| Background Facts
On the day of the CC, Woolworths’ legal
representatives informed the Claimant’s legal representatives
that Woolworths regarded the Claimant’s prospects of
success as very poor.
The Claimant’s legal representatives
indicated in response that the Claimant was upset by Woolworths’
position, and requested that Woolworths should state the company’s
liability position by telephone. Woolworths indicated that
that was unacceptable.
The parties did not physically come together,
nor was any argument on behalf of each party advanced to the
other, and there was no discussion in any form directed to
settling the claim. The legal representatives for the respective
parties separated on poor terms.
The Law
By originating application, Woolworths sought
an order that the parties attend and actively participate
in a CC pursuant to Section 36 of PIPA, and the Claimant brought
an application seeking a declaration that a CC had been held,
or alternatively, an order dispensing with the holding of
a CC. On the day of the hearing, the Claimant’s application
for the declaration was abandoned, and the alternative order
sought.
The Court noted that the ordinary meaning
of Section 38(6) of PIPA (Section 51(B)(10) of MAIA) is that,
subject to a party having reasonable excuse not to comply,
each party or a person authorised by the party to settle the
claim, is obliged to be present at a CC to actively participate
in an attempt to settle the claim.
For completeness, the Court noted pursuant
to Section 38(7) of PIPA, the obligation under Section 38(6)
can be varied to enable a CC to be conducted by, for example,
teleconferencing, but only if the parties agree. When a CC
is conducted of that type, the obligation for each party or
authorised party remains to actively participate in an attempt
to settle the claim.
The Court found that in this case, although
each party was in the vicinity of the other at the relevant
time and place, the parties did not attend a CC and did not
otherwise actively participate in an attempt to settle the
claim.
At the hearing of the application, it was
conceded on behalf of the Claimant that a CC had not been
held but it was argued that, given the attitude of Woolworths,
there was good reason to dispense with the CC.
His Honour found that the factual situation
of the case did not afford good reason to dispense with the
CC (Section 36 (5)(b) of PIPA) nor did it give rise to a reasonable
excuse for a party not to comply with its obligations under
Section 38(6) of PIPA. |
His Honour found that, prior to CC, it was
not uncommon for parties to have firmly held views as to the
strength of their respective positions, but the purpose of
a CC is to try and settle the claim at that early stage, notwithstanding
strongly-held views, and that must involve discussion between
the parties and an exchange of argument to see if a compromise
can be achieved. His Honour said “the obligation
[under Section 38(6) of PIPA] is not confined to claims in
respect of which settlement may be readily achieved”.
As such, the originating application of
Woolworths seeking that the parties attend and actively participate
in a CC pursuant to Section 36 of PIPA was granted and the
costs were reserved.
Practical Significance
It is usual for the parties at CC to ventilate
disparate views, particularly in relation to liability issues.
- Pre-CC Correspondence
We suggest, in cases where it is apparent
pre-CC the parties hold disparate views in relation to liability
and the claimant (or their legal representative) are likely
to be easily inflamed by contrary argument, that consideration
be given to foreshadowing in correspondence to the Claimant’s
solicitors that the Respondent’s position at CC, pursuant
to Section 38(6) of PIPA, will be one of active participation
in attempting to settle the claim at CC. We also recommend
that this decision be quoted as authority for seeking the
Claimant’s active participation in attempting to settle
the claim.
It is not uncommon for Claimant’s
solicitors to recommend dispensing with a CC in circumstances
where liability issues arise. In a letter of response we suggest
that this case should be quoted in refusing such a request.
- At CC
Further, at CC, we consider this case represents
good authority to make it clear at the commencement of a CC
that the Respondent remains ready and willing to participate
in a CC and fully ventilate liability issues if a Claimant’s
legal representative seeks to dispense with the CC simply
because arguments being raised at CC (usually in relation
to liability) are unpalatable to the Claimant.
David Bray
Managing Legal Practice Director
Bray Lawyers
21/01/09
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