Originally published in the Law Institute Journal
At its commencement, some viewed the Civil Procedure Act (CPA) as an aspirational guideline rather than a mandatory directive. Now, entering its 10th year, the courts have demonstrated their preparedness to put substance into the legislature’s ambitions, and sanction those who fail to comply.
Seldom has a singular piece of legislation had a more significant impact on the behaviour of practitioners and the conduct of litigation across Victoria in the way the Civil Procedure Act 2010 (Vic) (the Act) has. Commencing on 1 January 2011 and now entering its 10th year of operation, the Act provides the judiciary with “a valuable tool for improving case management, reducing waste and delay and enhancing the accessibility and proportionality of civil litigation”.1
In 2004, then Attorney-General Rob Hulls released a paper titled “New Directions for the Victorian Justice System”. The paper opined that in order to “reclaim the law as accessible and relevant to all Victorians . . . we must build the law’s authority on lucidity and inclusion, rather than mystification and exclusion”.2
This ambition formed the basis for the development of the Act. In its initial formulation, the Act was criticised for its apparent aspirational language, and many contemplated how a requirement to “further the administration of justice” would radically change a profession already subject to similarly phrased professional obligations.
But since its enactment, the Act has come to provide a powerful weapon for the court to hold rogue parties and their representatives to account for inappropriate conduct. The burden of the Act’s obligations is felt particularly by solicitors, who can no longer rely on the “explicit and informed instructions of the client” as a defence for misbehaviour.3 Although initially reticent, over time the judiciary has shown a preparedness to articulate practical expectations out of the Act’s more opaque language, and solidify the importance of compliance when engaging in civil litigation.
Section 7 of the Act declares the overarching purpose of the entire legislation to be the facilitation of the “just, efficient, timely and cost-effective resolution of the real issues in dispute”.4 This purpose demands of the supervising judiciary a balancing act between the conservation of a party’s ability to exercise their inherent rights when engaged in litigation with the court’s ability to manage cases within the confines of its limited resources. While it is clear that the implementation of this purpose should not be dogmatic to the point of undermining a party’s statutory rights,5 the courts have been prepared to rely on this provision as a source of authority to make decisions of significant consequences to the parties, including the granting of summary judgment where appropriate.6
Sitting at the centre of this legislative framework is the paramount obligation that all parties, including practitioners, expert witnesses, litigation funders and insurers7 are subject to, that is, the obligation to “further the administration of justice” while participating in litigation.8 As Dixon J observed in his decision in Hudspeth,9 practitioners have always held an obligation at common law to protect the public interest in the administration of justice. When considering this common law obligation, Dixon J accepted jurisprudence from 1940 which determined that it was “impossible to enumerate the various contingencies which may call into operation the exercise of this jurisdiction”. However, he conceded that these common law obligations primarily fell on legal practitioners, and certainly did not extend to other participants, such as expert witnesses, in the way the Act does.
How then does a court interpret the legislative enshrining of a phrase with such an extensive background of judicial consideration? According to the case of Bolitho,10 the test is “whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a lawyer should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice”. Such consideration must be “ground in reality and cannot be theoretical”.11
With such a broad ranging paramount obligation at its centre, the practical operation of the Act is assisted by the enforcement of the 10 overarching obligations contained in ss17 to 26. As the confines of this article do not permit consideration of each of these obligations, the following analysis considers how the courts have interpreted three of these obligations: the duty not to mislead or deceive, to narrow the issues in dispute and to ensure legal costs are to be reasonable and proportionate.
Misleading or deceiving conduct
The phrase “misleading or deceptive conduct, or conduct which is likely to mislead or deceive” is synonymous with consumer law and commercial litigation generally in Australia. Dixon J noted in Hudspeth that, “much judicial ink has been spilt” explaining that expression already.12 However, as s21 prohibits a person to whom the overarching obligations apply from engaging in behaviour which does or is likely to mislead or deceive, it is important to consider how this might transpire in the context of litigation as opposed to a commercial transaction.
Dixon J accepted the definition afforded to the duplicate provision in the Australian Consumer Law, that is, that “conduct will be misleading or deceptive if it induces or is capable of inducing error”.13 It is not necessary to read the word “knowingly” into the provision, as the state of mind of the participant is not relevant to the consideration of whether their behaviour was misleading or deceptive.14
To determine if a party has breached s21, the first step is to identify a particular course of conduct, as it is only after identifying the impugned conduct that an analysis can be undertaken of whether said conduct satisfies the definition of misleading or deceptive.15 Once the conduct is identified, it is important to then examine the behaviour in the context of the proceeding as a whole to determine whether it can be classified as misleading or deceptive.16
Although all overarching obligations have equal standing with one another, the court has recognised that an allegation that a party, and in particular a practitioner, has engaged in misleading or deceptive conduct is a very serious matter. If an allegation is to be made that a party has breached s21 in this way, the complainant must provide notice of what is alleged and afford the purported offender with an opportunity to answer the allegations made.17
Narrow the scope
Section 23 obliges a person to whom the obligations apply to agree on the issues that can be resolved and narrow the scope of the remaining issues, unless it is not in the interests of justice to do so. At face value, the imposition of a positive obligation on opponents in an adversarial system to agree to issues in dispute appears optimistic at best. However, the courts have demonstrated a preparedness to impose obligations on participants who fall foul of this obligation.
A primary example of the operation of this obligation is the case of Stewart.18 In this case, the parties were engaged in an interlocutory dispute regarding the discoverability of notes one side had taken during a conference with a witness. Despite the matter being the subject of a contested directions hearing and a written judgment requiring the production of the notes, it was not until sometime afterwards that the responsible party disclosed that there were no notes in existence from this conference. In that case, Lansdowne AsJ found that, although the party’s conduct did not go as far as to be misleading or deceptive, it was a violation of their obligation to narrow the issues in dispute (as disclosure that the notes did not exist would have obviated the need for the protracted interlocutory dispute).
It is not uncommon for parties who are accused of violating this particular overarching obligation to also allegedly be in breach of s19, the obligation to only take steps which they believe are reasonably necessary to facilitate the resolution of the proceeding, and s25, the obligation to use reasonable endeavours to act promptly and minimise delay.
Reasonable and proportionate costs
The obligation in s24 for participants, and particularly solicitors, to use reasonable endeavours to ensure that legal costs incurred are reasonable and proportionate to the complexity and importance of the issues is one that was the cause of some initial consternation. With the unpredictable nature of litigation, could a practitioner realistically be held in violation of this provision if, for example, a jury verdict was much smaller than originally anticipated?
Bell J noted in his decision in Actrol that the purpose of this provision was to discourage reliance on the old principle that “the ends justifies the means”.19 As His Honour noted, the inclusion of the phrase “reasonable endeavours” is designed to account for the “dynamic and multifarious nature of civil proceedings”.20 It is not designed to punish practitioners who have sensibly incurred legal costs in prosecution or defence of the client’s rights.
In the case of Yara,21 the Court described this provision as a “. . . flexible test. There is plainly no costs matrix or formula that can be applied in determining whether the parties have met their obligations. Rather, the Court must weigh the legal costs expended against the complexity and importance of the issues and the amount in dispute, in order to determine whether the parties used reasonable endeavours to ensure those costs were proportionate”.22
Breach of this provision is determined through an objective evaluation of the entire circumstances. While each party is subject to this provision, the legal practitioner in particular has a non-delegable duty to ensure compliance with this obligation, and compliance with this obligation overrides a solicitor’s professional obligations to act as instructed by their client.23
In addition to enumerating the obligations of participants in proceedings, the Act also provides a framework for the courts to sanction offenders of these provisions. The primary tool in the court’s arsenal is s29, which authorises the court, where satisfied of a contravention, to make a broad range of orders relating to costs, interlocutory steps and other measures, including the authority to make “any other order that the court considers to be in the interests of any person who has been prejudicially affected by the contravention of the overarching obligations”.24
As the Court noted in Yara, s29 confers powers on Victorian courts that are broader than any other jurisdiction in Australia, and broader than those previously afforded under the Supreme Court (General Civil Procedure) Rules 2005.25 In its decision, the Court noted that as at the publication of their decision in November 2013, orders under s29 had been a rarity, and these punitive provisions appeared to have been under-utilised by the judiciary as a collective.26 In its analysis of the reasons behind this reticence, the Court noted a misconception that these provisions enshrined authority that the Court was already afforded under other instruments. The Court mused that there may be a disinclination to embark on a judicial enquiry, consuming already limited resources and requiring material that had not previously been presented before the Court.
In its decision, the Court in Yara attempted to dispel this misconception by highlighting the breadth of the provisions in s29, and the conduct that can now be examined that was not previously captured under existing court rules and provisions. Further, as the primary punitive measures in s29 relate to the award of costs, judicial officers could overcome the need for additional separate hearings by inviting parties to address them on potential breaches as part of ordinary submissions in relation to costs at the conclusion of a matter.
Despite this initial trepidation, the judiciary appears to be fully prepared to flex the muscle afforded to it under s29 of the Act. Examples of this include the awarding of indemnity costs against counsel, instructing solicitors and an expert witness in the case of Hudspeth,27 and the imposition of indemnity costs (despite technically being successful in a claim for nominal damages) against the claimant in the case of Actrol.28
So, 10 years and several volumes of jurisprudence later, are we any closer to the lucidity and inclusion that our former Attorney-General aspired to? The court’s initial reluctance to enforce the provisions within the Act has well and truly dissipated, with the judiciary now routinely seeking assurance that provisions of the Act have been complied with and serious consideration given to the imposition of consequences under s29 for misfeasance. Although the vision of a harmonic utopia of litigation has not been realised, there have been notable improvements in the conduct and management of litigation in Victoria, and as the court becomes more comfortable with enforcing these provisions, it is anticipated that litigation culture will only continue to improve with the passage of time.
Genna Angelowitsch is an LIV accredited specialist in personal injury law and special counsel at Adviceline Injury Lawyers. She has extensive experiences assisting injured Victorians across a variety of circumstances, and as of January 2020 is head of the firm’s transport accident division.