LAWS398:CIVILPROCEDURE

COMPREHENSIVENOTES

SEM12017

2

LAWS398WEEK7CivilProcedure:IntroductiontoCP

CriminalvsCivilProcedure–Recap

- CriminalProcedureo StatevDefendanto Statemorepowerfulo Outcomeisusuallypunishmento Policeandcourtshavemajorroleinenforcemento Higherprofileinmediao Smallbodyofunderlyingsubstantivelawapplieso Statebearsmostcosts

- CivilProcedureo Privatevprivate(includingGovernment)o Partypowercanbeuneveno Manypossibleoutcomesusuallyinvolvingmoneyo Courtsandindividualsenforce(+bailiffs,sheriffs)o MoreCommonandAffectsmorepeopleo Hugebodyofunderlyingsubstantivelawapplieso Individualbearmostcosts

ExploringKeyThemesinCivilProcedure

- Thefeaturesandshortcomingsoftheadversarialsystem- The“principles”ofopenjusticeandproceduralfairnessinthecivil

context- EfficiencyvtheRighttobeheard- Accesstojustice- Problemsolving,appearingincourt,communicatingforlitigation

3

CivilProcedureClichés

- JusticedelayedisJusticedenied

o Thisissomethingjudgeshavebeensayingforcenturieso Itmakesalotofsense

§ Ifittakesforeverandcostsafortunetogetjustice,whatkindofjusticeisthat?

§ Ifyoutakeforeverandcostsafortune,youwilldenyalotofpeoplethisjustice

• E.g.mostpeoplewon’tevenstartalitigationduetothelengthycostsandtimeconsumingaspectontheirlife

• E.g.ifyoudostartalitigation,therearealotofthingsthatcangowrongduringthatextremelylongtimeperiod

- RoughJusticeisnoJustice

o Thisisalsotrueo Ifyoudonotgivepeopleaproperhearing,youwillnotget

justiceo Ifthejusticeprocessistoofast(technocraticjustice),howisthis

justice(dueprocessmodelisbetter)o EfficiencyvtheRighttobeheard

AdversarialorInquisitorialSystem

- Australiahasanadversarialsystem- MostEuropeancountrieshaveaninquisitorialsystem- Australia

o Commonlawsystemo Adversarialsystem

- Europe

4

o Civillawsystem

AdversarialSystem

- Partiescontroldispute

o Partiesdefinedisputeandpresentevidenceandargumento Partieshavealotofcontrolo Plaintiffhasalotofcontrol

§ Decidewhatcasetobringandhowtobringito Defendanthascontrol

§ Cross-claim- Courtdecisionsformprecedent,bindingonfuturedecisions

o Precedentsformthelaw- Trialsarelengthyandinvolveextensiveevidence

- Judgeasumpire–impartial;roleisreactive(cfproactive)

o Impartialarbiter- Emphasisonoralargument/evidenceespeciallycross-examination

- Partiesbearthecosts

InquisitorialSystem

- Mainlycodifiedlaw.Priorcasesaremerelypersuasive

- Norigidseparationbetweentrialandpre-trialphases

- Minimalrulesofcourt-roompractice

- Thejudge’sroleisproactiveandinquisitive

- Strongemphasisondocumentaryproof

- Virtuallynocross-examinationandoftennophysicalhearing(i.e.

entirematterheard“onthepapers”)

- Casesaremuchshortergenerally

5

CivilProcedure–Definition

- “[R]uleswhicharedirectedtogoverningorregulatingthemodeorconductofcourtproceedings”

o McKainvRWMillerandCo(SA)PtyLtd(1991)174CLR1at26-

27perMasonCJ- CivilProcedurewillteachyouhowoursocietyresolvesdisputes

betweenprivateparties(bothwithandwithoutcourt)andtherolelawyersplayinthatprocess

SourcesofCivilProcedureLaw

- ApplicableinNSW

o CivilProcedureAct2005(NSW)o UniformCivilProcedureRules2005(NSW)o FederalCourtRules2011(Cth)o FederalCourtofAustraliaAct1976(Cth)o CourtActs

§ SupremeCourtAct1970§ DistrictCourtAct1973§ LocalCourtAct2007

o CourtPracticenotescreatedbyJudgesinaccordancewithpowergrantedbyCPAandUCPR

PerceivedProblemswithCivilProcedure

- Cost- Delay- Lackofaccess(usuallyduetoCostandDelay)

6

- Uncertainty- Unfairness- Excessivecomplexity

CivilProcedureThemes:BalancingCompetingObjectives

- Civilprocedureisallaboutbalancingcompetingobjectives.Someofthekeyareaswhereobjectivesofcivilprocedureclashare:

o 1.Thetensionbetweenefficiency(costanddelayreduction)andjustice/proceduralfairness

§ SeeAONvANU(mostimportant)

§ SeeQueenslandvJLHoldings§ SeeERAvArmstrong§ Ittakestimeandmoneytoexploreevidencesoincreases

inefficiencycanthreatenjusticeo 2.AccesstoJusticeandtheroleoflitigationinsociety

§ A)DoessocietybenefitmorefromcarefulbutexpensivejusticewhichsetsgoodprecentsforsocietytofollowOR

§ B)Fromquickandcheapjusticewhichisaccessibletoeveryone?

• HazelGenn,JudgingCivilJustice,HamlynLectures,

2008,CambridgeUniversityPress,Chapter1o 3.Openjusticevstherighttoprivacy

§ Openjusticeiskeyforjudicialaccountabilityandfaithinourjusticesystembutalsoasignificantinvasionofprivacyandcaninvolvevulnerablepartiessuchaschildrenandthedisabled

• RinehartvRinehart(2014)FCA1241(paras21-31)o 4.Theroleofjudicialdiscretioninmanagingcases

§ Toomuchjudicialdiscretionleadstouncertaintyforlitigantsandreducedjudicialaccountabilitybutrigidrulesofproceduredonotcaterforthevarietyoflitigantsandtheirneeds

7

OpenJustice

- ‘…openjusticeisoneofthemostfundamentalaspectsofthesystemofjusticeinAustralia.Theconductofproceedingsinpublic…isanessentialqualityofanAustraliancourtofjustice.’

o JohnFairfaxPublicationsPtyLtdvDistrictCourtofNSW(2004)61NSWLR344(SpigelmanCJ)

- Howcanjusticebeclose?o Closedcourtorders(familylaw)o Nonpublicationorders(defamation)o Pseudonymorders(migration/children)o Ordersforanonymouswitnesses

§ E.g.useofscreens,CCTV,pseudonymorders(WitnessvMarsden(2000)49NSWLR429)

o Confidentialityofdocuments(NAKvStarkeyandSevenNetwork(Operations)vJamesWarburton(No.1)

- “…thereisnoprincipleinourlawbywhichdocumentsareprotectedfromdiscoverybyreasonofconfidentialityalone.Nonetheless,itisrecognisedthatdiscoveryconstitutesaseriousinvasionoftheprivacyandconfidentialityofalitigant’saffairsand,whiletheprocessformspartofcivilprocedurebecauseofthepublicinterestinensuringthatjusticeisdonebetweentheparties,itoughtnotbeallowedtoplaceuponthelitigantanyharsherormoreoppressiveburdenthanisrequiredtopermitjusticetobedone…”

o JusticeBreretonNAKAustraliaPtyLtdvStarkeyConsultingPtyLtd[2008]NSWSC1136

RinehartvRinehart[2014]FCA

- BiancaHopeRinehartvGeorginaHopeRinehart[2014]FCA1241(PARA21-31)

- Oneofabout50Rinehartcases- Setsoutprinciplesofopenjustice:

8

o 1.Suppressionordermustbenecessarytopreventprejudicetoadministrationofjustice

o 2.Openjusticefundamentalprincipleofjusticesystemo 3.Courtmustconsiderprimaryobjectiveistosafeguardpublic

interestinopenjustice(suppressionorderlegislationsupportsthis)

o 4.Needtodojusticeispartof“necessity”principleo 5.Mediareportingiscorollaryor“openjustice”o 6.Possibleembarrassment,lossofreputation,consequential

lossisgenerallypricepartiesmustpaytolitigateo 7.Recognisedexceptionsincludewhereopennesswoulddestroy

justicebyvindicatingblackmailerorseriouslyaffectcommercialvalueofsubjectmatter

StatutorypowerstodepartfromOpenJustice:CivilProcedureAct2005

- Section71:Businessintheabsenceofthepublic

o SubjecttoanyAct,thebusinessofacourtinrelationtoanyproceedingsmaybeconductedintheabsenceofthepublicinanyofthefollowingcircumstances:…

o B)ifthepresenceofthepublicwoulddefeattheendsofjustice,o C)ifthebusinessconcernstheguardianship,custodyor

maintenanceofaminoro D)iftheproceedingsarenotbeforeajuryandareformalor

non-contentiouso E)ifthebusinessdoesnotinvolvetheappearancebeforethe

courtofanyperson

CourtSuppressionandNon-PublicationOrdersAct2010

- EmpowersCourttomakeasuppressionornon-publicationorder- Isinadditiontoinherentpower

9

- S6providesthecourt“musttakeintoaccountthataprimaryobjectiveoftheadministrationofjusticeistosafeguardthepublicinterestinopenjustice”

- S7andS8setoutthepowerstograntorders

RighttoProceduralFairness

- Justicedelayedisjusticedenied(i.e.delayandcostpreventjustice)soefficiencyiscrucialtojustice

Vs

- Therighttoproceduralfairness:areasonableopportunitytobeheard- Audialterampartem:Heartheotherside

CivilProcedureActNSW2005s56(overridingpurpose)

- 1)…overridingpurposeoftheAct…istofacilitatethejust,quickandcheapresolutionoftherealissuesintheproceedings

- 2)Thecourtmustseektogiveeffecttotheoverridingpurposewhenitexercisesanypower…andwhenitinterpretsanyprovisionsofthisAct

- 3)Partytocivilproceedingsisunderaduty…- 4)Asolicitororbarristermust…- 5)Thecourtmaytakeintoaccountanyfailure…withrespecttocosts

ProceduralvsSubstantiveJustice

- thebestprocedureisthefastestandcheapestbutthisriskssubstantiveinjustice

10

- theclosestthingtothe“rightanswer”(substantivejustice)maybeprocedurallyunfairasitislikelytobeexpensiveandslow

- Iftheprocesstakestoolongitbecomesprocedurallyunjust

TheBalancingAct

- Speedydispositionofcases

VS

- IndividualJustice

Judgesfeeltheneedforspeed

- “Makingjusticefastandaffordableaswellasfairisadilemmathathasgrownmoreacute,inaworldofcomplexfinancialengineering,increasinglysophisticatedcriminalsyndicates,internetscamsandtechnologicalchange”

o ElisabethSexton,DeborahSnow,JoelGibsonandGeescheJacobsen:SydneyMorningHerald19October2010

CaseStudyNABvMcCann[2010]NSWSC766

- Amendmentofpleadingscase- FollowsAONvANU(2009)- Casemanagementleadstostrikeoutofdefence- Defaultjudgmentforplaintiffnotsetaside- Nohearingonthemerits- Wasdefendantdeniedrighttoafairhearing?

11

TheDefendant’sViewpoint

- Forcedtodefendproceedingstoretainhome- Particularsofclaimnotprovided- Defencesstruckout- Lawyersfoundtobeincompetent- Probonoassistancedenied- Foundtohavefailedtoprovidesatisfactoryevidence- Defaultjudgmentagainsthersustained

ThePlaintiff’sViewpoint(NAB)

- Foreclosureonbadloansecuredbymortgage- PossessionnotgrantedtoNAB- Serviceavoidedrequiringsubstitutedservice- Claimpoorlydefended- Severaldefencesstruckout- 3applicationstosetasidedefaultjudgementdefendedbyNAB- 2years’delayinregainingloanfunds

TheCourt’sViewpoint

- Needtograntsubstitutedservice- Unrepresenteddefendantrequiringspecialassistanceincluding

reviseddefences- Incompetentlawyersfordefendant- Numerousinterlocutoryappearances- Judgementcarefullywrittentoassistpartiestohelpjudgegivejustice- Futilewasteofcourttimeforsameresult

12

LAWS398WEEK7CivilProcedure:LitigationSteps,AlternativeDisputeResolution,LimitationPeriods

CommonStepsIncludingADR

- 1.ADR:InformalNegotiation

o Beforecommencinglitigationmostpartiesengageinsomesortofnegotiation

- 2.CommenceLitigation

o Ifnegotiationsfail,partiesmaycommencelitigationbystatementofclaim

- 3.ADR:InformalNegotiations

o Evenaftercommencingproceedings,manypartieswillcontinuetryingtosettle

- 4.Pleadingsfiledandserved

o Atthisstagebothpartiesshouldknowwhatisindispute- 5.ADR:Negotiation/Mediation

o Itiscommonforcourtstoordermediationatthispointand/orforpartiestoorganiseitinformally.Thisisalsoagoodtimeforfurthernegotiation

- 6.Evidenceprepared.

o Oncethediscoveryandwitnessevidencearecomplete,thematterisessentiallyreadyforhearing

- 7.ADR:Settlement,negotiations,mediationandarbitration:

o Areallpossibleatthisstageo Bothcourtorderedandadhoco ADCcanoccuranytimefromhereincludinguntilthelitigation

hearingiscomplete

TypicalLitigationSteps

13

- 1.Disputearises- 2.Partiesareunabletoresolvebynegotiation- 3.Letterofdemand/threatoflitigationissent- 4.PlaintifffilesStatementofClaimincourt- 5.StatementofClaimisservedonDefendant- 6.Defendantentersappearance- 7.Directionshearing(timetabletotrialset)- 8.Defendantrequestsfurtherparticulars- 9.Plaintiffprovidesfurtherparticulars- 10.DefendantfilesStatementofDefence- 11.Possiblefurther:

o Particularso AmendedStatementofClaimo CrossClaimso Interlocutorymotionsonpleadings

- 12.PleadingsClose- 13.Partiesundertakediscovery- 14.Partiesservelistsofdiscovereddocuments- 15.Interlocutorymotionsre:discoveryandprivilege- 16.3rdpartiessubpoenaedfordocuments

o Thiscanoccurearlierand/orlaterandcanoccurseveraltimes- 17. Plaintiff prepares and serves witness evidence including expert

reports- 18.Defendantpreparesandserveswitnessevidenceinreplyincluding

expertreports- 19.Plaintiffpreparesandservesevidenceinreply- 20.Mattersetdownfortrial- 21.Trialpreparation(e.g.witnessessubpoenaed)- 22.Trial- 23.Judgment

14

CaveattoLitigationSteps

- The litigation steps above are indicative of a complex litigation in ahighercourt

- Litigationprocessvariessignificantlydependingon:o TheCourto Thejudgeo Thepartieso Thenatureandcomplexityofthedisputeo Thenatureandcomplexityoftheremedysoughto Theissuesindisputeo Whetherthedisputeisprimarilyfactual,legaloramixture

- Litigationischangingo E.g.moreonlineprocessesandamoveawayfromdiscovery

AlternativeDisputeResolution

- AlternativetoLitigationinCourt:o Negotiationo Mediationo Conciliationo Arbitration

ADR

- Definitiono AlternativeDisputeResolutionorAppropriateDisputeResolution

- InteractionbetweenLitigationandADRincluding:o Settlementoflitigationo CourtorderedADRo Pre-litigationprotocols

15

- BenefitsandDisadvantagesofADR- TypesandExamplesofADR:

o Negotiationo Mediationo ConciliationArbitrationo Refereeso CollaborativeLaw

- AffectofADRonCivilProcedureThemes

DefinitionofADR

- AlternativeDisputeResolutionor“AppropriateDR”or“AdditionalDR”- Processes, other than judicial determination, in which an impartial

personassiststhoseindisputetoresolvetheissuesbetweenthemo National Alternative Dispute Resolution Advisory Council

(“NADRAC”)

- NB NADRAC definition encompasses formal ADR not informalnegotiation

RelationofLitigationtoADR

- Majorityofdisputes resolved throughnegotiationorothermeansofADR

- Evenwherelegalproceedingscommended,90%+settlebeforetrial- Courts may refer litigation to mediation, arbitration, expert

determinationorreferees- LegislationmayrequireADRpriortocommencinglitigation- OptiontolitigateinformsADRprocess- Settlementoffersinfluencelegalcostsordersinlitigation

16

SettlementCorrespondence

- Even where formal ADR used, e.g. mediation, written offers arecommonunlessfinalisedinADR- 1.Offerstocompromise

o UnderUCPR:rr20.26,42.13–42.17- 2.Calderbankletters

o Withoutprejudicesaveastocosts-CommonLaw- Offermaybefromeitherside- Therearecostsconsequencesofofferifmatterdoesn'tsettle- For indemnity costs:mustbegenuineofferof compromise;mustbe

unreasonableforoffereetohavedeclined- ‘Walkaway’offercanbeagenuineoffer

o LeichardtMCvGreen[2004]NSWCCA341

Example1:

- Plaintiffservesofferofcompromiseon4/1/16for$1millionpluscostsasagreedorassessed

- Defendantrejectsoffer- Judgemententeredfor$2millionon22/3/16- Whattypeofcostorderwilltheplaintiffapplyfor?

Solution

- 1. Costs up until date of offer areworked out on usual bases (costsfollowevent:r42.1)

- 2.Butofferor(pl)willseekindemnitycostsfromdateofofferonwards(rr42.14–42.15A)

o Rationale§ Offerwasbetterthanwhatoffereewasentitledto§ Offeree(def)shouldhaveaccepted$1millionoffer§ Incentivetoacceptreasonableoffers

17

Example2

- Defendantservesofferofcompromiseon4/1/16for$1millionpluswillpayplaintiff’scostsasagreedorassessed

- Plaintiffrejectstheoffer- Judgmententeredfor$500000on22/3/16- Whattypeofcostorderwillthedefendantapplyfor?

Solution

- Defendantwillapplyforplaintifftopaydefendant’scostsonindemnitycostsfromthedateofofferastheplaintiffshouldhaveacceptedthe$1Million

- Defendantwillpaytheplaintiff’scostsonordinarybasisuptothatdateas theplaintiffwas successful on claimand so itwas reasonable forplaintifftorunclaimupuntilplaintifffailedtoacceptoffer

Caveatre:SettlementandCosts

HoltvTCNChannelNineP/L(No2)[2012]NSWSC968

- Factsofthecase

o Defamationcaseo Plaintiffofferedtosettlefor$95Kanddefendantdidn'tacceptor

makeanyoffero ThePlaintiffwonbutonlyfor$4900o Further, defendant had reasonable prospects of truth defence

although ultimately unsuccessful on several counts; the courtfoundplaintifftobestrategicliar,assaultedhiswifeandtookhermoney

- Held

18

o Defendanttopayhalfofplaintiff’scosts.Thiswasdespitespecialobligationsindefamationcasestoreachsettlement

o “Idonotconsiderittobeincumbentonadefendantpublisherinthatpositiontomakeasettlementofferorsufferacostspenaltymerelyonthebasisthatitmusthavecontemplatedthepossibilityoflosingtheproceedings”

- Sothecaveatisthatthecourtsdon'talwayshavetofollowthe“rules”

abouttheimpactofsettlementoncosts

EdwardsvEndeavourEnergy[andotherproceedings](No.5)[2014]NSWSC

68

- “11.CostsareinthediscretionoftheCourtandtheCourthasfullpowertodeterminebywhom,towhomandtowhatextentcostsaretobepaid:s.98(1)CivilProcedureAct2005.

o CostsshouldfollowtheeventunlessitappearstotheCourtthatsomeordershouldbemadeastothewholeoranypartofthecosts:Rule42.1UniformCivilProcedureRules2005

- “13.TheexerciseoftheCourt’sdiscretionastocostsultimatelyrequiresanassessmentofwhatisfairinallthecircumstances:

o McLaughlin v Dungowan Manly Pty Ltd [2010] NSWSC 306 at[22]”

ADRandIndigenousCommunities

- WesternstyleADRisnotnecessarilyabettersolutionthanthecourts- AboriginalsandTSIcommunities“shouldbeabletoimplementmodels

in theirowncommunities,whichrecognisetraditionalculturalvaluesandtraditionalstructuresofdecisionmaking”

o Larrisa Behrendt: Aboriginal Dispute Resolution (1995)

FederationPress

19

ReasonsforGrowthofADR

- Difficulties ‘accessing justice’ through adversarial litigation and theLitigationDeterrents(emotional,timeandmoneycosts)

o E.g.Fearofadversecostso Inacomplexlitigation,costscaneasilyoutstripthevalueofthe

dispute.§ It is not uncommon for costs to be in the $millions for

complexcommerciallitigationandcostsusuallyfollowthecausemeaningthattheloserpaystheotherside’scostsaswellastheirown.

§ Thecostspayablepursuanttoanorderofcostsinthecauseareusuallyparty/partycostswhichareonlyabout60-70%usuallyofactualcosts.

§ Thismeans that even thewinning sidewill likely end upsignificantlyoutofpocket.

§ Also, significant time cost for individuals or corporatepersonnel in locating documentary evidence and givingwitnessevidence(oftenincludingseniorpersonnel),stressforthoseinvolvedinthelitigation.�

- Desirability of addressing broader (non-legal) interests and needs ofpartiesincludingthedesiretopreserve‘relationships’

o Adverseeffectsofadversarialprocessinclude:§ Destructionofrelationshipswithopposingparties§ Adversepublicity(whichcandamagerelationshipswiththe

public)o Amediationorsimilarcanresultinawin/winresultwhereasat

leastonepartylosesinlitigation. § E.g.adisputeastoafaultydeliverymayberesolvedbyan

agreementastoanewlargershipmentatareducedcostwhichmayactuallybeagoodresultforbothparties.

§ E.g.Divorcedparentsaremorelikelytomeetbestinterestsof themselves and children if they can agree informal,flexiblecustodyratherthanrelyingonarigidCourtorder.�

20

AdvantagesofADR

- PartieshaveIncreasedControlo Controloverprocesso Controloveroutcomeo Controlovercostso Controloverparticipationo Controloverdelayo Choiceoverindependentdecisionmaker/assistant

- RelationshipscanRemainIntacto Compromiseratherthanwin/loseo Moreco-operative/less‘adversarial’

- Reputationscanbeprotectedo Confidential

AdvantagesofADR:Optionforwin/winoutcome

- ADR approaches can be “interest based” rather than “positional”leadingtopossiblewin/winsolutionsinsteadofwin/loseorlose/lose

- BATNAo Besto Alternativeo Too Negotiatedo Agreement

§ Informs positional negotiation but is not the basis forsettlement

DisadvantagesofADR

- Notsuitableforsomecaseso E.g.testcases

- Lackofproceduralprotection

21

o Reasonso Evidenceo Appeals

- Lackofenforceability- Lessaccesstootherside’sinformation- Mayincreasecost,ifunsuccessful- Mayaddtodelay

o Beusedtactically- Noprocedural‘fairness’

CircumstancesinwhichpartiesundertakeADR

- VoluntarytoInvoluntary

o Adhoc:§ Before commencing proceedings, during preparation for

trial,duringtrialo Contractual

§ Beforecommencingproceedingso CourtOrdered

§ Duringpreparationfortrial§ Duringtrial§ Aspartoftrial

o Legislativelyrequired§ Beforecommencingproceedings

ADRandCaseManagement

- ADRcanbepartoflitigationCMprocess- ReferraltoADR

o Initiallyoutsidethecourtsystemnowintegrated intothecourtsystem

- Courtcanrefertomediationwithoutconsent

22

- Courtcanrefertoarbitrationorreferees- Pre-litigationprotocolsalsopotentiallyCM

TypesofADR(NADRAC)

- 1.FacilitativeProcesseso Mediation

o Conciliationo Ombudsmen

- 2.DeterminativeProcesseso (ENFORCEABLE)

§ Adjudication§ Arbitration

§ Expertdetermination§ Privatejudging

o (NOTENFORCEABLE)§ Fact-finding§ Earlyneutralevaluation

- 3.Advisoryo Expertappraisalo Caseappraisalo Casepresentationo Minitrialo Earlyneutralevaluationo Collaboration

- 4.Hybrido Combination

§ E.g.mediationandarbitration