CIVIL PROCEDURE

Lecture 2
Some terms; adversarial system;
offers of compromise

Discussion points
Discuss, in groups, what the following terms
might mean:
Discovery
Ex parte
Interlocutory
Issue
Judgment
Master
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Discussion points

Motion
Order
Originating process
Prothonotary
Registrar
Statement of Claim
Summons
Writ

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Discussion points
Discovery: Pre-trial process, where one side sights
anothers documents or administers interrogatories
(questions answered on oath) on the other side;
Ex parte: An application made in the absence of the
opposing party. Inter partes when the other party is
present;
Interlocutory: Procedural applications or matters occurring
before the trial are interlocutory. Discovery applications are
an example (for better particulars);
Issue: A document issued by the court when it proceeds
from that court. Parties do most of the writing up of
documents, rather than the court.
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Discussion points
Judgment. Courts final decision on plaintiffs claim for relief.
May be enforceable for up to 15 years.
Master. Judicial Officer. Masters vested with certain of the
courts powers. In Victoria, the Senior Master is a judicial
member of the Court. He is responsible for the administration
of the Office and the performance of its functions. One
example is holding money paid into the court.
Motion. An application for an order is made by motion.
(Motion for costs, a motion for guilt or innocence of the party
after a jury verdict.)
Order. An order is a court command other than final
judgment.
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Discussion points
Originating process. Any document that
commences the plaintiffs case.
Prothonotary. Courts chief registrar, the
person in charge of court registers and filing
systems. Victoria has a Prothonotary office.
Registrar. Court will have a registrar in each
split system.
Statement of Claim. Ps pleadings, setting
nature of Ps case, and relief claimed
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Discussion points
Summons. Issued by court summoning the addressee
to attend court proceedings or suffer sanction.
Writ. Document issued out of court registry that
addressee either do something or suffer consequences
in default. Writs might start an action (originating writs);
writs to compel court attendance (subpoenas).
Writ is the necessary vehicle to get the process rolling.
Trial Divisional Allocation (Order 4). Writ will have
Statement of Claim or Endorsement of Statement of
Claim.
The writ must be served within 1 year of it being filed.
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Scenario
In Monty Python and the Holy Grail, medieval villagers
bring a woman to Sir Bedevere, accusing her of witchcraft.
The villagers admit that they gave her a fake nose,
attempting to dress her up to look more like a witch. An
unconvinced Sir Bedevere proposes a non sequitur test to
determine whether or not she is a witch: witches burn, and
so does wood, so witches are made of wood; wood floats
on water, and so do ducks, therefore, if she weighs as
much as a duck, she is a witch. She is carried off by the
villagers to be burned, adding, Its fair cop she was
rightly accused and properly tried. Discuss the legal
aspects of this case regarding justice and procedure.
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Actions

What is the basis of a civil action?

Existence of a claim;
Resistance to that claim;
Reliance on an institution to adjudicate the
claim;
May not always be a disagreement
proceedings may involve parties in
agreement for instances, some actions
for debt; or some family law proceedings.
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Actions
(a) Existence of a claim of witchcraft;
(b) Resistance to that claim though in
this case, there was very little chance of
the accused mounting a true resistance;
(c) Reliance on an institution to adjudicate
the claim. In this case, that institution is
not as formalized as a court, but is Sir
Bedevere;
(d) Remedies
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Actions
Procedural law is that which governs the
conduct of proceedings before the court, the
mode of proceeding by which a legal right is
enforced, a distinguished from the law which
gives or defines the right.
Justice is, of course, questionable here:
The procedure here determined guilt, and the
procedure itself was what was problematic.
There was no legal representation.
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Actions
Particularly in the light of some of the more
complex and lengthy cases of late, it is arguable
that a certain level of the process leading up to
trial is unnecessary and perhaps, positively
harmful to the attainment of justice. Do we
need to completely re-think the ordeal of the
civil trial we put litigants through in an attempt to
achieve justice?
Justice John Middleton, The Attainment of Justice with particular emphasis on the Federal
Court, [2008] FedJSchol 34.

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What of justice?

Equal protection
Equity
Fairness
Mutual agreement
The best consequence (utilitarianism)
Equal access to courts
Or is it the rule of the strong? (see Platos
Thrasymachus in The Republic)

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Actions
Remember the goal is efficiency and
justice.
Is this goal confused?
It comes with problems
These are the twin pillars of civil
procedural reform and practice.
Now, in Victoria, what would the process
be?
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Reform
How do we assess whether a civil
procedural system needs reform?
This is where justice is important
Does the system do justice?
Common law maxim and imperative:
that justice should not only be done
but should manifestly and
undoubtedly be seen to be done (R v
Sussex Justices; Ex parte McCarthy
[1924] 1 KB 256

Reform
Cost of litigation;
Time needed to resolve disputes;
Accuracy with which the system finds the
facts and applies the law.
These criteria may sometimes conflict.
As we said last week: the Australian civil
justice system was said to be in crisis in
the 1980s.
Characterized by delays, high cost of
hearings and litigation.
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Actions
Regarding management in Victoria, there
is a controlled special list that operated for
the Supreme Court. (Intellectual property,
building, admiralty, commercial matters,
taxation and major torts must fall within
these lists)
Judge-in-charge of lists gives direction to
parties from early stages of each
proceeding to their list.
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Actions
Lists form part of the Trial Division of the
SC of Victoria.
Division divided into three divisions:
Commercial and Equity, Criminal Law and
Common Law. This is probably going to fit
into a criminal list.

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OVERVIEW
Adversarial systems a mix in
Australia
Offers of compromise
Calderbank offers

Adversarial system
Defined adversarial system as one
where proceedings are conducted
before an impartial judge or
adjudicator to determine a dispute
(the judge being passive in the matter
a neutral umpire);
On the basis of information provided
by the parties;

Adversarial system
Parties having primary responsibility for
defining the issues in dispute through
formalities such as pleadings and
particulars;
Parties also being responsible for pushing
the proceedings.
While only referring to resolution of
disputes in the court system through trial,
it has broader effects in society.

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Adversarial system
The parties square off against each other
over positions that are separate and distinct
from the decision maker (judge or jury);
The decision maker is meant to be free
from bias (again, whether the jury or the
judge);
The fact-finder is to be uninvolved with the
presentation of the arguments. Why would
this be? To prevent the arrival at premature
decisions.
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Adversarial system (ctd)

The civil law systems employ the
inquisitorial method, where the judge
assumes an investigative role,
interviewing witnesses and coming to
a decision;
Those supporting the adversarial
system argue the truth emerges after
the contest. In actual fact, truth is
ancillary in the adversarial system to
the issue of fairness.

Adversarial system
Have the parties been given a fair chance
to put their case? To be represented?
Access to resources? The European
court will hunt for the truth; the AngloAmerican court, for the process of
fairness. The courts role is merely to
decide what is put before them in the
cases.
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Adversarial system (ctd)

Defenders of adversarial justice
believe that the process is democratic
for allowing parties to define and
control the dispute.
Parties may well bring into evidence
in such a process that a
dispassionate inquiry might overlook:
J. Frank, Courts on Trial: Myth and Reality in American Justice (Princeton, 1949).

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Adversarial system
But note that this is dependent on the parties
knowing what their best interests in the case
are, and that argument is turn dependent on
qualities and resources available to them
(Dietrich v R (1992) 177 CLR 292, 335
(Deane J); Giannarelli v Wraith (1988) 165
CLR 543, 55 (Mason CJ).
It is the structure and organization of the
forensic process or investigative method, not
the adversarial nature per se, that
distinguishes the inquisitorial and adversarial
system.
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Is Australias legal system really

adversarial?
Some elements of the legal system blend
both adversarial and non-adversarial
forms (super tribunals).
It seems clear that link between
adversarial processes and civil matters
only began clearly in the 19th Century, a
result of procedural reforms made
between 1852 and 1875

Australian system: a hybrid

A dual system operates in Australia:
More adversarial proceedings and tribunals
mixed with inquisitorial procedures.
Adversarial and non-adversarial processes are
mixed.
Consider the Administrative Appeals Tribunal.
Such functions have been acknowledged by the
High Court (Bushell v Repatriation Commission
(1992) 175 CLR 408, 424-5) as having an
inquisitorial process.

Australian civil system

Judges are more managerial now
in the way they engage the
judicial process.
Judges are meeting parties in
addition to judging the merits of
the case to encourage the
settlement of disputes;

Australian civil system

Judges supervise case preparation.
This is non-adversarial decisionmaking;
Judge no longer a passive figure (see
ALCR, Review of the Adversarial
System of Litigation: Rethinking the
Federal Civil Litigation System)
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Australian civil system

Australian Law Reform Commission, The
Adversarial-non adversarial debate, in
Discussion Paper 62: Review of the
Federal Civil Justice System (1999) was
lukewarm towards the notion of ditching
adversarial proceedings.
All systems have their problems.

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Australian civil system

Adversarial system, for all its
imperfections, irrationalities,
loopholes and perversities, did a
good job as any other of finding the
truth and protecting legal rights;
Some adjudicatory process is hard to
avoid and is even deemed necessary;
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Australian civil system

Adversarialism is the way we have always
done things: if a social institution does a
reasonable enough job of its sort that the
costs of replacing it outweigh the benefits,
and if we need that sort of job done, we
should stay with what we have. (D. Luban,
Lawyers and Justice: An Ethical Study
(Princeton, 1988))
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Offers of compromise
What is the purpose of the Offer of Compromise
system?
Encourage parties to assess changes in realistic
manner;
Then take steps to resolve proceedings;
Avoid lengthy litigation;
Sometimes, it may not be clear what the
prospects were in the sense that the evidence
was not available to the party at the time;
Court discretion can be utilized.

Offers of compromise (ctd)

Costs penalties are leveled against
the party who rejects an offer, those
who proceed to trial and fail to obtain
an amount greater than the original
offer.
Both defendants and plaintiffs can use
the Offer of Compromise system. A
plaintiff might offer to settle for less
than the judgment finally obtained.

Offers of compromise (ctd)

The court then awards costs on a
more generous basis than if the
offer of compromise had not been
made.
Imposition of costs order is
presumed but not automatic.
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Offers of compromise (ctd)

The role of cost orders
Cost orders used to encourage early settlement
of disputes. There is a risk of loss, however
good ones chances are. The expense for all
parties must be considered in the litigation
process.
Penalty costs can be made against parties who
do not abide by settlement offers.
Winner is awarded costs to be paid by the loser.

Offers of compromise (ctd)

Difference between litigants solicitors bill and
amount of costs the loser is ordered to pay the
winner. Often, the court-ordered cost comes to
two-thirds the winners actual costs.
Court ordered costs between parties are known
as party/party costs, and are typical for offers of
compromise, rather than indemnity costs. (Pepe
v Platypus Asset Management Pty Ltd (No 2)
[2011] VSC 21)
The court order never covers litigants personal
costs (loss of time etc.)

Offers of compromise (ctd)

Victorian Courts and VCAT have provisions to serve as
offers of compromise. They must be in:
Writing;
Contain a statement to the effect that it is served in
accordance with O. 26 (Supreme Court (General Civil
Procedure ) Rules 2005 (Vic))
Must be open for a period not less than 14 days after
service;
Must not be withdrawn during the time it is open to be
accepted, unless court otherwise orders;
May take into account other claims between the parties
made in the proceeding;
No need to prove unreasonableness on the recipients
part in not accepting it (unlike a Calderbank offer).

Calderbank offers
Calderbank letters
A way of determining whether rejection of such
an offer was unreasonable so that cost penalties
might apply;
Calderbank Letter [Calderbank v Calberbank
[1976] Fam 93] An offer by one party to
another, made without prejudice, save as to
costs, where the net effect involves keeping it
secret until the court comes to consider the
issue of costs.

Calderbank offers
The point of such a letter is that it can be
used as a point of argument later to show
that the offeree should pay costs to the
offeror from the date of the rejection of the
offer if what is awarded is not better than
what is given. (When D has made an offer
better than the result obtained by the
plaintiff.) It is the basis for a special order
of costs to be made against the party who
unreasonably failed to accept the offer.
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Calderbank offers (ctd)

Court uses its discretion:
Court has to consider at what stage of
the proceeding the offer was received
(see discussion in Paul Giankos v
SPC Ardmona Operations Limited
(2009) County Court of Victoria [2009]
VCC 1461; Hazeldenes Chicken
Farm Pty Ltd v Victorian WorkCover
Authority (No. 2) 13 VR 435).

Calderbank offers (ctd)

Was there sufficient information on the offer to
consider it properly;
Was there sufficient time allowed for the
offeree to consider the offer?
What was the extent of the compromise offer?
Was the offer a genuine discount (as opposed
to a mere offer to capitulate)?
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Calderbank offers
How clear were the terms of the
offer?
Did the offer foreshadow an
application for indemnity costs in the
event of the offeree rejecting it?
Court treats the award as an
indemnity basis (which is more
lucrative than party/party costs)
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Calderbank offers (ctd)

Usually, it is only party/party costs, based
on a court scale. Sometimes, there might
be an indemnity award made, say, in
terms of a misconduct of party or their legal
advisers (solicitor/party costs) but this is
more likely for Calberbank than it is for
Offers of Compromise:
(a) Obstructionism;
(b) Abuse of process;
(c) Delay

Scenario
Amber Jones (the testatrix) died leaving a will
dated 25 February 2014. Under the will, Amber
appoints her solicitor Will Rogers as executor of
her estate. The testatrix left the whole of the
residual estate to her two children in equal
shares. The deceased was married at the time
of her death to the respondent, Peter Jones. In
her will the deceased provided in clause 5 as
follows:

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Scenario
"I declare that I make no provision for my husband Peter
Jones as I believe I have adequately provided for him
during my lifetime and it is my wish that my children are
the sole beneficiaries of my estate." It was accepted at
trial that no provision had been made for the respondent
during the lifetime of the testatrix and that the statement
in clause 5 of the will was false. The respondent brought
a claim pursuant under the Administration and Probate
Act 1958 seeking an order that such provision for his
proper maintenance and support be made out of the
estate of Amber Jones.

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Scenario

The value of the estate at the time is roughly $600,000. The

lawyers for Peter Jones have made an offer in writing to the
executors that he would accept, in full settlement of his claim,
one-quarter of the net estate plus his legal costs on a
solicitor-client cost basis.
The offer is received by Will Rogers who refused to deal with
it immediately. He sat on it for some time, proving vague on
where he stood on the offer, hoping that the court might
favour his case. We might consider the offer in due course.
Nothing more comes of it, and the matter is determined by
the court. At trial, the judge accepts the argument by Peter
Jones and awards in his favour that provision shall be made
for him out of the estate. What are the salient issues in

this case? Discuss, with reference to legal principles.

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Scenario

Parties (Will Rogers and Peter Jones)

Relevant issues
Relevant principles
Apply the principles
Consider remedies, conclusions

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Scenario
A fundamental principle at stake here is
costs and the offer of compromise system
that underpins a crucial aspect of the civil
procedure system in Australia. Courts are
keen to settle out of court or prevent cases
from dragging out and being resolved in
court if they can help it. Judges have
taken an interventionist role in case
management, and have been critical in the
way they manage cases.
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Scenario
Central here is the idea of using costs to
promote settlements, a point that was
voiced by the Australian Law Reform
Commission.
Costs penalties are levelled against the
party who rejects an offer, those who
proceed to trial and fail to obtain an
amount greater than the original offer.
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Scenario
Both defendants and plaintiffs can use the
Offer of Compromise system. A plaintiff
might offer to settle for less than the
judgment finally obtained. The court then
awards costs on a more generous basis
than if the offer of compromise had not
been made.
Imposition of costs order is presumed but
not automatic.
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Scenario
The system is designed to encourage parties to
assess their case in realistic manner.
Then take steps to resolve proceedings;
Avoid lengthy litigation;
To keep costs proportionate to what is being
litigated over;
Sometimes, it may not be clear what the prospects
were in the sense that the evidence was not
available to the party at the time;
Court discretion can be utilized.
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Scenario
There are two ways of viewing this case:
A party can make a formal offer within the
rules set by the Supreme Court; or
A party can make an informal offer for
settlement recognised under the common
law.

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Scenario
Is there an offer?
In Victoria, the relevant order is Order 26
(Supreme Court (Civil Procedure) Rules)
on the matter of offers of compromise.
There seems to be an unequivocal offer
made as to settlement by Peter Jones and
his representatives.
Was it served with a statement in
accordance with O. 26 of the SC Rules?
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Scenario
It seems that the offer was made in writing
(r 26.02(3)).
Does the offer satisfy rr. 27.02 to 27.04?
(there is a need to use certain terms; need
to be of durable white paper 297
millimetres by 210 millimetres; the size
known as International Paper Size A4
see r. 27.03)
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Scenario
Did the offer expire?
Timing is important here. It is not clear in
the case, but an offer expires after 14
days of service. Presumably, the offer can
be said to be rejected by Will Rogers
judging from his conduct, though this was
never clearly expressed. He said he was
considering it.
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Scenario
Was written acknowledgment given?
Will Rogers had to also give written
acknowledgment of the service within 3 days
after service to Peter Jones representatives.
(See relevant sections in r. 26.03.)
Is there a need to prove unreasonableness in
the behaviour of the party refusing the offer?
Not in the case of the offer of compromise
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Scenario
Cost consequences for non-acceptance: if
the plaintiff makes an offer and the
defendant does not accept it, and the
plaintiff obtains judgment more favourable
than the terms of the offer, entitles the
plaintiff to costs against the defendant up
to and including the day the offer would be
party to party costs but there is the
possibility of costs awarded on an
indemnity basis (r. 26.08)
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Scenario
Is a Calderbank offer made here? No.
Even if the formalities were not met for O 26, we
have to ask if it is a Calderbank Letter as discussed
in the case of Calderbank v Calberbank [1976] Fam
93. Such offers are treated as weaker than formal
court mechanisms, because the cost penalties are
not enshrined in any formal rule. However, it would
seem that the Calderbank offer is being treated as
something akin to a formal rule in costs at the
discretion of courts.

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Scenario
The Calderbank offer involves an offer from
one party to another, made without
prejudice, save as to costs, where the net
effect involves keeping it secret until the
court comes to consider the issue of costs.
There is only one thing here whether the
form of the Calderbank letter was used.
Does it mention an offer made without
prejudice as to costs? Probably not in this
case.
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Scenario
Why is that terminology used? The fact that the
offer made by the lawyer is without prejudice
protects the party making the offer from being
compromised legally by an admission made by
that party in attempting to reach a settlement.
When awarding costs, the court has the power to
consider the earlier offer and to award legal
costs in favour of the party who had made the
settlement offer covering all legal costs from the
date upon which the other party ought
reasonably to have accepted it.
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Scenario

Things court will consider

Sufficient information to make a decision?
Genuine discount?
At what stage of the proceeding the offer was
received (see discussion in Paul Giankos v SPC
Ardmona Operations Limited (2009) County Court of
Victoria [2009] VCC 1461.
Was there more than enough time to consider the
offer? Keep in mind that SC rules allow an offer of
compromise to be served at any time before verdict
or judgment in respect of the claim to which it
relates.
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Scenario
Was the duty to negotiate constructively in
response to the Calderbank offer
discharged? (This might be the case
under English common law)
Now, consider Civil Procedure Act 2010
(Vic), s 22 a lawyer must use
reasonable endeavours to resolve a
dispute by agreement;
Rogers may have been unreasonable
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Scenario
It is good to use a Calderbank when no
proceeding has yet commenced;
It is good to use such an offer if there will
be a change of circumstances within the
period of acceptance of the offer you
cant use the same principle for offer of
compromise.
More flexible to use
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Scenario
Peter Jones and his lawyers were astute
here to go for the offer in a tactical way
settlement, and probably feeling that Will
Rogers would not call their bluff and settle.
They got more than they in effect were
asking for.

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Scenario
A costs order is therefore likely to be ordered against
the executor from the date of the rejection. It will be
more than party-to-party costs. It is most probably
going to be an indemnity award against the executor
and estate. The relevant case here is Madden v
Singvongsa (2003), Victorian Supreme Court. That
case now stands as a precedent in the State of
Victoria for a plaintiff to apply pressure on estate
executors (where they are not also beneficiaries) to
settle a claim for fear of incurring greater legal costs
if the court ultimately grants a less favourable
outcome than the offer.
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Scenario
Discipline and Will Rogers
As a lawyer in addition to being an executor, there
were legal implications in Will Rogers conduct
regarding the negotiations with Peter Jones and his
representatives. However, he may well have been
right to assume prospects of success that Peter Jones
would not be awarded a share of the estate. Costs
orders can be made on a disciplinary basis where
proceedings are commenced irresponsibly. (On
matters of conduct, see White Industries v Flower and
Hart (1998) 156 ALR 169; Cook v Pasminco (No.2)
(2000) 107 FCR 44)
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Question
In Black and Decker Australasia v GMCA [2007]
FCA 1623, Finkelstein J was dealing with a
situation where the respondent sought leave to
file two affidavits out of time. In his judgment,
Finkelstein J described the High Court decision
in JL Holdings as having a chilling effect and
that it had been applied in many cases where a
simple costs order will not do justice between
the parties. Discuss any relevant points
Finkelstein J raises.
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Question
Issue of case management
Status of case management
What is the current law on the subject, as
opposed to the old law?

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The old law

Queensland v JL Holdings Pty Ltd (1997) 189
CLR 146 (the old law)
Dawson, Gaudron and McHugh JJ:
Case management is not an end in itself. It is
an important and useful for ensuring the prompt
disposal of litigation.
The ultimate aim of the court, despite rise in
case management is the attainment of justice
and no principle of case management can be
allowed to supplant that aim.
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Criticism of JL Holdings
Criticism of JL Holdings by Finkelstein J in
Black & Decker Australasia:
A case that is reasonably well prepared is
just as likely to be decided correctly as a
perfectly prepared case.
In other words, you should not allow all
applications for leave to amend to be
granted.
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Criticism of JL Holdings
There must be excusable non-compliance;
Factors to consider:
(a) the direct and indirect prejudice to the opposing
party;
(b) the impact of the delay on the proceedings;
(c) the reasons for the delay;
(d) good faith or lack of good faith on the part of the
party seeking to be excused; and
(e) the effect of putting off a trial both on other litigants
and generally on the courts ability to efficiently
manage its cases.
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Changing the law

Aon Risk Services Australia v Australian
National University (2009) 258 ALR 14; [2009]
HCA 27, Aug 5, 2009.
Concerned a dispute between ANU and
insurance broker, Aon Risk Services Australia
over leave to amend ANUs statement of claim.
The amended statement of claim by ANU raised
an alternative claim against Aon that it was
negligent in failing to arrange renewal of
insurance coverage for the omitted property.
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The new law

Judicial officers must now consider the wider
public interest in the efficient use of limited court
resources when deciding whether to grant
applications to amend pleadings;
Parties are not entitled to raise any arguable
case at any stage of proceedings, subject only to
payment of costs;
Amendments that produce delay impact on the
entire court system and affect parties who wish
to use the court system;
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The new law

The HC overruled statements in
Queensland v JL Holdings that case
management concerns are only relevant
in exceptional circumstances. Courts
must consider the public interest in the
efficient use of court resources when
determining whether to grant indulgences
such as amendment of pleadings and
adjournments.
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The new law

If a party will have adequate opportunity to
plead its case, courts may limit re-pleading
on that basis.
Parties do not have a right to raise any
arguable issue, subject only to payment of
costs. Costs are an insufficient cure for all
prejudices such as prolonged
engagements and disruptions to the court
schedule.
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