Chief Justice, distinguished guests, ladies and gentlemen.
I am delighted to be here, contributing to “Hot Topics in the Tropics” at the North Queensland Law Association Conference. I am not sure how “hot” my topic is but it is “topical”, and I do wish to discuss a case that derives from Queensland, namely State of Queensland v JL Holdings (1997) 189 CLR 146. I have entitled my topic “The Attainment of Justice – with Particular Emphasis on the Federal Court”, although I am afraid that is in an attempt to try to stimulate your immediate interest – later I will be talking about discovery.
It has always been the object of the judicial system to obtain justice, in whatever form might be appropriate in the circumstances. The method employed to achieve justice has varied greatly throughout history, and between empires and countries. Different eras and jurisdictions have favoured the use variously of, for example, judges, or juries, or even the invocation of God.
There has not always been, of course, court rules with page after page of reference to pleadings, notices to produce, discovery rules and interrogatories. Indeed, there are still jurisdictions without such regulated procedures or equivalent concepts. So who has got it right? Are we more able in Australia in 2008 to deliver justice by virtue of the myriad of procedural rules than in times past or in jurisdictions with less complex procedure? Many would argue not necessarily; that the existing procedures, and even case management, for the sake of it, are not achieving the purpose they were designed for.
Most now accept that a procedural Rolls Royce is not the best approach to every case. The next question is what aspects of procedure are not pulling their weight, and in what circumstances? After answering this question, we then become equipped to ask how some reform might be made.
First, let us look at another, older, approach to justice – one with far fewer procedural rules.
In the middle ages, the notion of trial by ordeal was considered the method du jour of establishing guilt. It was a practice held in high esteem. Usually, under trial by ordeal, the guilt or innocence of the accused was determined by subjecting them to a painful task. If either the task was completed without injury, or the injuries sustained were healed quickly, the accused was considered innocent. In medieval Europe, like trial by combat, it was considered a judicium Dei: a procedure based on the premise that God would help the innocent by performing a miracle on their behalf. These days of course, it is lawyers who must perform the miracles.
In Europe, ordeals commonly required an accused person to test himself or herself against fire or water, though the precise nature of the proof varied considerably at different times and places. Fire was the element typically used to test noble defendants, while water was more commonly used by lesser folk.
In 12th Century Catholic churches the priest would demand a suspect to place his hand in the boiling water. If, after three days, God had not healed his wounds, the suspect was guilty of said crimes.
There was also the ordeal by cold water. This involved variously being submerged in a stream with a subsequent acquittal if you survived, or being submerged in a barrel three times, being considered guilty if you sink to the bottom.
This ordeal became also associated with the witch-hunts of the 16th and 17th centuries. Some argued that witches floated because they had renounced baptism when entering the Devil's service. Some claimed that they were supernaturally light, and recommended weighing them as an alternative to dunking them.
Women accused of being witches were often thrown into deep water with a millstone round her neck. It was thought that the guilty would sink. This method of course achieved a 100% success rate from the prosecutor’s point of view.
In Monty Python and the Holy Grail (and I’m working from the authorised version here), a crowd of medieval villagers bring a woman to Sir Bedevere, accusing her of witchcraft. The villagers admit that they gave her a fake nose and had dressed her up to appear more like a witch. Sir Bedevere, not fully convinced, proposes a non sequitur test to determine whether or not she is a witch: witches burn, and so does wood, so witches are made of wood; wood floats on water, and so do ducks, therefore, if she weighs as much as a duck, she is a witch. She does, and is carried off by the villagers to be burned, adding, "It's fair cop"—that is, that she was rightly accused and properly tried.
These glimpses into the history of trials show us how the acceptance of different modes of and procedures at trial change over a period of time. Each considered “the” preferred way to proceed. I would like to return to civil procedures and the present day.
We have a long history of court procedure which underpins the civil litigation process in Australia, with many aspects including pleadings, discovery, and the giving of evidence being well known even amongst non-lawyers. But the extent to which such procedures are necessary to obtain justice, itself a subjective term, is an area of disagreement by practitioners and judicial officers alike. Particularly in the light of some of the more complex and lengthy cases of late, it is arguable that a certain level of the process leading up to trial is unnecessary and perhaps, positively harmful to the attainment of justice. Do we need to completely re-think the “ordeal” of the civil trial we put litigants through in an attempt to achieve justice?
The purpose of my presentation today is to identify some tension in the use of case management principles and to talk about the relatively recent development of doing away with pleadings and limiting discovery in the Fast Track list in the Federal Court. Necessarily, I can only touch upon these aspects for the purposes of promoting discussion.
Let me start with a discussion of a case which will likely be familiar to many of you: State of Queensland v JL Holdings (1997) 189 CLR 146. In that case, the parties were engaged in a long running commercial dispute in the Federal Court concerning a lease to develop certain land. The estimated length of the trial was four months. After a number of interlocutory hearings and several amendments to the defence, the defendants applied again to amend their defence. All but one of their amendments were allowed. The judge (Kiefel J) refused leave to add a defence which, though arguable, was likely to result in the vacation of the date which had been fixed for the trial six months ahead. The judge considered that maintaining that date was a more pressing consideration than a party’s right to present a further defence. After being upheld by the Full Court on appeal, the trial judge’s decision was then overturned by the High Court, which held that, while case management principles were a relevant consideration, they could not be used to prevent a party from litigating an issue which was fairly arguable. A party should be permitted to raise an arguable defence provided any prejudice to other parties could be compensated by costs.
Justices Dawson, Gaudron and McHugh referred to several cases relied upon by the Full Court, including a comment by Bowen CJ in Cropper v Smith (1884) 26 Ch D 700 at 710, that:
… it is a well established principle that the object of courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. … I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace.
The Federal Court decision in Clough and Rogers v Frog (1974) 48 ALJR 481 was also referred to, where applications for leave to amend the defences in two actions by adding a new defence had been refused. The actions had been commenced more than five years previously and the applications were made two days before the actions were listed for hearing. The Court stated that:
As the defence, if established, would be a complete answer in either action, the amendments sought should have been allowed unless it appeared that injustice would thereby have been occasioned to the respondent, there being nothing to suggest fraud or improper concealment of the defence on the part of the appellants.
Justices Dawson, Gaudron and McHugh then referred to a contrary stance espoused in Sali v SPC (1993) 67 ALRJ 841, where it was stated by Toohey and Gaudron JJ (at 849) that:
The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard.
… the matters referred to by the primary judge were insufficient to justify her Honour’s refusal of the application by the applicants to amend their defence and nothing has been made to appear before us which would otherwise support that refusal. Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion.
It must be said that the decision in JL Holdings is not without its critics, one of whom occupies chambers two doors down from mine. Late last year, in Black and Decker Australasia v GMCA  FCA 1623, Finkelstein J was dealing with a situation where the respondent sought leave to file two affidavits out of time which were contended to be by way of reply. His Honour stated that:
It is common for parties to do little more than pay lip service to timetables fixed to regulate when steps should be taken to get a case on for trial. Seemingly it makes no difference whether the timetable is fixed with the consent of the parties or following argument. The view that has taken hold in many quarters is that a party is only required to keep an eye on the timetable and, if it cannot be met, it will be extended. The assumption is that the wronged party will be fully compensated by an award of costs. The assumption may be true in some cases. But often it is not true when it comes to commercial parties involved in a commercial dispute. Those parties do incur losses resulting from delay that can never be compensated by a costs order. For one thing the costs are often not capable of being calculated. For another thing the costs are not only directly pecuniary. Take, for example, the cost that results from diversion of management time away from the firm’s business and to the litigation. This should not be, but more often than not is, overlooked. There is also the opportunity cost of a dispute remaining unresolved. Every businessman knows that firms are often inhibited from taking action until the court determines whether the action is lawful. Ultimate success in the dispute will not undo the loss incurred in the past. Finally there is the ever growing discrepancy between the costs recovered pursuant to a costs order and a party’s actual out of pocket expenses. Nowadays the party that obtains a costs order is lucky to get back 50% of its actual costs.
His Honour described the JL Holdings decision as having a ‘chilling effect’ and that it had been applied in ‘many cases where a simple costs order will not do justice between the parties’. Justice Finkelstein went on to say that:
It is time that this approach is revisited, especially when the case involves significant commercial litigation. One of the primary objects of a commercial court is to bring the litigants’ dispute on for trial as soon as can reasonably and fairly be done. If, in some instances, the preparation of the case is not perfect so be it. A case that is reasonably well prepared is just as likely to be decided correctly as a perfectly prepared case.
I am of the firm view that parties should not be treated as leniently as they have been in the past. Commercial parties expect this approach from the courts and their expectation should be met. A useful rule to adopt is to allow an extension only if the failure to meet the existing timetable is the result of excusable non-compliance. In deciding whether there is excusable non-compliance the court should take into account, among other factors: (a) the direct and indirect prejudice to the opposing party; (b) the impact of the delay on the proceedings; (c) the reasons for the delay; (d) good faith or lack of good faith on the part of the party seeking to be excused; and (e) the effect of putting off a trial both on other litigants and generally on the court’s ability to efficiently manage its cases.….
Not all Federal Court judges would agree with his Honour’s view however. Last month, Logan J commented that: