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Schwartz, David --- "Practitioners' obligations in the conduct of civil litigation: Hudspeth v Scholastic Cleaning Services and Consultancy Services Pty Ltd (No 8) [2014] VSC 567" [2015] PrecedentAULA 13; (2015) 126 Precedent 49


PRACTITIONERS’ OBLIGATIONS IN THE CONDUCT OF CIVIL LITIGATION

Hudspeth v Scholastic Cleaning Services and Consultancy Services Pty Ltd (No. 8) [2014] VSC 567

By David Schwartz

A series of decisions[1] flowing from a jury trial reinforce the need for practitioners to take care in their dealings with expert witnesses, and to be acutely aware of their obligations to the court under its Supreme Court Rules (Rules); obligations that have been significantly expanded through the operation of the Civil Procedure Act 2010 (Vic) (CPA).

THE JURY TRIAL

Mrs Hudspeth, who worked as a cleaner at a school, claimed that she had sustained an injury while attempting to clean up liquid soap from the floor of a school toilet block. The soap dispenser in the toilet block had been vandalised, causing the soap to leak.

Hudspeth brought claims in negligence against the cleaning company that employed her (the first defendant), and against the school (the second defendant). A claim against a third defendant, the manufacturer/installer of the soap dispenser, was abandoned during the trial.

Of significance to the claim against the employer was the sequence of events that had followed Hudspeth’s discovery of the soap leak; specifically, to whom she reported the issue, the advice she received, and at what point the injury was sustained.

The jury returned a finding of no negligence, no breach of duty and no occupiers’ liability against either defendant.

Hudspeth appealed the jury verdict, arguing that the trial judge, Dixon J, had erred in refusing her Senior Counsel’s application that the jury be discharged in light of comments made by Senior Counsel for the second defendant.[2]

THE EVIDENCE OF THE EXPERT WITNESS

In preparation of the matter, the worker’s solicitors engaged an engineer as an expert witness.

When the engineer was called to give evidence at trial, the court understood that he had produced two reports, dated 9 April 2010 and 19 November 2012.

In the course of giving his evidence, it emerged that the engineer had produced a further two reports: a second version of the 9 April 2010 report and a report dated 12 November 2012.

Under the heading ‘assumed facts’, the second version of the 9 April 2010 report held that there had been previous incidences of the soap dispensers being vandalised, whereas the original version held that there had been no such prior incidences.

The report dated 12 November 2012 set out a different sequence of events as to the reporting of the soap leak and the date of injury to that contained in either version of 9 April 2010 reports.

All three reports made representation that their factual assumptions derived from an interview that the engineer conducted with Hudspeth in February 2010.[3]

There was some confusion at trial as to whether both versions of the report of 9 April 2010 had been served on both defendants (it ultimately turned out that they had been).[4] It was acknowledged that the report of 12 November 2012 had not been served on either defendant.[5]

In his closing address, Senior Counsel for the second defendant, in reference to the report of 12 November 2012, made comments to the jury to the effect that Hudspeth’s legal team had attempted to deceive the court in an effort to present Hudspeth as a reliable witness.[6]

Dixon J considered that a ‘false issue’[7] had been created for the jury by these comments. However, Dixon J held that appropriate direction given to the jury to ignore the false issue would be sufficient in the circumstances, and therefore refused to discharge the jury.[8]

AN ENQUIRY ON THE COURT’S OWN MOTION

In pronouncing judgment, Dixon J stated that there were prima facie grounds on which the court may be satisfied that there had been contraventions of the CPA with regard to the report dated 12 November 2012.[9] (The CPA was not operative when the report(s) of 9 April 2010 were produced.)

Under s29(2)(b) of the CPA, the court proposed, on its own motion, to consider whether any order under s29(1) of the CPA should be made in the interest of justice.[10]

In a ruling dated 20 November 2014, Dixon J found that in relation to the report of 12 November 2012, Hudspeth’s Senior Counsel had breached their overarching obligations set out in s21 (obligation not to engage in misleading or deceptive conduct)[11] and s26 (obligation to disclose the existence of documents).[12] Hudspeth’s solicitors were found to have breached s 26,[13] and the expert witness was found to have breached s21.[14]

Dixon J found that there was no requirement of knowledge or intention for the obligation set out in s21 to be breached.[15] Hudspeth’s solicitors were found to be in breach of their obligation under s26, notwithstanding their deposition that they were unaware of the existence of the report, as they were bound by the knowledge of Counsel.[16]

Affidavits produced pursuant to the enquiry have clarified the circumstances in which the second version of the 9 April 2010 report and the 12 November 2012 report came into existence.[17]

It is apparent that the second version of the report of 9 April 2010 was produced after Hudspeth’s solicitors telephoned the office of the engineer and spoke to an employee in July 2010, advising them that the original report contained an incorrect history regarding incidence of prior vandalism. Without having been reviewed by the engineer, a new version of the report containing an altered history regarding prior vandalism was produced by his office and forwarded to the solicitors.[18] The solicitors then served this report on the defendants under a covering letter which referred only to it being an ‘updated’ report.[19]

The report of 12 November 2012 was produced following a telephone conversation on that date between Hudspeth’s Senior Counsel and an employee of the engineer, in which Hudspeth’s Senior Counsel made suggestions as to the factual changes and deletions that should be made.[20] The engineer then made these changes, following a telephone conversation with Hudspeth’s Senior Counsel in which the engineer confirmed that the changes suggested by Senior Counsel did not alter any of his previously expressed opinions; the report was forwarded to Hudspeth’s Senior Counsel on the evening of 12 November.[21]

Neither of these reports referred to the above communications in their ‘documents and materials’ section that listed the sources of factual information.[22]

COURT OF APPEAL DECISIONS AND RE-TRIAL

In a 2:1 decision, the Court of Appeal set aside the jury verdict, holding that the trial judge erred in failing to discharge the jury following unfair and prejudicial comments made by Senior Counsel for the second defendant.[23] In a further decision, the Court of Appeal remitted the matter to be re-heard by Dixon J alone and apportioned costs with respect to the appeal.[24]

Notwithstanding the success of the appeal, the Court of Appeal was critical of the conduct of Hudspeth’s Senior Counsel,[25] who admitted to inadvertently breaching Order 44.03(03) of the Rules in relation to the report of 12 November 2012.[26]

The conduct of Hudspeth’s solicitors in relation to the second version of the report of 9 April 2010 was also found to have contributed to the suspicion that developed between practitioners at the trial which had provoked the comments of Senior Counsel for the second defendant.[27]

Pursuant to Order 63.23 of the Rules, having determined that responsibility for the miscarriage of justice at trial lay with the second defendant, Senior Counsel for Hudspeth and her solicitors, the Court of Appeal ordered that her Senior Counsel and her solicitors each indemnify the second defendant for 40 per cent of Hudspeth’s legal costs of the appeal, in addition to any other unrecoverable costs.[28] Costs of the trial were to be determined by Dixon J following the retrial.[29]

In a ruling of 20 November 2014, Dixon J found Hudspeth’s employer negligent and in breach of its statutory duty in the circumstances of Hudspeth’s injury, and awarded her damages in the sum of $610,400.[30]

LESSONS FOR PRACTITIONERS

This series of decisions underlines the importance of ensuring that experts must be – and be seen to be – independently providing their evidence for the benefit of the court.[31] While it is sometimes necessary, and entirely appropriate, for practitioners to contact experts in relation to the way that an expert has recorded factual matters, great care should be taken to ensure that such interventions are transparent.[32]

For this reason, it is prudent that a request for an amended/supplementary report due to a factual issue be put in writing.[33] The practitioner should also ensure that any report produced as a consequence of such an intervention clearly records the nature and extent of that intervention.

The series of judgments also provides further illumination of the still-evolving significance of the CPA in the conduct of civil litigation generally.

In her dissenting opinion, Warren CJ noted that the Overarching Obligations in the CPA had significantly changed the traditional obligations of practitioners and the court, and meant that the court must consider these obligations in weighing up how or where the interests of justice lie.[34] In this context, the conduct of the worker’s legal team at trial was a factor that must be considered in an overall assessment of the interests of justice.[35] In this case, Warren CJ considered the Overarching Obligations perspective to be a factor supporting the trial judge’s decision not to discharge the jury.[36]

As to the status of advocates’ immunity from suit in CPA-era civil litigation, the view of Dixon J is that it has been ‘eroded’ by the powers given to the court under s29 to make any order it considers appropriate in the interest of justice.[37] In an earlier decision, Dixon J foreshadowed that Hudspeth herself could make such an application for loss and damage arising from the conduct of her legal team.[38]

CONCLUSION

The series of decisions flowing from this jury trial provides some salutary lessons for practitioners in the preparation and conduct of civil litigation.

With practitioners now exposed to new and unprecedented sanctions under the CPA, it is essential that practitioners turn their mind to the Overarching Obligations contained in the CPA and to the Rules when making forensic decisions about the management of their case.

David Schwartz is Senior Associate at Adviceline Injury Lawyers, a division of Holding Redlich, in Melbourne. PHONE (03) 9321 9906 EMAIL David.schwartz@alil.com.au.


[1] See Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd (No. 4) [2013] VSC 14; Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd (No. 6) [2013] VSC 159; Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 3; Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 78; Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd (No. 8) [2014] VSC 567.

[2] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 78.

[3] Ibid at [26].

[4] Ibid at [12].

[5] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 3 at [29].

[6] Ibid at [58].

[7] Ibid at [9].

[8] Ibid at [10].

[9] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd (No. 4) [2013] VSC 14 at [2].

[10] Ibid at [2].

[11] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd (No. 8) [2014] VSC 567 at [195-204].

[12] Ibid at [214-221, 229].

[13] Ibid at [222-229].

[14] Ibid at [205-210].

[15] Ibid at [186-194].

[16] Ibid at [225-226].

[17] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 78 at [8-13].

[18] Ibid at [33].

[19] Ibid at [33].

[20] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd (No. 8) [2014] VSC 567 at [73-74].

[21] Ibid at [13]; Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 3 at [88].

[22] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 3 at [92, 108].

[23] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 3.

[24] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 78.

[25] Ibid at [14].

[26] Ibid at [42].

[27] Ibid at [3].

[28] Ibid at [76].

[29] Ibid at [80].

[30] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd (No. 7) [2014] VSC 542.

[31] See Ibid at [40]; Glenn McGowan SC and Tomaso di Lallo, ‘Management of Experts’ at 16, 23. Accessed at http://www.listgbarristers.com.au/site_media/uploads/tom_di_lallo/dilallo,_t_-_expert_witnesses_%28april_2014%29.pdf.

[32] See Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 3 at [208]; Glenn McGowan SC and Tomaso di Lallo, see above note 31 at 23; Stephen O’Meara QC and Matthew Hooper, ‘More than a restatement of existing obligations: The Civil Procedure Act 2010 (Vic)’, 123 Precedent, August 2014, 24.

[33] Glenn McGowan SC and Tomaso di Lallo, see above note 31 at 20.

[34] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd [2014] VSCA 3 at [36].

[35] Ibid at [36].

[36] Ibid at [36].

[37] Hudspeth v Scholastic Cleaning Services & Consultancy Services Pty Ltd (No. 8) [2014] VSC 567 at [175].

[38] Ibid at [13].


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