Bar-Mordecai v Attorney-General of NSW

Supreme Court of NSW|2013-09-11|Before: Garling J, Mr J

Judgment 1On 11 September 2013, in the course of the hearing of an application by Mr Michael Bar-Mordecai for leave, pursuant to s 14 of the Vexatious Proceedings Act 2008 ("VP Act") to commence proceedings in the District Court, I delivered reasons for rejecting the tender by the Attorney-General of NSW and TS of a letter dated 23 August 2013. 2Later on, during the course of the further hearing of the application, on 11 September 2013, the letter was again tendered by counsel for the Attorney-General, and I rejected that tender. At the time I indicated that I would deliver reasons in due course. These are those reasons.

Background of the Proceedings 3In the principal proceedings I have delivered two judgments. The first, Bar-Mordecai v Attorney-General of NSW [2013] NSWSC 1303 ("the first judgment"), dealt with the initial tender of the letter of 23 August 2013. That judgment was published on 11 September 2013, and provided the reasons for the rejection of the tender on the previous day, 10 September 2013. 4On 27 September 2013, I delivered a further judgment on the substantive application being Bar-Mordecai v Attorney-General of NSW (No.2) [2013] NSWSC 1538. For the reasons contained in that judgment, I granted leave on terms to Mr Bar-Mordecai to commence proceedings in the District Court of NSW. 5The substance of the application being made by Mr Bar-Mordecai, is contained in those judgments. There is no need to repeat that substance in this judgment. 6As the first judgment demonstrates, the letter dated 23 August 2013 is a letter written by Mr Bar-Mordecai to the solicitor for TS, which is headed "Without Prejudice". It was a response to a letter dated 21 August 2013, sent to Mr Bar-Mordecai by the solicitor for TS. The terms of that first letter are set out at [26] in the first judgment. 7As I concluded in the first judgment at [53]-[55], I was satisfied that the letter was, within the meaning of s 131(1)(a) of the Evidence Act 1995, a communication which was in connection with an attempt to negotiate a settlement of the dispute, and that accordingly, it ought be excluded from evidence. 8This ruling is necessitated by a submission by counsel for the Attorney-General, that Mr Bar-Mordecai has waived his privilege, or alternatively, that the Court ought conclude that he has impliedly consented to the disclosure of the contents of the letter, by reason of the contents of paragraph 5 of an affidavit sworn by Mr Bar-Mordecai on 30 August 2013 having been read in evidence. In short, it is submitted that paragraph 5 of that affidavit, which was in the following form: "5. My intent and purpose of writing the settlement letter to Mr Sutton was to settle the matter with my daughter, and have my elderly nonagenarian parents have immediate access to their great grandchildren prior to their demise." bespeaks an intention by Mr Bar-Mordecai that the proceedings in the District Court, if permitted to be instituted by a grant of leave, would be conducted in good faith, appropriately, and without constituting vexatious proceedings; whereas the content of the letter of 23 August 2013, to which Mr Bar-Mordecai referred in the affidavit as "the settlement letter", demonstrated to the contrary.

Affidavit of 30 August 2013 9It is necessary to set out the contents of that affidavit and in relevant part, the annexures. 10The affidavit reads, omitting formal parts: "2. On the 29 August 2013, I received a one page letter authored by Mr J Sutton of Armstrong Legal Solicitors representing my elder daughter, TS. Annexed hereto and marked with the character A is a copy of Mr J Sutton['s] letter dated 28 August, 2013. 3. On the 28 August 2013, I received a second one page letter authorised by Mr J Sutton of Armstrong legal Solicitors representing my elder daughter, TS threatening disclosure of privileged information. Annexed hereto and marked with the character B is a copy of Mr J Sutton's letter threatening disclosure of privileged information. 4. On 30 August 2013, I replied to those two letters in a consolidated letter. Annexed hereto and marked with the character C is a copy of my letter in reply to Mr J Sutton's two letters dated 30 August 2013. 5. My intent and purpose of writing the settlement letter to Mr Sutton was to settle the matter with my daughter, and have my elderly nonagenarian parent have immediate access to their great grandchildren prior to their demise. 6. I have written to Mr Sutton and invited him to withdraw his delinquent submissions, but I have had no written reply to my request." 11A letter dated 29 August 2013 is annexed and referred to in paragraph 2. Relevantly, it is in the following form: "To the extent it is necessary, and for complete transparency, my client does not consent to the appeal in the District Court, wherein you will seek to have the AVO currently protecting her dismissed. My client honestly and reasonably believes she requires the protection of the Apprehended Domestic Violence Order. I trust the position is clear." 12The letter which is referred to in paragraph 3 of the affidavit, and which is Annexure B, informs Mr Bar-Mordecai that it is Mr Sutton's intention: "... to rely upon that letter and tender it to the Court in opposition of your leave application to appeal to the District Court." Mr Sutton was referring to the letter of 23 August 2013. 13In paragraph 4, Mr Bar-Mordecai refers to his letter in response. It is unnecessary to set it all out. However, insofar as it relates to the letter of 23 August 2013, it includes these statements: "a. The privilege which applies to settlement negotiations can only be waived with the consent of all parties. I do not give you or your client consent to have my 'without prejudice' settlement letter dated 23 August 2013 to you, tendered in evidence in the above matter, where it was an offer of settlement in response to your client's monetary offer and the Plaintiff does not consent to waive that privilege, in what appeared to be a genuine attempt to negotiate a settlement of the dispute with my mentally afflicted daughter with post-traumatic stress syndrome due to marital disharmony; b. At common law, evidence of admissions by words or conduct made by parties in the course of genuine negotiations to settle an existing dispute is privileged unless all parties to the negotiations agree to the contrary. The rational for the privilege is that parties should be free to explore settlement of disputes, and make admissions in the course of those discussions, safe in the knowledge that if the negotiations break down, any admissions made will not be tendered against them later in court. This was confirmed by Robison DCJ in June 2013 in Bar-Mordecai v State NSW; c. Whether communications are covered by the privilege depends, not on whether the words 'without prejudice' have been used, but upon the parties' intentions which are to be ascertained from the nature of the communications. Whilst the words are a relevant factor in determining the relevant intention, it is the situation of settlement negotiation that is critical to the operation of the privilege; d. The intent of the writer's letter to you dated 23.8.2013 was a settlement negotiation, after your client offered a monetary enticement for settlement; e. The privilege can only be waived with the consent of all parties, and the Plaintiff does not give consent to have that privilege waived, such that you will be precluded from tendering that letter to the Supreme Court."

Submissions of the Attorney General 14Counsel for the Attorney-General puts three submissions which support the admissibility of the settlement letter. Firstly, he submits that the letter is not a communication to which s 131(1)(a) of the Evidence Act applies. Secondly, he submits that if it is a letter to which the section applies, then Mr Bar-Mordecai has consented to the evidence being adduced and, accordingly, the exception in sub-section 131(2)(a) of the Evidence Act applies. Thirdly, he submits that there is a further exception to s 131(1) of the Evidence Act which applies, namely that set out in s 131(2)(g) of the Evidence Act, namely, that evidence led in the proceedings is likely to mislead the Court unless the evidence of this communication or document is adduced to contradict or qualify that evidence. 15In the first judgment, I held that I was satisfied that the letter was a document prepared in connection with an attempt to negotiate a settlement of a dispute. Nothing has been advanced by the Attorney-General which would cause me to reconsider that finding. For the reasons given in the first judgment, I adhere to that finding. 16The second submission is that there has been consent to the tender of the document. 17Counsel for the Attorney-General argues that the reading of paragraph 5 of the affidavit constitutes such consent, particularly when considered together with the tender of an initial part of the letter as Exhibit 1. 18I reject that submission. 19The correspondence between Mr Sutton and Mr Bar-Mordecai which is annexed to the affidavit, and to which I have made extensive reference, indicates that when confronted with the suggestion that the document was to be tendered, Mr Bar-Mordecai made it plain that he was not consenting to the tender, nor was he waiving any privilege in the document created by such offer of settlement as was made in the document. 20A statement as to his intent and purpose in writing the document, which is what is contained in paragraph 5 of the affidavit, does not constitute the giving of consent to the tender of the document. 21One of the principal issues in the proceedings before me was whether, if leave was granted pursuant to the VP Act for Mr Bar-Mordecai to commence proceedings in the District Court of NSW, those proceedings would be vexatious or not. 22The statement of intent in paragraph 5 of the affidavit does not go to any issue directly raised in the proposed proceedings, and was a statement made and tendered in evidence as a reaction to the assertion in Mr Sutton's letter that he intended to tender the letter written by Mr Bar-Mordecai. I am quite unable to discern any consent on the part of Mr Bar-Mordecai to the tender in court of the settlement letter. 23The third argument raised by counsel for the Attorney-General was that because the evidence in paragraph 5 of Mr Bar-Mordecai's affidavit had been adduced in the proceedings before me, I was likely to be misled unless evidence of the settlement letter was adduced to contradict or qualify that evidence. In advancing this submission, counsel relies upon the provisions of s 131(2)(g) of the Evidence Act. 24As the judgment of Emmett J in Brown v Commissioner of Taxation [2001] FCA 596 demonstrates, the exception contained within s 131(2)(g) must be considered in its context within the scheme of s 131 as a whole. His Honour said at [180]: "180. The presence of s 131 in the Evidence Act is a recognition of the desirability of encouraging settlements - see ALRC 26 Vol 1 para 891. Certainly, s 131 does not incorporate any judicial discretion to overcome the privilege in circumstances that do not fall within the list of exceptions. Nevertheless, the exceptions contained in s 131(2) are not intended to negative the basic intention of s 131 that settlement should not be discouraged by the possibility of the communications made in connection with an attempted settlement might be tendered against a party to those communications. 181. Paragraph (g) must be construed in the light of the other exceptions outlined in s 131(2). Paragraphs (a), (b) and (c) of s 131(2) exclude a communication when the communication has been disclosed. Paragraph (d) excludes a communication where the communication is not confidential. Paragraphs (e) and (f) are concerned with evidence relating to attempts to settle a dispute, for example, where there is a dispute as to whether or not the settlement has been achieved. Paragraph (h) is concerned with the recognised exception of what is known as a Calderbank offer. Paragraph (i) allows an exception where communication or perpetration of a document affects a persons right. Paragraphs (j) and (k) are concerned with communications and documents in furtherance of fraud or criminal offences and the abuse of power." 25Further in his judgment Emmett J went on to say at [185]: "185. It is not appropriate to attempt an exhaustive exposition of the effect of s 131(2)(g). However, I consider that it will not be attracted simply because evidence to which s 131(1) applies, contradicts or qualifies evidence that has been already adduced. Section 131(2)(g) will apply where the Court would be likely to be misled as to the existence or contents of an excluded communication or document where those matters are in issue in the proceedings. The fact of, or the contents of, the communications, of which the Commissioner now seeks to adduce evidence are not directly relevant to the proceedings before me. I do not consider that s 131(2)(g) is applicable in relation to the objective material." 26I have formed a like view to that of Emmett J in Brown. The content of the letter is not a fact or matter in issue in the proceedings before me. What is in issue is whether leave should be granted to commence proceedings under the VP Act. One issue in that consideration is whether those proceedings are likely to be vexatious. 27I am quite unable to see how the content of a settlement letter, which responded to an offer made to Mr Bar-Mordecai by the solicitor for TS, whatever be its contents, would be likely to mislead this Court as to the matters in issue before it. 28For these reasons I rejected the tender of the document.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 November 2013

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