused serious injuries to L.
It was uninsured, thus pursuant to s 33 of the Motor Accidents
Compensation Act 1999 (NSW), L brought proceedings against the
Nominal Defendant. He alleged the injuries were the fault of the driver and
collision operating under MAC s 3A of operation of a vehicle. L was
unsuccessful in the NSWDC and in the NSWCA. The nominal defendant
sought indemnity costs based on a rejected offer of compromise pursuant
to UCPR r 20.26.
Issues: Was it unreasonable to reject the offer and hence incur indemnity
costs as a consequence? Is this case so exceptional that the courts may us
their discretion to order otherwise?
Held: McColl JA (Gleeson JA and Sackville AJA agreeing) held that it was
readily apparent that the drafter of the offer to compromise was unaware
of the 2013 UCPR 2013 amendments. These are seen in construing of the
offer to find expiry date to the open offer (r 20.26(2)(f)) and non-use of no
order as to costs permitted by r 20.26(3)(a)(i). However, in light of this

information, the essence of the offer did not change despite noncompliance of the legislation. The object and scope of the whole statute
remains intact with regards to rr 42.14 and 42.15 dealing with
consequences of rejection. His Honour then discussed the significance of
compromise and agreed that there was compromise. That being seen by
the all or nothing determination of liability, where only costs could be in
dispute. It was inferred that the ongoing costs would be involve a
significant sum and thus was sufficient compromise. L argued despite
these circumstances, he should not be held liable for indemnity cost for his
case was exceptional and rejection was no unreasonable. The prima facie
position is rarely departed for proper reasons unless there arises an
exceptional case. The mere subjective view the offer was unreasonable is
not enough to describe an exception. The essence of the opposition to the
costs orders was due to the walk-away nature which invites capitulation.
The invitation of capitulation by the defendant for indemnity costs will be
rejected if the court sees no significant compromise, where engaging an
early walk-away offer does not serve public policy of encouraging
settlement. Another factor in allowing the appeal against the indemnity
costs is the severity of the injuries suffered, including brain injury, where
such costs offered did not take into account any damages suffered and
thus did not serve public policy of encouraging settlement.
Principle:

Hart Security Australia v Boucousis (NO 2) [2014] NSWSC 1815

Facts: HSA sought equitable and statutory relief from the first defendant B,
for breach of directors duties causing loss of a commercial opportunity to
provide security services at airports. HSA further alleged that the 63
lawyers at HWL were liable for knowingly assisting B in breaches of
fiduciary duty. HSA failed their claim against B. HWL later sought HSA to
pay costs of the proceedings (save the unsuccessful UCPR r 29.10 want of
evidence application) for rejection of offers of compromise in 2013 and
2014.
Issues: Can the sheer fractional amount between assessed costs and the
offered of compromise costs be weighted highly enough to be the sole
factor determining liability to indemnity costs?
Held: Walk-away offers were offered in both occasions, however, there was
not a more favourable judgement for the defendant by trial with respect to
the first offer, but it was more favourable for the second offer. Pursuant to
UCPR r 42.15A, HWL sought indemnity costs and pointed out that they
bore the onus of proof. HWL submitted that there was no basis for
exercising order otherwise for the case was difficult, there was sufficient
information for assessment and to order otherwise would be contrary to
CPA s 56. The court held that although it was difficult, the claim was not
frivolous of vexatious. Moreover, the courts assessed the damages to
$2,000,000 compared to $30,000 offered by the second compromise.
However, in face of this, the courts accepted that it was unreasonable to
reject the offer on the basis that there was uncertainty of winning, the
significant legal costs accrued and the $30,000.
Principle:

Calderbank letters
The Hon Justice M J Beazley, Calderbank Offers
The genesis of Calderbank offers is the English decision of Calderbank v
Calderbank, where a without prejudice or a waiver of confidentiality, offer is
assessed by the courts to determine indemnity costs. This principle was
extended to non-matrimonial cases in Computer Machiner v Drescher.
The determination of costs begins with the event: UCPR r 42.1. This can be in
whole or in part: r 42.1. Costs assessed on ordinary basis or part costs: UCPR
42.2. Making of an Calderbank offer allows exercise of discretion by the court: r
42.1 (cf rr 42.14 and 42.15).
It encourages a private interest and public policy interest by encouraging quick
disposal and ending of litigation. It reduces misuse or waste of Court resources
and backlog. In terms of private interest, an offeree must seriously consider the
offer because unreasonable refusal may incur indemnity costs. This is outlined in
EA s 131, which provides an exclusion for determination of liability for courts,
allowing adducement of evidence into court.
SMECs decision was upheld in Jones v Bradley allowed a prima facie successful
Calderbank offer resulted in an order for costs on an indemnity basis in favour of
the offeror.
Calderbank offers must be a genuine offer of compromise, which the offeror
bears the burden to satisfy the court that the offeree had unreasonably rejected
the offer. These are evaluative judgements which differ between judicial minds,
but each will take into account: the disproportion between the judgement and
offer, the earning capacity of the litigant and the foregoing of interest. In walkaway offers where each party bears their own costs, the courts are less likely to
accept as a genuine offer for failure to encourage settlement, though it is upon
the courts discretion to measure this.
In determining whether rejection was unreasonable, there needs to be
investigation into whether there was sufficient time to consider the offer;
whether the offeree had adequate information to enable it to consider the offer,
and; whether any conditions are attached and if so, whether those conditions
were reasonable.
The courts have accorded greater sympathy to a defendant who makes an early
offer. It is the opposite if he makes an offer and does not serve sufficient
evidence for evaluation, especially when he is in possession of them during the
open period of the offer: South Eastern Sydney v King; Vale v Eggins (No 2). On
the other hand, a rejection after the offeree was warned of the strength of this
evidence, will likely be unreasonable: Blagojevch v Australian Industrial
Relations. Prospects of success will also be weighed according to each case.
Sometimes Calderbank offers are inclusive of costs (Elite v Salmon) which are
valid, but involve the courts discretion and which are more difficult to consider
due to the uncertainty in the legal costs accrued. There is an unqualified costs
whereby the favourable offer over judgement does not necessary allow an order
indemnity cost for lack of quantifying legal expenses.

The advantage of using a rules offer which are now more flexible, are:

An offer may be made relating to the whole or part of the claim: r 20.26(1)
An offer need not be restricted to money sum: r 20.26(8)
More than one offer may be made for the same claim: r 20.26(10)
Offers can be made any time, including during course of trial: rr 42.14 and
42.15

The restrictions are:

An offer must not be inclusive of costs or an amount for costs: rr 26.2(c),

26.3(a)
An offer cannot be withdrawn during the period of acceptance without
leave of the court: r 26.11
Must state it is an offer in accordance to the rules: 26.2(d)
Offer cannot modify or restrict operation of the rules: r 26.12

The advantages are the automatic order for indemnity cost from the start of the
event (r 42.14), unless the court can prove an exceptional circumstance (r
42.14). This must be proved at a higher standard and the onus lies on the
offeree. The only primary advantage of the Calderbank offer is the inclusive of
costs or amount for costs allowed for the flexibility is nearly the same.
Furthermore, there is less likely a second mini-hearing to determine further legal
costs and thus incurring more costs in rules offer.
Whitney v Dream Developments [2013] NSWCA 188

Issues: Can a rules offer be construed to be calderbank offer?

Held: Barrett JA held that if the offer is made with intention of employing
UCPR r 20.26, then any non-compliance will render the offer without force.
However, if the offer is attendant to some cover letter specifying its force
as a calderbank letter, should the rules not comply, then it will have force
irrespective of the UCPR: Trustee for Salvation Army.
Principle:

Lee v Carlton Crest Hotel (Sydney) (No 2) [2014] NSWSC 1586

Facts: Ms Ls husband, Mr L, died from injuries sustained when his car fell
off the edge of a two storey carpark. L sued CCC and the council who
approved of the designs. The trial judge awarded $2,600,000 for Ms L. This
was more than her offer of compromise of $1,555,000. The offer was
poised in accordance to UCPR, but ultimately did not comply. There was an
ending clause that held that this should be construed to be a Calderbank
letter in those circumstances.
Issues: Can the Court find calderbank offer in instances where there is
non-compliance to the UCPR? Secondly, by what measures will the court
exercise their discretion?
Held: Beech-Jones J held that in those circumstances where the cover
letter expressly states that a calderbank note should prevail when there is
non-compliance with the UCPR, then it would be allowed. His Honour then
examined the reasonableness of the offer. L was able to discharge the
onus of satisfying the court that non-acceptance was unreasonable. CCC
argued that there was some uncertainty related to the tax returns, but

ultimately it was determined that there was sufficient evidence on the

whole to assess the likelihood of the damages. These reasons follow that
Ms L had just started a speech pathology practice causing her returns to
be higher than before Mr Ls death. That Mr L was a qualified professional
with a full career ahead. Also, Ms Ls psychological damage as third major
contributing factor. For the council, it was held that they had reasonably
rejected the offer for their culpability is far lower and thus should have had
a discounted offer. In conclusion, his Honour ordered indemnity costs
against CCC, but not the council, and that the damages be paid by both
parties.
Principle: