National Builders Group IP Holdings v ACN 092 675 165 Pty Ltd

National Builders Group IP Holdings v ACN 092 675 165 Pty Ltd - [2015] VSCA 260 - VSCA 2015 case summary — Zoe

[50]

reform, modernise and unify the procedure for the conduct of civil litigation. Courts play an important role in adjudicating civil disputes and procedural rights and that role should, of course, continue. But as a public resource, courts must be used responsibly. Parties should not abuse their right of access to the courts by unnecessarily tying up court resources, thereby preventing others from accessing justice. A well-resourced litigant should not be able to use their power to play tactical games and draw out litigation until the other party is forced into an unfair settlement or withdraws.

This bill will curtail such behaviour and arm the courts with the power to prevent such conduct. Parties should be encouraged to resolve their disputes by agreement, and where they require court intervention, the bill will ensure they adhere to appropriate standards of conduct. The result will be a more accessible civil justice system for those parties who need adjudication by the courts.

Very few of the cases which are lodged with the courts proceed to a final hearing. Most cases settle or are withdrawn prior to trial. However, the process to achieve resolution of civil matters that are started in the courts, including the cases that are settled before trial, is often unduly long and costly. The current cost of litigation has reached a point where access to the civil courts is beyond the reach of most Victorians.

...

The bill recognises that the civil litigation system has become out of balance and is increasingly unable to achieve essential goals of accessibility, affordability, proportionality, timeliness and getting to the truth quickly and easily. This bill will make these goals once again more achievable.

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Once proceedings have been initiated, the role of the overarching obligations is to continue to encourage the parties and their lawyers to use reasonable endeavours to achieve early resolution of cases by agreement or to narrow the issues in dispute except where justice or judicial determination is genuinely required.

The bill also provides clear legislative guidance to judges to proactively manage cases in a manner that will promote the overarching purpose - that is, the just, efficient, timely and cost-effective resolution of the real issues in dispute. This will empower them to give clear, effective directions in cases by requiring the parties to keep to the real issues in dispute. It should reduce the number of interlocutory applications in complex litigation and could be used, for example, to limit the time taken up in oral submissions.

At the core of these reforms is the concept of proportionality. Participants in litigation will be required to use reasonable endeavours to ensure that legal and other costs spent in the proceeding are reasonable and proportionate to the complexity or importance of the issues in dispute. The courts will also be required to deal with a civil proceeding in the same manner.

These provisions are designed to cure unnecessary expenditure on litigation and the inappropriate use of the courts as a public resource, a matter that has been highlighted in several recent decisions.[5]

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Overarching purpose

7(1) The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.

Court's powers to further the overarching purpose

9(1) In making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to the following objects -

(a) the just determination of the civil proceeding;

(b) the public interest in the early settlement of disputes by agreement between parties;

(c) the efficient conduct of the business of the court;

(d) the efficient use of judicial and administrative resources;

(e) minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for -

(i) the fair and just determination of the real issues in dispute; and

(ii) the preparation of the case for trial;

(f) the timely determination of the civil proceeding;

(g) dealing with a civil proceeding in a manner proportionate to -

(i) the complexity or importance of the issues in dispute; and

(ii) the amount in dispute.

(2) For the purposes of subsection (1), the court may have regard to the following matters -

(a) the extent to which the parties have complied with any mandatory or voluntary prelitigation processes;

(b) the extent to which the parties have used reasonable endeavours to resolve the dispute by agreement or to limit the issues in dispute;

(c) the degree of promptness with which the parties have conducted the proceeding, including the degree to which each party has been timely in undertaking interlocutory steps in relation to the proceeding;

(d) the degree to which any lack of promptness by a party in undertaking the proceeding has arisen from circumstances beyond the control of that party;

(e) the degree to which each person to whom the overarching obligations apply has complied with the overarching obligations in relation to the proceeding;

(f) any prejudice that may be suffered by a party as a consequence of any order proposed to be made or direction proposed to be given by the court;

(g) the public importance of the issues in dispute and the desirability of a judicial determination of those issues;

(h) the extent to which the parties have had the benefit of legal advice and representation.

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Although that is clearly a statement of the common law to the effect that there be made out an abuse of the process of the court which would render any further proceedings unsatisfactory, in the sense that the court, in light of the way in which discovery had been conducted could not do justice to the parties, that test in my view is overtaken by the provisions of the Civil Procedure Act which go beyond the common law position. The sanction provisions provided by s 56 of the Act in particular are designed to give discovery obligations a significant and unprecedented level of importance in their observance.

They are not to be confined, in my view, to the circumstance where there is a real risk of the conduct of the party in question amounts to an abuse of process of the court which would render the further conduct of the proceeding unsatisfactory and prevent the court from doing justice in a case. In this respect, the ordering of the sanction of awarding compensation for financial or other loss arising out of any conduct amounting to a failure to comply with discovery obligations or any order or direction in relation to discovery a case in point as exemplified by s 56(2(g).

A reference here is further made to the provisions of the Civil Procedure Act, namely referring to s 7 and s 8. The Court of Appeal in Yara Australia Pty Ltd & Ors v Oswald[9] took the opportunity to review the statutory regime and obligations imposed by the Civil Procedure Act. The Court of Appeal made observations of relevance in paragraphs 9 to 11. In Yara, the Court of Appeal summarised its analysis with the following observation:

'The Act prescribes the parties to a civil proceeding are under a strict, positive duty to ensure that they comply with each of the overarching obligations and the court is obliged to enforce these duties. The statutory sanctions provide a valuable tool for improving case management, reducing waste and delay and enhancing the accessibility and proportionality of civil litigation. Judicial officers must actively hold the parties to account.'

Discovery is of central importance in civil litigation in an adversarial common law system, as has been often recognised. In this case, there has been a persistent failure to comply with the orders for discovery in spite of generous periods allowed for compliance, as I have described. I am satisfied that in relation to the 2nd defendant [scil the first defendant, Holdings], there has been not only a failure to explain the delay in complying with the last orders by not going on to affidavits - going into not swearing to any explanation in an affidavit but further, there has been, as I have found, a failure on its part to comply with Rule 29.04 in any event in the supplementary affidavit of documents which it purported to file even late.

At a glance

Court

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Before

Source

Judgment (107 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (6)