Civil Procedure Act - time to take our obligations seriously

by David Levesque

IN EARLY 2011, certain provisions of the Civil Procedure Act 2010 (Vic) (Act) came into effect. The purpose of the Act is to regulate the conduct of civil proceedings in the Victorian Courts to facilitate the just, efficient, timely and
cost-effective resolution of the real issues in dispute. In other words, it was to be used by the judiciary as a case management tool to change the culture of civil litigation in Victoria.

Those who have been a party to civil litigation in the past three years would be familiar with the overarching
obligations (contained in sections 16 to 26 of the Act) and would have signed an “overarching obligations certification” acknowledging that they understood what they mean. These obligations
apply equally to lawyers acting in civil proceedings.

The obligations are to:

  • act honestly;
  • not make a claim or response that has no proper basis;
  • only take steps to resolve or determine the dispute;
  • cooperate in the conduct of civil proceeding;
  • not mislead or deceive;
  • use reasonable endeavours to resolve the dispute;
  • narrow the issues in dispute;
  • ensure costs are reasonable and proportionate;
  • minimise delay;
  • disclose the existence of documents.

If satisfied that a person has breached one or more of these obligations, the Act gives the Court very broad powers (under section 29 of the Act) to make any order it considers appropriate, including specifically in relation to costs (under section 28).

However, despite the fact that the Act has now been in effect for over three years, it has only been in the past 12 months or so that the Courts have begun to utilise its powers. Prior to this, it was unclear how the obligations in the Act would translate into practice not only in relation to the circumstances in which a party would be found to be in breach of the Act, but also what the consequences would be for non compliance.

There has been a significant move by the Courts recently to exercise its powers under the Act by penalising
parties (and in some cases, their lawyers) for contravening the Act. A key milestone came in November 2013, when the Victorian Court of Appeal delivered its ruling in the case of Yara Australia Pty Ltd v Oswald. The Court considered both the obligations imposed by the Act, and the Court’s “powers and the means by which parties or their legal representatives can be penalised for any contravention”. Notably, the Court thought that the Act had perhaps been underutilised due to a “false perception that [the Act’s] provisions and the overarching obligations do not effect any material change to the [Court] Rules and the inherent jurisdiction of the Court”.

The Court found that the contents of the Court books, containing documents concerning the appeal, were excessive. The Court held that the Applicants’ lawyers had failed to ensure that the costs were reasonable and proportionate. Those lawyers were ordered to contribute to the costs incurred by their clients and the other parties in connection with the excessive or unnecessary content of the Court books.

In April of this year, the NSW Supreme Court (in a case relating to that state’s equivalent legislation) made a clear statement about the current position in relation to the obligations of parties in civil proceedings. The Court confirmed that “[they] are not just pious exhortations to be acknowledged and then ignored. They have real consequences for the clients and lawyers…and are to be applied rigorously in the conduct of all litigation, great or small.”

The Courts have shown in recent months that the Act is not the “toothless tiger” that it was initially thought to be and judicial officers have shown a willingness to impose sanctions on parties that do not act in accordance with their obligations. In summary, parties to civil proceedings (and their lawyers) who do not take their obligations under the Act seriously, do so at their own peril.


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