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Protected under the Evidence Act?

Protected under the Evidence Act?

By Jessica Andreacchio

Practice & Procedure Settlements 

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We should be mindful of what information is disclosed during, and outside of, settlement negotiations.

Section 131 of the Evidence Act 2008 (Vic) sets out the exclusion of evidence in relation to settlement negotiations.
For relevant purposes, ss131(1) and 131(2)(g) of the Act state:

1. Evidence is not to be adduced of –

(a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or

(b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.

2. Subsection (1) does not apply if –

(g) evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence.

Recent case – Slea Pty Ltd v Connective Services Pty Ltd & Ors [2017] VSC 232

In this case, the plaintiff, Slea Pty Ltd, sought inter alia an advanced ruling seeking that the evidence which was proposed to be adduced by the defendants, be inadmissible pursuant to s192A of the Act.

What was the disputed evidence?

The parties were involved in a trial which commenced on 21 October 2016 before Judd J. During the second day of trial, the parties were referred to mediation before Wood AsJ, which commenced in the rooms available at the court. The parties sought to continue mediating beyond the venue’s closing time. Consequently, the parties continued the mediation by relocating to the offices of the plaintiff’s solicitors.

During the mediation, the plaintiff’s solicitor said words to the effect of “I need to ring my client for instructions”. When the plaintiff’s solicitor was questioned as to whether a particular individual was present, the plaintiff’s solicitor responded “no he’s in the room next door”.

The evidence set out in the affidavit of Justin Taede Vaastra, sworn on 1 December 2006, stated as follows:

“I remember this exchange distinctly, because it confirmed the impression which I had formed by that time, that any conversation or discussion I had with Sof and/or Slea was effectively with Liberty, and that Sof was not really in control of Slea.”

The defendants sought to rely on the above statements as evidence that the plaintiff’s solicitor was receiving instructions from a person other than the plaintiff, which arguably contradicted earlier statements made by the plaintiff’s solicitor that he would not have agreed to waive the plaintiff’s pre-emptive rights at the mediation had certain information been known.

The primary question for the Court’s determination was whether the disputed communications were made in connection with an attempt to negotiate a settlement of the dispute, pursuant to s131(1)(a) of the Act.

Court’s ruling

Almond J found that the content of the disputed communications in the context in which they were made led inescapably to the conclusion that the disputed communications were made in connection with an attempt to negotiate a settlement of the dispute.

Further, Almond J found that the disputed communications included “qualitative and subjective elements, such as the solicitor’s perception that he needed to take instructions (arising from something which had arisen during the settlement discussions) and the solicitor’s subjective belief as to the whereabouts of an attendee for the [plaintiff’s] interest at the mediation”.

This case confirms that we should be mindful of what information is disclosed during, and outside of, settlement negotiations, as there will be circumstances where the Act may not offer the protection being sought. 

 

Jessica Andreacchio is special counsel at Thomson Geer in the dispute resolution team. She is a national accredited mediator and a member of the LIV Alternative Dispute Resolution Committee and the Court Practice Committee.


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