Bar-Mordecai v Attorney-General of NSW

Supreme Court 12On 2 July 2013, Mr Bar-Mordecai filed a Summons in which he sought an order pursuant to s 14 of the VP Act, that he be granted leave to file an appeal against the judgment of Milledge LCM dated 25 June 2013. 13Orders were made pursuant to s 16(1)(a) of the VP Act that Mr Bar-Mordecai serve the Summons and his affidavits in support upon TS, Senior Constable Tom Sands, and the Attorney-General of NSW. Case management orders were made for the service of evidence and outlines of submissions by those served with the Summons. 14Senior Constable Sands submits to any order of the Court save as to costs. TS and the Attorney-General oppose the grant of leave sought by Mr Bar-Mordecai.

A contested tender of the whole of a letter 15As I have earlier indicated, the question with which this judgment deals is the tender, by counsel for TS, of the whole of a letter dated 23 August 2013, written by Mr Bar-Mordecai to the solicitor for TS. The letter is headed "without prejudice". 16Mr Bar-Mordecai objects to the admission into evidence of any part of the letter, except those parts to which I have referred in [4] above, because he says it is protected by the provisions of the privilege set out in s 131 of the Evidence Act 1995. 17It is necessary to consider the terms of the relevant legislation, and the principal authorities which assist in the elucidation of the meaning of the legislation.

Legislation and Authorities 18Section 131 of the Evidence Act is in the following form, relevantly: "131. Exclusion of evidence of settlement negotiation 1. Evidence is not to be adduced of: (a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or (b)... 2.Subsection 1 does not apply if: (a) ... ... (i) making the communication, ... affects a right of a person;" 19In Silver Fox Co Pty Ltd v Lenards Pty Ltd (No.3) [2004] FCA 1570; (2005) 214 ALR 621, Mansfield J explained the purpose of s 131(1) of the Evidence Act at [36] as follows: "Section 131(1), subject to its exceptions, gives effect to the policy of ensuring that the course of negotiations - whether private or by mediation - are not adduced into evidence for the purpose of influencing the outcome of the primary matters in issue. Clearly, it is in the public interest that negotiations to explore resolution of proceedings should not be inhibited by the risk of such negotiations influencing the outcome on those primary issues. It is equally in the public interest that negotiations should be conducted genuinely and realistically." 20It is now beyond argument that the mere insertion of, or use of the words "without prejudice" on a document is not, without more, determinative of the issue of whether a communication (in this case by way of a letter), is "in connection with" an attempt to negotiate a settlement: GPI Leisure Corporation (In Liq) v Yuill (1997) 42 NSWLR 225 at 226G per Young J. 21However, the use of the words "without prejudice" will be some evidence of an intention that the communication is made for the purpose of attempting to negotiate a settlement of a dispute: Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd [2011] FCA 276 at [39] per Bromberg J. 22In considering what the phrase "attempt to negotiate a settlement" means, it is appropriate to keep in mind what Bromberg J said in Barrett Property at [33]-[34]. He said: "33. It is in the public interest that disputes be quelled or resolved. A dispute may be resolved through one or both parties compromising their positions. Equally, a dispute may be resolved by one party fully conceding the claim of the other including by the claimant withdrawing its claim. Resolution of a dispute does not necessarily require compromise by each party. Disputes are regularly resolved without any compromise, including by a claimant withdrawing its legal proceeding or the threat thereof. 34. Section 131(1) speaks of an attempt to negotiate a settlement. It does not require an attempt to negotiate a compromise in which some middle ground is found. The applicants emphasise the word 'negotiate', as though it necessarily connotes a willingness by every party to the dispute to compromise. In the context of the phrase 'in connection with an attempt to negotiate the settlement of the dispute', the word 'negotiate' simply means to arrange for or bring about a settlement: see Macquarie Dictionary (5th ed, 2009)." 23As Spigelman CJ said in Bhagat v Global Custodians Ltd [2002] NSWCA 160, at [29], a demand for surrender may constitute an attempt to negotiate a settlement, even though no compromise is offered. 24Contrary to the submissions made by Counsel for TS, the phrase "attempt to negotiate a settlement" does not require as a necessary step that the offer to negotiate includes an offer capable of acceptance: see Korean Airlines Co Ltd v Australian Competition and Consumer Commission (No.3) [2008] FCA 701 per Jacobsen J at [73]. It is helpful to set out his Honour's conclusions on this issue: "72 The statutory requirement that the communication be "in connection with an attempt to negotiate a settlement" reflects the language used by the High Court in Field at 293. There, Dixon CJ, Webb, Kitto and Taylor JJ contemplated that the privilege extends to cover communications that are reasonably incidental to negotiations. 73 The effect of the authorities at common law is that the privilege applies to offers to negotiate and expressions of willingness to do so; it is not necessary that there be an offer capable of acceptance: Trade Practices Commission v Arnotts at 72-73. 74 The same position applies under the Evidence Act. It is sufficient that the communication can be described as an "opening shot" in negotiations: GPI Leisure Corporation Ltd (In Liq) v Yuill (1997) 42 NSWLR 225 at 226." 25As is clear, much depends upon the context in which the relevant letter is sent, the contents of it, and the characterisation of it.

Letter of 21 August 2013 26Mr Bar-Mordecai submits that the context commences with a consideration of the letter of 21 August 2013 sent by the solicitor for TS to Mr Bar-Mordecai. It is in the following terms: "We are instructed to act for [TS] in relation to the above matter. As you are aware LCM Milledge delivered her decision in the application to extend the apprehended domestic violence order ... against you on 25 July 2013. At the same time as granting the extension of the Order her Honour made an award of costs ... against you in the sum of $22,977.42. Our client has provided instructions that she undertakes not to enforce that Costs award against you and she will, via this Office, enter into consent orders with the sole purpose of vacating that Costs award. This letter will be provided to the Court on the question of your application seeking leave, in the Supreme Court pursuant to the Vexatious Proceedings Act, to appeal the extension of the order." 27It was submitted by Counsel for TS, which submission was supported, and expanded upon by Counsel for the Attorney-General, that this letter was not capable of constituting an offer, or else a communication in connection with an attempt to negotiate a settlement of a dispute, and accordingly, could not reasonably be regarded by Mr Bar-Mordecai as a letter which invited a response of the kind which he made, nor a response which was capable of being regarded as an attempt to negotiate a settlement of a dispute. 28It was put that this letter was merely a statement of TS's position with respect to the proceedings in the Supreme Court, namely that she proposed to put the terms of the letter before the Court as a basis for the Court to conclude that leave to commence the District Court proceedings ought not be granted, because the order for costs no longer needed to be set aside, or even considered, in any prospective District Court proceedings. 29It was submitted that the terms of the letter did not leave any room for acceptance or rejection of the statement, and therefore it could not be reasonably regarded as an offer, or else a communication in connection with an attempt to negotiate a settlement of a dispute. 30I do not accept that it is appropriate to so characterise this letter. There are two reasons why I have come to that conclusion. The first is that the letter proffers an inter partes undertaking by TS to do something. In my view, any inter partes undertaking is capable of acceptance or rejection by the party to whom it is offered. After all, if it is not accepted, it is difficult to see any circumstances in which it could thereafter be relied upon, by the party to whom it was proffered. Nor can I see any circumstance in which the party proffering the undertaking would be held to it, at the suit of the other party, if that party had rejected it. An undertaking to the Court may be in a different category. 31Secondly, the reference to the phrase "enter into consent orders" implies that Mr Bar-Mordecai will be invited to consent to orders in the Local Court. That invitation is capable of acceptance or rejection by Mr Bar-Mordecai. 32In those circumstances, it seems to me that whilst this letter may well have the purpose which was contended for by Counsel for TS and the Attorney-General namely, once tendered in these proceedings, to weigh in favour of TS, in the determination of the proceedings. However, it also has the purpose of providing an offer to Mr Bar-Mordecai, the purpose of which is to settle, at least a part of the dispute between the parties, namely whether Mr Bar-Mordecai should have leave to appeal against that order of the Local Court which required him to pay TS's legal costs of the Local Court proceedings before Milledge LCM. 33Applying such a construction to the letter, means that it is unsurprising that Mr Bar-Mordecai's response of 23 August 2013 is marked "without prejudice" and puts a proposal for settlement negotiations.

Letter of 23 August 2013 34On 23 August 2013, Mr Bar-Mordecai wrote a letter to Mr Sutton, TS' lawyer. The heading and first paragraph of the letter, which were both admitted by consent in the proceedings, are in the following form: "Re: Proposed settlement negotiations for Leave to Appeal a decision of a Magistrate in Bar-Mordecai v Attorney-General matter no.2013/201207 and a District Court appeal in Schwarz v Bar-Mordecai matter no.2007/146343 1. This is to advise you that the writer has received his elder daughter's kind offer to not press for your legal cost award granted by ... Magistrate Milledge - the offer is rejected, but please, thank your client for the kind thought. ... ." 35The parts of the letter of 23 August 2013, which I have extracted above, make it plain that: (a)Mr Bar-Mordecai saw the letter of 21 August 2013, as an offer to resolve, at least in part, these Supreme Court proceedings, and the proposed proceedings in the District Court, which offer he rejected; (b)he intended that his letter of 23 August 2013, respond to that first letter, and that it be received as an offer, or a counter offer, to negotiate to settle the proceedings; and (c)that intention is readily apparent from the use of the words "without prejudice", and the use of the heading on the letter "Proposed settlement negotiations", and the contents of the first paragraph. 36However, Counsel for TS, and the Attorney-General, submits that the balance of the contents of the letter demonstrate, beyond argument, that the offer which was made in the letter, was not a genuine, or bona fide, attempt to negotiate a settlement. Counsel accept that it is a matter for the Court to make an evaluation, by looking at the entirety of the contents of the letter, and having regard to the context of surrounding circumstances, as to whether the letter is, or is not, a genuine attempt to negotiate a settlement. 37Counsel pointed to a number of features of the letter to support a conclusion that the attempt to negotiate was not genuine. Those features were: (a)the reference to a wholly extraneous subject matter, namely, access arrangements between Mr Bar-Mordecai's parents, and their great-grandchildren, who were protected persons under the ADVO, accompanied by a notification that Mr Bar-Mordecai would institute proceedings on behalf of his parents in the Family Court for access to their four great grandchildren; (b)the lack of an adequate and clear specification of what settlement it was that Mr Bar-Mordecai was in fact proposing i.e. what would happen to the Supreme Court proceedings and the proposed District Court proceedings; (c)the inclusion of specified conditions, which benefited only Mr Bar-Mordecai, and which were said to be necessary for a settlement to be effected. One of the conditions specified arrangements with respect to access between Mr Bar-Mordecai's parents and their great-grandchildren, which, counsel argued, were not capable of being given effect to, having regard to the short space of time involved; and, finally (d)a demand, apparently unrelated to any other issue in the Supreme Court or proposed District Court proceedings, for the loan of a sum of money. 38Counsel for the Attorney-General, in particular points to the fact that the condition about immediate access for Mr Bar-Mordecai's parents to their great grandchildren, was not capable of being accepted having regard to the timeframe which was contained within it. 39In addition, counsel for TS submits that there is no concrete proposal made in the letter, which was capable of acceptance by his client. 40In my view, these submissions ought not be accepted. I have formed the view that the contents of the letter of 23 August 2013, amount to a communication made in connection with a genuine attempt to negotiate a settlement of the proceedings before this Court. 41A careful reading of this letter indicates, or else allows of the reasonable conclusion, that whilst Mr Bar-Mordecai seeks to have the costs orders made by the Local Court vacated in the course of any settlement, he is offering to give up the process of a hearing in the District Court of NSW which, no doubt, he would see as an opportunity to vindicate the errors, which he perceives to have been made, in the Local Court judgment. 42The fact that one of the terms is itself, on one view, not capable of ready acceptance, does not suggest the entire offer is not a genuine attempt to negotiate a settlement. In this case, such a term could be met easily by a counter-offer which accepted the term but changed the date concerned. In any event, the fact that an offer includes one term, which may be impossible to accept, does not mean that the entire offer is not a genuine attempt to resolve the position. 43Nor am I satisfied that the statement of preconditions to any settlement which Mr Bar-Mordecai makes in the letter, are anything more than "staking out" the boundaries within which he wishes to negotiate. It is not at all uncommon that negotiations include a statement, certainly at the start of the negotiating process where one party insists on certain matters or facts being agreed to. In my view, the so-called conditions of Mr Bar-Mordecai are nothing more than that. 44Nor am I satisfied that the letter does not include a settlement which is capable of being understood and accepted by TS. On the contrary, a careful reading of the proposal shows that Mr Bar-Mordecai is proposing that the District Court proceedings, if leave be granted, be resolved in a particular way. It naturally follows from such a proposal, that in the formal terms of the settlement, either the proceedings in this Court could be settled by an unopposed grant of leave which would then enable the District Court proceedings to be settled; or, alternatively, terms could be entered into in the Supreme Court, which require parties to do certain things in the District Court. There is no doubt that the letter is not, by itself, a complete offer with all facets of a proposal addressed, but such an offer is not necessary in order to constitute a communication in connection with an attempt to negotiate a settlement of a dispute 45Even if the terms of the settlement were not capable of ready acceptance, because of a lack of sufficient specificity, that is not a reason to regard this letter as not being a genuine attempt to negotiate a settlement. An opening letter in settlement negotiations, or a "shot across the bows", may nevertheless be a genuine attempt to negotiate a settlement. 46In my view, the proper characterisation of this letter is that it is a statement of Mr Bar-Mordecai's preparedness to agree to a settlement with certain preconditions attached to it. 47There is no feature of it which I can see that suggests that it is not a genuine attempt to settle the proceedings.

An exception 48Counsel for TS argued that the exception set out in s 131(2)(i), namely that making the communication affected a right of a person; namely TS. If such an exception was established, then the letter would, if otherwise relevant, be admissible. 49It is clear that should the offer contained in the letter of 23 August be accepted, in whole or part, then with the agreement of TS, it is possible that an existing right may be affected. For example, she may have agreed to vacate a costs order the benefit of which she had. She would lose such rights to enforcement of that order as she had. 50However, that is not what the section is intended to address. If it were so, then most, if not all, offers to negotiate a settlement would fall within the section, because most offers involve adjusting rights which a person has. But the section is directed to the communication itself directly affecting the rights of a person, and not what parties may do, by agreement, after settlement negotiations come to fruition. 51The subject letter did not, and was not capable of, affecting the rights of TS. I reject the submission of Counsel for TS.

Conclusion 52The three issues which arise on the question of the admissibility of the evidence of the letter of 23 August have been resolved in favour of rejecting the tender of the document. 53The first is whether it was a communication made between persons "in dispute" within the meaning of s 131(1)(a) of the Evidence Act. It was conceded that the communication should be so described. 54The second is whether it was a communication "in connection with an attempt to negotiate a settlement of the dispute": s 131(1)(a) of the Evidence Act. For the reasons which I have expressed above, I am satisfied that this is so. 55The third issue is whether, in the event that the communication would otherwise be excluded under s 131(1), it is admissible under the exception stated in s 131(2)(i) of the Evidence Act. I am satisfied that this exception is not applicable here.

Order 56It was for theses reasons that on 10 September 2013, I made the following order: (1)Tender of letter dated 23 August 2013 rejected.

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