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Evidence of offers at mediation admitted into evidence

November 14th, 2010 · No Comments

Simply Irresistable Pty Ltd v Couper [2010] VSC 505 is a ruling in a solicitor’s negligence case decided under the Evidence Act, 2008 about an objection to the adduction of evidence as to offers made in a previous proceeding. A company is suing its former lawyers for negligence in the Supreme Court at the moment.  They are defending on bases that include that the company caused its own losses, and alternatively failed to mitigate them.  A woman gave evidence for the company.  An inference arising from the evidence is that the company’s former lawyers were the sole cause of the loss of an opportunity to exercise an option pursuant to which they could have acquired for about $200,000 an apartment then worth $600,000.  The company says the lawyers negligently failed to advise her to exercise the option, so that she lost about $400,000, plus additional amounts representing the increase in value in the property since then.

The woman had previously sued her solicitor before the defendants commenced to act for her, as well as the person from whom they could have purchased had they exercised the option (Maher v Millennium Markets [2004] VSC 174).  In that earlier proceeding, there was a mediation.  According to the solicitor defendants in the present matter, the defendants in the earlier proceeding offered to settle on the basis that the woman could purchase the apartment for $250,000.  Their counsel intimated a desire to cross-examine the woman in order to establish that fact.  The woman’s counsel objected on the basis that the offer was made at a Court-ordered mediation and was without prejudice.

There are two statutory privileges which were potentially applicable: s. 24A Supreme Court Act 1986, and s. 131 of the Evidence Act 2008.  They can both have operation.  Section 24A did not have operation in this case, however, because its prohibition on the adduction of evidence of things said and done in a Court-ordered mediation is limited to the proceeding in which the mediation took place.  The present proceedings are separate, and subsequent.  The question for s. 131’s application was whether, but for the adduction of the evidence, existing evidence or inferences drawn from it would be likely to mislead the Court.

Justice Kyrou allowed the cross-examination. That is, he recognised the exception to the privilege, and permitted the adduction of evidence which the woman’s counsel contended was privileged.  His Honour reasoned:

’19 A key premise in the plaintiff’s case – both in its pleadings and in the evidence of [the woman] – is that the breach of retainer and negligence on the part of [the present defendants]  in not advising the plaintiff about the Option deprived it of the opportunity to acquire, on 9 July 2001, an apartment that was then worth $600,000, for $210,000. An inference that arises from [the woman’s] evidence is that the opportunity to acquire the Apartment for a substantially discounted price was lost forever after 9 July 2001 and that the loss of that opportunity was due solely to the breach of retainer and negligence on the part of [the present defendant solicitors].

20 At this stage of the proceeding, I am unable to say what conclusions, if any, would be open to me on the basis of the proposed evidence. For example, I do not know whether there were any legal or practical impediments to the acceptance of the alleged offers or whether any purported acceptance would have created a legally binding contract. It is clear, however, that if the proposed evidence has the effect contended by [the solicitor defendants’ counsel, their inability] to adduce that evidence to contradict or qualify [the woman’s] evidence would be likely to mislead the Court on the issues of contributory negligence and mitigation. Exclusion of the proposed evidence would enable the plaintiff to assert a case which was inconsistent with that evidence.’

As an aside, I should say that how the plaintiff could assert a case which was false is not entirely clear to me.

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Tags: Evidence · Negotiation privilege