Practice and Procedure

Assessing and Weighing Evidence in Civil Proceedings

1. Introduction: The Judicial Function in Evidence Assessment

The assessment of evidence constitutes the core of the judicial function in civil proceedings. Unlike questions of law, which are amenable to precise rules and principles, the evaluation of evidence is an inherently discretionary exercise informed by legal principle, experience, and reasoned judgment. The ultimate question is whether the tribunal of fact has been persuaded to the requisite standard that the facts necessary to establish the cause of action or defense have been proved.

The standard of proof in civil proceedings is the balance of probabilities.

1.1 The Briginshaw Principle: Subtleties and Application

While the balance of probabilities remains the applicable standard, the High Court in Briginshaw recognized that the degree of satisfaction required may vary according to the gravity of the matters alleged. Dixon J articulated this principle (at 361-362):

"The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding, are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal."

It is crucial to understand that Briginshaw does not alter the standard of proof or create a "third standard" between the civil and criminal standards. Rather, it recognizes that the more serious the allegation, the more carefully the court should scrutinize the evidence before being satisfied on the balance of probabilities (Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449-450).

This principle operates as a practical recognition that, in considering whether the balance of probabilities has been met, the nature and consequences of the facts to be proved are inherently relevant to whether the court feels an actual persuasion that they occurred. This nuance was further clarified in Cubillo v Commonwealth of Australia (No 2) (2000) 103 FCR 1 at [322], where the Court emphasized that the Briginshaw principle does not impose a higher standard of proof but "merely reflects a conventional perception that members of society do not ordinarily engage in fraudulent or criminal behavior."

2. Assessing Oral Evidence

2.1 Credibility versus Reliability

A critical distinction when evaluating oral testimony is that between credibility (honesty) and reliability (accuracy). A witness may be entirely truthful yet provide unreliable evidence due to perception, memory, or articulation issues. Conversely, a witness might generally be unreliable but accurately recall certain specific details.

In Doherty v Sampey [2023] WASC 10, Allanson J demonstrated this distinction in practice, finding that some witnesses, while attempting to be honest, had memories affected by "the passage of time... strong emotions... and, in the case of Norris, his health" (at [31]). The court proceeded to accept parts of testimony while rejecting others, showing the nuanced approach required.

2.2 Demeanor: A Cautionary Approach

Traditional emphasis on demeanor as a central element in credibility assessment has been significantly qualified by modern jurisprudence, which recognizes the limitations of demeanor-based evaluations. This shift is evident in Fox v Percy (2003) 214 CLR 118, where the High Court noted at [30]-[31] that "recent research has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of demeanor."

The Full Court of the Federal Court articulated this limitation in SBAS v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 195 at [82], observing that "it is all too easy for a judge to think that a shifty-looking witness is a liar, when his appearance may be due to stress, embarrassment... [or] personality." This recognition requires judges to treat demeanor as just one factor among many, with greater emphasis placed on objective factors such as consistency with established facts, contemporaneous documentation, and inherent probability.

2.3 Consistency and Corroboration

Consistency takes multiple forms that must be evaluated differently:

2.3.1 Internal Consistency

Minor inconsistencies within a witness's testimony may actually enhance credibility, as they can indicate lack of rehearsal or fabrication. Conversely, perfect consistency on peripheral details over multiple tellings may suggest preparation rather than genuine recall. The focus should be on whether inconsistencies relate to central or peripheral matters, and whether they follow a pattern suggesting unreliability or merely reflect natural memory processes.

2.3.2 External Consistency

External consistency involves the relationship between a witness's testimony and:

  • Objectively established facts

  • Contemporaneous documents

  • The testimony of other witnesses, particularly independent ones

  • Previous statements by the same witness

When assessing external consistency, particular weight should be given to consistency with contemporaneous documents and objectively verifiable facts. The Court of Appeal in Kakavas v Crown Melbourne Ltd [2012] VSCA 95 at [449] observed that "the objective facts... provided the most reliable yardstick against which to measure the reliability of the evidence given by the various witnesses about past events."

2.4 Memory and Recollection

Courts must be acutely aware of the reconstructive nature of memory, particularly regarding conversations or events occurring years before trial. The inherent frailties of human memory were articulated by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319:

"Human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time... The difficulty is compounded when the conversation is heard differently by different listeners, and is affected by the bias and interest of those who purport to recall it."

This scientific understanding of memory has important consequences for evidence assessment:

  1. Greater weight will typically be accorded to contemporaneous documents than to later recollections

  2. The more time that has elapsed, the more carefully oral recollections should be scrutinized

  3. Memories of specific conversations should be assessed with particular caution

  4. The court should consider the effect of post-event discussions or information that may have influenced memory

Nevertheless, as Vaughan J noted in Westgyp Pty Ltd v Northline Ceilings Pty Ltd [2018] WASC 244 at [53], and as endorsed by Allanson J in Doherty v Sampey [2023] WASC 10 at [35], the correct approach is not to "simply place little reliance on oral recollection" but to "assess that evidence in light of its inherent probabilities in the context of the objectively established facts."

2.5 Reconstruction versus Independent Recollection

Courts should be alert to the distinction between genuine independent recollection and reconstructed memory. A witness who is reconstructing what "must have happened" based on knowledge of events, documents reviewed, or subsequent conversations, is not providing direct evidence of recollection. While reconstruction may still be valuable evidence, it does not carry the same weight as authentic independent recollection.

In Onassis v Vergottis [1968] 2 Lloyd's Rep 403 at 431, Lord Pearce observed that "witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active."

2.6 Interest and Bias

A witness's interest in the outcome of proceedings, whether financial, emotional, or reputational, requires the court to scrutinize their evidence with particular care. This does not mean that interested witnesses should be disbelieved merely because of their interest; rather, their evidence should be tested against objective facts and inherent probabilities with heightened attention.

Allanson J's treatment of the evidence of Mr. Hughes in Doherty v Sampey [2023] WASC 10 illustrates this approach. The court observed that Mr. Hughes, as a loyal friend to one party, could not be regarded "in the same way as... a truly independent witness" because he was "obviously affected by his friend's distress" (at [97]). The court acknowledged that this relationship may have "distorted his recollection of events" without automatically rejecting his evidence.

2.7 Witness Unavailability: Special Considerations

When evidence relates to dealings with a person who cannot give evidence (due to death, incapacity, or non-attendance), particular caution is required. This principle has been articulated in cases such as Blacket v Barnett [2017] NSWSC 1032 at [243]-[250], where the court emphasized the need for careful scrutiny of evidence about conversations with deceased persons.

These principles were applied by analogy in Ng v Sevastos [2024] WADC 75, where Curwood DCJ carefully scrutinized evidence concerning dealings with a party who could not testify due to cognitive impairment. The court accepted the plaintiff's evidence only after finding it corroborated by contemporaneous documents and conduct.

The rationale for this heightened scrutiny is that the evidence cannot be tested through cross-examination of the other participant in the conversation or transaction, removing a crucial safeguard for testing reliability and truthfulness.

2.8 Partial Acceptance of Evidence

The principle that a court may accept some parts of a witness's evidence while rejecting others is well-established. In Cubillo v Commonwealth of Australia (No 2) (2000) 103 FCR 1 at [118], the court noted that "the trial judge is entitled to believe part of the evidence given by a witness and to reject the rest" after making an assessment of all the evidence.

This selective approach recognizes that witnesses may be honest and accurate on some matters but not others, whether due to memory lapses, unconscious bias, or deliberate deception on specific points. The court's task is to identify which aspects of testimony are reliable and which are not, based on objective indicia of reliability rather than making a global assessment of the witness's credibility.

3. Assessing Documentary Evidence

3.1 Categories and Weight

Different categories of documentary evidence attract different evaluative approaches:

3.1.1 Contemporaneous Business Records

Documents created in the ordinary course of business, without contemplation of litigation, generally have enhanced probative value. This includes invoices, ledgers, meeting minutes, emails, and routine reports. Such documents are typically created for operational rather than forensic purposes and are less likely to reflect bias or advocate a particular position.

3.1.2 Self-Serving Documents

Documents created by a party after a dispute has arisen, or in contemplation of potential litigation, warrant greater scrutiny. While not automatically discounted, such documents may reflect a party's desired interpretation of events rather than an objective record.

3.1.3 Official Records and Public Documents

Documents created pursuant to statutory or regulatory obligations often carry heightened reliability due to the formal responsibilities under which they were prepared.

3.2 Authentication and Chain of Custody

Before a document's content can be evaluated, its authenticity must be established. This involves consideration of:

  • Who created the document and when

  • How the document has been stored and preserved

  • Whether there is evidence of alteration or tampering

  • The source from which the document was obtained

In Ng v Sevastos [2024] WADC 75, questions arose about an envelope allegedly signed by a key witness but kept in the defendant's safe. The court carefully considered the chain of custody and potential for alteration when assessing its evidentiary value.

3.3 Electronic Documents: Special Considerations

Electronic documents present unique challenges and considerations:

  • Metadata may provide important information about creation, modification, and access

  • Electronic documents may exist in multiple versions

  • Questions of authentication are often more complex

  • The manner of production and preservation may affect reliability

Courts should be alert to these issues when assessing electronic evidence, particularly when authenticity or integrity is contested.

3.4 Interpreting Documentary Evidence

The interpretation of documents involves both their literal content and contextual meaning. Courts should consider:

  • The purpose for which the document was created

  • The author's knowledge and authority

  • The intended audience

  • Contemporary circumstances that inform meaning

  • Technical or specialized terminology

  • Consistency with related documents

In commercial contexts, the objective approach to contractual interpretation articulated in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35] may be instructive – focusing on what a reasonable business person would understand the document to mean, considering the language, surrounding circumstances, and commercial purpose.

4. Weighing Different Forms of Evidence

4.1 The Primacy of Contemporaneous Documents

Where reliable contemporaneous documents conflict with subsequent oral testimony, courts typically accord greater weight to the documents. As Lord Goff observed in Armagas Ltd v Mundogas SA [1986] AC 717 at 757:

"The judge's task is to assess the testimony of the witnesses but also to evaluate it in light of the contemporaneous documentation, the pleaded case and the inherent probability or improbability of the competing cases."

This principle reflects recognition of memory's fallibility and the fact that documents are typically less susceptible to the distorting effects of time, bias, and suggestion. However, this does not amount to an absolute rule that documentary evidence always prevails. Documents may be ambiguous, incomplete, or even inaccurate, and oral evidence may convincingly explain apparent inconsistencies.

4.2 Reconciling Conflicts in Evidence

When faced with conflicting evidence, courts should first attempt to reconcile apparent inconsistencies. Only when reconciliation is impossible should the court determine which evidence to prefer.

In Doherty v Sampey [2023] WASC 10, Allanson J demonstrated this approach when evaluating contradictory accounts about whether certain agreements were loans or property sales. The court reasoned:

"Although Norris and Doherty were uncertain in their recollection of these events, I am satisfied that they would have remembered an agreement to sell the Fanfare premises and 720 Albany Highway. Their evidence that it was a loan that was discussed and agreed is consistent with later documents, and I accept it."

This analysis shows the court drawing on probability (the likelihood that parties would remember selling property), consistency with documentary evidence, and the inherent plausibility of competing accounts to resolve the conflict.

4.3 Absence of Evidence: Jones v Dunkel Considerations

The absence of expected evidence may, in appropriate circumstances, permit an inference that the missing evidence would not have assisted the party who failed to adduce it. This principle, derived from Jones v Dunkel (1959) 101 CLR 298, applies where:

  1. A party fails to call a witness who would be expected to be called if their evidence would assist that party;

  2. The witness's evidence would have elucidated a matter; and

  3. No satisfactory explanation is given for the failure to call the witness.

Similar principles apply to documentary evidence that would naturally be expected to exist but is not produced.

However, the principle has important limitations. As clarified in Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at [63]-[64], the rule "cannot be employed to fill gaps in evidence, or to convert conjecture and suspicion into inference." It does not operate as a substantive rule of law but as a permissible inference that may, not must, be drawn depending on the circumstances.

In Ng v Sevastos [2024] WADC 75 at [155]-[156], the court noted the absence of evidence from defendants regarding the source of funding for certain payments or their purpose if unrelated to the disputed property development. This absence strengthened the plaintiff's case by leaving the plaintiff's explanation unchallenged and unsupplanted by any alternative account.

5. Expert Evidence: Special Considerations

5.1 Admissibility versus Weight

The assessment of expert evidence involves two distinct inquiries:

  1. Admissibility - whether the evidence satisfies legal thresholds for admission

  2. Weight - the probative value to be accorded to the evidence once admitted

This section focuses on the latter, assuming admissibility requirements have been met.

5.2 Evaluating Expert Opinions

Expert evidence should be assessed with reference to:

5.2.1 Qualifications and Specialized Knowledge

The expert's qualifications must be relevant to the specific opinion offered. Expertise in one field does not necessarily qualify a witness to give opinions in related but distinct areas.

In Doherty v Sampey [2023] WASC 10, Allanson J identified instances where an expert valuer had "strayed from his proper role" by making deductions from signatures that went "beyond his accepted expertise." While this did not entirely invalidate the expert's evidence, it affected the weight given to those specific opinions.

5.2.2 Factual Foundation

An expert opinion is only as reliable as the facts upon which it is based. Courts should scrutinize:

  • Whether the expert had all relevant information

  • Whether the factual foundation was accurate and complete

  • Whether assumptions made by the expert are supported by evidence

Allanson J's critique in Doherty v Sampey [2023] WASC 10 of an expert valuer's report illustrates this point. The court found that "the factual foundation for the opinions expressed... was not established" and that it was impossible to "ascertain the extent to which [the expert] acted on information... which was not included in the letter of instruction, and was not otherwise proved."

5.2.3 Reasoning Process

The expert's reasoning process should be transparent, logically sound, and based on methodologies accepted within the relevant field. Courts should be skeptical of opinions that:

  • Fail to explain underlying reasoning

  • Rely on unsupported assertions

  • Do not address contrary evidence or alternative explanations

  • Employ novel or contested methodologies without adequate justification

5.2.4 Independence and Objectivity

The expert's role is to assist the court, not to advocate for a party. Evidence of bias, partisanship, or lack of objectivity diminishes the weight of expert testimony. Indicators may include:

  • Selective use of data

  • Failure to acknowledge limitations or uncertainties

  • Dismissal of contrary viewpoints without adequate analysis

  • A history of consistently testifying for one side

  • Financial arrangements that could incentivize particular outcomes

5.3 Conflicting Expert Evidence

When experts disagree, courts should not simply count opinions or choose the expert who appears most confident or credible. Instead, the court should engage with the substance of competing opinions, considering:

  • Which opinion is better supported by established facts

  • Which expert provides more transparent and thorough reasoning

  • Whether one expert possesses greater relevant expertise

  • Whether one expert has considered and addressed the other's methodology

In Doherty v Sampey [2023] WASC 10, Allanson J carefully evaluated competing valuation evidence, identifying specific methodological flaws and factual deficiencies in each expert's approach before determining which aspects of each opinion to accept.

6. Practical Guidance for Evidence Assessment

6.1 Applying the Balance of Probabilities

The balance of probabilities standard requires the court to determine whether it is more likely than not that the fact in issue occurred. This involves weighing the evidence for and against the proposition, not merely identifying possibilities.

When applying this standard:

  • The court must feel an actual persuasion of the fact's existence

  • The fact must be proved by evidence, not conjecture or speculation

  • The more serious the allegation, the more carefully the evidence should be scrutinized (Briginshaw principle)

  • The degree of persuasion required varies with the gravity of the facts alleged and their inherent probability

6.2 Addressing Cognitive Biases

Decision-makers should be aware of common cognitive biases that can affect evidence assessment:

6.2.1 Confirmation Bias

The tendency to search for, interpret, and recall information that confirms pre-existing beliefs while giving disproportionately less attention to information that contradicts them. To counteract this bias, courts should:

  • Actively consider alternative explanations

  • Test provisional conclusions against contrary evidence

  • Consider the evidence from multiple perspectives

6.2.2 Anchoring Bias

The tendency to rely too heavily on the first piece of information encountered. To mitigate this:

  • Reserve judgment until all evidence has been considered

  • Consciously revisit initial impressions in light of subsequent evidence

  • Consider the evidence in different sequences

6.2.3 Hindsight Bias

The tendency to perceive past events as having been more predictable than they actually were. To address this:

  • Evaluate decisions based on information available at the time

  • Avoid imposing unrealistic standards of foresight

  • Recognize the difference between actual and apparent predictability

6.2.4 Availability Heuristic

The tendency to overestimate the likelihood or importance of things that come readily to mind. To counter this:

  • Consider whether vivid or memorable evidence is being given disproportionate weight

  • Ensure all relevant evidence is considered, not just the most salient

  • Be attentive to potentially important but less dramatic evidence

6.3 Giving Reasons

Comprehensive, reasoned judgments serve multiple purposes:

  • Demonstrating to the parties that their evidence has been considered

  • Enabling appellate courts to understand the basis for findings

  • Promoting public confidence in the administration of justice

  • Providing guidance for future cases

Effective reasons should:

  • Identify the key factual issues

  • Explain the evidence relevant to each issue

  • Address significant conflicts in the evidence

  • Articulate why certain evidence was preferred over other evidence

  • Connect the findings to the applicable legal principles

In Doherty v Sampey [2023] WASC 10, Allanson J exemplified this approach by explicitly acknowledging the evidentiary challenges presented by events occurring years earlier, explaining his method for resolving conflicts in the evidence, and providing detailed reasoning for his findings on contested issues.

7. Conclusion

The assessment of evidence in civil proceedings remains an art informed by legal principle rather than a mechanical process. It requires judges to bring to bear their knowledge of human behavior, understanding of evidentiary principles, and capacity for logical reasoning to determine where the truth most likely lies.

The task is inherently evaluative and discretionary, but not arbitrary. By applying established principles consistently, acknowledging the strengths and limitations of different forms of evidence, and providing transparent reasoning, courts can ensure that findings of fact are as reliable and just as the imperfect nature of human fact-finding allows.

Mediators Making Orders: An Issue Explored in Nugawela v Medical Board

In Nugawela v Medical Board of Australia (WA Branch) [2024] WASC 15, the Supreme Court of Western Australia considered whether a mediator presiding over a mediation in the State Administrative Tribunal (SAT) had the power to make orders giving effect to a settlement reached between the parties at the end of that mediation.

The background to the case involved disciplinary proceedings brought by the Medical Board against Dr Nugawela, a medical practitioner. After an unsuccessful mediation, a further mediation was held which resulted in signed consent orders between the parties. The mediator, upon being presented with the consent orders, stated words to the effect that she would make orders to give effect to them. Orders were subsequently made in identical terms to the consent orders.

In considering whether the mediator had the power to make the orders, the court analysed the interplay between the procedural provisions in the Health Practitioner Regulation National Law (HPL) - the legislation under which the disciplinary proceedings were brought - and the procedural provisions of the SAT Act which establishes SAT. The court held that the consent orders constituted an application to the mediator to approve the settlement reflected in the consent orders. The court was satisfied that the mediator made an independent decision to make the orders, as required by the HPL.

Citing the Western Australian Court of Appeal decision in Chang v Legal Profession Complaints Committee [2020] WASCA 208, the court stated that the consent of parties alone is not enough to finally dispose of vocational proceedings, with the tribunal needing to be independently satisfied of the appropriateness of any settlement. However, the court noted that the parties' agreement is still a relevant consideration in making that assessment.

Discretion to Set Aside Irregular Default Judgments

Setting Aside Irregular Default Judgments

This blog examines the principles applicable to setting aside a default judgment where the entry of default judgment was irregular.

It discusses the relevant legislative provisions and procedural rules, and cites the recent decision in Cicirello v Carter [2023] WADC 130 (Cicirello) as an illustrative example.

The Facts

The facts in Cicirello, as outlined at [4]-[30], were that the plaintiffs commenced an action against the defendant builder seeking damages for overcharging under a 'costs plus' building contract.

The defendant sought to enter an appearance after the time for doing so had expired under the rules, by emailing it to the court. However, this went to the court's 'junk mail' and was not entered on the court file.

Default judgment was later entered against the defendant. Some months later, after the plaintiffs had taken steps to enforce the judgment, it came to light that the defendant had attempted to enter an appearance.

The court then brought the matter on of its own motion to consider whether the default judgment had been irregularly entered and if so, whether it should be set aside.

Irregularity in Entry of Default Judgment

Pursuant to Order 2 rule 1 of the Rules of the Supreme Court 1971 (WA), any failure to comply with court rules is an irregularity: Cicirello at [32]. Relevantly, under Order 13 rule 1(2), default judgment may only be entered if the defendant 'does not enter an appearance within the time limited for appearing'.

In Cicirello, the defendant had in fact sent an appearance to the court by email before default judgment was entered, so the entry of default judgment was irregular: see [35]-[44]. The rules enable a defendant to enter an appearance after the specified time, unless judgment has already been entered: Order 12 rule 5, cited at [41] of Cicirello.

Setting Aside Irregular Judgment

An irregular judgment is not a nullity, but may be varied or set aside pursuant to Order 2 rule 1, which gives the court a broad discretion to make appropriate orders: Cicirello at [45]. The defendant or plaintiff may apply to set aside an irregular judgment within a reasonable time of discovering the irregularity, under Order 2 rule 2: Cicirello at 46.

Additionally, for default judgments specifically, Order 13 rule 12 requires the judgment to notify the defendant's right to apply to set it aside, while Order 13 rule 14 empowers the court to set aside or vary a default judgment at its discretion: Cicirello at [47].

In Cicirello, although the defendant had not made a formal application to set aside as contemplated by Order 2 rule 2, the court considered it had inherent powers to deal with the irregularity on its own motion, to regulate its processes and prevent abuse: see [53].

Exercise of Discretion

The discretion to set aside an irregular default judgment is expressed in the broadest terms and not limited by any qualifiers: see Cicirello at [55] citing Hall v Hall [2007] WASC 198 at [63].

However, while irregular judgments will usually be set aside, not every irregularity will justify this: Cicirello at [55] citing ACN 076 676 438 Pty Ltd (in liq) v A-Comms Teledata Pty Ltd [2000] WASC 214 at [17]-[19].

The discretion must be exercised to 'do justice between the parties, having regard to the particular circumstances': Cicirello at [55] citing Hall v Hall at [63]. Relevant factors include the length of any delay in applying to set aside the judgment, and the defendant's explanation: Cicirello at [56] citing Wildflower Electrical Refrigeration Service (WA) v Refrigid Pty Ltd [2014] WASC 382 at [11].

In Cicirello, the court refused to set aside the irregular default judgment. The defendant had not explained his failure to engage with the court's orders affording him opportunities to apply to set aside the default judgment and advance his position: see [57]-[59]. He also failed to identify any substantive defence he wished to run if the judgment was set aside: [59(d)].

Meanwhile, the plaintiffs had taken steps in reliance on the judgment, following procedures under the Civil Judgments Enforcement Act 2004 (WA) to enforce it: [59(f)].

In line with Starrs v Retravision (WA) Ltd [2012] WASCA 67 and Scott v Baring [2019] WASC 278, the court determined it was not in interests of justice to set aside the judgment given the defendant's disengagement, nor to further delay resolving the matter: Cicirello at [59]-[61]. As stated in Scott at [51], a defendant 'must bear the consequences' of failing to participate in the proceedings: Cicirello at [62].

Conclusion

In summary, while irregular default judgments will ordinarily be set aside, the court retains a discretion to refuse this if the interests of justice do not require it. Defendants who fail to engage with opportunities to advance their position may not have irregular judgments set aside to their benefit, especially if the plaintiff has acted in reliance on the judgment. When exercising its discretion, the court will look at the particular circumstances holistically. Relevant considerations include delay in applying, the defendant's explanation, whether the plaintiff has taken steps in reliance which may cause prejudice if the judgment is set aside, and any indication of the defendant's substantive case.

Protecting the Estate's Interests: The Need for Independent Legal Advice for Executors

Introduction

In Hall v Hall [2023] WASC 342, Christopher Hall brought proceedings against his brother Michael Hall in Michael's capacity as executor of their mother Alwyn's estate, and in Michael's personal capacity.

An issue arose as to whether the firm acting for Michael in both capacities, Taylor Smart, owed potentially conflicting duties to him in those different capacities.

Facts

Michael was appointed executor of Alwyn's estate, which was valued at over $9 million ([31]).

Christopher sought various orders requiring Michael as executor to take action against Michael personally relating to loans, property improvements and unpaid rent ([35]-[37]).

Michael opposed the orders sought ([39]).

Taylor Smart (lawyers) acted for Michael as executor and personally, filing affidavits and submissions without distinguishing his capacities ([65]).

The court noted Taylor Smart had prepared Alwyn's will and power of attorney ([65]), and there was no evidence Michael as executor had independent advice about potential claims against Michael personally ([68]-[69]).

Analysis

In Hall v Hall, Howard J considered Taylor Smart's representation of Michael in his personal and executor capacities gave rise to a potential conflict of duties ([66]).

His Honour stated it was "imprudent, at the least" for Taylor Smart to act for Michael in these potentially conflicting capacities without distinguishing between them ([70]).

The court has a supervisory role over its officers to ensure the administration of justice, which includes ensuring solicitors avoid acting where there are conflicting duties.

Michael as executor was entitled to be advised independently about potential claims against Michael personally ([68]-[69]).

Michael ought to consider his positions and obligations as executor and personally, and obtain independent advice, given the potential conflict ([74]).

The court refrained from making any order at that time, but considered it sufficient to raise the obvious matter ([75]).

Joinder & Scandalous Affidavits in Defamation Cases: Insights from Souraki Azad -v- Jose [2023] WASC 160

In defamation, issues about the: (a) joinder of parties and (b) scandalous affidavits, commonly arise. Both arose in the recent case of Souraki Azad -v- Jose [2023] WASC 160.

Joinder

The joinder process allows for additional parties to be included in an ongoing lawsuit.

Souraki Azad -v- Jose

In Souraki Azad -v- Jose, the plaintiff and defendant were medical doctors.

The plaintiff sought to join the Australian Health Practitioner Regulation Agency (AHPRA) to his defamation case.

The plaintiff accused AHPRA of conspiring against him, thus playing a role in the defamation.

The Court, following the principles established in John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503 [58] and the Rules of the Supreme Court 1971 (WA) Order 18 rule 3(2), scrutinized the plaintiff's application. What was required was a solid basis in the pleadings for the joinder of AHPRA.

Legal Principles

One of the key factors the court considered was whether the plaintiff had a 'colour of right' to the final relief - a principle established by Gleeson CJ in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199 [18].

The 'colour of right' implies that the plaintiff must demonstrate a reasonable likelihood of entitlement to the relief they seek.

In this case, the court found no evidence that the plaintiff had a recognised basis in law to sustain final relief against AHPRA.

The court also scrutinized the balance of convenience, as well as the public interest, in this case.

The joinder application did not succeed.

Precision in Joinder Applications

Another noteworthy aspect of this case was the court’s attention to the precision and clarity in joinder applications. This vagueness in the application served as one of the justifications for dismissing the joinder application.

Scandalous Affidavits

When an affidavit crosses the line into scandalous territory, it can complicate proceedings and impact the fairness of the trial.

In Souraki Azad -v- Jose [2023] WASC 160, the plaintiff, Dr. Azad, filed a series of affidavits that were contested by both the defendant and AHPRA.

The affidavits contained serious, unsupported allegations of criminal wrongdoing by various persons, including representatives of the Medical Board and AHPRA, and included inappropriate images of children. Their counsel argued that these were scandalous, irrelevant, and oppressive, necessitating their removal from the court file.

Legal Framework: Order 37 Rule 7 RSC

The objections to the scandalous affidavits were grounded on Order 37 rule 7 of the Rules of the Supreme Court (RSC), which allows the court to strike out scandalous, irrelevant, or otherwise oppressive matter from an affidavit.

Court's Approach in Souraki Azad -v- Jose

In evaluating the scandalous nature of the affidavits, the court recognized the gravity of ordering the removal of affidavit material from the court file, stating it was an 'extreme step' that should be taken with great caution.

Despite the scandalous nature of the affidavits, the court decided to restrict access to these affidavits to the court and parties involved, rather than removing them entirely from the file.

This was an interim solution, with the option to revisit the removal application as the action progressed.

Understanding When a Lawyer Can Be Prevented from Acting in a Case

Legal professionals are bound by a set of ethical rules that guide their conduct in various scenarios. A situation that often presents a challenge is determining the circumstances under which a lawyer can be restrained from acting in a particular case.

This blog post sheds light on this subject using references from precedent cases and legislation.

A fundamental concept to understand is the duty of confidentiality. This principle, as outlined in the case of Prince Jefri Bolkiah v KPMG [1999] 2 AC 222, stipulates that a lawyer is obliged to protect any confidential information provided by a client.

A lack of recollection about an earlier matter does not exempt a lawyer from this duty. It has been suggested, as in Yunghanns v Elfic Ltd (Unreported, VSC, 3 July 1998), that this confidential information could even extend to the general knowledge a lawyer gains about a client during their professional relationship, although this is rare.

The courts also possess inherent jurisdiction to prevent a solicitor from acting in a case if doing so could undermine the administration of justice. This principle, illustrated in cases like D & J Constructions and Mallesons, is rooted in the concern that public confidence in the justice system could be damaged if a lawyer is perceived to switch sides easily.

Another factor is the fiduciary duty of loyalty a lawyer owes to a former client, even after the end of their professional relationship. However, there is conflicting legal opinion on whether this duty persists after the termination of the retainer. The primary concern here is to avoid any real risk of a breach of confidence or any action that could jeopardize the judicial process.

The 1882 case Mills v Day Dawn Block Gold Mining Co Ltd dealt with the issue of proving the existence of confidence. The court decided that if a dispute arises between a solicitor and a former client over whether confidential information was shared, it's inappropriate to demand to know what the confidence was, as it could expose the client to the very harm they're trying to avoid.

In summary, a court may prevent a lawyer from acting in a case if there's a risk of breaching confidentiality, undermining the administration of justice, or violating a potential continuing duty of loyalty. The nature of the relationship between the lawyer and the client, the type and scope of the confidential information, and the potential for misuse of such information are all factors that the court will consider.

Consolidation of Cases: A Closer Look

Multiple cases with overlapping subjects and shared parties are not rare in the legal field.

The court system addresses such instances through the consolidation of cases.

Consolidation involves combining two or more separate legal actions into one proceeding.

This process is nuanced, and not all cases are suitable for consolidation.

To understand this topic better, let's review the case of Newbey v Smoothy [2023] WADC 45, where the plaintiff sought to consolidate two actions.

In Newbey v Smoothy, the plaintiff, Mrs Helen Newbey, attempted to consolidate action CIV 4983 of 2022 with CIV 1954 of 2020, under Rule O 83 r 1 of the Rules of the Supreme Court 1971 (WA). She also requested that CIV 1954 of 2020 be designated as the lead action. The defendants opposed this application.

In this case, the court decided against the consolidation of actions but allowed for the two actions to be heard together. The court emphasized the difference between consolidation and joint determination of actions, a case management technique referenced by Justice Lundberg in Walthamstow Pty Ltd v Caratti.

The decision to consolidate cases or hear them together depends on the circumstances of each case. It’s influenced by several key considerations, as described in cases such as Lois Nominees Pty Ltd v QBE Insurance (Australia) Ltd and A Goninan & Co Ltd v Atlas Steels (Aust) Pty Ltd.

The primary factor is whether consolidation would promote convenience, avoid multiple actions, and save time and expense.

Other considerations include the presence of common questions of law or fact, potential prejudice or unfairness to any of the parties, and if consolidation would facilitate a just resolution of the issues. Practical matters that may make consolidation inexpedient are also considered.

The court also highlighted the importance of promoting a just determination of litigation, efficiently disposing of the court's business, and making effective use of judicial and administrative resources, as outlined in Order 1 r 4B RSC, referencing Sino Iron Pty Ltd v Mineralogy Pty Ltd.

In Newbey, the court found common parties and similar transactions in both actions. There were likely overlapping issues of fact and law across both actions, based on the summary of the pleaded cases. However, the court concluded that consolidation could potentially be unfair to the defendants. Therefore, it decided to hear the cases together but not formally consolidate them.

Here are some of the key factors that courts often consider when deciding whether to consolidate cases, citing specific cases and paragraph numbers:

  1. Promotion of Convenience and Efficiency: The court assesses whether consolidation would promote convenience, save time, and avoid multiple actions. This principle is derived from the cases Lois Nominees Pty Ltd v QBE Insurance (Australia) Ltd [1995] 2 VR 513, 518 (Ormiston J) and A Goninan & Co Ltd v Atlas Steels (Aust) Pty Ltd [2002] NSWSC 585, [12] (Palmer J).

  2. Common Questions of Law or Fact: The presence of common questions of law or fact in the actions under consideration is a strong argument for consolidation. This was discussed in A Goninan & Co Ltd v Atlas Steels (Aust) Pty Ltd [2002] NSWSC 585, [12] (Palmer J).

  3. Potential Prejudice or Unfairness: The court weighs whether consolidation would create potential prejudice or unfairness to any of the parties involved. This factor is referenced in A Goninan & Co Ltd v Atlas Steels (Aust) Pty Ltd [2002] NSWSC 585, [12] (Palmer J).

  4. Just Resolution of Issues: The court considers whether consolidation would facilitate a just resolution of the issues at hand. This is referenced in Walthamstow Pty Ltd v Caratti [2018] WASC 321, [10] (Lundberg J).

  5. Practical Impediments to Consolidation: The court assesses any practical matters that may make consolidation inexpedient. This is derived from the case A Goninan & Co Ltd v Atlas Steels (Aust) Pty Ltd [2002] NSWSC 585, [12] (Palmer J).

  6. Effective Use of Judicial and Administrative Resources: The court also evaluates whether consolidation would enable more efficient use of judicial and administrative resources, as outlined in Order 1 r 4B RSC, referencing Sino Iron Pty Ltd v Mineralogy Pty Ltd [2018] WASC 51, [8] (Mitchell J).

  7. Fair and Efficient Administration of Justice: The overarching goal is to promote a just determination of litigation and efficiently dispose of the court's business, as highlighted in Sino Iron Pty Ltd v Mineralogy Pty Ltd [2018] WASC 51, [8] (Mitchell J).

These factors are not exhaustive, and the court's decision ultimately depends on the specific circumstances of each case.

When do Court's Grant Leave to Commence an Action Against a Company Under External Administration?

Richard Graham Perth Lawyer

The insolvency landscape is fraught with complexity, especially when one seeks to initiate a lawsuit against a company in external voluntary administration.

In this blog post, I explain the circumstances under which courts grant leave to commence an action against such a company.

The analysis hinges upon a recent Western Australian Supreme Court decision, "Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147", and several other relevant cases and legislative references.

Corporations Act 2001 (Cth) - Section 500(2)

Section 500(2) of the Corporations Act 2001 (Cth) stipulates that after the resolution for voluntary winding up, no civil proceeding can be commenced or continued against the company without the court's leave.

This measure aims to prevent a company in liquidation from being overwhelmed by multiple time-consuming and expensive actions (Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314; Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550).

The Court's Discretion

The discretion to grant or refuse leave under these circumstances is broad, and it is not feasible to outline all relevant considerations exhaustively.

However, the amount, seriousness, and nature of the claim, the degree of complexity of legal and factual issues, and the stage at which the proceedings have reached all play crucial roles (Re Gordon Grant; Viscariello v Bernsteen Pty Ltd (in liq) [2004] SASC 266).

Prejudice to Creditors

A critical principle is that the action should not prejudice the creditors or hamper the orderly winding up of the company. It is often said that there must be no such prejudice before the action is allowed to proceed (Re Gordon Grant and Grant Pty Ltd (in liq) (1982) 6 ACLR 727; Re Sydney Formworks Pty Ltd (in liq) [1965] NSWR 646).

Insurance and Asset Considerations

The court is less likely to grant leave if there is no prospect of surplus assets in the company and no question of insurance (Re AJ Benjamin Ltd (in liq) [1969] 2 NSWR 374). However, if an insurer stands behind the company in liquidation and is prepared to pay the amount of any judgment awarded, that factor strongly favours the grant of leave (Lawless v Mackendrick [No 2] [2008] WASC 15).

Demonstrating a Serious Question

A claimant seeking leave only needs to demonstrate a serious question to be tried (Vagrand Pty Ltd v Fielding).

Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147

In "Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147", the court was satisfied that there was a serious question to be tried, considering the nature and seriousness of the plaintiff's claim, the defendant's status as a company under external administration, and the existence of a relevant insurance policy.

Cases mentioned in this blog post:

  • Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147

  • Lawless v Mackendrick [No 2] [2008] WASC 15

  • Viscariello v Bernsteen Pty Ltd (in liq) [2004] SASC 266

  • Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550

  • Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314

  • Re Gordon Grant and Grant Pty Ltd (in liq) (1982) 6 ACLR 727

  • Re AJ Benjamin Ltd (in liq) [1969] 2 NSWR 374

  • Re Sydney Formworks Pty Ltd (in liq) [1965] NSWR 646

Dealing with Procedural Irregularities under the Rules of the Supreme Court in Western Australia

Richard Graham Perth Lawyer

Procedural irregularities occur commonly, and the courts are often called upon to remedy or address these issues.

In this blog post, I discuss how the Rules of the Supreme Court of Western Australia allow the Supreme and District Courts to handle procedural irregularities, with a focus on a recent decision, Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147.

The Rules of the Supreme Court

The Rules of the Supreme Court (WA) provide a framework for the conduct of civil proceedings in the Supreme Court and District Court.

Addressing Procedural Irregularities

In Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147, the court was faced with a procedural irregularity relating to the filing of an originating summons.

The plaintiff sought leave to commence civil proceedings against a company in liquidation under section 500(2) of the Corporations Act 2001 (Cth). However, the plaintiff had not filed an originating process under Rule 2.2 of the Corporations Rules, as required.

The court exercised its discretion under Rule 2.10 of the Rules of the Supreme Court to treat the originating summons as if it were an originating process filed under Rule 2.2 of the Corporations Rules.

This allowed the plaintiff to continue the proceedings without the need to re-file the documents and start afresh.

This demonstrates the court's willingness to use its discretion to address procedural irregularities where it is appropriate and just to do so.

Factors Influencing the Court's Decision

In deciding whether to exercise its discretion, the court may consider several factors.

These include whether the procedural irregularity caused any prejudice or injustice to the other party, whether the irregularity can be easily remedied, and the overall interests of justice.

In Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147, the court determined that there was no prejudice to the defendant in treating the originating summons as if it were an originating process and that doing so would further the interests of justice.

The Lifespan of Settlement Offers: A Closer Look

Richard Graham Perth Lawyer

In the context of legal proceedings, the offer of compromise is an indispensable tool. It not only hastens the resolution of disputes but also mitigates the potential financial and emotional toll of litigation on all parties involved.

One critical aspect of these offers, however, often stokes debate: the time in which an offer should remain open.

This question has been addressed through several judicial decisions, one of them being Tonkin -v- Heilongjiang Feng Ao Agricultural & Animal Husbandry Group Co Pty Ltd [2015] WASC 378 (S).

This case concerned a Calderbank offer, a specific type of settlement offer, based on the English case Calderbank v Calderbank [1975] 3 All ER 333.

In the Tonkin case, the court underscored the pivotal role of the Calderbank offer in facilitating dispute resolution. The defendant's offer, a Calderbank offer, was open for seven days until a specified date. However, the court had to determine whether the plaintiffs' rejection of this offer was unreasonable. This evaluation involved a holistic view of the circumstances surrounding the offer.

The court's approach towards Calderbank offers has been shaped by various decisions, both within Western Australia and across the Commonwealth. In the case of Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115, the court held that the test for awarding indemnity costs against a party who rejected a Calderbank offer was whether the rejection was unreasonable under the circumstances. The burden of proof falls on the offeree to establish unreasonableness.

A similar sentiment was echoed in the New South Wales Court of Appeal in Miwa Pty Ltd v Siantan Properties Pte Ltd [No 2] [2011] NSWCA 334. The court posited that a reasonable offer could alter the court's perspective on the costs award, particularly when the party rejecting the offer fails to obtain a better result in the judgment.

When assessing the reasonableness of rejection, several factors come into play. These were elucidated in Lo Presti and further elaborated by Beech J in McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 (S). These include:

  • the stage of proceedings at which the offer was received;

  • the time allowed to the offeree to consider the offer;

  • the extent of the compromise offered;

  • the offeree's prospects of success, assessed at the date of the offer;

  • the clarity with which the terms of the offer were made; and

  • whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejection.

In Tonkin, the court examined these factors to determine the reasonableness of the rejection.

The offer was made within six months of the commencement of proceedings, which was considered marginally in favour of the defendant. However, the court viewed the seven-day timeframe as potentially too short for careful consideration and perhaps expert advice, suggesting 28 days might have been more appropriate.

Key Take-Aways

  • The time in which offers need to remain open is a nuanced issue and depends on various considerations.

  • It requires a careful balance between hastening dispute resolution and allowing enough time for the parties to make informed decisions.