Chief Justice, distinguished
guests, ladies and gentlemen.
I am delighted to be
here, contributing to “Hot Topics in the Tropics” at the North Queensland Law
Association Conference. I am not sure how “hot” my topic is but it is
“topical”, and I do wish to discuss
a case that derives from Queensland, namely State of Queensland v JL Holdings (1997) 189 CLR 146. I have entitled my topic “The Attainment of
Justice – with Particular Emphasis on the Federal Court”, although
I am afraid
that is in an attempt to try to stimulate your immediate interest – later I
will be talking about discovery.
It has always been the object of the judicial system to obtain
justice, in whatever form might be appropriate
in the circumstances. The
method employed to achieve justice has varied greatly throughout history, and
between empires and countries. Different eras and jurisdictions have favoured the
use variously of, for example, judges, or juries, or even the invocation of
God.
There has not always
been, of course, court rules with page after page of reference to pleadings, notices
to produce, discovery rules and interrogatories. Indeed, there are still
jurisdictions
without such regulated procedures or equivalent concepts. So who
has got it right? Are we more able in
Australia in 2008 to deliver justice by
virtue of the myriad of procedural rules than in times past or
in jurisdictions
with less complex procedure? Many would argue not necessarily; that the
existing procedures, and even case management, for the sake of it, are not
achieving the purpose
they were designed for.
Most now accept that
a procedural Rolls Royce is not the best approach to every case. The next
question is what aspects of procedure are not pulling their weight, and in what
circumstances?
After answering this question, we then become equipped to ask
how some reform might be made.
First, let us look
at another, older, approach to justice – one with far fewer procedural rules.
In the middle ages,
the notion of trial by ordeal was considered the method du jour of establishing
guilt. It was a practice held in high esteem. Usually, under trial by ordeal, the guilt or innocence of the
accused was determined by subjecting them to a painful task.
If either the
task was completed without injury, or the injuries sustained were healed
quickly, the accused was considered innocent. In medieval Europe, like , it
was considered
a judicium Dei: a procedure based on the premise that would help the innocent by performing a
miracle on their behalf.
These days of course, it is lawyers who must perform
the miracles.
In Europe, ordeals
commonly required an accused person to test himself or herself against fire or
water, though the precise nature of the proof varied considerably at different
times
and places. Fire was the element typically used to test noble
defendants, while water was more commonly
used by lesser folk.
In 12th Century
Catholic churches the priest would demand a suspect to place his hand in the
boiling water. If, after three days, God had not healed his wounds, the suspect
was guilty
of said crimes.
There was also the ordeal by cold water. This involved variously being submerged in a stream with a subsequent acquittal if you
survived, or being submerged in a three times, being considered guilty if you sink to the bottom.
This ordeal became also
associated with the of the 16th and 17th centuries. Some argued that witches floated
because they
had renounced when entering
the 's service. Some
claimed that they were supernaturally light, and recommended weighing them as
an alternative
to dunking them.
Women accused of being
witches were often thrown into deep water with a round her
neck. It was thought that the guilty would sink. This method of course
achieved a 100% success
rate from the prosecutor’s point of view.
In (and I’m working from the authorised version here), a crowd of medieval villagers bring a woman to , accusing
her of witchcraft. The villagers admit that
they gave her a fake nose and had
dressed her up to appear more like a witch. Sir Bedevere, not fully
convinced,
proposes a test to determine whether or not she is a witch:
witches
burn, and so does wood, so witches are made of wood; wood floats on
water, and so do ducks, therefore,
if she weighs as much as a duck, she is a
witch. She does, and is carried off by the villagers to be burned,
adding,
"It's fair cop"—that is, that she was rightly accused and properly
tried.
These glimpses into the
history of trials show us how the acceptance of different modes of and
procedures at trial change over a period of time. Each considered “the”
preferred way
to proceed. I would like to return to civil procedures and the
present day.
We have a long history
of court procedure which underpins the civil litigation process in Australia, with
many aspects including pleadings, discovery, and the giving of evidence being
well known even amongst non-lawyers.
But the extent to which such procedures
are necessary to obtain justice, itself a subjective term, is an
area of
disagreement by practitioners and judicial officers alike. Particularly in the
light of some of the more complex and lengthy cases of late, it is arguable
that a certain level
of the process leading up to trial is unnecessary and
perhaps, positively harmful to the attainment of
justice. Do we need to
completely re-think the “ordeal” of the civil trial we put litigants through in
an attempt to achieve justice?
The purpose of my presentation
today is to identify some tension in the use of case management principles
and to
talk about the relatively recent development of doing away with pleadings and
limiting discovery in the Fast Track list in the Federal Court. Necessarily, I
can only touch
upon these aspects for the purposes of promoting discussion.
Let me start with a
discussion of a case which will likely be familiar to many of you: State of Queensland v JL Holdings (1997) 189 CLR 146. In that case, the parties were engaged in
a long running commercial dispute in the
Federal Court concerning a lease to
develop certain land. The estimated length of the trial was four months.
After
a number of interlocutory hearings and several amendments to the defence, the
defendants applied again to amend their defence. All but one of their
amendments were allowed.
The judge (Kiefel J) refused leave to add a
defence which, though arguable, was likely to result in the
vacation of the
date which had been fixed for the trial six months ahead. The judge considered
that maintaining that date was a more pressing consideration than a party’s
right to
present a further defence. After being upheld by the Full Court on appeal, the trial judge’s decision was then overturned by the
High Court,
which held that, while case management principles were a relevant
consideration, they could not be used to prevent a party from litigating an
issue which was fairly arguable.
A party should be permitted to raise an
arguable defence provided any prejudice to other parties could
be compensated
by costs.
Justices Dawson,
Gaudron and McHugh referred to several cases relied upon by the Full Court,
including a comment by Bowen CJ in Cropper v Smith [1884] UKLawRpCh 91; (1884) 26 Ch D
700 at 710, that:
… it is a well established principle that the object of
courts is to decide the rights of the parties,
and not to punish them for
mistakes they make in the conduct of
their cases
by deciding otherwise than in accordance with their rights. … I
know of no kind of error or mistake which,
if not fraudulent or intended to
overreach, the court ought not to correct, if it can be done without
injustice
to the other party. Courts do not exist for the sake of discipline, but for
the sake of deciding matters in controversy, and I do not regard such amendment
as a matter
of favour or of grace.
The Federal Court
decision in Clough and Rogers v Frog (1974) 48 ALJR 481 was also
referred to, where applications for leave to amend the defences
in two actions by adding a new defence had been refused.
The actions had been
commenced more than five years previously and the applications were made
two days before the actions were listed for hearing. The Court stated that:
As the defence, if established, would be a complete answer
in either action, the amendments sought should
have been allowed unless it
appeared that injustice would thereby have been occasioned to the respondent,
there being nothing to suggest fraud or improper concealment of the defence on
the part of the appellants.
Justices Dawson,
Gaudron and McHugh then referred to a contrary stance espoused in Sali v SPC (1993) 67 ALRJ 841, where it was stated by Toohey and Gaudron JJ (at 849) that:
The contemporary approach to court administration has
introduced another element into the equation or,
more accurately, has put
another consideration onto the scales. The view that
the conduct of litigation is not merely a matter for the parties but is also
one for the court and the need to avoid disruptions in the court's lists with
consequent inconvenience to the court and prejudice to the interests of other
litigants waiting to
be heard are pressing concerns to which a court may have
regard.
The High Court went
on to find in JL Holdings (at 155) that:
… the matters referred to by the primary judge were
insufficient to justify her Honour’s refusal of the
application by the
applicants to amend their defence and nothing has been made to appear before us
which would otherwise support that refusal. Justice is
the paramount consideration in determining an application such as the one in
question. Save in so far as costs may be awarded against the party seeking the
amendment,
such an application is not the occasion for the punishment of a
party for its mistake or for its delay
in making the application. Case management, involving as it does the
efficiency of the procedures
of the court, was in this case a relevant
consideration. But it should not have been allowed to prevail
over the
injustice of shutting the applicants out from raising an arguable defence, thus
precluding the determination of an issue between the parties. In taking an
opposite
view, the primary judge was, in our view, in error in the exercise of
her discretion.
It must be said that
the decision in JL Holdings is not without its critics, one of whom
occupies chambers two doors down from mine. Late last year, in
Black and
Decker Australasia v GMCA [2007] FCA 1623,
Finkelstein J was dealing with a situation where the respondent sought leave to
file two affidavits out of time which were contended to be by way of reply. His
Honour
stated that:
It is common for parties to do little more than pay lip
service to timetables fixed to regulate when steps
should be taken to get a
case on for trial. Seemingly it makes no difference whether the timetable is
fixed with the consent of the parties or following argument. The view that has
taken hold in many quarters is that a party is only required to keep an eye on
the timetable and,
if it cannot be met, it will be extended. The assumption is
that the wronged party will be fully compensated
by an award of costs.
The assumption may be true in some cases. But often it is
not true when it comes to commercial parties
involved in a commercial dispute.
Those parties do incur losses resulting from delay that can never
be
compensated by a costs order. For one thing the costs are often not capable of
being calculated. For another thing the costs are not only directly pecuniary.
Take, for
example, the cost that results from diversion of management time away
from the firm’s business and to
the litigation. This should not be, but more
often than not is, overlooked. There is also the opportunity
cost of a dispute
remaining unresolved. Every businessman knows that firms are often inhibited
from taking action until the court determines whether the action is lawful. Ultimate
success in the dispute will not undo the loss incurred in the past. Finally
there is the ever
growing discrepancy between the costs recovered pursuant to a
costs order and a party’s actual out of
pocket expenses. Nowadays the party
that obtains a costs order is lucky to get back 50% of its actual
costs.
His Honour described
the JL Holdings decision as having a ‘chilling effect’ and that it had
been applied in ‘many cases where a simple costs
order will not do justice
between the parties’. Justice Finkelstein went on to say that:
It is time that this approach is revisited, especially when
the case involves significant commercial litigation.
One of the primary
objects of a commercial court is to bring the litigants’ dispute on for trial
as soon as can reasonably and fairly be done. If, in some instances, the
preparation
of the case is not perfect so be it. A case that is reasonably
well prepared is just as likely to be
decided correctly as a perfectly prepared
case.
And:
I am of the firm view that parties should not be treated as
leniently as they have been in the past.
Commercial parties expect this
approach from the courts and their expectation should be met. A useful
rule to
adopt is to allow an extension only if the failure to meet the existing
timetable is the result of excusable non-compliance. In deciding whether there
is excusable non-compliance
the court should take into account, among other
factors: (a) the direct and indirect prejudice to the
opposing party; (b) the
impact of the delay on the proceedings; (c) the reasons for the delay; (d) good
faith or lack of good faith on the part of the party seeking to be excused; and
(e) the effect of putting off a trial both on other litigants and generally on
the court’s ability
to efficiently manage its cases.….
Not all Federal Court
judges would agree with his Honour’s view however. Last month, Logan J
commented that:
With the very greatest respect, I do not regard Queensland v JL Holdings as having a chilling effect. It seems to me that there is a
need not to confuse the particular principle
enunciated in JL Holdings with the outcome in particular cases.
During the special leave
application to the High Court in the Black and Decker case (which was
refused), Gummow J made some interesting comments about JL Holdings:
I am not sure that if you got here and JL Holdings was
looked at again that it might not undergo some reinterpretation. … One of the
things not discussed in any detail in JL at any rate is the
importance of parties observing directions in complicated cases, patent cases
in particular I say from personal experience, and directions are orders of the
Court.
He also said that:
Orders … are not advisories. They are orders and if
there appears to a judge to be – I am not saying
it is right or wrong in
this case – failure to comply with orders of a sustained nature that is a
significant matter to go in the scales.
As an aside, his Honour
commented during the hearing that:
… the notion of case management is, in my view, something of
an overstatement – we were case managing
cases in the Federal Court, I think,
from 1977 from the start. We did not call it case management.
We called it
getting on with it. ….. You did not get PhDs in the subject either.
So where does the best
balance lie to attain justice? There is no doubt that, by necessity,
particularly complicated cases, factually or legal, generally warrant greater
levels of
preparation than ‘cut and dry’ ones. Some cases will go on for ever.
My researches have shown that the longest suit on record
in England is one which existed between the heirs of Sir Thomas Talbot, Viscount Lisle, and the heirs
of
a Lord Berkeley, in respect of some property in the county of Gloucester. It began at the end of the reign of Edward IV., and was
pending until the
beginning of that of James I., when it was finally determined, being a period
of not less than one hundred and twenty years! So Justice Sackville who heard
and decided
the C7 case should not complain!
However, the attainment
of justice, the ultimate aim of all court proceedings, may be done even if all
of the traditional procedural steps, or aspects, of proceedings are not undertaken.
For example, there is sometimes no desire by parties in certain cases to have
discovery ordered
at all, or sometimes just very limited discovery. Certainly
there is no desire by junior solicitors to
undertake extensive discovery in my
experience or, as my associate calls it, “death by documents”. To
return to Justice Finkelstein, and to demonstrate that my topic is “hot” off the press, only yesterday his
Honour was quoted in The Age (dated 29 May 2008), in relation to the
Opes case, where one party wanted documents numbering more than
250,000 items:
“Not in my court,” Justice Finkelstein said
firmly.
“I will not allow this kind of search process to
go on unless it involved security of the nation or something
like that”.
“There’s got to be a limit, otherwise people are
going to spend millions of dollars in wild-goose chases
to find a single
document. Why would anybody allow that to take place? Neither in this case or
in other cases should people be allowed to cause other parties to incur millions
of dollars in expenses if the gain is likely to be zero or insignificant.”
To assist in the
resolution of some cases, the Federal Court has introduced the Fast Track List,
based on the notion that justice is better served in certain cases by a simplification,
or relaxation, of the civil procedures we have normally come to expect. The
aim is not to focus on
process, but upon the ultimate end that is sought
to be achieved on a decision based upon law.
For those who are less
familiar with the Fast Track List, which is still in ‘trial’ phase in Melbourne
where currently three of the most attractive judges in the Court run the list –
Justices Finkelstein, Gordon and myself, I will set out some of its elements.
The proceedings that can be entered
on the Fast Track List are proceedings arising out of or relating to:
(a) commercial transactions;
(b) an issue that has importance in trade or
commerce;
(c) the construction of commercial documents;
(d) an issue that has importance in personal
insolvency;
(e) intellectual property rights apart from patents;
(f) such other commercial matters as the presiding
judge may direct;
but excluding proceedings –
(x) that would otherwise be allocated to the -
i. admiralty panel;
ii. corporations panel;
iii. taxation panel.
(y) the trial of which is likely to exceed eight (8)
days.
Corporation matters and tax matters
have their own similar procedures, but are conveniently dealt with separately.
There are no pleadings. Instead,
there are statements of a party’s claim or cross-claim, points of defence
and
points in reply (collectively referred to as “case summaries”).
All case summaries must, avoiding
undue formality, state in summary form:
(a) the basic elements of the party’s claim or
defence, as the case may be;
(b) where applicable, the relief sought;
(c) the issues which the party believes are likely to
arise;
(d) the principal matters of fact upon which the
party intends to rely; and
(e) the party’s contentions (including the legal
grounds for any relief claimed) and the leading
authorities
supporting those contentions.
There is an initial Scheduling
Conference, where there is discussed:
· an initial witness list;
· the narrowing of issues;
· a fixed Trial Date; and
· the pre-trial Schedule.
Except where expanded or limited by
the presiding judge, discovery in cases in the Fast Track List will,
as regards
liability, be confined to documents in the following categories:
(a) documents on which a party intends to rely; and
(b) documents that have significant probative value
adverse to a party’s case.
Parties are required to provide
discovery of any document within the limited discovery categories that a
party
knows of at the time of the Scheduling Conference, or that the party becomes
aware of at a later point in the pre-trial or trial process, or that the party
discovers in the course
of a good-faith, proportional search of its documents
and records.
A “good-faith proportionate search”
is a search undertaken by a party in which the party makes a good-faith
effort
to locate discoverable documents, while bearing in mind that the cost of the
search should not be excessive having regard to the nature and complexity of
issues raised by the
case, including the type of relief sought and the quantum
of the claim. This will usually involve more
than simply placing your hand in
your home filing cabinet, pulling out 20 random documents, and giving
them to
your solicitor.
If requested by any party, a party
must describe briefly the kind of good faith proportionate search it
has undertaken
to locate discoverable documents.
A party may require additional
discovery in relation to discrete issues, such as the quantification of
damages. In that event the judge will make a separate order for that purpose.
The order may include a requirement that discovery be by inspection alone.
Interrogatories will not be permitted
in cases in the Fast Track List except in exceptional circumstances.
A pre-trial conference shall be held
approximately three weeks prior to the scheduled trial date with the
presiding
judge, the lawyers involved in the case and all parties attending. The
pre-trial conference is an opportunity for the parties and the judge to deal
with any outstanding
matters or applications before the start of the trial.
At the pre-trial conference the
parties will be required to identify the material facts that are agreed
and the
material facts in dispute. In addition, a final witness list will need to be
prepared.
In urgent matters the Court will
deliver judgments quickly, if necessary with reasons to follow. In all
other
cases, the Court will endeavour to deliver judgment within six weeks. Delays
in giving judgment used to be treated seriously in ancient times. A poor widow
complained to the
King of the Romans that a suit of hers had been in court
three years, which might have been decided in
a few days. The King, being
informed who were her judges, gave orders that they should give all expedition
to the poor woman’s cause, and in two days it was decided to her satisfaction.
The King then summoned the judges before him, and inquired how it was that they
had one in two days
what they had delayed for three years? “The recommendation
of your majesty,” was the reply. “How,” said
the King, “when I put you in
office, did I not consign all pleas and proceedings to you? You deserve death
for having delayed that justice for three years, which two days could
accomplish;”
and, at that instant, he commanded their heads to be struck off.
This is not something that I am advocating
for judges who perhaps take too long
to deliver their judgment.
Of course, the Federal
Court continues to employ the docket system.
It is probably worth
stating the obvious, in that the docket system of Federal Court, introduced 10
years ago, is itself a case management tool. The Chief Justice recently issued
a
memorandum reiterating the purpose and principles of the docket system, as
follows:
The overarching purposes of individual cases management
within the docket system is the just resolution
of disputes as quickly, inexpensively,
and efficiently as possible.
In giving effect to the overarching purposes the Court, the
profession and the parties will necessarily
have regard to what the interests
of justice, either generally or in the particular case, require.
To that end, the
Court may be expected to have regard to the desirability of:
· identifying and narrowing the issues in dispute
as early as possible;
· ascertaining the degree of difficulty or
complexity of the issues really in dispute;
· setting a trial date early;
· minimising unnecessary interlocutory steps by
permitting only interlocutory steps that are directed to
identifying, narrowing
or resolving the issues in dispute between the parties;
· exploring options for assisted dispute
resolution as early as practicable.
The Chief Justice noted
that the parties and their representatives have an obligation to cooperate
with, and assist, the Court in fulfilling the overarching purposes and, in
particular,
in identifying the real issues in dispute as early as possible and
dealing with those issues in the most
efficient way possible.
What is interesting
from this is that case management principles are not seen by the Court (or, one
presumes, the litigants) to be a concession or an abrogation of justice in
order
to get a speedy judgment or to save costs for example; to the contrary,
case management is generally used
as a tool to better achieve that
justice. The real problem is that one has to be careful not to over manage a
case prior to trial, just as being careful not to under manage. The starting
point is usually deciding
on a trial date, work out what is necessary for that
event, and then “getting on with it”, to use the terms
of Gummow J.
One of the goals for
the Federal Court at least is consistency in its application of case management
principles. Perfect consistency is of course difficult given the fact that the
judges are numerous and human, although that last proposition is arguable. Each
case does not and cannot
‘run itself’ as it were; if it did, one could have a
computer containing all the formulae for efficient
case management, and parties
would just input via their own computers the facts, the causes of action,
the
likely number of relevant discoverable documents, and the evidence likely to be
led. The computer would then process the data, and spit out a timetable to be
followed by the parties,
including all interlocutory orders which might be
necessary. All that would be left for the judge to do
would be to hear the
case and make a decision. But this would focus too much on “process”, and not
upon what was absolutely necessary for each individual case to dispose of it at
a trial.
Let me return to
discovery. Many litigation practioners complain that they are buried in
documents and that the amount of documentation in litigation is exploding,
particularly in
large and complex litigation. There is the example of the
Multiplex case where there have been estimates
of up to $25m for discovery when
the total claim was for $100-150m. In the Seven Network Ltd v News Ltd case 85,000 documents were put before the court. This was however only fifteen
percent of the discovered
documents and millions were reviewed to get it down
to the 85,000. These do not seem to be isolated instances
- there are examples
of cases set down to run for a year to eighteen months. In another case
concerning $80,000 over 800,000 emails were discovered.
The aim, in an ideal
world, would be identify and exchange the critical documents at an early date,
which might spare much of the other discovery. It seems that many large,
sophisticated
defendants would have risk management systems in place to deal
with document creation and retention and,
if this is so, then they should be
able to identify the key documents early in the process. But who should
decide
which documents are the crucial ones? The parties, or the courts? Should
judges be more interventionist and order parties to hand over the key documents
early in the piece?
Some practioners consider that the courts need to exercise
more control. But you cannot please everybody,
and there are critics of
category discovery as it can make documents that otherwise would not be
relevant discoverable, and can lead to disputes over the categories.
There is the
possibility of the introduction of special staff to manage discovery issues in
large cases. These might be equivalent to the senior administrative staff who
manage pre-trial
conferences and perform a role that is analogous to the
special masters in the USA.
There may be a need
to reconsider a party’s ‘right’ to discovery, or to express more precisely the
content of any such right. We should look at the process of discovery in the
context
of some of the fundamental principles of case management, namely:
· Ensuring the parties are on equal footing;
· Saving expense;
· Dealing with the case in ways which are
proportionate to;
o The amount of money involved;
o The importance of the issue;
o The complexity of the issues;
o The financial position of each party; and
· Ensuring that it the case is dealt with
expeditiously and fairly.
In addition to reforming the rules,
courts could augment discovery in several ways. One proposal is to
give judges
discretionary power to allow oral depositions as well as to appoint special
masters to manage discovery in large-scale actions, including the conduct of
depositions.
It seems difficult to avoid the
conclusion that the current discovery regime is defective because it does
not
explicitly force litigants to justify discovery requests (ie by reference to
the costs and benefits) nor does it constrain the trial judge to reject
requests not so justified.
There is an obvious virtue in requiring
the parties and the court to isolate beforehand precisely what it
is the
parties want discovery of and why. If a litigant cannot clarify and justify a
request, then it should not be granted. The more the court is able to narrow
discovery to specific
documents (eg the board minutes for a particular meeting)
rather than broad categories (eg all documents
mentioning the defendant), the
easier it will be to ensure compliance, minimise disputes, and control cost
burdens.
I then leave you all with this final
observation. A great degree of co-operation between practioners is
going to be
expected in the running of future litigation. We are still in an “adversarial system”,
but it is being tempered. Co-operation to achieve an expeditious and fair result
will need to become the norm. Judges will need to encourage and reward such
co-operation, and equally
deal appropriately with those litigants (and their
advisors) who do not assist with the overriding objective
of enabling the
courts to deal with cases justly.
Again, “hot” off the press is the
announcement by the Victorian Attorney-General that he has received a
750 page
report into civil litigation in the Victorian Parliament yesterday (28 May
2008). The report is the product of an 18 month inquiry by the Victorian
Law Reform Commission,
led by Peter Cashman, and makes 177 recommendations for reforms
aimed at reducing the cost, duration and
complexity of litigation and to
encourage more disputes to be resolved before trial.
The report recommends increasing
standards of court users – including the parties, lawyers, litigation funders
and insurers – by creating a duty to ensure costs are “minimised and proportionate”
and steps in the process are “reasonably necessary”. The court will have power
to award compensation
to those harmed by a breach of the standards.
I am not sure this is necessarily the
way to go. My experience is that most practitioners do co-operate
and if
suitably prompted and encouraged, assist the court in reaching an expeditious
trial or coming to an appropriate settlement. The culture among litigators is
changing, and there
is now an appreciation that there is a need to get to the
nub of the dispute as quickly as possible and
without wasting valuable court
resources.
Thank you and I hope that you enjoy
this conference.
