Lunn v Trustee for National Hearing Centres Unit Trust
[2023] FedCFamC2G 241
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Lunn v Trustee for National Hearing Centres Unit Trust [2023] FedCFamC2G 241
File number(s): ADG 203 of 2022 Judgment of: JUDGE BROWN Date of judgment: 31 March 2023 Catchwords: CONSUMER LAW –breach of contract – supply of hearing aids and related service contract – applicant seeks damages for breach of statutory warranty – purchase monies refunded – applicant seeks damages – application of principle in Moore v Scenic Tours – consideration of non-economic loss – disappointment occasioned by disappointment at failure to improve hearing – is contract one analogous to one to provide pleasure, relaxation or freedom from molestation – matters to be considered
PRACTICE AND PROCEDURE – whether the parties attend Court based mediation – consideration of further conduct of proceedings – fair trial – relevance of cross-examination – directions to enable self-represented applicant subject to disability to take part in proceedings
Legislation: Competition and Consumer Act 2010 (Cth) Sch 2 Ch 3 ss 4, 21, 54, 55, 56, 60, 61, 62, 236, 267, 268, 275
Civil Liability Act 1936 (SA) s 3
Evidence Act 1995 (Cth) ss 27, 31
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 5(a), 169, 186, 190, 191, 199
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 rr 4.04, 15.01
Cases cited: Baltic Shipping Company v Dillon (1993) 176 CLR 344
Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No3) (2009) 181 FCR 152
Moore v Scenic Tours Pty Ltd [2020] HCA 17
Tarrant v Statewide Secured Investments Pty Ltd [2012] FCA 582
Division: Division 2 General Federal Law Number of paragraphs: 86 Date of hearing: 23 February 2023 Place: Adelaide Applicant: Appeared in person Counsel for the Respondent: Mr Mellor Solicitor for the Respondent: Barry Nilsson Lawyers ORDERS
ADG 203 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: JAMES EDWARD LUNN
Applicant
AND: THE TRUSTEE FOR NATIONAL HEARING CENTRES UNIT TRUST
Respondent
order made by:
JUDGE BROWN
DATE OF ORDER:
31 March 2023
THE COURT ORDERS THAT:
1.A copy of these Reasons for Judgment be provided to the Court’s IT Department to ensure appropriate voice recognition software processes are in place for future hearings.
2.The parties be referred to a Registrar for mediation under s.169 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and Division 23.1 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), such mediation to be conducted on 15 June 2023 at 9:30am with the mediation to be conducted on a face to face basis.
3.Further consideration of the matter is adjourned to 27 June 2023 at 9:30am for directions NOTING the proceedings will be conducted face to face at Court.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
These proceedings arise pursuant to the provisions of the Australian Consumer Law.[1] Issues arise at an interlocutory stage as to how the proceedings are to be conducted given the applicant, who is acting on his own behalf, suffers from significantly impaired hearing.
[1] Competition and Consumer Act 2010 (Cth), Sch 2. Hereinafter referred to as “the ACL”.
In these circumstances, it would be his preference that the issues arising in the case be determined by the Court reading the various affidavits filed in the proceedings augmented by written submissions from each party. The Court could then turn to determine issues of liability and, if necessary calculate damages.
Such an outcome would be unsatisfactory from the respondent’s perspective. It contends that there are factual controversies arising between the parties, which can only be satisfactorily resolved through cross-examination of witnesses, including Mr Lunn himself. As such, it would be unfair to it to proceed in the manner proposed by Mr Lunn.
In these circumstances, of its own motion, the Court has proposed a middle way involving the provision of a laptop computer to Mr Lunn, on which would be installed voice recognition software. This could be integrated with the Court’s microphones, which collect everything said in court and enable the provision of a contemporaneous transcript of proceedings.
Information provided to me, by the Court’s IT Services indicates that such a procedure has been utilised previously but cannot be guaranteed to be perfect, in the sense that everything said will be accurately transcribed and produced contemporaneously in real time. It seems inevitable that glitches will occur.
The other procedural controversy arising in the case relates to whether the matter should be referred to mediation with a District Registrar of the Court. It is the position of the respondent that such a referral would be an appropriate use of the Court’s resources, given the issues arising in the case.
The applicant does not agree. By necessary implication, it is his view that the case is incapable of consensual resolution. As he is a party to the case, for obvious reasons, his position must be given some credence by the Court.
BACKGROUND
Mr Lunn commenced these proceedings on 17 August 2022. He is legally qualified and practiced as a barrister, in South Australia, for over thirty years, until around about the time of his sixtieth birthday.
Up until this time, he experienced some minor hearing loss, which did not significantly impede his practice as an advocate. However, sadly, in March of 2005, he suffered a debilitating hearing loss, which left him with profound hearing loss in his left ear and severe hearing loss in his right ear.
No cause was attributable for this loss, which was managed by Mr Lunn acquiring hearing aids. This allowed him to continue to practice as a barrister engaging in written advice work rather than advocacy, as before. He retired completely in mid-2012, by which stage he was aged in his late sixties.
In the latter half of 2020, he began to notice signs of a further deterioration in his hearing. He conducted some research and discovered that since his acquisition of his earlier hearing aids, there had apparently being significant advances in hearing technology, which, for obvious reasons, he was keen to explore.
In early 2021, he discovered that a process involving the digitalisation of sounds received by hearing aids had been invented. This enabled the pairing of the hearing aids utilised in the different ears of a person with hearing loss, so that they could, in effect, communicate with one another, via the Bluetooth technology of the smart phone of the person concerned.
In technical terms, it was considered that such a pairing of hearing aids had the potential to balance and control the sounds produced by each such hearing aid and provide an enhanced level of hearing for the user of the relevant devices. Given these circumstances, Mr Lunn decided to investigate the replacement of his then hearing aids with a new digital pair of hearing aids.
As a consequence, Mr Lunn made an appointment with an audiologist, at the Hyde Park clinic of Amplifon, which is the trading and business name of the respondent to these proceedings, to have a hearing assessment. His first appointment took place on 15 June 2021. There is no controversy between the parties that at this appointment Mr Lunn was provided with copies of two brochures produced by Amplifon for its clients. In addition, on this occasion, Mr Lunn underwent a hearing assessment.
The first brochure is entitled Discover the Amplifon Advantage and describes Amplifon as your hearing solution specialists. Mr Lunn has held private health insurance for many years on which he can claim for hearing aids. His insurer is Bupa. The second brochure is entitled Bupa customer care package.
The content of these brochures is at the heart of the dispute between the parties. It is Mr Lunn’s contention that the brochures constitute statutory guarantees under the relevant provisions of the ACL, which the respondent has breached in its supply of two hearing aids to him. As a consequence, he contends that he is entitled to damages, under various heads, pursuant to the provisions of section 236 of the ACL.
It is Mr Lunn’s contention that the brochures indicated that, if he purchased a particular type of hearing aid, for use in tandem, which was described as being in the level of excellence, it would enable him to hear soft sounds; hear speech clearly in both quiet and noisy conditions; reduce background noise; and be adaptable to hearing in different environments.
In addition, Amplifon purported itself to be an industry leader in hearing solutions; to provide industry leading hearing solutions; ongoing support and care; and a world class service. After his hearing assessment, Mr Lunn indicated that he wanted to be fitted with such excellent hearing aids. It is his contention that he was led to belief that such hearing aids would enable to him to hear to the level indicated by the relevant brochures provided to him.
As a consequence, on 5 August 2021, Mr Lunn contracted with the respondent to purchase two hearing aids at a cost to him of $6,205.00. In addition, he entered into an agreement with Amplifon that it would provide him with Personalised lifetime aftercare support in respect of the hearing aid on account that he was a Bupa policy holder.
From Mr Lunn’s perspective, the hearing aids did not perform to the expectations he had been led to belief would occur, namely a significant improvement in his hearing and a resultant improvement in his standard of life. In addition, he contends that he did not receive the customer support he was promised. He deposes that he felt misled, let down and disappointed.
It is Mr Lunn’s contention that the audiologist who fitted him with the two relevant hearing aids should have informed him that the hearing in his left ear was so reduced that the hearing aid recommended would have no or little effect in improving his hearing overall.
In contrast, it is the position of the respondent that Mr Lunn was advised, from June of 2021 onwards that streaming would potentially be available in the right ear only and the available technology was limited in respect of any devise applied to his left ear. Mr Lunn disputes that he was told these things and contends that he should have been, which most likely would have resulted in him not agreeing to purchase the two hearing aids recommended to him.
Throughout the remainder of 2021, Mr Lunn persisted with using the two hearing aids, hoping that if he became more adept at using them, the quality of sound provided to him would improve. By Christmas of that year, he became convinced that the hearing aids were not working properly and he attended at the Hyde Park clinic to report that he had streaming in one ear only. From his perspective, his attendance on the relevant audiologist who had assessed his hearing and fitted him with the devises, was entirely unsatisfactory and he was rudely treated.
In terms of his personal expectations as to what level of improvement he could expect to receive, Mr Lunn has deposed as follows:
I did not expect my hearing to be perfect, but I felt that the substantial cost to me would be justified to get the promised assistance for my future social life and reduce the isolating restrictions of my profound and severe hearing losses.
In this context, it is Mr Lunn’s contention that the hearing aids supplied to him did not provide him with the level of excellence in his hearing, which he asserts he had been led to believe he would receive by what was stated in the Amplifon brochures provided to him.
After contacting another audiologist, he asserts that he became aware that the aids in question were not actually paired so that they could be displayed simultaneously on his iPhone. This is another basis on which Mr Lunn asserts that he has been misled by the respondent. Essentially, Mr Lunn contends that the hearing aids were not suitable for him, given his level of hearing loss and he has been misled.
On 23 March 2022, Mr Lunn wrote to the respondent in the following terms:
On 5/8/21 I purchased from you hearing aids, and ancillary equipment for $5,885 on the basis that it was top level and state of the art. In particular the hearing aids were bought as a pair, i.e. would communicate directly with each other to give the best possible amelioration of my deafness.
I also purchased a Continuous Care Plan for a further $210.
What was supplied never performed as required because the hearing aids did not communicate with each other and thus were not top level state of the art.
When I sought support from you it was ineffective and then ceased as stated above.
I have since purchased a different brand of hearing aids (at slightly less cost) which have functioned correctly and to far better effect than those you supplied.
I attach copies of your Tax Invoices.
You breached both contracts.
In addition to the contract sums I have paid about $100 for batteries and wax filters in persevering with your hearing aids.
This email is a letter of demand for the sum of $6,300. I reserve the right to claim further amounts if this matter is not resolved promptly.
Subsequently, on 13 May 2022, Mr Lunn issued a final notice in the Magistrates’ Court of South Australia against the respondent indicating his intention to commence proceedings to recover the amount of $6,300.00 from it together with costs.
Shortly afterwards, Mr Lunn wrote to the respondent indicating that the sum sought by him represented only his wasted expenditure and that he reserved the right to recover other damages relating to what he asserted was Amplifon’s breach of its duty of care to him, which had resulted in him suffering distress, discomfort and mental health effects.
As I understand his correspondence, his entitlement to damages stemmed from what he asserted was the respondent’s failure to make good on its implied warranty that it was a world class provider of audiology services and would provide him with a personalised hearing solution.
On 19 May 2022, a representative of Amplifon offered Mr Lunn an appointment with another senior audiologist at another clinic to see if the issues raised by Mr Lunn could be resolved. This was unacceptable to Mr Lunn and other proposals advanced by him, to Amplifon, to resolve the matter, were unacceptable to the respondent.
In these circumstances, on 24 May 2022, the respondent elected to refund the sum of $6,356.50, sought by Mr Lunn in his final notice. However, this did not resolve the controversies between the parties. It remains Mr Lunn’s position that the respondent has breached the various statutory guarantees contained in sections 54, 55 & 56 of the ACL, which relate to acceptable quality, fitness for purpose; and correspondence with description.
In addition, in respect of the after care service agreement, Mr Lunn asserts that the respondent has breached sections 60; 61 & 62 of the ACL, which relate to similar guarantees in respect of the supply of services.
In all these circumstances, Mr Lunn pleads that he is entitled to damages on the basis that the respondent has engaged in unconscionable conduct in respect of its supply of goods and services to him in contravention of section 21 of the ACL.
Given that a significant aspect of Mr Lunn’s claim relates to his allegation that the respondent failed to comply with its warranties made to him in respect of its future conduct towards him, arising from the after care service agreement he also relies on section 4 of the ACL, which defines misleading representations in respect of future matters.
In all these circumstances, Mr Lunn contends that the supply of the hearing aids to him, within the context of the services which he fails were not supplied to him, amount to a major failure by Amplifon, in the terms envisioned by section 268 of the ACL, which entitle him to receive damages pursuant to sections 236 and 267.
Section 236 of the ACL deals with damages. It reads as follows:
236Actions for damages
(1) If:
(a)a person (the claimant) suffers loss or damage because of the conduct of another person; and
(b)the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
(2)An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.
The sections referred to fall within Chapter 3 of the legislation.
Section 267 reads as follows:
267Action against suppliers of services
(1) A consumer may take action under this section if:
(a)a person (the supplier) supplies, in trade or commerce, services to the consumer; and
(b)a guarantee that applies to the supply under Subdivision B of Division 1 of Part 3‑2 is not complied with; and
(c)unless the guarantee is the guarantee under section 60—the failure to comply with the guarantee did not occur only because of:
(i)an act, default or omission of, or a representation made by, any person other than the supplier, or an agent or employee of the supplier; or
(ii)a cause independent of human control that occurred after the services were supplied.
(2)If the failure to comply with the guarantee can be remedied and is not a major failure:
(a)the consumer may require the supplier to remedy the failure within a reasonable time; or
(b)if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time—the consumer may:
(i)otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or
(ii)terminate the contract for the supply of the services.
(3)If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
(a)terminate the contract for the supply of the services; or
(b)by action against the supplier, recover compensation for any reduction in the value of the services below the price paid or payable by the consumer for the services.
(4)The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure.
(5)To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).
As is apparent, section 267(4) speaks of damages that are reasonably foreseeable. In this context, it may be necessary to have regard to the provisions of section 275 of the ACL, which has the effect of applying any limitation, arising in the law of the state where the contract in question arose, as it relates to the recovery of liability.
The relevant South Australian legislation would appear to be the Civil Liability Act 1936 (SA), if the relevant contract between Mr Lunn and Amplifon is taken to have been entered in South Australia. Section 3 of that Act defines non-economic loss as comprising; pain and suffering; loss of amenities of life; loss of expectation of life; and disfigurement. These are heads of damage which relate to the law of torts rather than contract.
Given, Mr Lunn has been refunded the monies advanced by him in respect of the hearing aid purchased by him, it would seem to be the case that the application of section 267(4) is at the heart of the controversy between the parties.
Mr Lunn contends that he is entitled to damages arising as a consequence of a complex series of constant and overlapping disappointments and stresses on account of the fact that his hearing was not improved to the level of excellence, which had been warranted to him.
As such he is seeking some form of compensation for non-economic loss but given he does not assert that he has suffered some form of injury as a consequence of the breach of contract with Amplifon, it cannot arise in the context of the assessment of damages following a personal injury.
In a letter to the respondent dated 2 June 2022, Mr Lunn put his case in the following terms:
I will make no claim for damages for physical or mental impairment as such, but only for disappointment, stress and loss of enjoyment as the direct consequences of your defaults (on the principles as recently set out and endorsed by the High Court), and for exemplary damages because of the overall circumstances, including your repeated conduct and/or reckless disregard of implementing or applying any system for compliance with your promises regarding provision of personalised lifetime aftercare support.
Mr Lunn relies on the case of Moore v Scenic Tours Pty Ltd (“Scenic Tours”).[2] The facts of the case can be concisely detailed. Mr Moore purchased a European river cruise from Scenic. It was marketed as a once in a lifetime cruise along the grand waterways of Europe in which passengers would be immersed in luxury and would have a truly unforgettable journey.
[2] Moore v Scenic Tours Pty Ltd [2020] HCA 17.
The trip proved to be unforgettable for its patrons but not for the reasons advanced by Scenic. It was bedevilled by bad weather and took place more by bus than by boat. Mr Moore argued successfully that there had been a total failure by Scenic to provide him what he had been offered and purchased from Scenic. It was accepted that Mr Moore was entitled to damages for the distress and disappointment, under the ACL, for not being able to enjoy a holiday of a lifetime.
It is Mr Lunn’s contention that similar considerations apply to him. He was promised excellent hearing. Such an outcome did not eventuate for him. As a consequence he asserts that he has suffered distress and disappointment, which is compensable under the rubric provided by Scenic Tours. He asserts that such a head of damages is distinct from the forms of non-economic loss provided by section 3 of the Civil Liabilities Act.
In Scenic Tours, the plurality of the High Court (Kiefel CJ, Bell, Gageler, Keane, Nettle & Gordon JJ) accepted that the peaceful and comfortable accommodation, promised to a holidaymaker, which did not answer to that description, was not a form of non-economic loss, within the terms of the New South Wales equivalent to the Civil Liability Act, but did provide an exception to the general common law rule that damages could not be recovered for injured feelings caused by a breach of contract.
As a consequence, such a breach of contract could form the basis for a separate assessment of damages relating to claims for damages for distress, vexation and frustration where the very object of the contract has been to provide pleasure, relaxation or freedom from molestation.[3] Necessarily, the purpose of a holiday was to provide pleasure and relaxation, which clearly had not occurred for Mr Moore, on his holiday with Scenic Tours. The plurality said as follows:
Disappointment at a breach of a promise to provide recreation, relaxation and peace of mind is not an “impairment” of the mind or a “deterioration” or “injurious lessening or weakening” of the mind. Frustration and indignation as a reaction to a breach of contract under which the promisor undertook for reward to provide a pleasurable and relaxing holiday is, of itself, a normal, rational reaction of an unimpaired mind. In this regard, Mr Moore’s claim for damages for his disappointment and distress resulting from Scenic’s breach of contract can be seen as no more a claim relating to personal injury than would be a claim for damages for the indignation occasioned by false imprisonment or defamation.[4]
[3] Moore v Scenic Tours Pty Ltd [2020] HCA 17 at [44].
[4] Moore v Scenic Tours Pty Ltd [2020] HCA 17 at [41].
In an earlier case, Baltic Shipping Company v Dillon (“Baltic”)[5] Mason CJ identified the following other exceptions to this general rule, which I will summarise as follows:
·Damages for injured feelings as a consequence of breach of promise of marriage;
·Damages for pain and suffering, including mental suffering and anxiety, where the breach of contract causes physical injury;
·Damages for physical inconvenience including fatigue;
·Damages for mental suffering directly related to vexation and discomfort; and
·Damages for distress, vexation and frustration where the very object of the contract has been to provide pleasure, relaxation or freedom from molestation.
[5] Baltic Shipping Company v Dillon (1993) 176 CLR 344.
In Baltic, Brennan J (as His Honour then was) confirmed authority that a plaintiff, in an action for breach of contract, is entitled to recover what damages naturally result from the breach of contract, but not damages for the disappointment of mind occasioned by the breach of contract.[6] Disappointment of mind being necessarily a different concept to pain and suffering. The rationale being that such a form of detriment is too remote from the consequences of the breach of contract to be compensable.
[6] Baltic Shipping Company v Dillon (1993) 176 CLR 344 at page 367.
Clearly, Mr Lunn’s claim is not one based on him suffering some form of personal injury. It is also different, in factual terms, from those arising in Scenic Tours, in the sense that the issue in dispute is not the provision of the pleasure and relaxation absent from a holiday gone wrong. Rather the case centres on Mr Lunn’s disappointment that his hearing was not restored and what he asserts are the damages potentially referrable to that, which are distinct from the types of non-economic loss detailed in section 3 of the Civil Liability Act.
Mr Lunn has had the costs of hearing aids refunded to him. In economic terms, he has been restored to the situation in which he was prior to any contractual breach. In addition, in another sense, he is in the same physical position which he was in, in respect of his hearing, prior to the contract.
In this context, a central issue, in the matter, is likely to be whether the contract between him and Amplifon can be characterised as one directed to provide [Mr Lunn] with pleasure, relaxation or freedom from molestation and on its breach what damages follow from it, given that in economic terms, he has been restored to the position in which he was prior to entering the contract.
In Baltic Mason CJ said as follows:
[I]t is evident that, while the innocent party to a contract will generally be disappointed if the defendant does not perform the contract, the innocent party's disappointment and distress are seldom so significant as to attract an award of damages on that score. For that reason, if for no other, it is preferable to adopt the rule that damages for disappointment and distress are not recoverable unless they proceed from physical inconvenience caused by the breach or unless the contract is one the object of which is to provide enjoyment, relaxation or freedom from molestation. In cases falling within the last-mentioned category, the damages flow directly from the breach of contract, the promise being to provide enjoyment, relaxation or freedom from molestation. In these situations the court is not driven to invoke notions such as "reasonably foreseeable" or "within the reasonable contemplation of the parties" because the breach results in a failure to provide the promised benefits.[7]
[7] Baltic Shipping Company v Dillon (1993) 176 CLR 344 at page 365.
As I understand matters, it is the divergences between the evidence of Mr Lunn, on the one hand and the audiologist who fitted the hearing aids, on the other, which have resulted in the respondent submitting that any hearing of the case requires cross examination. In addition, it contends, that Mr Lunn has never actually availed himself of the after care services which it offered.
Mr Lunn has provided some written submissions in which he has attempted to quantify the damages to which he contends he is entitled. He contends that an amount of $70,000.00 is appropriate. In addition, it may be the case that he seeks the imposition of civil penalties on the respondent.
I delineate these various issues, not for the sake of resolving them at this interlocutory stage, but rather to place in context the two issues currently in dispute between the parties, namely whether they should be referred to a compulsory mediation and how the hearing, if required, should be conducted, given Mr Lunn’s level of disability.
In my view, for the reasons outlined above the matter cannot be regarded as being without both a level of legal and factual complexity. From the respondent’s perspective, significant controversies arise as to what transpired between Mr Lunn and its senior audiologist when Mr Lunn’s hearing was being tested and what he was told, by way of representations, as to how his hearing might be ameliorated. In this context, it submits that these issues can only be resolved through cross-examination.
LEGAL PROVISIONS
The legal provisions applicable to the manner in which these proceedings are to be conducted are contained in the Federal Circuit and Family Court of Australia Act 2021 (Cth)[8] and the rules made under it, primarily, in this case the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021.[9]
[8] Herein after referred to as “the Act”.
[9] Herein after referred to as “the Rules”.
Section 5(a) of the Act indicates that one of the objects of the Court is to ensure that justice is delivered by federal courts effectively and efficiently. Division 2 of the Federal Circuit and Family Court is a busy court of first instance. Part of its raison d’être is to facilitate the just resolution of disputes as quickly, inexpensively and efficiently as possible.[10]This is described, in the relevant legislation, as the overarching purpose of case management provisions.
[10] See Federal Circuit and Family Court of Australia Act 2021 (Cth) at section 190(1).
In complete terms, sections 190(1) & (2) expands upon the objects contained in section 5. They read as follows:
(1)The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
…
(2)Without limiting subsection (1), the overarching purpose includes the following objectives:
(a)the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 2);
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c)the efficient disposal of the Court’s overall caseload;
(d)the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
Accordingly, in general terms, the arching purpose emphasises the desirability of there being an appropriate level of proportionality between the costs of the proceedings concerned and the issues raised. As is clear from the contents of section 191(1) & (2) these considerations apply equally to settlement discussions between the parties. It reads as follows:
(1)The parties to a civil proceeding before the Federal Circuit and Family Court of Australia (Division 2) must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.
(2)A party’s lawyer must, in the conduct of such a proceeding before the Federal Circuit and Family Court of Australia (Division 2) (including negotiations for settlement) on the party’s behalf:
(a) take account of the duty imposed on the party by subsection (1); and
(b) assist the party to comply with the duty.
In general terms, in my view, it is axiomatically congruent with considerations relating to proportionality, the saving of expense and the benefits of timely resolution that, wherever possible case should be resolved through consensual mechanisms rather than adjudication.
In this context, pursuant to the provisions of section 169 of the Act, the Court is granted a discretion to refer proceedings to mediation, in accordance with the Rules, with or without the consent of the parties concerned.
Accordingly, the fact that Mr Lunn does not agree to attend a mediation is not, of itself a bar to a mediation taking place. However, I concede that if I reach the conclusion that such a mediation will be a waste of time and money, because of his resistance to such a process, such an outcome would not be consistent with either saving time or money.
However, Mr Lunn’s interests are not the sole factor in determining whether to order a mediation. In this case those advising the respondent are desirous of seeing if the case can be successfully resolved through a process of alternative dispute resolution.
I am not in position to ignore the respondent’s concerns in this Court. By necessary presumption, they are of the view that a properly conducted mediation can achieve something of value and it is worth the expense which will be incurred to pursue it. However, I also recognise that fact that it takes two to tango.
In this Court, mediation is conducted by a Registrar of the Court, who is a legally qualified person with significant experience in the types of civil litigation conducted by Division 2 of the Court. Part of this role includes an aspect of conciliation or an ability to informally explore the strengths and weakness of each party’s case through the views of a neutral person.
In general terms, a mediation offers the parties concerned a neutral setting in which to discuss the prospects of settlement; the costs, both direct and indirect of proceeding further; and how each views the strengths and weakness of the other’s case. In this context, it is open to the Registrar to express a view, on a confidential basis, about what he or she believes are the probable outcomes.
Another obvious benefit of a negotiated outcome is the parties themselves are in control of the process and so are able to avoid the uncertainty implicit in an outcome being imposed upon them after a contested hearing. The advantages of such an approach increasing or decreasing in proportion to the complexity of the issues, both in legal and evidentiary terms, in respect of the relevant proceeding before the Court.
Section 186 of the Act authorises the Court to make decisions in proceedings without an oral hearing. The provision reads as follows:
The Rules of Court may authorise the Federal Circuit and Family Court of Australia (Division 2) or a Judge to make decisions in proceedings without an oral hearing if the parties to the proceedings have consented to the making of such decisions without an oral hearing.
Accordingly, in general terms, it is open to the Court to proceed in the manner advocated by Mr Lunn. However, it seems clear that this can only occur with the respondent’s formal consent, which is currently not forthcoming.
Section 199 of the Act deals with the manner in which evidence is to be given in proceedings before the Court. It may be given orally or by affidavit. Section 199(4), (5) & (6) have application to cases in which evidence is given by affidavit. It provides an entitlement to cross-examination. The sections reads as follows:
(4) If:
(a)a person makes an affidavit; and
(b)a party to a proceeding in the Federal Circuit and Family Court of Australia (Division 2) adduces, or proposes to adduce, evidence by the affidavit;
a party to the proceeding may request the person to appear as a witness to be cross‑examined with respect to the matters in the affidavit.
(5)Subsection (4) has effect subject to the Rules of Court.
(6)If:
(a)a request under subsection (4) is given to a person who has made an affidavit; and
(b)the person does not appear as a witness to be cross‑examined with respect to the matters in the affidavit;
the Federal Circuit and Family Court of Australia (Division 2) is to give the matters in the affidavit such weight as the Court thinks fit in the circumstances.
Rule 15.01 of the Rules empowers the Court to give directions generally as to the conduct of proceedings. Accordingly, it may be arguable that the Court could direct that the proceedings should be conducted on the basis of oral evidence alone.
However, in my view, that would be an exceptional course to adopt and not one in keeping with either the provisions of the Rules, which direct how proceedings are to be commenced. Rule 4.04 directs that any person commencing a proceeding in the Court is to file an affidavit stating the facts relied on.
In my view, it would not be in keeping with the overarching principle and the manner in which proceedings are most commonly conducted in this Court if these affidavit are not dispensed with. In addition section 27 of the Evidence Act 1995 (Cth) provides that a party to a proceeding may question any witness.
In this context, in my view it is useful to consider what Katzmann J said in Tarrant v Statewide Secured Investments Pty Ltd.[11] Her Honour considered that a right to cross-examine was likely to be an incident of a fair trial in proceedings conducted on the basis of affidavits. The case arose within analogous legislation applicable to the now defunct Federal Magistrates Court. Her Honour said as follows:
Section 64(6) of the FM Act provides that if a request is made under subs (4) and the person who made the affidavit does not appear for cross-examination, the Court is to give the matters in the matter such weight as the Court thinks fit in the circumstances.
…
At common law there was no “right” to cross-examine a witness … the only right was the right to a fair trial. But s 27 of the Evidence Act 1995 (Cth) provides that a party may question any witness, except as provided by the Act. That suggests that the Parliament’s intention was to legislate for such a right
…
The right, of course, is not unfettered. But if a party wishes to cross-examine a witness on matters in dispute in the proceeding and gives reasonable notice of its intention to do so, it is an incident of the court’s duty to provide a fair trial that, in general, that wish be respected. The right to cross-examine a witness has been described as “a fundamental element of litigation when conducted on affidavits or witness statements, not lightly to be set aside”, all the more so when the witness is a party… (citations removed)
[11] Tarrant v Statewide Secured Investments Pty Ltd [2012] FCA 582 at [33] – [35].
As previously indicated, the Court is authorised to give directions generally as to the conduct of a hearing. In addition, provisions of the Evidence Act deal with the specific issues raised by Mr Lunn regarding his compromised hearing. In particular, section 31 provides as follows:
(1)A witness who cannot hear adequately may be questioned in any appropriate way.
(2)A witness who cannot speak adequately may give evidence by any appropriate means.
(3)The court may give directions concerning either or both of the following:
(a) the way in which a witness may be questioned under subsection (1);
(b) the means by which a witness may give evidence under subsection (2).
(4)This section does not affect the right of a witness to whom this section applies to give evidence about a fact through an interpreter under section 30.
CONCLUSIONS
On balance, I have come to the conclusion that, given the issues thrown up by this case, it is likely to be more useful than not, that there be a compulsory court based mediation in the matter. Mr Lunn’s view that it will not be useful in the case is an important factor but cannot be the sole determinative.
In my view, I must also consider the view of the respondent and the possibility that it genuinely desires to compromise the proceedings, if at all possible, and is therefore willing to attend mediation. Pursuant to section 191(1) of the Act it is under a statutory obligation to engage with the mediation process (as indeed is Mr Lunn) in a manner which is consistent with the overarching principle, namely with a focus on both expedition and financial expediency.
The fact that the case is replete with controversies both legal and evidentiary is not, in my view, a reason to avoid mediation or to prevent the parties having the opportunity to engage with one another, in a neutral setting, under the auspices of the Court’s Registrar.
In my view, it is clear that the matter cannot proceed without an oral hearing involving cross-examination. Firstly, the respondent do not consent to such an outcome. Secondly, they are entitled to require Mr Lunn to be cross-examined about the contents of his affidavits. Thirdly, in a case of this kind, in my view, there cannot be a fair trial without cross-examination.
Given Mr Lunn’s level of disability it is clearly the case that there are likely to be difficulties in the practicalities of him giving his evidence and indeed presenting his case, given that he is self-represented. Pursuant to section 31 of the Evidence Act and the general provisions of the Rules, the Court is authorised to make whatever are the appropriate directions to enable a party and/or witness to take part in proceedings.
In the different context of cross-examination of a witness via a video link, Buchanan J in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No3)[12] spoke of the balance between the interests of a cross-examiner who was able to utilise the traditional forensic elements of cross-examination with the inconvenience and artificiality of cross-examination occurring, at a distances, as a consequence of the utilisation of electronic media.
[12] See Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No3) (2009) 181 FCR 152 at 171 [78].
In this case, Mr Lunn has indicated that hearing loop technology is of no assistance to him. I accept that he cannot be cross-examined in a conventional manner. No suggestion has been made of an interpreter. In these circumstances, in my view, the only manner in which the interests of the parties can be balanced and each is accorded a fair hearing is if the Court adopts the proposal of voice recognition software leading to the provision of simultaneous text displayed on computer screen.
I will order that these reasons for judgment be provided to the Court’s IT Department for the necessary steps to be put in place, if required. Otherwise I will direct the parties attend mediation. For all these reasons the orders of the Court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 31 March 2023
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