Tips For First Appearances

Full Court Case Notes - First Quarter 2019

A quick review of some interesting Full Court decisions for the first quarter 2019. "Supervision" or "in the presence of" is there a difference ? When is hardship established in a leave to proceed application ? When accounting methodology does not meet FLA methodology and running Kennon arguments. When is legal privilege lost ? When is confidentiality to a settlement communication lost ?

Elias & Elias [2019] FamCAFC 53

The Full Court considered whether "supervised” time or time “in the presence of” had a difference in meaning.

  1. Before we turn to the matters raised by the father, we wish to record that we do not regard the word “supervision” or the phrase “in the presence of” as terms of art that have different meanings. The ordinary meaning of both suggests that constant presence is required of a person overseeing the child or children spending time with the parent subject to the supervision order. More particularly, it is our view that in the ordinary course the phrase “in the presence of” does not entail a lesser form of supervision which would permit, in the context of this case for example, the child to be left alone with the father, especially for significant periods of time.

..../....

  1. We consider that the phrase “in the company of” is no different to “in the presence of” – both connote constant presence. The primary judge clearly understood this to be so and used the words interchangeably as meaning the same thing. It is an arid exercise in semantics to seek to find a difference of substance in the primary judge’s choice of words, let alone one which demonstrates appealable error.
  2. Further, we consider there is force in the submission of the mother and the ICL that supervision is a word that naturally applies to professional supervision agencies because that is what they do, whereas “in the presence of” is more apt to apply to individuals, such as family members. Be that as it may, we accept that there is no difference of substance.

Rich & Shorland [2019] FamCAFC 50

Justice Ainslie-Wallace as a single judge of the Full Court considered an appeal from a decision granting leave and highlighted what is required to establishing “hardship” in leave to commence proceedings applications. 

Her Honour restated the relevant principles in such application as recently set out by the Full Court in Edmunds;

  1. In Edmunds & Edmunds [2018] FamCAFC 121;  (2018) FLC 93-847, the Full Court after quoting from Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1;  (1968) 118 CLR 618 said:
    1. ... Thus the Court, when considering the issue of leave and the strength of the proposed case, will look to see whether, in the event that the evidence remains the same at a final hearing, there is a probability that the applicant would succeed in obtaining a property settlement adjustment in her favour. The Court does not undertake a preliminary trial but looks to see whether there is some or a fair or reasonable probability that relief will be granted.
  2. Their Honours continued and said:
    1. As the Full Court pointed out in Sharp at [18], “the well-established test is that the applicant must have a prima facie claim worth pursuing or a ‘real’ probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship”.
    2. That involves a consideration, but not a final determination, of the nature of the applicant’s claim. In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.
  3. Having determined hardship of the kind to which these authorities speak, the Court must then consider whether, notwithstanding the identified hardship, it should, in the exercise of its discretion grant leave to commence proceedings. The resolution of that question requires consideration of matters such as the length of and explanation for the delay in commencing proceedings and the prejudice to the respondent if leave is granted.

In allowing the appeal Her Honour identified several difficulties with the trial judge’s application of the relevant principal and identifying within the reasons for decision that the trial judge had properly considered those relevant principles. 

The following paragraph are demonstrative of the facts, matters or circumstances needed to be addressed in the evidence in order to succeed in a leave to commence proceedings application;

  1. Nowhere does his Honour either advert to the nexus between the “real probability of success” and the alleviation of the hardship nor does he attempt the necessary assessment which is whether the “real probability” of success in the proceedings sought to be commenced would alleviate the identified hardship.

‚Äč.../....

  1. Turning then to the exercise of his Honour’s discretion and the considerations of the issues of delay in commencing proceedings and prejudice to the appellant, his Honour said:
    1. Thirdly, in relation to the issue of delay, I accept the applicant’s submission that a delay of approximately 9 months is relatively insignificant when compared to an eight year relationship. In addition, the Court accepts that the applicant’s relatively poorer circumstances and mental health post separation made it difficult for him to focus on the legal issues arising from the end of the relationship with the respondent. I accept the applicant’s submission that there is no real prejudice to the respondent by reason of the delay apart from the nuisance factor of having to respond to a property claim following the end of an eight year de facto relationship. 
  2. Although his Honour’s recitation of the relevant legal principles refers to the need to take account of the reasons “why time limitations exist” at [35], his Honour’s consideration was restricted to a comparison between the length of the relationship and the length of delay and the respondent’s mental health since separation.
  3. Delay and its explanation does not exist in isolation. It is inextricably linked to the prejudice to the party opposing leave.[8]
  4. Nor should it be assumed that even though, as here, no actual prejudice was raised by the appellant, none exists. The law presumes prejudice to flow to a person sought to be joined in the litigation after the effluxion of the relevant time limits.[9]
  5. His Honour’s reference to the issue of delay in the granting of leave amounting to no more than a “nuisance factor” to the appellant fails to engage with the fundamental principles concerning time limits and applications for extension.

Keating & Keating [2019] FamCAFC 46

Consideration of a property pool exceeded by liabilities and a Kennon argument vexed the Full Court.

Note the timeline – Matter originally heard 18 and 19 November 2013, final order made 30 April 2014, set aside by consent upon appeal in October 2014. Rehearing over November 2016, January and August 2017. Final decision, ex tempore on 10 January 2018. Appeal delivered 21 March 2019.  Appeal allowed and remitted for rehearing. 

The decision concerned a not uncommon substratum of facts. The husband was a tradesman who conducted a business through a complex corporate and trust structure. The value of the husband’s interest in this group and the “dramatic increase in the husband’s director loan account” tothe group were central issues. The non-super pool, after taking into account the husband’s loan equated to a net shortfall of $804,805.00. Consequently a 70/30 division of the non-superannuation assets left the wife with her personal items, her bank account and a motor vehicle. The husband retained the group with a turnover annually of $4M and “substantial franking credits”.

The Full Court, in determining the trial judge had failed to engage with the issues vis a vis the husband’s director loan account, highlighted the importance for family lawyers understanding the difference between accounting valuation methodology and FLA s79 considerations. 

  1. On the evidence it is clear that the Group is the alter ego of the husband (see Ascot Investments Pty Ltd v Harper [1981] HCA 1;  (1981) 148 CLR 337). Accordingly, as the wife contended, it was open to the primary judge to consider whether and how the loan account might be repaid and/or brought to account. There was no suggestion the Group would be wound up and there was evidence from the single expert as to the hundreds of thousands of dollars in franking credits available to the Group and husband, the Group’s significant income and the husband’s considerable drawings over many years. Furthermore, analysis of the evidence given by the single expert of the corporate entities demonstrates (beyond the executive summary attached to the trial reasons) that there were assets of real value in relation to which large adjustments were made for depreciation (see for example Keating Projects Group Pty Ltd). Thus the wife’s claim that the principles which emerge from cases such as Biltoft and Biltoft (1995) FLC 92- 614 were in play and could not be dismissed out of hand. This important integer of her case was given no consideration.

Although the Wife’s submission is not clear from the reading of the Full Court decision, it can be inferred that it was argued that the loan account could be ignored because it was not a liability in the true sense of a secured liability and was unlikely to be repayable any time soon. 

The other relevant part of this decision concerned consideration by the trial judge of the Wife’s Kennon argument. With so-called Kennon arguments often agitated in initiating material and then not pursued upon final hearing it is open to conclude that insufficient focus is being placed upon the power of the court to adjust contributions further on account of family violence, the law concerning when such adjustment will be made and marshalling the evidence that will support such a finding. 

  1. In Spagnardi the Full Court referred to Kennon and the necessity to show that the conduct had a “discernible impact” on the party’s contributions but noted that, there was an “insufficiency of evidence” [47]. Their Honours then continued:

As Kennon has established, it is necessary to provide evidence to establish:

·       The incidence of domestic violence; 

·       The effect of domestic violence; and 

·       Evidence to enable the court to quantify the effect of that violence upon the parties [sic] capacity to "contribute" as defined by section 79(4).

(Emphasis added)

  1. Their Honours further noted at [48] that there was a “complete absence of evidence as to how the husband’s conduct affected her ability to contribute”. At first blush the reference in Spagnardi to “quantification” seems to elevate the need for an evidentiary nexus or “discernible impact” between the conduct complained of and its effect on the party’s ability to make relevant contributions, requiring expert or actuarial evidence of the effect of the violence. That impression is reinforced by their Honour’s reference to and comparison with the husband’s failure to adduce evidence to demonstrate the impact on the value of the house by his renovations and improvements at [50] where their Honours said: 

An absence of quantification was also apparent in the appellant’s case. While the husband went to great lengths to identify each of the tasks undertaken by him in connection with renovations and improvements to the matrimonial property, he failed to provide evidence of the direct effect of his endeavours upon the value of that property. 

  1. This uncomfortable analogy does not illuminate what “quantification” of the effect of violence on contributions might look like. It suggests something more than the evidence by the victim spouse. We struggle to understand what that “quantification” evidence might be beyond that given by the victim spouse as to the incidence and effect of the violence as identified in Spagnardi in the first two dot points at [47]. Furthermore, we fail to see how this third step accords with the decision in Kennon which the Full Court in Spagnardi said governed the situation. Perhaps the use of the word “quantification” is infelicitous and has unintentionally added a gloss to the ratio in Kennon when, in truth, the Court in Spagnardi was merely reinforcing the need for there to be an evidentiary nexus between the conduct complained of and the capacity (and or effort expended) to make relevant contributions. And, depending upon the nature of the violence established, in the absence of express evidence about the effect that violence had on the victim spouse’s contributions, how difficult it might be for the Court to draw inferences which would establish the evidentiary nexus (see Spagnardi at [42]). But we did not have the benefit of argument on the point (nor it seems did the primary judge) and prefer to express no final view about it. 
  2. In any event, the primary judge gave no consideration to the inferences that might properly be drawn from the wife’s albeit limited evidence as to the effect on her of the husband’s violence taken in conjunction with her evidence of the severity of the violence. In this respect although there was evidence about violent behaviour by the wife, it was not the husband’s case that this warranted an adjustment in his favour. Perhaps this is why there is no reference to this evidence in the trial reasons.
  3. Turning then to the frequency and severity of the violence, we are troubled that the primary judge seems to have dismissed all incidents of violence towards the wife except that which resulted in the wife’s wrist being broken by the husband, apparently because her evidence was uncorroborated. 
  4. It is well settled that a party does not require his or her evidence to be corroborated before evidence of family violence can be accepted. A decade ago the Full Court said in Amador & Amador [2009] FamCAFC 196;  (2009) 43 Fam LR 268 at [79]:

Where domestic violence occurs in a family it frequently occurs in circumstances where there are no witnesses other than the parties to the marriage, and possibly their children. We cannot accept that a court could never make a positive finding that such violence occurred without there being corroborative evidence from a third party or a document or an admission. We have not been referred to any authority in support of such a proposition.

  1. The primary judge’s approach to the wife’s claim for an adjustment as a consequence of family violence was undoubtedly affected by the confused approach she adopted at trial and as reflected in her summary of argument filed in the appeal. Nonetheless it seems to us that his Honour’s approach to the issue of family violence as demonstrated in his reasons is persuasive of the conclusion that he misdirected his attention from the “discernible impact” of the husband’s violence on the wife’s capacity to make contributions focussing instead on there being no evidence allowing “quantification” of that effect. However, for an abundance of caution given the absence of a transcript, we cannot conclusively say that his decision to make no “Kennon” type adjustment was wrong. That argument and its ultimate determination must await the remitted trial.

Ding & Ding [2019] FamCAFC 35

Where the Full Court examined when legal privilege may be lost. The nub of the dispute was the wife’s application to set aside inter vivos family transactions by the husband in the months prior to separation in order to defeat her claim. The privileged letter was dated a few weeks prior to separation but only was discovered on day 6 of 7 of the trial. The letter was said to be the only other evidence in what was essentially a factual issue in dispute between the husband and wife resting upon an assessment of their credit.

During cross-examination of the husband he denied “turning his mind to the questing of any future claim for property settlement that the wife may bring”. Thereupon a call to produce the letter was made and objected to. The following is backdrop is relevant to understanding the Full Court’s decision to allow the appeal. 

  1. Section 118 of the Evidence Act 1995 (Cth) (“the EA”) is determinative of whether the relevant claimed privilege attaches and, relevantly, ss 125 and 122 of the EA are each determinative respectively of the question of whether, using the language of the EA, privilege is “lost” because of fraud or implied waiver. Section 118 was alluded to in oral argument before his Honour but no submissions were made by reference to its terms as to whether privilege attached.[8] Section 118 was not referred to in his Honour’s reasons.
  2. Nevertheless, and despite some cursory references apparently to the contrary during the proceedings and in the privilege reasons at [17] and [26], there is little doubt that the proceedings before his Honour were conducted on the basis of a concession that privilege attached to the 29 March letter with the relevant questions being whether privilege was lost through fraud or implied waiver. A consequence is that, despite no specific reference being made to the terms of s 118, the concession that the 29 March letter attracted legal advice privilege must also have been a concession that the terms of s 118 were satisfied; if the latter was not conceded, legal advice privilege could not attach.
  3. Therefore, as well as the admitted fact that the 29 March letter was a communication from the husband’s solicitor to him as a client, the concession that the letter attracted privilege is also an admission that the letter was confidential; that it contained legal advice and that it was prepared for the dominant purpose of the husband’s solicitor providing legal advice to him.

In relation to the issue of whether privilege the trial judge’s decision was encumbered with a number of difficulties but specifically upon when fraud might defeat privilege the Full Court said as follows;

  1. Fraud for the purposes of s 125, is “not limited to legal fraud in the narrow sense”, it can:[51]

...include the kind of sharp practice often associated with equitable fraud encompassed by the Shorter Oxford Dictionary sense of dishonesty, namely, ‘lack of probity; disposition to deceive, defraud or steal’.

  1. Crucial to the application of s 125 of the EA is proof that the relevant document was prepared “in furtherance of the commission of a fraud”. Relevant to the s 106B context at the heart of the proceedings before his Honour, it has been said that “obtaining legal advice in the context of an ongoing dishonest or fraudulent undertaking, so that the advice will or may impact upon or inform the client in the course of that undertaking, ... will be regarded as being in furtherance of the improper purpose”.[52]
  2. His Honour’s privilege reasons posit the question of whether the husband knew of the 29 March letter as “determinative”, saying that “[a]bsent a finding that he did, inferences drawn from the letter are simply speculative”.[53]
  3. Later, and to similar effect, his Honour found at [57]–[59]:
    1. The wife has been in possession of this letter for a number of years and her lawyers, more recently but it is fundamental to first establish that the husband knew of the letter or the communication before he could maintain its confidence. If I am satisfied that he did not know of the letter, then all of whatever is asserted as a waiver or illegal conduct is of no relevance.
    2. Of the husband’s knowledge, the onus of proof lies with the wife and she has to show a prima face case of fraud. While the test has a very low bar, that is of no relevance unless the husband was privy to the advice. In respect of looking at the document, I am conscious that that [sic] I have the sworn evidence of the husband and that of the wife but objectively, I prefer the husband’s version for the reasons that follow.
    3. Notwithstanding what Brennan CJ [said] about “colour to the charge” and the prima facie nature of the issue, I see no reason why I should depart from section 142 of the Evidence Act, and decide the matter on the balance of probabilities. That is, which of the two versions about what happened to this letter is more probable? that has to be determined not on the basis of a prima facie case or looking at some “colour to the charge” but rather whether or not I accept one of the two versions as more probable.

(Emphasis added)

  1. We consider, respectfully, that his Honour erred in making those findings and positing the husband’s knowledge of the letter as central to a determination of the issue of fraud. Contrary to what his Honour asserts, we are unable to agree that the husband’s knowledge was, in the circumstances of this case, relevant to the question at all.
  2. We have already sought to point out that a concession that the terms of s 118 of the EA had been satisfied such that the letter attracted privilege brought with it a concession that the letter to the husband from his lawyer was confidential and was prepared for the dominant purpose of providing legal advice to the husband. The terms of s 118 also make it clear that the privilege may attach “whether [the document is] delivered or not”.
  3. Privilege attaches at the point of creation of the document. By reference to the terms of s 125 of the EA, the question of whether a document is “prepared ... in furtherance of the commission of a fraud” arises when the document is created. Proof that it was may involve evidence as to the husband’s then knowledge of the document, but the corollary does not hold true; the document might satisfy s 125’s requirements even though the husband does not have knowledge of the document. The factual issues which his Honour said were necessary to determine on the balance of probabilities (at [59] of the privilege reasons above) were not in fact so necessary.
  4. His Honour correctly, with respect, identified that it was necessary to identify some “colour to the charge” by the wife of fraud,[54] the mere assertion of the same not being sufficient. We consider, with great respect, that not only were the matters which his Honour considered should be decided on “the balance of probabilities” largely irrelevant, his Honour should not have, as he said he would and did, depart from a consideration of whether there was “colour to the charge”.
  5. As we have said, the wife did not need to prove any intention on the part of the husband to sustain her s 106B claim, much less any fraudulent intention. She did, though, need to prove that orders in relevant proceedings were “anticipated” notwithstanding the time gap between the impugned transactions and separation. She needed to do so as a person who, to quote Santow J in Kang v Kwan[55] was:

... not in a position to lead very much evidence concerning purpose, as where the other party has exclusive access to that evidence, the Court may be satisfied with relatively less evidence. In contrast, much more evidence may be required where the party challenging improperly obtained access to that evidence...

  1. It was never established as a fact that the wife had “improperly obtained” the 29 March letter. Nor was that, as a specific consideration, referred to by his Honour as to whether he should inspect the letter. In any event, the treatment of the letter within the Court process marks it as distinguishable from the qualifying statement made by Santow J just quoted. As a result of the concession that the 29 March letter attracted privilege, it was an uncontroversial fact that the husband’s lawyer had authored a letter the dominant purpose of which was the provision of legal advice to the husband. It was an uncontroversial fact that a number of intra-familial transactions had the effect of devolving from the husband to his sister interests in property erstwhile held by the husband. It was also uncontroversial that those interests were transferred about a fortnight after the letter of advice was authored. It was asserted by the wife that the transfers occurred other than for full consideration and were not conducted at arm’s length. 
  2. Against that background, the wife’s counsel’s call for production occurred immediately after he asked a question of the husband in cross-examination as to whether “[a]t any time prior to the transfer of the three properties of 20 April 2010, was your attention drawn to a possible future claim for property settlement that the wife may bring”, to which the husband answered “no”.[56]
  3. Although the wife’s counsel, in the unusual circumstances earlier outlined, called for production of the letter, as distinct from seeking to tender it in evidence, there was the potential for its contents to be admissible and for the wife to re-open her case so as to tender it. The wife’s counsel submitted that, in respect of the issue of the privilege being lost through fraud:[57]

[COUNSEL FOR THE WIFE]: Well, I think, your Honour, in regards to the fraud issue, I think your Honour has got no alternative – if your Honour hears the application, your Honour has got no alternative but to look at the letter for yourself.

  1. The almost inevitable implication is that the wife, who like her counsel had seen the letter, considered that the letter would give further “colour to the charge”. In that respect, in Bailey v Director-General, Department of Land and Water Conservation,[58] the Full Court of the Federal Court rejected an argument that inspection pursuant to s 133 of the EA was confined to confirming the effect of evidence otherwise given, holding that the Court’s power “is engaged under the section in any case where ‘a question arises under this Part relating to a document’”.[59] Questions arising under s 125 arise under the relevant Part of the EA (namely, Part 3.10).

The Full Court thereupon considered the trial judge’s reasons for not inspecting the letter as in error. That consideration was, ultimately highly relevant to the determination if whether or not privilege attached.

  1. Any implied waiver said to arise by inconsistency with the position sworn to in the transcript extract quoted above depended upon evidence of the contents of the 29 March letter. There was no evidence before his Honour as to what that legal advice was. The passages in the arguments by senior counsel for the wife before us, highlighted in bold above, fall foul of that very point; there was no evidence of advice that dealt “with that topic” or “the particular issue”. 
  2. We see no error in his Honour’s conclusion with respect to waiver independent of the challenge that his Honour erred in not inspecting the document. 
  3. In that respect, it will have been seen that senior counsel for the wife submits that “this is a matter that could have been resolved by inspection”. That is true. The question for this Court is whether his Honour’s discretion erred in not carrying out that inspection.
  4. We consider that his Honour did err in that respect. The matters to which we have earlier referred in respect of the separate issue of fraud were just as relevant to his Honour’s discretion in deciding whether to inspect the letter for the purpose of establishing whether the relevant inconsistency was established.
  5. His Honour failed to take account of the relevant consideration that inspection of the letter could have illuminated if the husband was acting inconsistently with the maintenance of the privilege and failed to balance those considerations with considerations, including those identified by his Honour, which weighed against inspection. 
  6. In our view, his Honour’s discretion miscarried.

Stradford & Stradford [2019] FamCAFC 25

The Full Court considered the proper procedure for contempt allegations and when imprisonment thereafter might be appropriate. 

Phe & Leng [2019] FamCAFC 17

The Full Court considered when s131(2)(g) might apply to a communication that might otherwise be inadmissible as a settlement communication. 

In accepting a broad interpretation should be applied to s131(2)(g) the Full Court stated;

  1. t has been noted in various cases that the interpretation of the meaning and operation of s 131(2)(g) has been the subject of differing views (see, eg, Galafassi v Kelly [2014] NSWCA 190;  (2014) 87 NSWLR 119 at 147 [136]Slea Pty Ltd v Connective Services Pty Ltd [2017] VSC 232 at  [34]). Indeed, there are two competing interpretations as to the breadth of s 131(2)(g) of the Evidence Act
  2. The broader view, which, in our view, accords with the ordinary meaning of the provision, is that s 131(2)(g)of the Evidence Act applies where the existence or the contents of otherwise privileged communication contradicts or qualifies existing evidence or an inference from that evidence and the court is otherwise likely to be misled unless the communication is adduced. This interpretation has been supported in Nader v Sutherland Shire Council [2008] NSWCA 265 at  [48]–[52] and at first instance (see, eg, Mulkearns v Chandos Developments Pty Ltd (No 4) [2005] NSWSC 511;  (2005) 12 BPR 22,993 at [66]–[67]; Simply Irresistible Pty Ltd v Couper [2010] VSC 505 and Edwards v Transport Accident Commission [2013] VSC 557). 
  3. The narrower view is that s 131(2)(g) of the Evidence Act has to be read as applying only to cases where the privilege in s 131(1) could enable a party to mislead the court about the course of an attempt to settle a dispute where that matter was an issue in the proceedings and the privileged communication contradicted or qualified evidence which had been admitted about that issue. This view was initially expressed by Emmett J in Brown v Commissioner of Taxation [2001] FCA 596;  (2001) 187 ALR 714 at  [184]–[185] (“Brown”)and has been supported at first instance (see, e.g. Bloss Holdings Pty Ltd v Brackley Industries Pty Ltd[2005] NSWSC 756 at  [4]–[9]; Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd (No. 2) [2011] FCA 276;  (2011) 193 FCR 479 at  [41]–[57] (“Barrett Property Group”); Atlas Financial International Ltd v Nortbale Pty Ltd [2011] NSWSC 815 at  [84]–[86]; Payne v Rowe [2012] NSWSC 685;  (2012) 16 BPR 30,869 at 30,882  [45] (“Payne v Rowe”)).
  4. Assuming the court was likely to be misled (see [49] below), in this case, the message would be admissible if the broader view was adopted, as the exception would apply because the wife’s evidence contradicted what she wrote in the otherwise privileged message. If the narrower view was adopted, the exception to the privilege would not extend to adducing evidence which would contradict or qualify existing evidence already adduced and the message together with the subsequent cross examination of the wife upon it, would have been inadmissible.
  5. Section 15AA of the Acts Interpretation Act 1901 (Cth) (“the Acts Interpretation Act”) provides that, in the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying a provision shall be preferred to a construction that would not promote that purpose or object. 
  6. There is no cogent statement as to the purpose or object of s 131(2)(g) of the Evidence Act. The text of s 131(2)(g) of the Evidence Act has an ordinary meaning and requires three essential elements: 

(a) Evidence or an inference from evidence already adduced; 

(b) Evidence in an otherwise privileged communication or document sought to be adduced; and 

(c) A likelihood that the court will be misled unless the evidence in (b) is adduced to contradict or qualify the evidence in (a).

  1. The evidence in (b) is a reference to evidence about either the existence of or, the existence and contents of privileged communications.

Very relevant to conducting mediations;

  1. In our view, there are two policy objectives, not only the encouragement of settlement negotiation but also the provision of genuine representations during those negotiations. As Mansfield J said in Silver Fox Co Pty Ltd v Lenard’s Pty Ltd (No. 3) [2004] FCA 1570;  (2004) 214 ALR 621 at  [36] (in the context of considering the exception applying to privileged offers in a costs application; s 131(2)(h)):

Clearly, it is in the public interest that negotiations to explore resolution of proceedings should not be inhibited by the risk of such negotiations influencing the outcome on those primary issues. It is equally in the public interest that negotiations should be conducted genuinely and realistically.

(Emphasis added) 

  1. If, as it is here, the issue is of importance, it is not sound public policy to permit a party to assert something is “white” when attempting to negotiate a settlement and then give sworn evidence that it is “black”, without the court knowing the witness had previously said that it was “white” and the witness being exposed to being tested upon the assertion made during settlement negotiations. We accept that despite the obligation to negotiate genuinely, sometimes care may need to be taken by the court when placing weight upon statements made in settlement negotiations. It may be as a result of testing that the court might conclude that the statement made in settlement negotiations was false but, as in this case, it may not.

 

 

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