Sexual abuse victim successfully defends defamation case: Useful English case

A significant defamation case has recently been decided in England, Hay v Cresswell [2023] EWHC 882 (KB), which was handed down on 26 April 2023.

The case is likely to be persuasive in Australian courts, in many respects, including findings in relation to the credibility of the Defendant.

The case involved a sexual abuse victim, Nina Cresswell, who successfully defended a libel claim brought by the perpetrator, William Hay.

This case is noteworthy as it is the first reported case where a sexual abuse survivor naming their perpetrator has successfully relied on the public interest defence under section 4 of the Defamation Act 2013 (England and Wales).

Ms. Cresswell had met Mr. Hay in 2010, after which he sexually assaulted her.

The assault was reported to the police, but they did not treat her complaint as a crime, and so Mr. Hay was never arrested or charged.

A decade later, Ms. Cresswell decided to name him publicly in a blog, an email, and in social media posts, after which Mr. Hay sued her for libel.

The court held that the single meaning of the five publications by Ms. Cresswell was that Mr. Hay had violently sexually assaulted her. While there was limited evidence before the court, it found Ms. Cresswell's evidence more persuasive than Mr. Hay's, thus establishing the substantial truth of the allegations.

The court also noted that the public interest defence was applicable in this case.

The judge considered Ms. Cresswell's publications to be on a matter of public interest, and her belief that her publications were in the public interest was found to be reasonable given the circumstances​​.

However, this ruling does not provide a carte blanche for survivors to name perpetrators.

The primary question considered by the judge was one of truth versus falsity, and Ms. Cresswell still needed to be able to prove the truth of the allegation to the civil standard (balance of probabilities). If her allegation had been found to be deliberately false, her public interest defence would have failed​.

At [20] the Judge stated:

For the avoidance of doubt, I indicate that if I had concluded that the defendant's allegation was a deliberately false one (contrary to my primary finding above), I would not have found that she believed that publishing the statements in question was in the public interest or that such a belief, if it existed, was reasonably held.

The Judge, in this case, expressed some concerns about certain aspects of the Defendant's evidence:

1. The Judge did not accept the Defendant's claim that she had identified Mr. Hay to the Northumbria Police officers as her assailant on the morning of May 28, 2010, or that she had mentioned specific physical characteristics like tattoos or a septum ring. The Judge felt that even though the police investigation was superficial and inadequate, it was unlikely that the officers would have overlooked such details if they had been provided.

2. The Judge also questioned the Defendant's account that the police officers told her they had seen CCTV footage of her leaving the nightclub alone and wearing a leather jacket. The Defendant suggested that this was a further indication of the police investigation's deficiency, as she had left her jacket in the nightclub. However, the Judge found no reference to the police attending the nightclub in the incident log and doubted that the officers would have had the time to do so, isolate the relevant footage, and identify her in it. The Judge concluded that this aspect of the Defendant's account seemed aimed at bolstering her criticism of the police's response.

Despite these concerns, the Judge ultimately did not doubt the honesty of the Defendant's account in its essential aspects, which was supported by other evidence. The Judge recognized that an otherwise honest witness might be tempted to embellish their case, particularly in areas where they feel vulnerable. The Judge concluded that this is what had happened in this case.

The judgment shows that civil courts will not shy away from findings of truth even in the absence of a criminal investigation, caution, or conviction.

When to determine the "Serious Harm Element" in Defamation Cases: A potential issue in the Federal Court of Australia

An increasing number of defamation cases are being prosecuted in the Federal Court of Australia.

In this blog post, I look at a recent decision (9 May 2023) in which the Federal Court considered when, during the course of a case, the serious harm element should be considered and determined. The case of Selkirk v Hocking [2023] FCA 432 gives us an interesting perspective on the matter.

What is the Serious Harm Element?

In Victoria, the serious harm element arose from amendments made to the Defamation Act 2005 (Vic) (Defamation Act) in 2020. It introduced the “serious harm element” as a necessary factor in a defamation cause of action. (note: this factor is yet to apply in Western Australia).

Timing of Serious Harm Element

The fifth and sixth respondents in this case applied for the serious harm element to be determined before the trial commenced, as provided under s 10A(4) of the Defamation Act.

The Defamation Act's sub-sections 10A(1), (5) and (6) provide that a judicial officer should determine the serious harm element as soon as practicable before the trial unless there are special circumstances justifying postponement.

The factors that a judicial officer may consider when deciding on the presence of special circumstances include the:

• cost implications for the parties,

• resources available to the court, and

• extent to which establishing the serious harm element is linked to other issues determined during the trial.

Does this section apply to the Federal Court?

In Selkirk v Hocking, the court considered a complex jurisdictional issue.

This was whether ss 10A(5) and (6) of the Defamation Act are picked up by s 79(1) of the Judiciary Act 1903 (Cth).

This question arises because:

• once federal jurisdiction is engaged, as per Rana v Google Inc (2017) 254 FCR 1 at 7, the entire matter falls within the federal jurisdiction, and there's no concurrent federal and State jurisdiction being exercised;

• the court also needed to determine how the Defamation Act, as a state statutory law, applies in the exercise of federal jurisdiction (see Solomons v District Court (NSW) (2002) 211 CLR 119 at 134 [21]);

• section 79(1) of the Judiciary Act states that each State or Territory's laws, including those relating to procedure, evidence, and the competency of witnesses, should be binding on all Courts exercising federal jurisdiction, unless otherwise provided by the Constitution or Commonwealth laws.

A potential roadblock in the application of ss 10A(5) and (6) of the Defamation Act emerged concerning the Federal Court Act's ss 37M, 37N, and 37P, which define overarching purpose of civil practice and procedure provisions, require parties to act consistently with the overarching purpose, and grant the Court power to give directions about practice and procedure in a civil proceeding, respectively.

That is:

• is there an inconsistency between the Defamation Act and the Federal Court Act in relation to the timing of when the serious harm element is determined?

• it might be inconsistent with the “overarching purpose of civil practice” provisions of the Federal Court Act to, in effect, abide by what the Defamation Act says in relation to the timing of when the serious harm element gets dealt with during the course of a case.

The Judge stated at [41]:

The courts have long warned of the potential perils of hearing separate trials of issues. In Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at 55 [168]–[170], for example, Kirby and Callinan JJ said:

… The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap.

The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court’s, rather than the parties’, interests.

Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question.

How the Judge decided to deal with the application

The court decided to treat the application as brought under s 37P of the Federal Court Act and r 30.01 of the Federal Court Rules, and to order that the following questions be heard separately:

1. Whether the article conveyed one or more of the defamatory imputations alleged;

2. The extent of publication of the article; and

3. Whether, in light of the answers to (1) and (2), publication of defamatory matter about the applicant caused, or is likely to cause, serious harm to her reputation.

This approach, as noted by Sweeney J in TVW Enterprises Ltd v Duffy (No 3) (1985) 8 FCR 93 at 95, may determine the outcome of the proceeding and save the parties the expense of a trial on all issues. The advantages of ordering such questions separately are, as Sweeney J notes, "plain".

In the circumstances of Selkirk v Hocking, where the article was allegedly published to no more than three persons, and where the applicant has arguably agreed to having engaged in the same conduct that the article subjects her to, hearing these questions separately could be particularly beneficial.

Do sub-sections 10A(1), (5) and (6) of the Defamation Act apply in the Federal Court?

The Court in Selkirk v Hocking did not conclusively determine whether the application of ss 10A(5) and (6) of the Defamation Act gives rise to any potential statutory inconsistency standing in the way of the operation of s 79 of the Judiciary Act.

This issue was deemed sufficiently unclear that the Court decided not to resolve it at the time, opting instead for a case management hearing to be convened for further directions or orders.

"Plan Continuation Bias": A template letter to provide clients

Plan Continuation Bias is a cognitive bias, a psychological phenomenon that impacts our decision-making process.

It is the inherent tendency to continue with an initial plan or strategy, even in the face of new information or changing circumstances that suggest the plan may no longer be the best course of action.

This bias has been observed in numerous fields, from aviation and healthcare to finance and law, and it can significantly impact the outcomes of our decisions.

In its essence, Plan Continuation Bias is about being overly committed to an initial plan, to the extent that it can lead to ignoring important new information or overlooking better options.

It is fueled by a human preference for consistency and a resistance to change, especially when we have invested time, energy, and resources into a particular plan or strategy.

The origins of Plan Continuation Bias lie in our brain's natural desire for cognitive ease. Our brains favour routines and predictability as they help us navigate the world efficiently.

However, this efficiency can become a liability when the circumstances change, and our brains, favouring the initial plan, may fail to adapt quickly enough.

There are a number of reasons why people might fall victim to plan continuation bias, including:

1. It can be difficult to admit that we were wrong or that our original plan was not the best one.

2. We may have already invested a lot of time, effort, or money into the plan, and we don't want to give up on it now.

3. We may simply be afraid of change or the unknown.

In the context of legal proceedings, Plan Continuation Bias can become particularly problematic.

Lawyers and their clients might become overly committed to an initial legal strategy, finding it difficult to pivot or adapt when new evidence is introduced or when the landscape of the case changes. This can lead to missed opportunities for negotiation, settlement, or other advantageous pathways.

Understanding and recognizing Plan Continuation Bias can help us make better decisions, particularly in complex and dynamic situations such as legal cases. It encourages us to remain flexible, to regularly reassess our strategies, and to remain open to new information and perspectives.

The following template letter, designed for use at the beginning of a legal retainer, outlines the concept of Plan Continuation Bias and suggests ways in which lawyers and clients can work together to mitigate its potential impact on their case.

By being aware of this bias, we can strive to make the most effective decisions, always keeping the client's best interests at the forefront.

Template letter

Dear [Client's Name],

I am writing to you at the onset of your retainer of my law practice, to discuss a common cognitive phenomenon which impacts the decision-making process during the course of legal cases: Plan Continuation Bias.

Plan Continuation Bias is a cognitive bias that has been recognised across multiple disciplines, including psychology and behavioural economics.

It is the tendency for individuals or groups to continue with a set plan or course of action, even when new information or changed circumstances suggest that the original plan is no longer optimal or even viable.

This bias can emerge in any decision-making context, including in legal proceedings.

In the legal arena, Plan Continuation Bias may manifest in various ways. For example, we may become attached to our initial legal strategy and find it challenging to adapt when new evidence arises or circumstances change. In the context of settlement negotiations, we may become entrenched in our initial expectations about what a fair settlement would look like and could overlook potentially beneficial opportunities for compromise.

As we embark on this journey together, it is crucial that we are aware of and actively work to counteract Plan Continuation Bias. Here are a few steps we can take:

1. Embrace Flexibility: Let's remain open to reconsidering our strategy as the case progresses. While it is important to have a plan, we should not become so attached to it that we overlook better options or fail to adapt to changing circumstances.

2. Regular Reassessment: Throughout the case, let's make it a point to reassess our strategic decisions at regular intervals. This will ensure that we are not blindly following a preset plan and are incorporating new information as it becomes available.

3. Open Communication: Always feel free to share your thoughts, concerns, and new information you may come across. Open and honest communication can help us avoid becoming too anchored to our initial expectations.

4. Objective Analysis: We will make every effort to objectively analyze the strengths and weaknesses of our case, as well as the risks and benefits associated with various strategies. This includes regularly reassessing our position in any settlement negotiations.

5. Engage in "Devil's Advocacy": Occasionally, we will need to play the "devil's advocate" to challenge our assumptions and explore different perspectives. This can help us avoid falling into the trap of Plan Continuation Bias.

Our shared goal is to ensure the best possible outcome for your case. I believe that by being aware of, and actively working to mitigate, Plan Continuation Bias, we can make more effective decisions that align with this goal. I look forward to our collaboration in this endeavour.

If you have any questions or require further clarification on this or any other aspect of your case, please do not hesitate to let me know.

Best regards,

[Lawyer]

Navigating Uncertainty: The Role of Computational Irreducibility in Legal Practice

• This article explores the concept of "computational irreducibility" and its impact on legal practice.

• It draws parallels between legal cases and complex systems like chess, where outcomes are difficult to predict.

• It emphasises the importance of flexibility and preparedness in legal strategies due to inherent unpredictability.

"Computational irreducibility" is a concept from the field of cellular automata and more broadly from the study of complex systems, first introduced by scientist Stephen Wolfram in his book "A New Kind of Science."

In essence:

• Computational irreducibility suggests that for some processes, the only way to know the outcome is to perform the computation itself – there are no "shortcuts" or simpler ways to predict the result.

• This is in contrast to "computational reducibility," where one can predict outcomes without having to simulate or perform the entire process.

• In certain systems, despite knowing all the rules and initial conditions, the only way to predict the final outcome is to actually carry out the entire process. There's no shortcut, no formula that can give you the answer without going through each step.

For example, in a game of chess, despite the game's rules being quite simple, the number of potential games is SO LARGE, that there's no feasible way to predict the outcome of a game without actually playing it out – each game of chess is computationally irreducible.

The number of possible chess games is so large that it is difficult to comprehend. It has been estimated that there are more possible chess games than there are atoms in the universe. This is because there are so many different ways that the pieces can be moved and so many different possible outcomes.

There are 16 possible moves for the first move in chess. After the first move, there are 32 possible moves for the second move, and so on. This means that there are 16 * 32 * 32 * ... * 32 = 10^43 possible chess games after 64 moves!

I’ve been thinking about this concept "computational irreducibility" for years, and I began thinking about it again after seeing this YouTube video of a conversation between Lex Fridman and Stephen Wolfram:

Life in an illusion: The fabric of reality is constantly being rewritten | Stephen Wolfram

The whole clip is fascinating and worth watching (many times).

At 3:28 mins, Stephen Wolfram says:

… where everything in the world is full of computational irreducibility we never know what's going to happen next the only way we can figure out what's going to happen next is just let the system run and see what happens …

The concept of computational irreducibility has significant implications in fields like physics, computer science, and philosophy. For instance, if the universe is computationally irreducible, as Wolfram suggests, then it means that even with a complete understanding of physical laws, there may be no way to predict certain phenomena without simulating the entire history of the universe up to that point.

The concepts also applies in other, less scientific-based fields.

For me, the idea rings true in the legal profession.

When a client approaches us at the outset of a legal dispute, they often seek reassurance and clarity about how the case might unfold.

While we can provide them with our insights based on our experience and understanding of the law, the reality is that each legal case is a complex system, much like a game of chess.

We're dealing with a myriad of variables - evolving evidence, human emotions, changing laws, judicial discretion, and so much more.

This mindset becomes increasingly relevant as the world becomes more complex.

It's tempting to think that with enough expertise, we can predict the outcome of a case before it reaches trial. However, the concept of computational irreducibility reminds us that the only surefire way to see the result is to go through the process itself - every negotiation, every application, every piece of discovery, every testimony.

This doesn't mean we can't provide valuable advice or make educated predictions.

What it does highlight is the importance of preparing for a range of potential outcomes and staying agile in our strategies.

In the world of law, as in complex computational systems, “sometimes the journey is the only way to the destination” (Ralph Waldo Emerson).

Pre-Action Discovery in Defamation Cases: An Overview

When confronted with a potential defamation action, a critical stage that can significantly shape the trajectory of the case is pre-action discovery.

This process can involve obtaining relevant documents from the potential defendant, before formal proceedings are initiated.

It helps the plaintiff ascertain if there is a viable cause of action to pursue.

However, navigating the legal intricacies surrounding pre-action discovery in defamation cases can be challenging.

The Purpose of Pre-Action Discovery

The primary purpose of pre-action discovery is to assist a potential plaintiff who believes they may have a cause of action, but lacks specific details or evidence to substantiate their claim.

It can be particularly useful in defamation cases, where certain details may only be accessible to the potential defendant.

The Legal Framework

The Rules of the Supreme Court 1971 (WA) (RSC), specifically Order 26A rule 4, governs pre-action discovery in Western Australia for documents in the “custody, power or possession” of a potential defendant.

This rule provides that pre-action discovery can be ordered if the court is satisfied that the applicant may have a right to obtain relief from the court against a person, but can't ascertain certain details to initiate a proceeding.

Threshold for Pre-Action Discovery

The threshold for pre-action discovery is set high to prevent abuse of process.

As established in the case of Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14, the applicant must show they may have a right to relief, not merely a suspicion or speculative claim.

The test is an objective one and requires more than a mere assertion, conjecture, or suspicion.

Case Law Guidance

Several key cases provide further guidance.

In Waller v Waller [2009] WASCA 61, it was held that there must be some tangible backing or objective foundation that takes the existence of the cause of action beyond a mere allegation, suspicion or assertion. The applicant 'must demonstrate more than mere assertion, conjecture or suspicion, but does not have to positively establish the existence of a cause of action. What the applicant must produce is evidence showing that he, she or it may have a cause of action'.

In McCarthy v Dolpag Pty Ltd [2000] WASCA 106, it was emphasised that being wrongly subjected to an order for pre-action discovery can be a serious invasion of privacy.

In Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14 it was held there must be evidence objectively indicating - beyond the mere assertion, conjecture or suspicion of the applicant - that all facts necessary to give rise to a right to curial relief may be able to be established.

Balancing Act

Courts have to perform a delicate balancing act in pre-action discovery applications.

They must weigh the potential invasion of privacy and the oppressive nature of the order against the applicant's need for information to substantiate their claim.

As such, courts exercise caution and restraint in ordering pre-action discovery.

A Closer Look: BWS v ARV (No 2) [2021] WASCA 62

In BWS v ARV (No 2) [2021] WASCA 62, the plaintiff provided several pieces of evidence to substantiate their claim that they might have a substantive case against the defendant. These included details about their relationship with the potential defendant, the nature of alleged defamatory statements, and the reasoning behind their belief that the potential defendant was the source of these statements.

The parties were formerly married and had been involved in acrimonious proceedings in the Family Court of Western Australia (paragraph 5). The plaintiff was also engaged in separate proceedings before the Islamic Religious Council of Singapore (IRCS) involving a trust dispute (paragraph 5).

The plaintiff provided evidence of specific statements made in the IRCS proceedings that they considered to be defamatory and damaging to their personal life and affairs (paragraph 7). These included allegations about the plaintiff's religious practice, responsibilities as a parent, professional conduct, and personal and financial management.

The plaintiff believed that these defamatory statements were based on comments made by the potential defendant to one or more of the other parties in the IRCS proceedings (paragraph 8). The plaintiff's affidavit detailed the reasons for this belief, including their previous marital relationship with the potential defendant and the lack of other potential sources for the information contained in the defamatory statements (paragraph 9).

The court noted that while the plaintiff was able to present a logically consistent argument supporting their belief that the potential defendant had provided the defamatory information to the other parties (paragraph 44), the evidence did not go beyond this belief to directly establish the nature and content of the alleged communications between the potential defendant and these parties (paragraph 51).

This left the court to consider whether the plaintiff's belief that the potential defendant may have published defamatory statements about them was sufficient to satisfy the jurisdictional requirement under Order 26A rule 4(1) of the Rules of the Supreme Court 1971 (WA) that the plaintiff may have a cause of action against the potential defendant (paragraph 52).

The court concluded that the plaintiff’s belief, while logically consistent, did not meet the threshold for pre-action discovery as set out in the Rules of the Supreme Court and interpreted in case law. The plaintiff was not able to provide the necessary evidence of the nature and content of the alleged communications between the defendant and the other parties in the IRCS proceedings. Therefore, the court determined that the plaintiff’s belief alone was not enough to establish that they may have a cause of action against the appellant for defamation.

Key Take-Aways

• Pre-action discovery can be a potent tool for potential plaintiffs in defamation cases. However, the need to protect individuals from unnecessary invasion of privacy means the threshold for obtaining such orders is high.

• Familiarity with the rules and case law governing pre-action discovery can ensure a more strategic approach to potential defamation actions.

Cases mentioned in this blog post:

• BWS v ARV (No 2) [2021] WASCA 62

• Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14

• Waller v Waller [2009] WASCA 61

• McCarthy v Dolpag Pty Ltd [2000] WASCA 106

When do Court's Grant Leave to Commence an Action Against a Company Under External Administration?

The insolvency landscape is fraught with complexity, especially when one seeks to initiate a lawsuit against a company in external voluntary administration.

In this blog post, I explain the circumstances under which courts grant leave to commence an action against such a company.

The analysis hinges upon a recent Western Australian Supreme Court decision, "Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147", and several other relevant cases and legislative references.

Corporations Act 2001 (Cth) - Section 500(2)

Section 500(2) of the Corporations Act 2001 (Cth) stipulates that after the resolution for voluntary winding up, no civil proceeding can be commenced or continued against the company without the court's leave.

This measure aims to prevent a company in liquidation from being overwhelmed by multiple time-consuming and expensive actions (Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314; Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550).

The Court's Discretion

The discretion to grant or refuse leave under these circumstances is broad, and it is not feasible to outline all relevant considerations exhaustively.

However, the amount, seriousness, and nature of the claim, the degree of complexity of legal and factual issues, and the stage at which the proceedings have reached all play crucial roles (Re Gordon Grant; Viscariello v Bernsteen Pty Ltd (in liq) [2004] SASC 266).

Prejudice to Creditors

A critical principle is that the action should not prejudice the creditors or hamper the orderly winding up of the company. It is often said that there must be no such prejudice before the action is allowed to proceed (Re Gordon Grant and Grant Pty Ltd (in liq) (1982) 6 ACLR 727; Re Sydney Formworks Pty Ltd (in liq) [1965] NSWR 646).

Insurance and Asset Considerations

The court is less likely to grant leave if there is no prospect of surplus assets in the company and no question of insurance (Re AJ Benjamin Ltd (in liq) [1969] 2 NSWR 374). However, if an insurer stands behind the company in liquidation and is prepared to pay the amount of any judgment awarded, that factor strongly favours the grant of leave (Lawless v Mackendrick [No 2] [2008] WASC 15).

Demonstrating a Serious Question

A claimant seeking leave only needs to demonstrate a serious question to be tried (Vagrand Pty Ltd v Fielding).

Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147

In "Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147", the court was satisfied that there was a serious question to be tried, considering the nature and seriousness of the plaintiff's claim, the defendant's status as a company under external administration, and the existence of a relevant insurance policy.

Cases mentioned in this blog post:

• Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147

• Lawless v Mackendrick [No 2] [2008] WASC 15

• Viscariello v Bernsteen Pty Ltd (in liq) [2004] SASC 266

• Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550

• Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314

• Re Gordon Grant and Grant Pty Ltd (in liq) (1982) 6 ACLR 727

• Re AJ Benjamin Ltd (in liq) [1969] 2 NSWR 374

• Re Sydney Formworks Pty Ltd (in liq) [1965] NSWR 646

Dealing with Procedural Irregularities under the Rules of the Supreme Court in Western Australia

Procedural irregularities occur commonly, and the courts are often called upon to remedy or address these issues.

In this blog post, I discuss how the Rules of the Supreme Court of Western Australia allow the Supreme and District Courts to handle procedural irregularities, with a focus on a recent decision, Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147.

The Rules of the Supreme Court

The Rules of the Supreme Court (WA) provide a framework for the conduct of civil proceedings in the Supreme Court and District Court.

Addressing Procedural Irregularities

In Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147, the court was faced with a procedural irregularity relating to the filing of an originating summons.

The plaintiff sought leave to commence civil proceedings against a company in liquidation under section 500(2) of the Corporations Act 2001 (Cth). However, the plaintiff had not filed an originating process under Rule 2.2 of the Corporations Rules, as required.

The court exercised its discretion under Rule 2.10 of the Rules of the Supreme Court to treat the originating summons as if it were an originating process filed under Rule 2.2 of the Corporations Rules.

This allowed the plaintiff to continue the proceedings without the need to re-file the documents and start afresh.

This demonstrates the court's willingness to use its discretion to address procedural irregularities where it is appropriate and just to do so.

Factors Influencing the Court's Decision

In deciding whether to exercise its discretion, the court may consider several factors.

These include whether the procedural irregularity caused any prejudice or injustice to the other party, whether the irregularity can be easily remedied, and the overall interests of justice.

In Hartland -v- Firm Construction Pty Ltd (IN LIQ) [2023] WASC 147, the court determined that there was no prejudice to the defendant in treating the originating summons as if it were an originating process and that doing so would further the interests of justice.

Addressing Conflicts of Interest in Guardianship and Administration Appointments: IC [2023] WASAT 33

Guardianship and administration matters often involve complex legal issues and require careful consideration of the best interests of the represented person.

One such issue that frequently arises is the potential for conflicts of interest when deciding whether someone should be appointed as an administrator.

In this blog post, I discuss conflicts of interest in guardianship and administration cases and explore how the law addresses this issue when a proposed appointee is otherwise suitable for the role.

Conflicts of Interest in Guardianship and Administration

Conflicts of interest can arise when a proposed administrator has personal or financial interests that may not align with the best interests of the represented person.

This can become a significant concern in cases where the administrator is responsible for making important decisions about the represented person's estate, including potential legal claims or the management of assets.

An example of such a conflict can be found in IC [2023] WASAT 33, a recent Western Australia State Administrative Tribunal (WASAT) case, where the proposed administrator was the sister of the represented person and also a beneficiary of their mother's estate.

The Tribunal had to consider whether the sister's dual roles as administrator and beneficiary would create a conflict of interest that could compromise her ability to act in her brother's best interests.

The sister (VC) was the primary beneficiary of their mother's estate, which included the family home.

This created a conflict of interest because her brother (IC), for whom she was proposed to act as an administrator due to his mental disability, was apparently left out of their mother's will.

In other words, he was not set to inherit anything from the mother's estate.

VC stated that she intended to ensure that IC could continue to live in the family home for the rest of his life, which was also their mother's wish.

However, this intention was not legally secured as part of the mother's will.

The inherent conflict of interest lay in the fact that VC, as the beneficiary of the estate, could not act against her own interests and bring a claim on IC's behalf against the mother's estate, as it would potentially reduce the value of the estate she was set to receive.

While VC had the best intentions of providing for IC and ensuring his well-being, the law, unfortunately, has seen many instances where promises made cannot be kept in the future, regardless of the initial good intentions.

This highlighted a clear need for legal intervention to ensure IC's rights and interests were properly protected.

The conflict of interest was particularly significant because it could potentially affect IC's right to housing, given that the family home was part of the mother's estate.

It underscored the importance of considering potential conflicts of interest when appointing an administrator, particularly when the proposed administrator stands to benefit from the estate of the person they are set to represent.

Dealing with Conflicts of Interest

The Guardianship and Administration Act 1990 (WA) (GA Act) provides guidelines for determining the suitability of a proposed administrator, taking into account factors such as the compatibility of the proposed appointee with the represented person and the wishes of the represented person (s 68(3) GA Act).

In cases where a conflict of interest is identified, the Tribunal has several options to address the issue.

One option is to appoint a different individual or organization, such as the Public Trustee, to act as the administrator. This can help ensure that the represented person's best interests are protected by an independent party.

In IC [2023] WASAT 33, the Tribunal took this approach, appointing the Public Trustee as a limited administrator with specific responsibilities related to potential legal claims against the mother's estate. The sister was appointed as plenary administrator, save for this limited function given to the Public Trustee. This approach mitigates the conflict, by separating the roles and responsibilities that could potentially clash.

Lessons Learned

Cases like the one underscore the complexity of guardianship and administration matters, and the importance of identifying and properly addressing potential conflicts of interest.

They also highlight the need for legal professionals to be vigilant in spotting these issues and advising their clients accordingly.

The legal framework, including the GA Act and the Family Provision Act 1972 (WA), provide mechanisms to safeguard the best interests of the represented person, but they require careful navigation.

In cases where potential conflicts of interest arise, it's essential to consider all possible solutions - be it appointing a different administrator, creating a limited administration, or separating roles and responsibilities between multiple parties.

Key Take-Aways

• While conflicts of interest in guardianship and administration matters can be complex, they are not insurmountable.

• With careful planning, legal guidance, and the flexibility provided by our legal system, it is possible to ensure that the best interests of represented persons are protected, even in situations where conflicts of interest exist.

• It's a reminder of the importance of specialist legal advice in navigating these challenging situations.

Song v PCL Lawyers Pty Ltd (Legal Practice) [2023] VCAT 505: The Importance of Accurate Legal Costs Estimates

As a costs lawyer, I often come across situations where disputes arise between clients and their legal practitioners over the accuracy of legal costs estimates.

A recent decision from Victoria, Australia, Song v PCL Lawyers Pty Ltd (Legal Practice) [2023] VCAT 505, highlights the importance of providing accurate legal costs estimates and the potential consequences of failing to do so.

In this blog post, I discuss the key takeaways from this decision and the importance of accurate legal costs estimates in maintaining a healthy client-lawyer relationship.

Accurate Legal Costs Estimates

In this case of Song v PCL Lawyers Pty Ltd (Legal Practice) [2023] VCAT 505, Mr. Song argued that he was provided with an inaccurate cost estimate for a brief to be prepared for an expert witness.

This, he claimed, constituted misleading and deceptive conduct under section 18 of the ACL. However, the Tribunal found that the cost estimate provided to Mr. Song was not misleading or deceptive. It was found to be a genuine and honest assessment of the costs likely to be incurred at the time it was given.

Significantly, the Tribunal determined that the initial “quote” given by the law firm was not a fixed quote but an estimate that was based on assumptions, and these assumptions were made clear to Mr. Song. The Tribunal highlighted the importance of clear communication between the legal practitioner and the client when giving cost estimates, noting that the legal practitioner had taken reasonable steps to explain that the quote was an estimate and could be subject to change.

However, the Tribunal Member stated:

“I accept that Mr Song was misled by the estimate provided and that had Mr Song been informed of the actual cost prior to engaging PCL to prepare the brief, he may not have asked them to do so. Further, he has not obtained any benefit from that brief as he ultimately engaged a different expert and briefed that expert himself.”

Despite not finding the legal practitioner or the firm guilty of misleading or deceptive conduct, the Tribunal did order the law firm to refund Mr. Song the sum of $1,000.

This was based on the Tribunal's findings that the law firm had received the sum for the preparation of the brief, but that the brief had not been used, because Mr. Song had engaged a different expert and briefed that expert himself.

Furthermore, Mr. Song claimed for 'time waste and mental damage' due to delays in obtaining an expert report. However, the Tribunal did not find any loss or damage suffered as a result of this delay, as Mr. Song had ultimately filed his own expert report.

Potential Consequences

The Australian Consumer Law (ACL) and the Legal Profession Uniform Law (LPUL) set out the standards and obligations for legal practitioners when providing legal costs estimates.

Failure to comply with these obligations may lead to disputes and potential consequences, including:

1. Refunds: In some cases, if a client has paid for a service based on misleading cost estimates, they may be entitled to a refund for the amount paid.

2. Misleading and Deceptive Conduct: Under section 18 of the ACL, legal practitioners are prohibited from engaging in misleading or deceptive conduct. Breaching this provision may lead to legal action and potential penalties.

3. Disciplinary Action: If a client believes that their legal practitioner has engaged in unsatisfactory professional conduct or professional misconduct, they may lodge a complaint with the relevant Legal Services Commissioner. Disciplinary proceedings may follow, leading to potential consequences for the legal practitioner.

Tips for Providing Accurate Legal Costs Estimates

To avoid disputes and potential consequences, legal practitioners should consider the following tips when providing legal costs estimates to their clients:

1. Be thorough and realistic: Provide a detailed and realistic estimate based on a comprehensive understanding of the client's matter and the potential work involved.

2. Communicate clearly: Ensure that the client understands the basis of the estimate and any factors that may impact the final costs, such as the complexity of the case or the possibility of additional work.

3. Update the estimate as needed: Regularly review the costs estimate and update it as necessary to reflect any changes in circumstances or new information that comes to light.

4. Keep the client informed: Maintain open communication with the client about their legal costs throughout the matter, addressing any concerns or questions they may have.

Key Take-Aways

• Providing accurate legal costs estimates is an essential aspect of the client-lawyer relationship.

• The case of Song v PCL Lawyers Pty Ltd (Legal Practice) [2023] VCAT 505 serves as a reminder of the importance of fulfilling this obligation and the potential consequences of failing to do so.

• By being thorough, realistic, and transparent in their estimates, legal practitioners can help ensure that clients are well-informed and maintain a positive working relationship throughout the course of their legal matter.

The Lifespan of Settlement Offers: A Closer Look

In the context of legal proceedings, the offer of compromise is an indispensable tool. It not only hastens the resolution of disputes but also mitigates the potential financial and emotional toll of litigation on all parties involved.

One critical aspect of these offers, however, often stokes debate: the time in which an offer should remain open.

This question has been addressed through several judicial decisions, one of them being Tonkin -v- Heilongjiang Feng Ao Agricultural & Animal Husbandry Group Co Pty Ltd [2015] WASC 378 (S).

This case concerned a Calderbank offer, a specific type of settlement offer, based on the English case Calderbank v Calderbank [1975] 3 All ER 333.

In the Tonkin case, the court underscored the pivotal role of the Calderbank offer in facilitating dispute resolution. The defendant's offer, a Calderbank offer, was open for seven days until a specified date. However, the court had to determine whether the plaintiffs' rejection of this offer was unreasonable. This evaluation involved a holistic view of the circumstances surrounding the offer.

The court's approach towards Calderbank offers has been shaped by various decisions, both within Western Australia and across the Commonwealth. In the case of Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115, the court held that the test for awarding indemnity costs against a party who rejected a Calderbank offer was whether the rejection was unreasonable under the circumstances. The burden of proof falls on the offeree to establish unreasonableness.

A similar sentiment was echoed in the New South Wales Court of Appeal in Miwa Pty Ltd v Siantan Properties Pte Ltd [No 2] [2011] NSWCA 334. The court posited that a reasonable offer could alter the court's perspective on the costs award, particularly when the party rejecting the offer fails to obtain a better result in the judgment.

When assessing the reasonableness of rejection, several factors come into play. These were elucidated in Lo Presti and further elaborated by Beech J in McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 (S). These include:

• the stage of proceedings at which the offer was received;

• the time allowed to the offeree to consider the offer;

• the extent of the compromise offered;

• the offeree's prospects of success, assessed at the date of the offer;

• the clarity with which the terms of the offer were made; and

• whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejection.

In Tonkin, the court examined these factors to determine the reasonableness of the rejection.

The offer was made within six months of the commencement of proceedings, which was considered marginally in favour of the defendant. However, the court viewed the seven-day timeframe as potentially too short for careful consideration and perhaps expert advice, suggesting 28 days might have been more appropriate.

Key Take-Aways

• The time in which offers need to remain open is a nuanced issue and depends on various considerations.

• It requires a careful balance between hastening dispute resolution and allowing enough time for the parties to make informed decisions.