The evidence objected to
17In paragraphs 26, 39, 40, 41, 42 and 43 of his affidavit, Mr Mattiussi gives evidence of conversations he had with various representatives of the defendants in October 2011 and in June 2012 in which settlement of these proceedings was discussed. However I see nothing in those paragraphs which would tend to contradict or qualify the evidence given by the defendants in their affidavits which I have set out.
18However, two of the without prejudice letters annexed to Mr Mattiussi's affidavit do tend to contradict or qualify the defendants' evidence.
19A letter from the defendants' then solicitor to the plaintiffs' solicitor of 7 March 2012 stated that "provided all other matters can be resolved" mortgage security could be offered for the $170,000 over a property owned by the second defendant in Woollahra. The letter continued: -
"We are instructed that our clients intend upon sourcing the sum of $170,000 [from the sale of the Woollahra property]".
20Although the letter made a proposal about how the $170,000 would be paid (ultimately from the proceeds of sale of the Woollahra property, over which the plaintiffs would, in the meantime, have security), it was implicit in the letter that the $170,000 was payable. No suggestion was made in the letter of the varied or new agreement now alleged.
21On 12 June 2012, the defendants' then solicitor forwarded to the plaintiffs' solicitor a letter from the second defendant. That letter responded to a "without prejudice" offer made by the plaintiffs' solicitors. In the letter the second defendant stated: -
"The base figure of $170K of course was the figure in the original Deed of Settlement, however the rest of the claim in my opinion is incorrect as follows".
22The second defendant then gave a detailed refutation of the plaintiffs' contentions. But the letter made no suggestion of any agreement by the plaintiffs to not press their claim for the $170,000. On the contrary, it suggested that the one element of the plaintiffs' claim that was not challenged, was the claim for the $170,000.
23Varying views have been expressed as to the breadth of s 131(2)(g) of the Act. A more expansive view of the section has been adopted in a number of decisions in this Court compared to consideration given to the section by the Federal Court of Australia. The various authorities are conveniently gathered together in the decision of Bromberg J in Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd (No 2) [2011] FCA 276; (2011) 193 FCR 479 at [43] - [57], particularly [52] - [54].
24As Bromberg J said at [55]: -
"I respectfully agree with the analysis of Emmett J ... [in Brown v Commissioner v Taxation [2001] FCA 596; (2001) 187 ALR 714] and his Honour's conclusion that s 131(2)(g) is not attracted simply because evidence to which s 131(1) applies, contradicts or qualifies evidence that has already been adduced. I would respectfully add that s 131(2)(g) is only attracted where the exclusionary rule in s 131(1) would operate to allow a party which has adduced evidence, to use the exclusionary rule as an instrument for misleading the court."
25I agree that more than mere contradiction or qualification of earlier evidence is necessary. The subsection requires that, absent such contradiction or qualification, there be a likely misleading of the Court.
26The present case falls within the narrower view of the subsection favoured by Bromberg J. This is because exclusion of the "without prejudice" communications from the defendants' solicitor of 7 March 2012 and 12 June 2012 would, in my opinion, have the result that the evidence adduced by the defendants, who seek to rely on the exclusionary rule, would likely mislead the Court.
27Uncontradicted, or unqualified by the contents of the letters of 7 March 2012 and 12 June 2012, the defendants' evidence as to their true understanding of the events leading up to the settlement of 1 December 2011 would be, to say the very least, incomplete and likely to mislead the Court as to their true state of mind.
28The remaining "without prejudice" correspondence sought to be tendered by the plaintiffs comprises letters between the plaintiffs' solicitors and the defendants' then solicitors. These letters are relevantly equivocal. I do not think these letters are in the same category as those emanating from the defendants' side.
29For those reasons, I make the following orders: -
(1)I reject paragraphs 26, 39, 40, 41, 42 and 43 of Mr Mattiussi's affidavit of 3 August 2012;
(2)I admit the letters from Wood Marshall Williams to Willis & Bowring of 7 March 2012 (being annexure "Y" to Mr Mattiussi's affidavit and being the document at court book p 470) and 12 June 2012 (being annexure "AB" to Mr Mattiussi's affidavit and being the document at court book p 492 to 513);
(3)I reject the letter from Wood Marshall Williams to Willis & Bowring of 9 March 2012 (being the document at court book p 471), Willis & Bowring's letter to Wood Marshall Williams of 22 April 2012 (being annexure "AA" to Mr Mattiussi's affidavit being the document at p 491 of the court book) and the letter from Willis & Bowring to Wood Marshall Williams of 27 June 2012 (being annexure "AC" to Mr Mattiussi's affidavit and being the document at p 514 to 515 of the court book).