Australian Nationwide Investments Pty Ltd v Multigate Medical Products Pty Ltd

Texts Cited: Nil

Category: Procedural rulings

Parties: Australian Nationwide Pty Ltd v Multigate Medical Products Pty Ltd (Plaintiff)
Multigate Medical Products Pty Ltd (Defendant)

Representation: Counsel:
Mr A Crossland (Plaintiff)
Mr J Adamopoulos (Defendant)
Solicitor:
Plaintiff (Gillard Consulting Lawyers)
Bartier Perry (Defendant)

File Number(s): 2023/00225224

Publication restriction: Nil

Judgment

1. This is an interlocutory application made by an amended notice of motion filed by the defendant for a ruling under section 192A of the Evidence Act, 1995 as to the admissibility of certain paragraphs in an affidavit served by the plaintiff and the documents referred to in those paragraphs.

2. The affidavit said to contain the inadmissible evidence has been served by the plaintiff in accordance with case management orders made by the Court for the parties to file and serve their evidence as to liability.

3. Section 192A of the Evidence Act, 1995 provides:

Where a question arises in any proceedings, being a question about—

(a) the admissibility or use of evidence proposed to be adduced, or

(b) the operation of a provision of this Act or another law in relation to evidence proposed to be adduced, or

(c) the giving of leave, permission or direction under section 192,

the court may, if it considers it to be appropriate to do so, give a ruling or make a finding in relation to the question before the evidence is adduced in the proceedings.

4. The application arises in the following context.

A. Context

5. The defendant has not served its evidence as to liability.

6. The case has not been fixed for hearing.

7. The plaintiff’s claim is for approximately $1.2 million plus interest. There are really 4 sets of claims, one of which was is the subject of the notice of motion. The 4 claims are for “Extras”, “Shortfall”, “Additional charges” and a breach of exclusivity provision. The first 3 claims, counsel for both parties agreed, are claims in debt and the fourth is a claim for damages. All 4 claims are made pursuant to a contract between the parties under which the plaintiff provided express freight services to the defendant.

8. The plaintiff claims that a debt is due under the contract for “Extras” per an Invoice for $426,074.49 rendered on or about 6 February 2017.

9. The statement of claim commencing these proceedings was filed on 14 July 2017.

10. The defendant pleads in its defence (paragraph 9A of Amended Defence) that the Extras claim is statute barred by the operation of section 14 of the Limitation Act, 1969.

11. In response, it is common ground but not yet pleaded, the plaintiff says the defendant confirmed the cause of action in correspondence, thereby giving rise to an extension of the limitation period by the operation of section 54 of the Limitation Act, 1969. The cause of action was said to have been confirmed in a letter of 14 July 2017 from the chief executive officer of the defendant (Mr Chen) to the managing director of the plaintiff (Mr O’Neil), which letter was sent again on 4 August 2017 and 17 August 2017.

12. The defendant says the letter of 14 July 2017 and surrounding contemporaneous communications cannot be adduced in evidence because of section 131 of the Evidence Act, 1995 which provides for the exclusion of evidence of settlement negotiations.

13. The defendant asks the court to make a ruling under section 192A the Evidence Act 1995 that the evidence is inadmissible. This is the application in the amended notice of motion.

14. The plaintiff says the court should not make a ruling now under section 192A of the Evidence Act, but should leave the question of admissibility to the final hearing. It also says, in the alternative, that the evidence is in fact admissible because:

14.1 S.131(1) does not in fact apply at all because there was no relevant “dispute” or that if there was, the communication was not made “in connection with an attempt to negotiate a settlement of the dispute”.

14.2 Alternatively, it falls within the exception provided for in 131(2)(i) where “making the communication, or preparing the document, affects a right of a person”.

15. Mr Adamopoulos of counsel appeared for the defendant, applicant on the motion. Mr Crossland of counsel appeared for the plaintiff, respondent on the motion. They both provided detailed written submissions and addressed orally.

B. The contested evidence alleged to be inadmissible

16. The contested evidence alleged to be inadmissible was contained in a paginated white folder of documents which became exhibit B on the application (“the white folder”).

17. The first 21 pages of the white folder contained the affidavit of Mr O’Neil sworn and filed on 2 December 2024. The paragraphs which the defendant submitted are inadmissible are numbered 24 to 29 inclusive and 36 and 37.

18. The balance of the white folder, pages 22 to 80, contained the pages from the exhibit to Mr O’Neil’s affidavit most of which the defendant submitted are inadmissible.

19. The white folder was admitted into evidence on the application before me by consent but on the basis that the defendant maintained its asserted privilege over the documents and that putting them into evidence would not constitute a waiver of that privilege.

20. Both parties invited me to inspect the documents in the white folder, and in fact counsel for both parties took me to many of them in oral submissions. That procedure is permitted by section 133 of the Evidence Act, 1995.

C. Legal principles on an application under section 192A

21. Section 192A of the Evidence Act 1995 applies to both civil and criminal proceedings.

22. Rees J collected a number of the civil cases concerning the use and application of section 192A in The Owners-Strata Plan No 90189 v Parkview Constructions Pty Ltd [2022] NSWSC 1382 at [39]-[48].

23. One of the cases cited by her Honour is Australian Securities and Investments Commission, Re Whitebox Trading Pty Ltd v Whitebox Trading Pty Ltd [2017] FCA 324. In that case, Gleeson J set out a number of observations which in my respectful opinion are consistent with the other cases collected by Rees J and appear to me to be particularly relevant to the present application. According to Gleeson J at [21]-[24]:

[21] Section 192A permits, but does not compel, advance rulings to be given on the admissibility of evidence: Bailey v Director-General, Department of Natural Resources [2013] NSWSC 515 at [55]. Whether the Court should make an advance ruling is “a discretionary case management decision”: NA & J Investments Pty Ltd v Minister Administering Water Management Act 2000 (No 4) at [40]; Beslic v MLC Ltd [2015] NSWSC 908 (“Beslic”) at [33]. In (the Federal Court), that directs attention to the overarching purpose identified in s 37M of the Federal Court of Australia Act 1976 (Cth) (“Federal Court Act”), namely to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.

[22] The authorities indicate that “some good reason should be advanced in order that the court exercise jurisdiction under s 192A”: Beslic at [33], quoting Lambert Leasing Inc v QBE Insurance Australia Ltd [2012] NSWSC 953 at [13]. It may, for example, be appropriate to give an advance ruling “if all matters relevant to the issue have been or can then be ascertained and if it is clear that a ruling will inevitably be required”: TKWJ v The Queen [2002] HCA 46;(2002) 212 CLR 124 at [42] (Gaudron J). Further, the giving of a ruling, or the making of a finding, under s 192A may be appropriate where “a considerable amount of time, effort and money might be saved if the documents were ruled to be admissible now”: ACCC v Allphones Retail Pty Ltd (No 3) [2009] FCA 1075;(2009) 259 ALR 541 at [12].

[23] In some cases, trial preparation may be assisted by an evidentiary ruling in advance of the trial, so as to justify departure from the procedure in the ordinary case of dealing with objections at or shortly before the hearing: Gondarra v Minister for Families, Housing, Community Services and Indigenous Affairs [2012] FCA 185;(2012) 127 ALD 288 at [25].

[24] A sound reason to refuse to give a ruling under s 192A may exist where the proceeding is in its infancy, the issues have not yet been joined because the pleadings have not closed, and it is uncertain whether the evidence sought to be the subject of the advance ruling will be relied upon at final hearing: cf. Trusted Cloud Pty Limited v Core Desktop Pty Limited [2015] FCA 33 at [56] to [57].

24. Gleeson J’s reference to the “overarching purpose” in Federal Court proceedings has its equivalent in section 56 of the Civil Procedure Act 2005. Section 56(1) provides that “The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.”.

The objects of case management are set out in section 57 . It states:

(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects—

(a) the just determination of the proceedings,

(b) the efficient disposal of the business of the court,

(c) the efficient use of available judicial and administrative resources,

(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

(2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).

25. Another case cited by Rees J in Parkview is Searle v Commonwealth [2022] NSWSC 119. Her Honour explained that in that case Garling J made rulings on the basis of “cost and efficiency benefits”, as doing so could potentially result in the plaintiff not having to call an additional 12 witnesses, nine of whom lived outside of Sydney: at [43]-[49].

D. The issues

26. Ultimately, the following questions arise on the application:

26.1 Do I consider it to be appropriate to give a ruling under section 192A of the Evidence Act, 1995 in the circumstances?

27.1 If I consider it is appropriate to give a ruling, then:

(a) Does the evidence fall within section 131(1) of the Evidence Act 1995? (b) If it does, then does it fall within the exception provided by section 131(2)(i)?

E. Is it appropriate to give a ruling under section 192A of the Evidence Act, 1995?

27. The defendant submitted that an advance ruling was appropriate because:

27.1 There is a problem with the admissibility of the contested evidence, in that the defendant contends that it is evidence of communications in connection with a settlement of a dispute.

27.2 It is in inevitable that the court will need to rule on whether the contested evidence is privileged, as the claim for privilege will be pressed by the defendant at trial. The defendant submits that there is, therefore, no waste of time or resources in the court adjudicating the objection in advance of trial.

27.3 The court has the material it requires to make a ruling on the admissibility of the evidence. Unlike, for example, with objections to relevance, the objection need not wait until the close of evidence. The circumstances are no different from the court having to rule on whether material is privileged for the purpose of resisting production under a subpoena or in discovery.

27.4 The ruling will assist in the efficient conduct of the trial in several respects. First, the issue of admissibility of the evidence will affect the evidence that the defendant is required to lead in its evidence in response. In that regard attention was drawn to the evidence of Mr Kallipolitis, the defendant’s solicitor, who said in his affidavit at paragraph 16 that “If the plaintiff is allowed to rely on the (contested evidence) at a final hearing, I anticipate that the defendant will need to lead evidence in response to that evidence.”. Secondly, if a ruling is made that the contested evidence is inadmissible, it will significantly narrow the issues in dispute between the parties at trial. This is because it will be beyond question that the proceedings are time-barred, at least insofar as they concern the extras claim, shortfall claim and additional charges claim. It was submitted that it will therefore not be necessary for the court to have to adjudicate the dispute concerning the calculations that make up those claims something which, it is submitted, undoubtedly will be fact-intensive and time-consuming. Thirdly, the adjudication of the objection is one which is likely to occupy significant time at the commencement of the trial. Fourthly, and further to the third point, because the objection concerns a matter of privilege, the trial judge may consider it appropriate that the issue be dealt with by a different judge (in case, for example, the judge is required to review the contested evidence).

28. The plaintiff submitted that it was not appropriate to give an advance ruling because:

28.1 Contrary to the submission of the defendant, this is not a case in which the court has the material it requires to make a ruling on the admissibility of the contested evidence. The plaintiff submitted that the type of privilege the defendant refers to in its submissions is legal professional privilege. The plaintiff submitted that in most cases where there is a claim for legal professional privilege, it is possible to determine the claim based only on the documents over which privilege is claimed or, in some cases, with the additional aid of an affidavit from (generally) a solicitor. By contrast, where the privilege in question is so-called “settlement privilege”, it is far more likely that the scope, if any, of the asserted privilege, can only be determined after consideration of the evidence in the proceeding as a whole. It is far less likely, the plaintiff submitted, that the evidence necessary to determine the privilege has been or can be ascertained.

28.2 The plaintiff submitted, that based on the same evidence of Mr Kallipolitis at paragraph 16 of his affidavit it seemed likely that not all evidence relevant to the assertion of privilege is before the court. Further, the plaintiff submitted that this situation has arisen because the defendant has chosen not to comply with the court’s existing order that it serve its evidence on liability. The plaintiff submitted that the defendant should not be permitted to take advantage of its own non-compliance with that order.

29. In response, the defendant submitted that:

29.1 There is no basis for limiting advance rulings to claims made for legal professional privilege. A ruling was made under section 192A in Coastal Service Centres Pty Ltd V United Petroleum Ltd [2020] NSWSC 1870, a decision of Ward CJ in Equity as her honour then was, that five letters exchanged prior to the initiation of proceedings were inadmissible under s.131.

29.2 The evidence that Mr Kallipolitis refers to that would need to be led, would only need to be led if the court rules the evidence is not subject to the privilege.

29.3 The assessment of whether a communication is privileged under section 131(1) is made by reference to the disputed evidence itself. It does not require a consideration of the evidence in the proceedings as a whole. The plaintiff has not explained (nor could it) how other evidence in the proceedings would shed any further light on the issue of privilege.

The situation has arisen because the plaintiff has sought to deploy in its evidence in chief without prejudice communications.

30. In my view, in order to properly consider these submissions and to determine whether it is “appropriate” for the court to give a ruling, it is necessary to understand more about the nature of the ruling the defendant asks the court to make and the basis upon which it invites the court to do so.

31. I will turn to that now by reference to the submissions made by the parties on the substantive questions of whether the disputed evidence falls within section 131(1) and, if so, whether an exception in section 131(2) applies.

F. The parties’ submissions on the substantive questions

32. In their written and oral submissions the parties raised serious factual and legal questions on the substantive issues.

33. At a factual level, the defendant submitted that the evidence before the court demonstrated very clearly that the parties were in a dispute and that the contested documents were sent in connection with an attempt to negotiate a settlement of the dispute.

34. This evidence included the contested communications (in the white folder), passing between Mr O’Neil of the plaintiff and Ms Chaisumdet and Mr Chen of the defendant, together with affidavits of all three.

35. At a factual level, the plaintiff submitted that, to the contrary, the very same evidence, or at least different aspects of it, established the very opposite – that is that the parties were not in dispute at all, and even if they were in dispute, the contested communications were not made “in connection with an attempt to negotiate a settlement of the dispute”.

36. Neither Mr O’Neil, nor Ms Chaisumdet or Mr Chen were cross-examined on their affidavit evidence or the correspondence they had written at the time or the discussions they had had with one another. Presumably that was because the parties took the view that it was an interlocutory application and cross-examination is ordinarily not permitted. In any event, their evidence has not been tested by cross-examination. The parties would ordinarily have the opportunity to do that that a final hearing.

37. At a level of legal principle, both parties submitted that different principles applied both as to the first question of whether the evidence fell within section 131(1), and as to the second question of whether it fell within the exception in section 131(2)(i).

38. As to the second question, the defendant placed heavy reliance upon the decision of Burns J in the Supreme Court of the Australian Capital Territory in Teoh v Greenway (2015) 297 FLR 398, [2015] ACTSC 133.

39. Teoh was an appeal from a decision of the then Master Mossop, as his Honour then was. The respondent was injured in a car accident. The appellant’s insurer admitted liability and paid medical treatment accounts. The lawyers for both parties engaged in negotiation with a view to settling any claim by the respondent for damages arising from the accident, culminating in the appellant’s lawyer making a written offer to the respondent which was not accepted. The respondent commenced proceedings in the Supreme Court of the ACT claiming damages for personal injury arising out of the accident. The appellant filed a defence asserting that the proceedings were statute barred by virtue of section 16B of the Limitation Act, 1985 (ACT), which provides that personal injuries claims must be commenced within 3 years of the date of injury. The appellant accepted that the payment of medical treatment expenses on behalf of the respondent constituted a confirmation or acknowledgement of the respondent’s cause of action so that, by virtue of section 30 of the Limitation Act, the commencement date of the 3 year limitation period did not not begin until the date of the last medical treatment expense paid by the appellant. On that basis the 3 year limitation period expired 6 months before the respondent commenced proceedings. The appellant then sought summary judgment. In answer to the application, the respondent sought to lead evidence of settlement offers made to him by the appellant, including the final offer that was not accepted. The appellant objected to the reception of this evidence on the grounds that the communications were subject to privilege under section 131 of the Evidence Act, 2011 (ACT). The appellant conceded, however, that if the evidence was admissible it would constitute a confirmation of the respondent’s cause of action so as to extend the limitation period. Master Mossop ruled that the evidence of the offer of settlement was admissible and accordingly dismissed the appellant’s application for summary judgment. Master Mossop ruled that the evidence was admissible on the basis that it was permitted by the exception in section 131(2)(i). Burns J came to a different view. His Honour held that on a proper interpretation of section 131(2)(i), evidence of the offer of settlement was not admissible as an acknowledgement of the respondent’s cause of action because it did not create, alter, vary or interfere with any relevant right of the respondent.

40. The defendant submitted that the same result should follow in the present case in relation to the critical letter of 14 July 2017 from Mr Chen to Mr O’Neil and the resending of it on 4 August 2017 and 17 August 2017.

41. The plaintiff submitted that the provisions of the Limitation Act in the ACT are materially different to those in New South Wales with the result that Teoh should not be applied in the present case. In Teoh, Burns J determined that the effect of section 16B of the ACT Act was not to extinguish the cause of action at the expiration of the limitation period, but to bar the remedy. On that basis, his Honour held that the expiration of the limitation period found in section 16B did not extinguish the respondent’s cause of action, but operated as a bar to any remedy. The position is different in New South Wales, as counsel for the plaintiff pointed out. Under section 63 of the Limitation Act, 1969 (NSW) “… on the expiration of a limitation period fixed by or under this Act for a cause of action to recover any debt damages or other money, the right and title of the person formerly having the cause of action to the debt damages or other money is, as against the person against whom the cause of action formerly lay and as against the person’s successors, extinguished”.

42. With that background, I return to the question of whether it is appropriate to give a ruling under section 192A.

G. My analysis and conclusion

43. In all the circumstances, in my view it is not appropriate to give a ruling under section 192A of the Evidence Act, 1995 for the following reasons:

43.1 The defendant submitted that if the court made a ruling on the present application that the contested evidence was inadmissible, then it would obviate the need for the defendant to marshal and present evidence to the court on the Extras claim leading to significant savings in time and costs for the defendant. However, counsel for the defendant conceded that there was no evidence before the court of what evidence the defendant would put on and what expense would be incurred if the court refused the application. There was no evidence before the court of the costs that would be saved if the ruling were made. I am not prepared to make any assumptions favourable to the defendant on these matters when it would have been very straightforward for either an officer of the defendant or defendant’s solicitor to have set out the position in an affidavit. I am not satisfied that a considerable amount of time, effort and money might be saved if the documents were ruled to be inadmissible now.

43.2 On the defendant’s case, success in having the contested documents ruled inadmissible would be determinative of a very significant and sizeable part of the plaintiff’s claim, being the claim for the sum of $426,074.49 for Extras, without giving the plaintiff an opportunity to have its case determined on the merits at a final hearing in the usual way.

43.3 The factual issues raised by both parties are more appropriately considered and determined with the benefit of the full picture of the parties’ dealings with one another at the relevant time as they would be revealed in the usual course of evidence at a final hearing, with the benefit of cross-examination and full submissions. Having reviewed the white folder and heard the parties’ submissions, I am not satisfied that all matters relevant to the issue have been or can be ascertained on the present application. They are more appropriately to be ascertained at a final hearing.

43.4 That conclusion is reinforced in the context of the question of whether a document constitutes a sufficient confirmation for the purposes of section 54 of the Limitation Act, 1969. That is because, according to “Limitation of Actions – the Laws of Australia” (5th edition, Thomson Reuters) at [9.220], “In determining whether a document constitutes a sufficient acknowledgement, a court will examine the surrounding circumstances and will interpret the document in the manner in which its creator intended it to be read by the person to whom it was addressed. Parol evidence may be given to identify the amount of the debt, to relate the acknowledgement to the debt, to relate several documents to one another and to ascertain the date at which the documents were executed.”.

43.5 The legal issues raised by the parties, particularly in relation to the interpretation and application of the exception provided by section 131(2)(i), are complex and merit the full argument and consideration that can be provided at a final hearing. The parties were unable to provide the court with any case said to be directly on point other than Teoh. In my view, the difference in legislation between New South Wales and the ACT identified by counsel for the plaintiff significantly undermines the applicability of the force of the analysis applied by Burns J.

43.6 Some of the objects of case management set out in section 57 of the Civil Procedure Act, 2005 indicate that it is not appropriate to give a ruling. In my view, it is not an efficient use of available judicial and administrative resources for the issue to be determined in advance of a final hearing, particularly having regard to the timely disposal of all other proceedings in the court.

G. Orders

44. For those reasons I make the following orders:

44.1 The defendant’s notice of motion, as amended, filed 21 February 2025 is dismissed.

44.2 The defendant is to pay the plaintiff’s costs of the motion.