Litigation 2021

Last Updated December 04, 2020

Australia

Law and Practice

Authors



Gilbert + Tobin has a disputes and investigations practice comprised of 14 partners and over 90 supporting fee earners based across its offices in Sydney, Melbourne and Perth. The firm specialises in assisting clients to navigate complex and significant contentious issues. Many cases involve multiple parties and novel legal or factual issues. The firm has extensive experience advising on sensitive investigations and inquiries – from internal issues to regulatory investigations to Commissions of Inquiry – and understands the need for clarity of thought, discretion, insight and professionalism.

The Australian legal system is adversarial, which means the claims of opposing parties are presented to an independent decision-maker, a court or tribunal, for determination. The decision-maker will hear both sides of the dispute, then apply the law to that dispute.

Australia is a common law jurisdiction where courts are bound by the principle of precedent, which means that lower courts are bound to follow the decisions of a higher court. While the doctrine of precedent provides a fundamental constraint on judicial decision-making, lower courts are still permitted to develop legal principles that have not been the subject of a higher court's decision. Cases from other common law countries, such as the United Kingdom, while not binding on Australian courts, provide a source of comparative law.

Litigation proceedings are primarily conducted through oral argument before a court or tribunal. The preference for oral testimony reflects the common law rationale of providing a party with the opportunity to hear the case against it, and the court an opportunity to assess the credibility of the witness. While oral argument is a key feature of the Australian legal system, parties will also generally file and serve written submissions in advance of a hearing.

Australia is a federation of six states (Victoria, New South Wales, Queensland, South Australia, Tasmania and Western Australia) and two territories (the Australian Capital Territory and the Northern Territory). It has a federal court system and a separate hierarchy of courts in each state and territory.

The High Court of Australia is the highest court in the judicial system and exercises original jurisdiction in defined areas, including all matters arising under the Commonwealth Constitution or involving its interpretation, and in disputes between states. It also exercises appellate jurisdiction and hears appeals made from lower courts.

The jurisdiction of the Federal Court is conferred by over 150 Commonwealth Acts and includes a range of subject matters, including tax, corporations law, IP, competition law, consumer law, industrial relations, native title and bankruptcy. The court also exercises appellate jurisdiction. The Federal Circuit Court deals at first instance with less complex disputes in relation to some of this subject matter, as well as less complex family law disputes.

The superior court in each state and territory is the Supreme Court. The Supreme Courts exercise original and appellate jurisdiction, and have unlimited jurisdiction over all civil and criminal matters regardless of the subject matter of the claim, the amount in dispute or the place where the cause of action arose. Each state, other than Tasmania, has a mid-tier court called the District or County Court. Each state and territory also has a lower-level court called the Magistrates or Local Court. These mid-tier and lower-level courts have civil jurisdiction up to specified claim thresholds and criminal jurisdiction in respect of specified offences.

Within many of these courts and tribunals, cases involving areas of law that require particular expertise are allocated to specialist lists. In addition, there are a number of specialist Commonwealth, state and territory courts and tribunals with jurisdiction over specific subject matters.

The principle of open justice applies to all Australian courts and tribunals. As a general rule, all hearings should be open to members of the public to ensure transparency in judicial decision-making.

In certain circumstances, courts have the power to limit public access to proceedings. For example, orders may be made to suppress the publication of evidence, withhold the identity of a party or witness, or to exclude the public or a member of the public from attending a proceeding. A court may make such orders where it is satisfied that it is necessary to prevent a real and substantial risk of prejudice to the proper administration of justice that cannot be prevented by other reasonably available means, or to prevent prejudice to national or international security interests.

Whether the public can inspect documents filed in court depends on the particular court in which proceedings are issued. In the Federal Court, a non-party to a proceeding can inspect certain categories of documents filed in a proceeding, including pleadings, interlocutory applications and court transcripts, unless the court has ordered that the document is confidential or restricted from publication to the person, or a class of persons of which the person is a member. A non-party to a proceeding may also apply to the court for leave or permission to inspect a document that the person would not otherwise be entitled to inspect.

Only practitioners who are admitted to practice in the relevant state or federal jurisdiction are permitted to appear before the Court or make submissions to it without specific leave.

Funding Restrictions

In Australia, litigation funding is permitted subject to some restrictions. A third-party funder may fund litigation so long as it has established procedures for managing the conflicts that may arise between its interests, the lawyers and the funded party.

Historically, litigation funding has generally been permitted subject to limited restrictions. Due to this, third-party litigation funding has developed significantly in Australia over the past decade and is now an established part of Australian legal practice, particularly in respect of class actions. Recent amendments to the Corporations Act mean that litigation funders are likely to be subject to greater regulatory oversight in future.

Subject to certain exceptions, operators of litigation funding schemes will now be required to hold an Australian financial services licence (AFSL) and such schemes will be subject to the management investment scheme regime set out in the Corporations Act. Relevantly, AFSL holders are required to:

  • act honestly, efficiently and fairly;
  • maintain an appropriate level of competence to provide financial services; and
  • have adequate organisational resources to provide the financial services covered by the licence.

Overall, these changes mean that litigation funders are likely to be subject to greater scrutiny by regulators such as ASIC in future. Relevantly, ASIC has implemented certain measures to provide relief to litigation funders in respect of certain statutory obligations which were not intended to apply to apply to them.

Funding Arrangements

Litigation funders may enter into an arrangement with a party whereby its fees are calculated as a percentage or share of any judgment or settlement. In contrast, professional conduct rules prohibit lawyers from entering any arrangement to receive a share of the proceeds of litigation. However, lawyers may agree with a client that some or all legal costs will only be paid if the client is successful.

Such conditional costs agreements are subject to specific provisions and professional conduct rules in each state and territory. Under these rules, the agreement may include a reasonable premium payment, in addition to the standard legal costs, if the party succeeds. Such premium or "uplift" payments are subject to regulation, such as the prohibition in Victoria on uplift payments that exceed 25% of the original fees payable.

There are currently no restrictions on the types of proceedings which may be funded by third parties. However, in recent years, litigation funders have typically been involved in funding shareholder and investor claims, mass-tort claims and consumer claims, due to the potential amount of recoverable damages available in such proceedings. Outside the class action regime, third-party funding has also been used in the context of insolvency proceedings and commercial litigation proceedings involving large damages claims.

While third-party funding is available to both plaintiffs and defendants, the entrepreneurial aspects of litigation funding has meant that third-party funding is most often provided to plaintiffs. However, there may be rare circumstances where it may be attractive for a third party to provide funding to a defendant, for instance, where such funding is motivated by political or ideological reasons, for example, where a public figure or civil rights group is a defendant to a proceeding.

There are no restrictions in regard to the amount of funding which a third party can provide to a plaintiff or defendant. As a practical matter, the amount of funding provided will generally depend on the estimated legal costs and the practical considerations relevant to the proceeding, such as the size of the class (which is relevant in the context of class action claims) and the complexity and merit of the claim.

The costs covered by a third-party funder will depend on the nature of the proceeding and any other relevant matters set out in the litigation funding agreement between the third-party funder and plaintiff or defendant. Generally, a third-party funder will advance funds to cover the relevant party’s legal costs and related disbursements. In class action proceedings, the litigation funder may also advance funding to assist the representative applicant (and their solicitors) with project management, administration and pre-claim investigative costs. In most cases, the third-party funder will also indemnify the representative applicant in the event their claim is unsuccessful and adverse costs are awarded against them, and provide security for any costs for the other side which may be ordered by the court.

In general, Australian law prohibits legal practitioners from charging contingency fees. However, Victorian Parliament has recently passed legislation which allows lawyers to charge contingency fees in Supreme Court class actions within Victoria.

Across the rest of Australia, the prohibitions against contingency fees are contained in the relevant legislation and professional conduct rules which apply to solicitors in each state and territory of Australia. In accordance with those rules, solicitors are prohibited from charging any legal fees which are calculated as a proportion of a settlement or judgment amount. Despite this rule, a legal practitioner may agree with a client that some or all legal costs are only payable if the client’s claim is successful.

In such cases, the agreement may include a reasonable premium payment payable to the solicitor, in addition to legal costs, if the client’s claim is successful. As noted, such premium or "uplift" payments are subject to various regulations, which differ according to each state or territory. Comparatively, the use of contingency fees by third-party litigation funders is a widespread and common practice in Australia.

There are currently no time limits which regulate the period in which a litigant can obtain third-party funding.

In Australia, in contrast to other jurisdictions, there is no specific requirement for a potential plaintiff and defendant to issue and respond to a "pre-action letter" prior to the commencement of civil proceedings. However, certain jurisdictions impose compulsory formalities that must be completed before or at the time when civil proceedings are commenced.

For example, the Federal Court requires parties to comply with certain formalities, which are aimed at promoting the facilitation of the just resolution of disputes as quickly, inexpensively and efficiently as possible. The Civil Dispute Resolution Act 2011 (Cth) (CDRA) requires applicants to file a "genuine steps statement", which sets out the steps the parties have taken to resolve the dispute or explains why no such steps have been taken.

The CDRA does not specify what will constitute genuine steps, as this will depend on the parties’ circumstances and the nature of the dispute. However, it does provide a non-exhaustive list of examples of "genuine steps". For example, parties may participate in an alternative resolution mechanisms option, or attempt to negotiate with a view to resolving some or all of the issues in dispute.

A party that does not file a genuine steps statement, or that has not taken genuine steps to resolve a dispute, will not be prevented from commencing a claim in the Federal Court. However, the court may take this into account when exercising its powers, including its discretion to award costs.

In Australia, each jurisdiction has enacted legislation limiting the period within which certain civil claims may be issued. In general, a limitation period starts to run from the date on which the cause of action accrues. Different limitation periods apply. In most Australian jurisdictions, the limitation period for actions in contract is six years from the date of the breach. For actions in tort, the limitation period is generally six years from the date on which damage is suffered (except for the Northern Territory, where the limitation period is three years).

Australian courts have a discretionary power to extend or postpone the relevant limitation period in certain circumstances; for example:

  • where the plaintiff is under a disability;
  • where there is an acknowledgement or part payment by the defendant; or
  • where there is fraud or mistake.

In some jurisdictions there are special provisions applicable to certain types of matters, such as personal injury claims brought by minors or persons with a disability, or those involving child abuse or dust diseases. New South Wales is the only jurisdiction that imposes an ultimate bar on the extension of a limitation period beyond 30 years from the date on which the limitation period runs. However, the bar does not apply in all circumstances.

An Australian court will have jurisdiction over a foreign defendant provided that the proper originating documents are filed with the court and are properly served on the defendant.

A foreign defendant may challenge the jurisdiction of an Australian court on the basis that it is not the appropriate or convenient forum for resolution. In determining whether it is a convenient forum, the Australian court will consider various factors, including the connection between the subject matter and the parties to the jurisdiction, and whether the foreign defendant may be put to great expense and inconvenience in contesting the action in the jurisdiction. A court is more likely to accept jurisdiction where the facts and issues have an obvious connection with the Australian forum.

In Australian courts, a civil proceeding is generally commenced by filing a writ or originating application with the registry of the court in which it is sought to be heard. The writ or originating application may be accompanied by a general endorsement of the claim or a statement of claim. The particular requirements vary depending on the rules of the court in which the claim is filed and the subject matter of the claim.

In general, a document filed to commence a proceeding cannot be amended without the leave or permission of the relevant court, or the consent of the other party (or parties). The power of the court to grant leave to amend is discretionary and may be influenced by factors including public policy considerations, scheduling issues and other matters relating to the conduct of the party seeking leave to amend.

In Australian courts, the requirements for service on a party to a civil proceeding differ according to the type of document and, in some cases, the party to be served. The applicable court rules will specify which method must be used in particular circumstances. It is the responsibility of the party commencing proceedings to ensure service is effected in accordance with the applicable court rules.

There are two principal ways of effecting service: personal service and ordinary service. As a general rule, personal service is required where a writ or originating application must be served personally and is effected by leaving a copy of the document with the person to be served, or putting it in the person’s presence and stating the nature of the document. However, ordinary service generally applies to documents other than a writ or originating application and can be effected by leaving the document at, or posting it to, the proper address of the party or their solicitor. Some courts allow service by email, where a party has filed a notice authorising service by electronic communication.

Suing Parties Outside Australia

A party that is outside Australia can be sued in an Australian court provided the party is validly served with the writ or originating application. In such cases, service is governed by the relevant court rules of civil procedure in each state and territory as well as the Federal Court and High Court civil procedure rules. The court rules outline the categories of claim that can be served outside Australia. Generally, the rules require a connection between the substance of, or the parties to, the litigation and Australia. In Federal Court proceedings, a party must apply for leave or permission to serve proceedings outside Australia or otherwise apply for an order confirming service.

In addition to service on a party outside Australia, there is a process for service interstate (for example, where a proceeding is issued in the Supreme Court of Western Australia and a defendant is in Queensland). The Service and Execution of Process Act 1992 (Cth) governs the general process for service of a claim commenced in a state or territory on a party in another state or territory.

The Hague Convention

Australia is a signatory to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Convention). As a result, where the foreign party is within the jurisdiction of another signatory to the Hague Convention, the state receiving the request to facilitate service cannot generally refuse the request. The Hague Convention applies to all civil or commercial matters where there is occasion to transmit a judicial or extrajudicial document for service abroad. In such instances, the relevant court rules (other than in relation to the High Court) specify the relevant procedure for service.

If the party is outside Australia and not in a country that is a signatory to the Hague Convention, the relevant court rules generally provide that service is effected in accordance with the law of the foreign country.

After a defendant has been served with a writ or originating application, they must file a notice of appearance (and in some circumstances, their defence) within a specified time. If the defendant fails to file the relevant documents within the prescribed time, a plaintiff may apply for a judgment in default without giving further notice to the defendant. The specific procedure for seeking default judgment varies depending on the rules of the court in which the proceeding was commenced and the type of claim made and relief sought.

Class actions may be commenced in the Federal Court and in two states: New South Wales and Victoria. The regimes in these jurisdictions are broadly the same. In order to initiate a class action, the following requirements must be met:

  • seven or more people must have a claim against the same person;
  • the claims must relate to, or arise out of, the same, similar or related circumstances; and
  • the claims must share a substantial common issue of law or fact.

Australian courts have interpreted the last two requirements broadly and will permit a class action to proceed even if resolution of the common issue is unlikely to resolve the claims of all class members. In contrast to the regime in the USA, an applicant is not required to certify that the class meets the above threshold requirements. Instead, the onus lies on the respondent to challenge the proceeding as being improperly commenced.

A court may order that a proceeding should not continue as a class action if it is in the interests of justice to do so. For example, such an order may be made where it is not appropriate or efficient for the claim to be pursued as a class action, or where the costs of each class member pursuing their claims individually are likely to be less than the costs of the class action.

Class action claims are brought on behalf of all class members by one (or a small number of) representative plaintiffs. The class action regime is an "opt out" regime, ie, each potential claimant who falls within the class definition is a member of the class unless they opt out of the proceeding. The class can be defined by a list of names or by a set of criteria (for example, all persons who acquired shares in a particular company during a defined period). It is not necessary to name members of the class or to specify the number of people in the class or the total value of their claims.

Australian lawyers owe various duties to their clients, including a duty to disclose certain information in relation to costs and billing. These obligations are contained in laws regulating the legal profession in each jurisdiction.

In Victoria and New South Wales, law practices are required to provide clients with an estimate of the total legal costs for the matter and the basis on which the legal costs will be calculated. This information must be provided at the time, or as soon as practicable, after instructions are received. Law practices also have an ongoing obligation to notify clients of any substantial change to this information when, or as soon as practicable after, the change occurs.

A party may bring an interim or interlocutory application before or during proceedings. Such applications are generally made to preserve a party’s rights or property pending final resolution of the proceedings, or for the purpose of dealing with pre-trial formalities, such as particulars, discovery and interrogation.

An interlocutory application is any application that seeks an order, other than final judgment. Where the order sought is a temporary order, and only intended to apply until a further application extending the order is heard, the application and order are described as "interim". A party may make an interlocutory or interim application for "freezing" orders, search orders, orders for the presentation of property, or disposal of perishable or similar property.

Often, a party will seek interim orders or injunctions as a matter of urgency (for example, to ensure certain rights or property are preserved before a court order is obtained). In these cases, the application may be made on an ex parte basis.

A party can apply by motion for early judgment on certain issues in dispute. The court has a general discretion to give directions in relation to the order in which issues in dispute are to be tried. The court may make orders for the separate decision of any question of fact or law and the point in the proceedings at which it will be heard. However, courts are generally reluctant to order that an issue be determined separately, and a party seeking early determination will need to demonstrate the utility, economy and fairness of ordering a single-issue trial.

The court also has the power upon application by a party to strike out the other party’s case, in whole or part, before trial or substantive hearing of the claim. This order may be available where the case pursued by the other party:

  • discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;
  • has a tendency to cause prejudice, embarrassment or delay in the proceedings; or
  • is otherwise an abuse of the process of the court.

This procedure is generally directed at the form, rather than merits, of a case and a party is usually granted leave to amend its case.

A party may apply for a summary judgment or dismissal of proceedings. This procedure is useful in circumstances where one party has brought an elaborate and wide-ranging claim, and the other party will incur considerable expenses in preparing evidence to refute those allegations. In contrast to the strike-out procedure described above, these remedies are concerned with the merits (and not the form) of a case.

A defendant may seek the summary dismissal of a claim in circumstances where the proceeding is an abuse of process or scandalous, frivolous or vexatious. In rare circumstances, a plaintiff may obtain a summary judgment if the defendant has no defence to its claim, or part of the claim. In such cases, it is necessary for the plaintiff to show that any defence intended to be relied on is untenable and cannot possibly succeed. This remedy is used sparingly, and a court will generally exercise exceptional caution before entering summary judgment.

As a general principle, a third party can be joined to a proceeding if the court considers it necessary to determine all matters in dispute in the proceeding (including ancillary or preliminary questions).

Joinder may occur where a defendant:

  • claims contribution or indemnity from the third party;
  • claims relief from the third party, which is substantially similar to that which the plaintiff seeks against the defendant; or
  • seeks the determination of a question in the original proceeding, as between the third party and another party.

A court will only permit a third party to be joined to a proceeding if it is "just and convenient". The court will consider various factors, including whether joinder will minimise the parties’ costs, or result in unfairness to any party.

A defendant can apply to the court for an order for security for costs from the plaintiff. The court has wide discretion in such matters and may consider various factors such as the financial position of the plaintiff, the genuineness and prospects of success of the proceedings, the likely costs of the proceedings and the effect that an order for security would have on the plaintiff’s ability to pursue the claim.

Security for costs are not ordinarily available against plaintiffs bringing the claim as a natural person (as opposed to through a corporate entity).

A court can make orders for an unsuccessful party in an application or motion to bear the other party’s costs. Usually, this results in a portion of the successful party’s actual costs being paid, but the court has the power to make an order that all such costs be paid on a solicitor/client basis. However, the court has wide discretion to make orders in relation to costs and will consider issues such as whether the successful party has incurred excessive costs or has in fact failed on the substantive aspects of the application.

Whether the costs of an application can be recovered following the application or only after the final resolution of the dispute depends on the jurisdiction and circumstances of the case. In practice, costs orders in relation to interim applications are usually dealt with as part of the process of settling overall costs after final judgment.

The timeframes for dealing with applications or motions vary significantly and depend on factors including the nature and complexity of the application, the circumstances of the matter and the capacity of the court.

A party can request that the application be dealt with urgently, but it will be necessary for the party to demonstrate that the determination of the application is time sensitive.

The discovery process is limited to the discovery of documents and does not extend to the taking of witness testimony. A party will generally be able to access documents that are in the possession, custody or power of a party to litigation and that relate to an issue in dispute in the proceedings. Discovery is generally made by providing a list of potentially relevant documents together with an affidavit. Inspection of discovered documents is provided subject to any claim for legal professional privilege or any other applicable privilege.

Courts have increasingly sought to curb the extent of the discovery process by modifying their practices in relation to making orders for discovery. In some jurisdictions, courts usually refuse to make an order for discovery until after the parties have served their evidence, on the basis that the matters in dispute should have narrowed by that stage. There is also scope for the parties (either with or independently of the court’s involvement) to agree to practical strategies to manage the burden of discovery, eg, the parties might agree to the application of particular search terms or other filtering strategies for locating discoverable documents among electronic materials.

A party to litigation proceedings may seek orders requiring a third party to provide discovery. Such discovery is not available as a right, but requires application for an order from the court in accordance with that court’s rules. An applicant must satisfy the court that the third party possesses documents that are relevant to the proceeding.

In general, the application must be served personally on the third party, with a copy of the supporting affidavits. The application should describe the documents sought by the applicant, and the facts demonstrating the relevance of the documents and the likelihood that the third party has the documents in their possession, custody or power.

See 5.1 Discovery and Civil Cases.

Discovery mechanisms are provided for, so this does not arise.

A party may object to the production of otherwise discoverable documents on the basis of legal professional privilege, which applies to confidential communications or documents that are made or created for the dominant purpose of a client seeking legal advice from a lawyer, or a lawyer providing legal advice to a client or for use in connection with the conduct of existing or anticipated legal proceedings.

An in-house counsel may claim legal professional privilege in respect to advice provided to their employer subject to establishing that the dominant purpose of the communication was to seek or provide legal advice. It is also important that any in-house counsel be in a position to establish that they are sufficiently independent from the subject matter of the advice for the company to be able to claim privilege.

See 5.5 Legal Privilege.

A party may seek various injunctive relief depending on the circumstances.

Permanent Injunction

A permanent injunction is a final settlement of the parties’ rights and lasts indefinitely unless it is restricted by the terms of the order or dissolved by a further court order. A court will only grant a permanent injunction once it has made a final determination after hearing the matter at trial. The applicant must demonstrate the elements of the cause of action in respect to the infringing conduct and the prospect of continuing or recurrent injury.

Interlocutory Injunction

An interlocutory injunction is granted to preserve a state of affairs until the parties’ rights are determined at trial and so usually applies to a person’s conduct until the trial or a further order is made in the proceedings.

Interim Injunction

An interim injunction applies in respect of conduct until a specified day or the return date of an application for an interlocutory injunction. The order generally lasts for a few days and is granted in urgent circumstances, where a court is convinced that an applicant would otherwise suffer irreparable harm if the injunction were not granted. An application for such an order is made without notice to the person to be affected by the order. As such, the applicant must present all information relevant to the court’s exercise of its discretion and provide certain undertakings.

Injunctive Relief

Injunctive relief can also be classified according to the type of conduct to be secured or restrained. A prohibitory (or restrictive) injunction requires a person to cease doing a particular act, while a mandatory injunction directs a person to perform a particular act. A quia timet injunction restrains a person from performing a particular act that they have threatened to do but has not yet done.

Other Injunctions

There are also injunctions that seek to preserve property and prevent the defendant frustrating the court’s ability to administer justice. A freezing or Mareva order restrains a person from disposing of their assets until the trial of a proceeding or a further order of the court. A search order (or "Anton Piller order") requires a person to allow the applicant to access their premises to search for, copy and collect for safekeeping specific materials that are listed in the order and that are to be used in evidence in civil proceedings between the parties. A court must be satisfied that there is a real possibility that the defendant may destroy such material.

Injunctions can be obtained relatively quickly in urgent circumstances, provided the requirements for the injunctive relief are met, particularly when an application is made on an ex parte basis. The urgency of an application should be brought to the attention of the relevant judge upon making the application.

A party can seek injunctive relief on an ex parte basis in situations of urgency or where there is a serious risk the court’s administration of justice will be frustrated. At an ex parte hearing, the respondent is absent and does not have notice of the application. Accordingly, the applicant has an obligation to disclose to the court all material facts relevant to the applicant's right to the injunction, including any evidence that could be submitted in the respondent’s favour. If an applicant fails to disclose all material facts fairly and candidly, the injunction can be dissolved or the applicant refused continued interlocutory injunctive relief.

A compulsory feature of an application for an interlocutory injunction is that the applicant must give the "usual undertaking as to damages". That is an undertaking to submit to such order (if any) as the court may consider to be just for the payment of compensation, to be assessed by the court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation) thereof and to pay the compensation to the person there referred to.

If the applicant fails at trial, the respondent can be compensated for any loss suffered due to being temporarily prevented from performing what he or she was legally entitled to have done. Only damage flowing from the injunction proceedings will be covered, not damages flowing from the general litigation proceedings.

This principle also applies to ex parte injunctions. The suitability of damages as compensation for any potential loss the respondent may suffer as a result of granting an injunction ex parte is part of the assessment of whether to grant the injunction.

Parties to legal proceedings outside Australia may seek a freezing order to preserve assets within Australia on the basis that a prospective judgment in that overseas proceeding would be registrable under the Foreign Judgments Act 1991 (Cth). The High Court in Australia has recognised that freezing orders are designed to protect "a prospective enforcement process". In order to obtain a freezing order against a respondent with overseas assets, a party must still satisfy the requirements of the relevant Supreme Court Rules that govern the making of freezing orders in that jurisdiction (see PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36).

Injunctive relief can be obtained against third parties. A third party served with a copy of an injunction is obliged to act in accordance with its terms. Failure to do so may result in the third party being found to be in contempt of court. Courts tend to distinguish between innocent third parties, such as banks that merely hold a respondent’s assets, and third parties that are, or appear to be, acting in co-operation with a respondent with fraudulent intent. For instance, with regard to freezing orders, a court is less likely to grant a freezing order that affects the rights of innocent third parties.

If the respondent fails to comply with the terms of an injunction, the applicant can seek to have the respondent held in contempt of court. If this occurs, the respondent may be issued with a fine, or have their property sequestrated or be imprisoned. The applicant must first prove, beyond reasonable doubt, that the respondent breached the injunction.

A judgment is unlikely to be enforced unless the defendant had proper notice of the terms of the injunction. However, if a respondent liable to committal or sequestration was present in court when the order was made, the order can be enforced even though service was not effected in accordance with the rules.

Civil trials in Australia are usually conducted orally and augmented by written submissions. A trial usually commences with the plaintiff, who bears the burden of proof, opening their case. The plaintiff will make oral submissions to the court outlining their case and summarising the plaintiff’s evidence and any legal arguments upon which the case depends. Following this, the plaintiff may call any lay and expert witnesses to give evidence and the defendant will be provided with an opportunity to cross-examine those witnesses.

After the conclusion of the plaintiff’s evidence, the defendant may decide what, if any, evidence it will seek to adduce in defending the claim. If this occurs, the defendant will usually make opening submissions and call its lay and expert witnesses (who may then be cross-examined by the plaintiff). Once the defendant’s evidence is concluded, the defendant will proceed to make its closing submissions. The plaintiff may file evidence in reply to aspects of the defendant’s evidence. Once all the evidence is complete, the plaintiff will then make closing submissions followed by the defendant’s submissions.

An option available to the defendant is to submit a "no case submission" at the conclusion of the plaintiff’s case, which involves a submission that the plaintiff has not established a prima facie case. Australian courts will usually only allow such a submission where the defendant elects not to call any evidence.

Before a civil trial commences, there will usually be shorter hearings at which the court sets a timetable to progress the matter to trial and deals with interlocutory disputes. These interlocutory matters may involve substantive disputes (for example, where a party seeks an interim order, such as an injunction, to preserve the status quo until trial, or applies to strike out or dismiss the other party’s case without proceeding to trial), or procedural disputes relating to the parties’ evidence.

An interlocutory hearing is less formal than a trial. Written evidence by way of affidavit is generally required and it is common for affidavits to be filed ahead of any timetabled hearing. Evidence is rarely given orally by a witness present in court. A witness will only be required to attend if the other party has indicated that they intend to cross-examine the witness on their affidavit. Such cross-examination, however, is rare.

Jury trials are available for some types of civil cases (for example, defamation actions), although the vast majority of civil cases in Australia are conducted before a judge alone. Civil trials by jury are very rare in Australia. The precise circumstances in which a jury trial is available vary between each of the states and territories. In South Australia and the Australian Capital Territory, jury trials have been completely abolished.

When considering whether a trial is suitable for determination by a jury, the court will consider factors such as the cost and efficiency of a jury trial, and whether such a trial is likely to be unfair to one of the parties. Even where it is available, a jury trial is less likely to be ordered where the case concerns complex legal issues and the dispute is likely to be decided based more on the law, rather than the facts, of the matter.

Evidence is generally admissible in civil proceedings if it bears a logical connection with a fact in issue. Most relevant evidence is admissible, however, a party may object to the admission of evidence at trial that is otherwise relevant on certain grounds.

"Hearsay evidence" is evidence of a statement made to a witness by another person to establish that matter as a fact. It is generally excluded on the basis that it is considered unreliable. It may be admitted in certain circumstances; for example, in interlocutory disputes concerning procedural matters or if it falls under the "business records" exception, which provides that a document that forms part of the records of a business may be admitted into evidence to prove the truth of the matters contained in that record.

Evidence that is subject to a claim for privilege, whether that be legal professional privilege, without prejudice privilege, or the privilege against self-incrimination, is also inadmissible.

Opinion evidence is also not admissible unless it constitutes expert evidence. Expert opinion evidence is admissible so long as:

  • there is a field of specialised knowledge about which expert evidence can be given;
  • the witness is able to demonstrate they are an expert in that field; and
  • the opinion given by the expert is wholly or substantially based on the expert’s knowledge.

There are numerous other rules of evidence, but the rules above are the most relevant.

Parties routinely engage expert witnesses to prepare an expert report that addresses an issue or issues raised in the proceeding and to give evidence at trial. Each jurisdiction has specific rules and practice notes that govern how experts should be instructed and how their evidence can be given.

Where there is more than one expert giving evidence, a court may order that the experts confer before trial, endeavour to reach agreement on material issues and submit a joint report demonstrating matters about which they agree and disagree, including their supporting reasons. This is known as an "expert conclave". A court may also order that experts for different parties provide evidence at trial concurrently. Such a mode of giving evidence is known as "hot tubbing".

In civil cases, the court also has the power to appoint a referee or an assessor to report to the court on an issue arising in a proceeding. A reference may be made where complex technical matters have to be determined, or where a lengthy examination of documents or accounts is necessary. A court may accept or reject the report provided by the referee and deliver judgment as it sees fit.

Different courts have different rules and practices in relation to providing documents and transcripts to the public. In most courts, a person will need to submit an application (and pay a fee) to receive a copy of a court transcript.

Trial procedure in Australia is adversarial in nature, meaning that the judge will not usually intervene in proceedings unless one of the parties seeks the judge’s intervention. The judge’s role is to hear the evidence given, not to ask questions of witnesses, and to ensure that the trial is conducted fairly and in accordance with the law. However, judges frequently ask questions of counsel, and sometimes witnesses, to clarify their understanding of matters or to enquire about a legal argument.

At the end of the trial, the judge may give judgment immediately or reserve judgment. Judgment will usually be reserved in complex litigation or where significant questions of law have been raised, however, it is entirely in the judge’s discretion whether to do so.

The time between the commencement of proceedings and a trial depends on a number of factors, which means it is not possible to give a general timeframe for a proceeding. The length of a trial will depend on the number and complexity of the relevant issues, the nature and volume of the parties’ evidence and whether the parties engage in any interlocutory disputes. In general, civil proceedings in Australia are by their nature formal and lengthy processes. The courts do, however, allow for urgent matters to be expedited.

As a general proposition, parties are not required to seek the court’s approval to settle a lawsuit (although courts are required to make final orders to bring the proceeding to an end). If the settlement is consensual, parties usually arrange for draft orders dismissing the proceeding to be provided to the court and those orders are made as a matter of course.

If the party that commenced a proceeding wishes to resolve it without the defendant’s consent, this can be carried out in most jurisdictions by filing a notice discontinuing the claim.

Where proceedings are brought by representative plaintiffs in the form of a class action, any resolution of the proceeding must be approved by the court after being provided with all the relevant settlement details. The court is obliged to examine the settlement and determine whether, in all the circumstances, it is fair and reasonable, having particular regard to the interests of the class members.

The terms upon which parties have resolved a proceeding can, if parties' consent, remain confidential. Most commonly, parties will agree to reflect the terms of their settlement in a confidential agreement and the court will only be informed that the matter has been settled and that the proceeding should be dismissed. The fact that the proceeding has been dismissed will not be capable of being kept confidential.

A settlement agreement is primarily enforceable as a contract between the parties. A settlement agreement will usually contain a clause whereby the plaintiff agrees not to commence further proceedings against the defendant and to indemnify the defendant for any loss suffered due to breach of this obligation.

A settlement agreement may require the parties to consent to court orders effecting the settlement. Where judgment is given, the court order will prevent the action being reopened. Where the action has been dismissed, the court would not be inclined to reopen the matter without good reason and the existence of a settlement agreement would almost always prevent the matter from being reopened.

A settlement agreement may be set aside on the same grounds as any other contract in Australian law. Those grounds include mistake, misrepresentation, misleading or deceptive conduct, unconscionable conduct, duress, undue influence, lack of certainty, lack of consideration or frustration.

If the matter has also been discontinued when the agreement is set aside or sought to be set aside, the party seeking to set aside the agreement will also need leave to reinstate the proceeding. Where a judgment has been made by consent under a settlement agreement, it will be more difficult to set aside that judgment. However, if the settlement under which judgment has been given has been set aside, the court may refuse to stay a new proceeding brought by the plaintiff litigating the same issues as the original proceeding. This decision will be made at the court’s discretion.

The most common form of award to a successful party in litigation proceedings is monetary damages. Damages are fundamentally measured as the value of the loss or damage suffered by the plaintiff as a result of the defendant’s unlawful behaviour. Damages are typically available in cases of breach of contract and tort. Compensation is also available in respect of losses caused by tort-like equitable wrongs or statutory wrongs such as misleading or deceptive conduct.

Other remedies available as part of a judgment to a plaintiff in Australia include injunctive relief, restitution, an account of profits and declarations made by the court.

The types of damages available, and the method of calculating the amount of damages awarded to a plaintiff, will depend on the nature of the cause of action pursued. In Australia, the types of damages available include damages for loss of opportunity, indirect or consequential loss, restitution and damages calculated by account of profit. Australian courts may also award punitive damages (also referred to as exemplary damages); however, such awards are made relatively infrequently and typically calculated far more conservatively than awards in jurisdictions such as the USA.

A successful party in a proceeding is generally entitled to recover interest in relation to any principal amount, calculated from the date on which the court finds the amount should have been paid. The prescribed interest rate and the basis upon which interest is to be calculated will vary according to the court rules of each jurisdiction. The rate is usually a favourable benchmark amount above the Reserve Bank cash rate.

In most jurisdictions, a successful party is also entitled to recover interest on a debt arising from a court order (a "judgment debt"), which accrues from the date on which a judgment is entered. In many jurisdictions, the interest rate is even more favourable than the pre-judgment amount.

A plaintiff has a number of enforcement options where the defendant refuses to pay a judgment debt. The most common enforcement option is by a writ that provides for the sale of the real and personal property of the judgment debtor.

Other enforcement mechanisms include garnishing the defendant’s salary or wages, seizing and selling the defendant’s property, appropriating debts due to the defendant, bankrupting (in the case of a natural person) or winding up (in the case of a corporation) the defendant. A court order is required to use these mechanisms

There are two ways to enforce a foreign judgment in Australia: registration under the Foreign Judgments Act 1991 (Cth), or under the common law. The Act can only be used to enforce judgments entered in the countries listed in the Foreign Judgments Regulations 1992 (Cth).

Broadly speaking, a foreign judgment can be registered in Australia if it is for a sum of money (other than tax or a penalty, although the Act does extend to some non-money judgments specified in the regulations on the basis of reciprocity) and it is final and conclusive. The foreign judgment will not be registered if it has been wholly satisfied, or if (as at the date of applying for registration) the foreign judgment would not be enforceable in the country of origin. Once registered, the foreign judgment has the same force and effect as if it were a judgment in the Australian court in which it was registered.

At common law, a foreign judgment can be enforced by bringing a liquidated claim, if the foreign judgment meets certain requirements.

In Australia, unsuccessful litigation parties have a general right of appeal in relation to final orders made by a court. Most courts also provide for a party to seek leave to appeal from an adverse interlocutory or interim order.

In general, any first instance decision made by a trial judge can be appealed to a higher court. Decisions made at a state level may be appealed to the Court of Appeal or the Full Court of the Supreme Court of the relevant state or territory. Appeals against decisions of the Federal Court are made to the Full Federal Court, which has a bench of three judges (as opposed to one judge in the Federal Court). Further, the final court of appeal in Australia is the High Court of Australia.

Special leave must be obtained to appeal to the High Court, which is granted in rare cases, such as where a case involves new or inconsistently decided points of law, or is of high public importance. There is no right of appeal beyond a final determination of the High Court.

See 10.1 Levels of Appeal or Review to a Litigation.

The time period for making an appeal is set out in the specific rules of each court and jurisdiction. Generally, a party must lodge an appeal within 28 days from the date the relevant decision is made. In certain circumstances, parties can seek extensions of that time period, or file holding appeals until a final decision is made.

An appellant will not be permitted to raise new issues that were not raised at trial except in truly exceptional instances. Similarly, no new evidence will be allowed on appeal except in exceptional circumstances.

The appeal court will consider whether the primary judge made an error that affected the decision. The error may be an error of fact or an error of law; however, it is unusual for an appeal court to overturn a finding of fact, because a trial judge has the benefit of being present at the examination and cross-examination of witnesses.

Following an appeal, the appeal court will make orders that can uphold, dismiss or vary the original orders of the lower court.

See 10.5 Court-Imposed Conditions on Granting an Appeal.

In Australia, the general rule is that costs follow the event, which means that in the absence of special circumstances, a court will usually make orders requiring the unsuccessful litigant to pay the costs incurred by a successful party in bringing or defending the relevant claim.

A successful party is only entitled to receive costs which are deemed to have been properly or necessarily incurred. Accordingly, in practice, a successful party may only receive a proportion of its total costs. Generally, a costs assessor will make a determination as to the fair and reasonable amount of the successful party’s costs and in doing so, will consider whether the work carried out was reasonable and conducted in a reasonable manner, and whether the fees charged reflect a fair amount for the work concerned. A party who is dissatisfied with the decision of a costs assessor may appeal that decision, with appeal procedures varying according to each state or territory jurisdiction.

In certain circumstances, a court may make orders requiring a litigant to pay indemnity costs to the other party. Such orders may be made where one party has declined an offer of compromise made by the other side and proceeded to obtain an order or judgment which provides that party with an equal or less favourable outcome. Indemnity costs may also be awarded in circumstances where a party commences or continues a claim with little prospects of success, or where proceedings represent an abuse of process or a party has engaged in fraudulent conduct.

A court has discretion to apportion costs, where the successful party has failed on issues of substance, or where it has incurred excessive costs. When deciding an order for costs or assessing costs on an ordinary basis, Australian courts will generally have regard to the conduct of both parties and their legal representatives. Additionally, a court may follow certain conventions depending on the type of matter. See 4.6 Cost of Interim Applications/Motions.

In Australia, interest is payable on costs, however, the date on which interest is payable varies according to the relevant jurisdiction. For instance, in New South Wales interest begins accruing on the judgment date, while in Victoria, interest accrues from the date of the relevant costs order.

Alternative dispute resolution (ADR) has become increasingly common and is accepted as an important tool for resolving disputes outside the formal court system. Processes such as negotiation, conciliation and mediation provide parties with cost-effective and efficient avenues for resolving their disputes that are not restricted by the complexities of court adjudication (and its associated costs). Mediation, in particular, has become a popular alternative in commercial disputes.

Certain jurisdictions require parties to engage in an ADR process before they are eligible to file their claim in court. At the federal level, the Civil Dispute Resolution Act 2011 (Cth) requires parties to take "genuine steps" to resolve their disputes through a negotiation or third party-assisted ADR process before they are permitted to commence civil proceedings in the Federal Court or Federal Circuit Court. A court may consider a party’s failure to comply with this obligation when exercising its case management powers and discretion as to costs.

Once a matter has commenced, other legislative provisions grant courts and tribunals the power to refer a legal dispute to mediation or arbitration at any time during the proceedings, with or without the consent of the parties. Parties referred to ADR are not forced to settle and may generally continue the formal court process without penalty. However, if a proceeding has been referred to ADR and one party does not attend, the court may order the absent party to pay the costs "thrown away". Similar provisions for mandatory ADR exist in other jurisdictions within Australia.

Outside the legal profession and court system, a number of institutions at the national and state level promote and offer ADR for disputes across a range of areas. The success of these institutions in resolving legal disputes is largely dependent on the level of industry collaboration, which in Australia is fairly high.

At the national level, the Mediator Standards Board (MSB) has contributed considerably to improving the organisation of this aspect of ADR in particular. Other organisations that offer ADR services at a national level include the Australian Disputes Centre and the Resolution Institute. The majority of these organisations have a dual function of promoting ADR in the community as well as facilitating connections between ADR practitioners and clients. This referral process, where clients are connected with practitioner members of the organisation, is a relatively streamlined process.

Australia has two separate regimes for international commercial arbitrations and domestic commercial arbitrations. Both regimes draw upon international conventions, legislation and the common law. International arbitrations are governed by federal legislation, namely the International Arbitration Act 1974 (IA Act). Domestic arbitrations are governed by state and territory legislation, namely, the Commercial Arbitration Acts (CA Acts).

Once an arbitral tribunal has issued an award, it is considered final and binding on the parties and may be enforced in the Federal Court of Australia (under the IA Act) or a court of a state or territory (under the IA Act or CA Acts) as if the award were a judgment. The procedure for enforcing awards is similar under both regimes. The party seeking enforcement must provide the court with an original or certified copy of the award and arbitration agreement. A court can refuse to enforce an award in limited circumstances (for example, due to serious irregularities or breaches of natural justice in the arbitration process, or if enforcement of the award would be contrary to public policy).

At a general level, criminal law matters and enforcement proceedings commenced by regulators cannot be referred to arbitration.

See 13.1 Laws Regarding the Conduct of Arbitration.

See 13.1 Laws Regarding the Conduct of Arbitration.

Currently, there no major proposals for dispute resolution reform in Australia.

Proposals for law reform are generally considered by the Australian Law Reform Commission or equivalent commissions at a state or territory level. In June 2018, the NSW Law Reform Commission considered the possible introduction of model mediation provisions in order to address inconsistent mediation processes in NSW. However, ultimately, this proposal did not receive significant support from stakeholders due to the wide variety of contexts in which mediation takes place, and the need for specific nature statutory provisions to cater for these different circumstances.

As a result of COVID-19, Australian courts have pursued various measures to accommodate social distancing protocols. Some state courts have suspended jury trials and the Federal Court has placed an emphasis on conducting litigation proceedings via video conferencing. Australian courts have also increased the use of pre-existing technologies, such as e-filing and online court mechanisms, and created new rules and procedures where necessary.

In terms of procedural matters, the High Court has issued Practice Directions concerning electronic filing and the swearing of affidavit evidence. Similarly, the Federal Court has issued practice notes relating to special measures adopted in light of COVID-19, which provide that "in person" hearings will only be conducted in exceptional circumstances and provide procedures for the submission of electronic material and use of file sharing services, email and other platforms to tender litigation documents. Each state has also issued similar notes, which have helped to continue the effective operation of courts, mainly through the heavy reliance on technology to facilitate litigation proceedings remotely.

In addition to these new processes, courts are also developing jurisprudence to reflect the unique circumstances surrounding the COVID-19 pandemic. For example, in DPP v Combo [2020] VCC 726, the court commented that where matters could appropriately be determined on the papers in COVID-19, they should be. Further, in Capic v Ford [2020] FCA 486, the court commented that the requirement on the courts to facilitate the "just" resolution of disputes as quickly, inexpensively and efficiently as possible, also had to be balanced with the possible health risk posed to practitioners, witnesses, courts, the judiciary and transcript staff and ensuring that matter timetables reflected these competing considerations.

Gilbert + Tobin

Level 35, Tower Two
International Towers Sydney
200 Barangaroo Avenue
Barangaroo NSW 2000

+61 2 9263 4000

+61 2 9263 4111

info@gtlaw.com.au www.gtlaw.com.au
Author Business Card

Law and Practice

Authors



Gilbert + Tobin has a disputes and investigations practice comprised of 14 partners and over 90 supporting fee earners based across its offices in Sydney, Melbourne and Perth. The firm specialises in assisting clients to navigate complex and significant contentious issues. Many cases involve multiple parties and novel legal or factual issues. The firm has extensive experience advising on sensitive investigations and inquiries – from internal issues to regulatory investigations to Commissions of Inquiry – and understands the need for clarity of thought, discretion, insight and professionalism.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.