Mair & Anor v Mazzitti (No 1) No. DCCIV-00-1772

ANDREW JOHN MAIR and RENEE FENTON-MAIR
v
SYLVANA MAZZITTI (NO 1)
[2003] SADC 164
Judge Lunn
Civil
REASONS FOR RULING A DOCUMENT INADMISSIBLE UNDER s67C OF THE EVIDENCE ACT 1929

In this action Andrew Mair (“Mr Mair”) has sued the defendant for damages for injuries which he received in a road accident on 20 December 1997. His wife (“Mrs Mair”) is a co-plaintiff, but her claim is confined by the pleadings to one for loss of consortium pursuant to s33 of the Wrongs Act 1936 arising from the injuries to Mr Mair.
In the same accident Mrs Mair herself suffered physical injuries. On 10 March 2000 her solicitors wrote to the defendant’s insurer (“the Letter”) setting out allegations about her own injuries and symptoms, formulating a claim for damages for them and indicating that she was prepared to accept the formulated sum in settlement of her claim. Subsequently this claim by her was settled without her ever instituting proceedings for it. In this joint action with her husband no ground of defence has been pleaded that this settlement of her other claim is a bar to her now pursuing damages for loss of consortium.
Mrs Mair has given evidence in the trial of this action which is part heard before me. In her cross examination counsel for the defence sought to put the Letter before her for the purpose of cross examining her on its contents. The plaintiffs’ counsel objected and asserted that the Letter was inadmissible by virtue of s67C of the Evidence Act 1929.
To resolve the objection I conducted a voir dire inquiry during the trial. The Letter was placed before me as evidence on this voir dire. It was accepted that the factual assertions made by both counsel during argument on the voir dire were correct. I ruled that the Letter was not admissible and indicated that I would later deliver these reasons for my ruling.
There was some confusion in the course of argument about whether the Letter was a notice under Rule 6A. I was misled by the date of the Letter into suggesting that Rule 6A did not apply, but a subsequent reading of Rule 6A.01(1) confirmed that it probably did apply as it operated in respect of all actions commenced on and after 3 September 2000 even if the notice was given earlier. If Mrs Mair had not settled her claim for her own injuries and had sued, Rule 6A would have applied if she had commenced her action on or after 3 September 2000, but it would not if she had instituted her action earlier. It seems likely that if her claim for her personal injuries had not been settled, it would have been included as part of the present joint action. In that event Rule 6A would have applied as the joint action was commenced on 10 December 2000. (It was conceded in argument that if Mrs Mair had brought a separate action for her personal injuries it would have been brought in the District Court.)
The relevant parts of Rule 6A are as follows:
“Notice Before Action
6A.01(1) Rule 6A applies to inter partes actions commenced on and after 3 September 2000 and to the exclusion of Rule 101.01(1)(b) in relation to those actions.
……
6A.02(1) At least 90 days before commencing an action the plaintiff is to post or send to the defendants at their last known address a notice of the proposed claim with sufficient detail so that the defendants have a reasonable opportunity to make an offer to settle the claim before it is commenced.
(2) Where the claim is for any unliquidated amount the notice is to state the sum which the plaintiff will accept in satisfaction of such unliquidated claim or why, with brief reasons, such sum cannot be stated.
6A.03 Where the plaintiff believes that an insurer is likely to indemnify any proposed defendant against the claim the notice under Rule 6A.02 is also to be sent to that insurer.
6A.04 Where the claim is supported by expert evidence the plaintiff is also to send to the defendants and the insurers copies of any relevant reports from any expert which are relied upon with the notice under Rule 6A.02 unless such reports have already been supplied.
6A.05 The Court may deprive a plaintiff who does not comply with Rule 6A of the whole or part of the costs of the action.
……
6A.07 In any order for the costs of the action the Court is to have regard to any failure of a defendant or insurer to make any, or a reasonable, response under Rule 6A.06 and it may as a result of it order costs as between solicitor and client to the plaintiff for the whole or part of the action.
……”
The contents of the Letter appear generally to fulfil a prospective plaintiff’s obligations under Rule 6A. There was no evidence about what, if any, response the defendant or her insurer made to the Letter except that a settlement was reached.
In the event Rule 6A had not applied, Rule 101.01(1) would have applied which provides:

“…… the Court may:
……
(b) in any action seeking damages for personal injury order that the plaintiff shall not recover costs or shall recover part only of the costs if the plaintiff has failed to submit, at least 90 days before the institution of the proceedings, to the defendant’s insurer, if he is aware of such insurer, or, if he is not so aware, to the defendant, a detailed claim in writing together with copies of supporting documents including medical reports which set out the nature and extent of the plaintiff’s injuries and residual disabilities as known to the plaintiff at that time.
……”

The important difference between this rule and Rule 6A is that this rule did not require a plaintiff to formulate a claim in monetary terms. The Letter fulfilled a prospective plaintiff’s obligations under Rule 101.01(1)(b). I will not further refer to the possibility that this was the applicable rule as the conclusions which I reach below about the Letter would also apply if Rule 101.01(1)(b) was the applicable rule.

The plaintiffs relied on s67C of the Evidence Act 1929 which provides:
“Division 8—Evidence of settlement negotiations
Exclusion of evidence of settlement negotiations
67C. (1) Subject to this section, evidence of a communication made in connection with an attempt to negotiate the settlement of a civil dispute, or of a document prepared in connection with such an attempt, is not admissible in any civil or criminal proceedings.
(2) Such evidence is, however, admissible if—
(a)     the parties to the dispute consent; or
(b)the substance of the evidence has been disclosed with the express or implied consent of the parties to the dispute; or
(c)the substance of the evidence has been partly disclosed with the express or implied consent of the parties to the dispute, and full disclosure of the evidence is reasonably necessary to—
(i)enable a proper understanding of the other evidence that has already been adduced; or
(ii)    avoid unfairness to any of the parties to the dispute; or
(d)the communication or document included a statement to the effect that it was not to be treated as confidential; or
(e)the proceeding in which the evidence is to be adduced is a proceeding to enforce an agreement for the settlement of the dispute or a proceeding in which the making of such an agreement is in issue; or
(f)the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute; or
(g)the making of the communication, or the preparation of the document, affects the rights of a party to the dispute; or
(h)the communication was made, or the document was prepared, in furtherance of—
(i)     the commission of a fraud or an offence; or
(ii)the doing of an act that renders a person liable to a civil penalty; or
(iii)   the abuse of a statutory power.
(3) Subsection (1) does not apply to parts of a document that do not concern attempts to negotiate a settlement of a dispute, if it would not be misleading to adduce evidence of only those parts of the document.”
Section 67C has made substantial changes to the old law on “without prejudice” privilege. The issue here for determination is whether s67C by its terms applies to make the Letter inadmissible. All I am determining is whether s67C applies to this particular Letter, and not whether it applies to all notices under Rule 6A. I now deal with the arguments put forward by the defendant’s counsel on why he submitted s67C did not make the Letter inadmissible.
The primary submission of the defendant was that s67C(1) should not be construed as applying to a notice before action and the formulation of a claim which were required by the Rules of Court. I do not agree. Section 67C(1) is only expressly made subject to the exceptions in its (2) and not to Rules of Court. If s67C(1) by its terms applies to make the Letter inadmissible that cannot be over-ridden by any Rule of Court which only has the force of subordinate legislation. The purpose of Rule 6A is to give defendants the opportunity to make realistic offers of settlement before they are subjected to defending court proceedings. The only sanctions for non compliance with Rule 6A are in the realm of costs. Non compliance with Rule 6A does not stop a plaintiff from pursuing litigation. Insofar as Rule 6A requires plaintiffs to disclose and formulate their claims it is only for the limited purpose of enabling defendants to assess what they should offer. If plaintiffs do not make complete or truthful disclosure about their claims in their Rule 6A notices that is only a relevant matter for the Court to take into account when deciding what costs should be ordered at the end of the litigation. The details to be included in the Rule 6A notice are not meant to be a quasi pleading of a plaintiff’s claim and, if the details are defective, plaintiffs are not to be subjected to the same consequences as they would have been if there were similar defects in their subsequent statements of claim. The whole pre-action procedure envisaged by Rule 6A would become far too cumbersome, protracted and expensive if plaintiffs had to put forward the equivalent of full statements of claim and affidavits of loss in complying with Rule 6A for fear that they might be cross examined at trials to their detriment because all the details of their claims had not been fully or properly set out in the Rule 6A notices.
I also do not accept the argument of the defendant’s counsel that the application of s67C to the Rule 6A notice would make it impossible for the Court to give effect to the Rule 6A notice. I deal below with how and when s67C(2)(g) makes a Rule 6A notice admissible.
The next argument of the defendant was that the Letter was admissible pursuant to s67C(2)(c) which provides:
“(2) Such evidence is, however, admissible if –
……
(c) the substance of the evidence has been partly disclosed with the express or implied consent of the parties to the dispute, and full disclosure of the evidence is reasonably necessary to –
(i)enable a proper understanding of the other evidence that has already been adduced; or
(ii)avoid unfairness to any of the parties to the dispute; or
……”
In her evidence-in-chief and cross examination Mrs Mair has given evidence about her own injuries and symptoms and the effect of those injuries and symptoms on her employment and life style. She has also given evidence on the effect of her husband’s injuries and symptoms on her employment and life style. Part of the Letter deals with these topics. The defendant’s counsel argued that this evidence had been partly disclosed by consent of the parties for the purposes of subsection (2)(c) and full disclosure by reference to the Letter was needed either properly to understand the evidence adduced and/or to avoid unfairness to the defendant. I do not agree. When referring to “the substance of the evidence” and “full disclosure of the evidence” subs (2)(c) is referring to “evidence of a communication made in connection with an attempt to negotiate the settlement of a civil dispute” as referred to in subs (1). It is not referring to the evidence of the circumstances of the dispute but evidence of the communication. A similar interpretation also applies in respect of subs (2)(b) and other subparagraphs of subsection (2). If subs (2)(c) meant that once some evidence of the matters in dispute had been given by consent then everything said about the matters in dispute in negotiations would become admissible provided either subparagraphs (i) or (ii) of subsection (2)(c) were satisfied, it would mean that parties to settlement negotiations would need to be very careful and circumspect about what was said and disclosed in negotiations and this would be likely to inhibit settlements. That is not the intention of s67C. Rather, in the light of the purpose of s67C, and in its context, subs (2)(c) means only that if part of the communication is put into evidence by consent then neither party can prevent the balance of the communication being put into evidence if subparagraphs (i) or (ii) are satisfied. (Subs (2)(c) was considered by the Full Court in Chapman v Allan (1999) 74 SASR 274, but the issue raised in this matter was not addressed there.)
Even if I am wrong about the limited application of subs (2)(c) I would not have found that subparagraphs (2)(c)(i) or (ii) were satisfied. The contents of the Letter would predominantly have gone to collateral issues of credit if it had been used in Mrs Mair’s cross examination. It had little, if any, direct bearing on her claim for loss of consortium.
The next submission of the defendant’s counsel was that the Letter was admissible under subs (2)(g) which provides:
“(g) the making of the communication, or the preparation of the document, affects the rights of a party to the dispute; or
……”
The argument was that the Letter affected the rights of the defendant because as its contents dealt with the claim for consortium and/or the credit of Mrs Mair on issues relating to Mr Mair’s claim it could assist the defendant in resisting those claims. While (g) is limited to the rights of a party to the dispute, here, fortuitously, the defendant was a party to the disputes concerning each of Mrs Mair and Mr Mair. Again I do not accept this argument. My interpretation of (g) is similar to that which I have placed above on (2)(c). Subs (g) operates on “the making” of the communication or “the preparation” of the document and it is that making or preparation which must affect the rights of a party and not merely the contents of the communication or of the document. If the defendant’s contention was correct, it would mean that everything said by a party in negotiations about the matters in dispute during the negotiations could be put to him or her in cross examination at a subsequent trial of the dispute where there had been any alleged inconsistency, omission or the like. Again this is quite contrary to the intent of s67C and Rule 6A in facilitating full and frank negotiations to maximise the possibility of settlements.
This construction of subs (g) is demonstrated by the application of s67C to notices under Rule 6A. Subsection (g) makes communications under Rule 6A admissible where the giving of a Rule 6A notice affects the rights of a party to the dispute. As mentioned above, Rule 6A only affects rights in relation to costs. Hence at the point in an action where a party seeks some costs order in his or her favour by reason of the operation of Rule 6A, but not otherwise, subs (g) operates to make the Rule 6A notice admissible because it is the fact of its making which then affects the right to costs. When subs (g) so operates, but only at that point, and only on that issue in the action, s67C(1) no longer bars the admissibility of the Rule 6A notice.
Although it was not referred to in argument there is some dicta of a single Judge of the Supreme Court which may favour the contention of the defendant on subs (g). In Hutchinson v Myer Stores Ltd (1995) 184 LSJS 398 there was an application to set aside a consent judgment based on the acceptance of a Rule 40 offer. It was alleged that the acceptance of the offer was a mistake based on a misapprehension about what had been said about what the settlement was to include at a without prejudice pre-trial conference held shortly before the offer was made. The plaintiff sought to tender affidavits on the application deposing to what had been said and done at the pre-trial conference. The defendant opposed their admissibility under s67C(1). Bollen J, inter alia, relied on subs (g) in making the affidavits admissible. He said at pp 404-5:
“The making of the affidavits with the information in them ‘affects the rights of’ the respondent. The respondent is affected by the negotiations which took place. The amount payable by it depends on the information in the affidavits. The affidavits are admissible. Nor could privilege be extended to the happenings and sayings at pre-trial conferences. To shut out the information would be contrary to justice. Here, in the events which have happened, a ‘higher policy interest’ (ie higher than ‘privilege’) demands the release of the information in the affidavits (see R v Bell, exparte Lees (1980) 146 CLR 141 per Gibbs J at 147, per Stephen J at 156 and per Wilson and Aickin JJ at 162). As I say, the affidavits were admissible.”
With respect, I consider that it is incorrect to categorise the affidavits as communications or documents referred to in subs (g). The affidavits were merely the means by which the oral communications which were otherwise subject to s67C(1) were being put before the Court. Insofar as it is dicta which is contrary to the interpretation of subsection (g) which I have put forward, I respectfully decline to apply it.
Counsel for the defendant also sought to make something of the fact that the Letter was not expressed to be “without prejudice” or the like. A major change made by s67C has been to do away with the artificial and technical effect of privilege possibly depending upon a notation of “without prejudice” or the like. Indeed, s67C(2)(d) seems to reverse the position: unless the document states that it is not to be treated as confidential then it is to be inadmissible.
Here the Letter was not compliance with Rule 6A for the purposes of Mrs Mair’s claim for loss of consortium. I do not know if there is another notice under Rule 6A which might deal with that claim. Paragraph 11 of the statement of claim refers to a Rule 6A notice apparently in respect of the joint action which is not the Letter. The Letter is not a Rule 6A notice for the present action, but apparently one for a separate claim which was settled before any action was commenced in respect of it. In State Bank of SA v Smoothdale (No 2) Ltd, (1995) 184 LSJS 254 at 260 et seq the Full Court held that the operation of s67C(1) did not extend beyond the settlement of the dispute which was the subject of the negotiations. A new subsection (e) was subsequently introduced into s67C(2) which appears to have reversed the reasoning upon which that decision was based. (See Hansard, House of Assembly, 26 March 1996, p 1,237.) Thus the settlement of Mrs Mair’s personal claim does not affect admissibility of the Letter.
For these reasons I ruled that the Letter was inadmissible.

[2003] SADC 164

20 November 2003