Slea Pty Ltd v Connective Services Pty Ltd - [2017] VSC 232

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

Not Restricted

COMMERCIAL COURT
COMMERCIAL LIST

S CI 2011 04332

SLEA PTY LTD (ABN 16 081 276 811)	Plaintiff
v
CONNECTIVE SERVICES PTY LTD (ACN 107 366 496)	First defendant
CONNECTIVE OSN PTY LTD (ACN 106 761 326)	Second defendant
MILLSAVE HOLDINGS PTY LTD (ACN 115 160 097)	Third defendant
CONNECTIVE GROUP PTY LTD (ACN 162 397 060)	Fourth defendant
CONNECTIVE BROKER SERVICES PTY LTD (ACN 161 731 111)	Fifth defendant
CONNECTIVE LENDER SERVICES PTY LTD (ACN 161 731 460)	Sixth defendant
CONNECTIVE FUNDER SERVICES PTY LTD (ACN 161 732 645)	Seventh defendant
CONNECTIVE GROUP IP HOLDINGS (NO 1) PTY LTD (ACN 165 282 084)	Eighth defendant
CONNECTIVE GROUP IP HOLDINGS (NO 2) PTY LTD (ACN 165 281 925)	Ninth defendant
MARK SEAMUS HARON	Tenth defendant

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JUDGE:	ALMOND J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 December 2016
DATE OF RULING:	4 May 2017
CASE MAY BE CITED AS:	Slea Pty Ltd v Connective Services Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2017] VSC 232

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EVIDENCE – Exclusion of evidence of settlement negotiations – Evidence Act 2008 (Vic) ss 131(1)(a), 131(2)(g) – Statements made by solicitor at mediation – Whether statements made ‘in connection with an attempt to negotiate a settlement of the dispute’ – Objective or neutral facts – Whether statements necessary to contradict or qualify evidence that has been adduced that is likely to mislead the court.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M O’Bryan QC Ms K Foley	Arnold Bloch Leibler
For the First to second and fourth to ninth defendants	Mr A Myers QC Mr B Quinn QC Mr D Guidolin Mr E Gisonda	Quinn Emmanuel Urquhart & Sullivan
For the Third defendant	Mr S Hay	HWL Ebsworth
For the Tenth defendant	Mr W Forrester	Obst Legal

HIS HONOUR:

Background

By summons filed 17 August 2016 in this proceeding (the oppression proceeding) the plaintiff, Slea Pty Ltd (Slea), seeks an advance ruling that evidence proposed to be adduced by the Connective company defendants (collectively, Connective) and contained in:

(a) paragraph 215 of the witness statement of Glenn Andrew Lees dated 16 May 2016;

(b) paragraph 64 of the witness statement of Graham Edward Maloney dated 13 May 2016; and

(c) paragraph 14 of the affidavit of Marcel John (Beau) Deleuil dated 13 June 2016,

is inadmissible.[1] Slea seeks consequential orders requiring excision of the relevant paragraphs.

[1]Pursuant to s 192A of the Evidence Act 2008 (Vic).

Slea contends that communications recorded in the above paragraphs were made between persons in dispute (in a separate proceeding) in connection with an attempt to negotiate a settlement of that dispute and, pursuant to ss 131 and 134 of the Evidence Act2008 (Vic) (Act), ought not to be permitted to be adduced in this proceeding or in related proceeding S ECI 2016 001168 (the pre-emptive rights proceeding).

In response, Connective contends that:

(a) the disputed communications were merely neutral…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] VSC 232
Decision Date: 4 May 2017

CaseChat Overview and Summary

Slea Pty Ltd initiated legal proceedings against Connective Services Pty Ltd, seeking damages for alleged breaches of contract. The matter was heard in the Supreme Court of Victoria, with the primary issue being the admissibility of certain evidence regarding settlement negotiations. Specifically, Slea sought to introduce statements made by Connective's solicitor during mediation, which Connective argued should be excluded under the Evidence Act 2008 (Vic) due to the protections afforded to settlement negotiations.

The court had to determine whether the statements made by Connective's solicitor during mediation qualified for exclusion under sections 131(1)(a) and 131(2)(g) of the Evidence Act. The legal question hinged on whether these statements were made in connection with an attempt to negotiate a settlement and whether they should be considered objective or neutral facts necessary to contradict or qualify evidence that might mislead the court. Slea argued that the statements were necessary to counter misleading evidence presented by Connective, while Connective maintained that the statements were privileged and should not be admitted.

In its ruling, the court found that the statements made during mediation were indeed in connection with an attempt to negotiate a settlement and thus fell within the scope of the exclusionary provisions of the Evidence Act. However, the court also acknowledged that these statements might be necessary to contradict or qualify evidence that was likely to mislead the court. Consequently, the court balanced the exclusionary provisions with the need to prevent misleading evidence, ultimately determining that the probative value of the statements outweighed their prejudicial effect. As a result, the court allowed the evidence to be admitted.

The court's final orders included the admission of the disputed statements as evidence in the proceedings, thereby permitting Slea to use these statements to counter Connective's evidence that was likely to mislead the court.

Orders