Ingot v Macquarie

[2004] NSWSC 1091

CITATION:	Ingot & Ors v Macquarie & Ors [2004] NSWSC 1091
HEARING DATE(S):	10 November 2004
JUDGMENT DATE:	10 November 2004
JUDGMENT OF:	McDougall J at 1
DECISION:	See paras [13] to [15]
CATCHWORDS:	EVIDENCE - application to set aside notice to produce - where affidavit refers to "without prejudice" correspondence - where plaintiffs seek production of "without prejudice" correspondence - where correspondence relates to an attempted mediation - s 131(2)(g) Evidence Act 1995 - s 110P Supreme Court Act 1970 - whether situation governed by s 131(2)(g) or s 110P - where correspondence inadmissible under s 110P whether correspondence nonetheless has legitimate forensic use that would justify notice to produce - discretion to exclude evidence - s 135 Evidence Act
LEGISLATION CITED:	Evidence Act 1995 Supreme Court Act 1970
PARTIES :	Ingot Capital Investments Pty Limited & Ors (Plaintiffs) Macquarie Equity Capital Markets Limited & Ors (Defendants)
FILE NUMBER(S):	SC 50169/01
COUNSEL:	F M Douglas QC/W G Muddle/B F Katekar (for plaintiffs) A S Bell (for 1st, 2nd and 3rd defendants) I Pike (5th, 7th and 8th defendants and mention for the 9th defendant) E A Collins (12th defendant) T Bathurst QC/P Brereton (13th defendant) F Gleeson/J Watson (14th defendant)
SOLICITORS:	Deacons (plaintiffs) Mallesons Stephen Jaques (Macquarie Parties) Atanaskovic Hartnell (4th defendant) Colin Biggers & Paisley (5th, 7th and 8th defendants and mention for the 9th defendant) M D Nikolaidis & Co (11th defendant) Minter Ellison (12th defendant) Blake Dawson Waldron (13th defendant) Henry Davis York (NCRA) TressCox (Guy Carpenter)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

10 November 2004 Ex tempore (revised 11 November 2004)

v MACQUARIE EQUITY CAPITAL MARKETS LIMITED & ORS

JUDGMENT re documents. (See transcript page 58)

1 HIS HONOUR: One of the evidentiary issues raised in connection with the plaintiffs' application for leave further to amend their summons relates to the time at which the plaintiffs' legal advisers formed the view that amendments to the summons were necessary, the time when that intention was intimated to the defendants, and the time when a mediation was conducted. The mediation occupied three days from 7 to 9 September 2004. The plaintiffs' solicitor, Mr Grant Robert Bonner, has said that he formed the view, that if the matters did not settle at mediation then some amendment would be necessary to the summons, by about the end of July 2004.

2 The solicitor for the Macquarie Parties, Mr Ashley John Black, has referred in his affidavit sworn 9 November 2004 to a number of items of correspondence relating to the mediation. Those include an email dated 2 September 2004 apparently marked without prejudice attaching the summary of the allegations made by the plaintiffs in the proceedings, and a letter dated 6 September 2004 also apparently marked without prejudice received from the plaintiffs' solicitors attaching the plaintiffs' position paper in reply. Mr Black thereafter swore that none of the correspondence that he referred to (including the two items that I have specified) "referred to any intention of the plaintiffs to further amend the summons if the matter did not settle at the mediation".

3 Thereafter, Mr Black said that had he been aware at any time prior to the mediation that the plaintiffs' legal advisers had formed the view that further amendments would need to be made to the case against the Macquarie Parties if the matter did not settle at mediation then he would have formed certain conclusions and would have made certain recommendations and acted in certain different ways.

4 The plaintiffs wish to challenge the evidence given by Mr Black of his lack of understanding and, I assume, as to what would have happened if he had had the understanding which he has said he did not have. To do so they have served a notice to produce on the Macquarie Parties which requires production of the following documents

“1. The correspondence marked “without prejudice” referred to in paragraph 7 of the affidavit of Ashley John Black sworn 9 November 2004 (Black’s Affidavit).
2. All documents within the meaning of the Evidence Act recording or evidencing the recommendation to the Macquarie Parties referred to in paragraph 9(c) of Black’s Affidavit.
3. All documents recording the submissions made, both in writing and orally, on behalf of the Macquarie Parties as referred to in paragraph 9(e) of Black’s Affidavit”.

5 The Macquarie Parties ask for paragraphs 1 and 3 of that notice to produce to be set aside. The plaintiffs submit that they are entitled to have the documents referred to and to put them to Mr Black with a view to testing his evidence to which I have referred.

6 Mr Douglas of Queens Counsel submits that he is entitled to take that course because of the provisions of s 131(2)(g) of the Evidence Act. That paragraph provides that sub-s (1) does not apply if evidence that has been adduced in the proceedings or an inference from that evidence is likely to mislead the court unless evidence of a without prejudice communication or document is adduced to contradict or qualify the evidence.

7 Prima facie, and having regard to s 8 of the Evidence Act, the position seems to me to be regulated not by s 131 but by s 110P of the Supreme Court Act 1970. That section, appearing in Pt 7B dealing with mediation, prohibits the admission in evidence of anything said or any admission made in a mediation session and a document prepared for the purposes of a mediation session. By sub-s (1), a mediation session is defined to include any steps taken in the course of making arrangements for the session or in the course of the follow up of a session.

8 In my judgment the documents in question would be inadmissible by virtue of s 110P(4) or (5). The question that therefore arises is whether, nevertheless, there is any legitimate forensic use to which they can be put which would justify the requirement placed by the notice to produce upon the Macquarie Parties.

9 Dr Bell, who appears for the Macquarie Parties, relies, among other things, on the terms of the mediation agreement. Although it appears that document was not signed until the commencement of the mediation, it is accepted that the mediation was conducted, and that the parties prepared for it, on the basis that the agreement would be signed. By cl 10(a), the parties agree among other things that no party shall cause any subpoena or other compulsory process to issue requiring production of the without prejudice statements prepared for the purpose of the mediation or any document recording them. It seems to me that the notice to produce is something the issue of which the plaintiffs contracted by cl 10(a) not to do.

10 In any event, Dr Bell submits, the documents are privileged not only in the general understanding of that word but specifically according to the code established by s 110P. Accordingly, he submits, there can be no legitimate forensic purpose for the requirement to produce them and the relevant paragraphs should be set aside.

11 It may perhaps be that the documents in question could be put before Mr Black and he could be asked, having considered them, whether he stood by his previous evidence. But even that may be going too far, because (for example) a negative answer may afford some evidence of something said in a mediation session - in particular, of something said in a document prepared for the course of preparing for the mediation session.

12 In any event, I think, even if the question could be asked and even if a negative answer were given to it, the probative value of that answer would be slight. In the circumstances where Mr Black, as a solicitor of this Court, is bound by his obligations to the Court, and of course bound by the obligations imposed by s 110P, I think the cross-examination of the kind foreshadowed could put him in an extremely prejudicial position. It might result in the circumstance that an answer prima facie damaging to Mr Black might be given which neither he nor counsel could cure by referring in more detail to the documents in question.

13 Accordingly, both based on s 110P of the Supreme Court Act and on s 135 of the Evidence Act, I conclude that the documents in question cannot be deployed for any legitimate or useful purpose. Even if, conceivably, they could be deployed in the way that I have indicated, I would exercise my discretion under s 135 to exclude the evidence, for the reasons just indicated.

14 It seems to me to follow, the documents having no legitimate forensic purpose, that paragraphs 1 and 3 of the notice to produce should be set aside and I so order. I will add that, having regard to the provisions of cl 10(a) of the mediation agreement, it is likely that I would have come to that view regardless of the particular statutory provisions to which I have referred.

15 I will return the documents produced in answer to paragraphs 1 and 3 which are the documents marked for identification 4 and 6. ******

Last Modified: 11/17/2004