Equity and Commercial Practice in the Supreme Court of New South Wales in 2005

Transcription

1 Equity and Commercial Practice in the Supreme Court of New South Wales in 2005 Clifford Einstein QC and Mark Brabazon, April 1996 * Revised by Mark Brabazon, February 1999, June 2002, February 2005; Carol Webster August 2007 INTRODUCTION Cases in the Equity Division of the Supreme Court and in the Commercial List, the business of which is assigned to the Equity Division, are often won by careful and timely preparation. This paper deals with general Equity and Commercial List practice with a view to achieving efficiency in litigation and forensic advantage. Topics covered include applicable Practice Notes, usual orders and directions, practice with respect to expedition, and selected provisions of the Supreme Court Rules. With the exception of the Commercial List, rules specific to particular subjects within the general Equity jurisdiction and the rules and practice relating to particular specialized subjects which are assigned to the Equity Division are not addressed. * This paper was originally written by Einstein Q.C. (now Einstein J) and Brabazon in The authors gratefully acknowledge the helpful comments of Judges of the Equity and Commercial Divisions, particularly Brownie J, McLelland CJ in Eq, Bryson and Cohen JJ, and Rolfe ACJ Comm Div and Hunter J, on earlier drafts of the original paper, and of Acting Master Berecry on a draft of the 2005 revision. Page 1 of 34

2 THE EQUITY DIVISION AND THE COMMERCIAL LIST From 1987 to 1998, separate Equity and Commercial Divisions existed within the Supreme Court of New South Wales. The Commercial Division superceded an earlier Commercial List in the Common Law Division of the Court 1. The business formerly assigned to the Commercial Division is now assigned to Equity and managed in the Commercial List 2. In the original version of this paper, Einstein Q.C. observed, One may be pardoned in 1996 for having some difficulty in discerning which sets of proceedings are appropriately brought before the Equity Division and which before the Commercial Division. In large measure this is because many suits may be brought in either Division and proceedings are, or course, transferred occasionally between Divisions. There are some important distinctions between the practice which generally applies in Equity and that which applies in the Commercial List. A general understanding of which cases ought properly be commenced in the general jurisdiction of the Equity Division or in the Commercial List may be gleaned from the considerations set out in the following pages. The Equity Division The history of the Equity Division and its origins with the creation of the Court of Chancery have been traced by Sir Frederick Jordan, Chief Justice of New South Wales from 1934 to The present constitution of the Division is set out in the Supreme Court Act 1970 and the Supreme Court Rules (SCR). The business assigned to the Equity Division includes proceedings within the general equitable jurisdiction of the Court 4, proceedings under a large number of specified Acts 5, protective 1 See Supreme Court Act 1970, section 56 (repealed by the Supreme Court (Commercial Division) Act 1985 with effect from 1 January 1987). 2 Supreme Court Rules (Amendment No 322) 1998, Gaz 117 of 7 August, 1998, p Sir Frederick Jordan, Select Legal Papers, Legal Books Pty Limited 1983, chapter 1 topics ii-iv. 4 Supreme Court Act, section 53(2). 5 SCR Part 12, rules 5 & 7, and Part 77 now UCPR rules 1.16, 1.19 and 1.20 Page 2 of 34

3 business 6, certain proceedings relating to infants 7 and adoption 8, intellectual property cases 9, proceedings in the Commercial List 10, the Technology and Construction List 11, the Corporations List 12, and proceedings previously within the jurisdiction of the Admiralty 13 and Probate 14 Divisions. Specific rules relating to these separate topics are not dealt with this paper. Some of the commonest actions conducted in the Equity Division concern contractual disputes, applications for discretionary remedies such as injunctions, specific performance, appointment of receivers, vendor-purchaser disputes, fraud (both "common law" and "equitable"), intellectual property disputes, company related proceedings, proceedings relating to minors, actions for specific performance of contracts, the execution of trusts, the dissolution of partnerships, the administration of estates and the rectification or setting aside or cancellation of deeds and written instruments. Proceedings under the Real Property Act and the Family Provision Act are among those explicitly assigned to Equity. Proceedings under the Conveyancing Act 1919 and under the Trustee Act 1925 are usually commenced in Equity. The Judges of the Equity Division also have the experience and ability to determine cases of the types sought by the Supreme Court Act and Rules to be channelled to the Commercial Division before the 1998 amendments. On some occasions a Judge of the Equity Division used to sit as 6 SCR Part SCR Part SCR Part SCR Part 81 now UCPR rule 1.16 and Schedule 8, Part 2 10 SCR Part 14. now UCPR rule SCR Part 14A. now UCPR rule Proceedings under the Corporations Act 2001 (Cth) and related legislation are assigned to the Equity Division by the combined operation of the Corporations (Ancillary Provisions) Act 2001 (NSW), section 10, the Corporations (New South Wales) Act 1990 (NSW), section 51, and SCR Part 12, rule 5(a)(xxxi) [now UCPR rule 1.16 and Schedule 8] which provisions also support the operation of the Corporations Law Rules. 13 Supreme Court Act, Sch. 4, cl. 10(1)(a). 14 Supreme Court Act, Sch. 4, cl. 10(1)(d). 15 SCR Part 12, rule 5 now UCPR rule 1.16 and Schedule 8, Part 1 16 SCR Part 77, rule 54. now UCPR rule 1.16 and Schedule 8, Part 1 Page 3 of 34

4 a Commercial Division Judge or vice versa, or be transferred from one Division to the other. The 1998 amendments have enabled better use to be made of the commercial expertise of the Equity Judges. The Equity Division does not hold itself out as specializing only in the resolution of commercial transactions or as offering the commercial community expedition as a matter of course in bringing proceedings to a swift hearing. This is not to say that the Equity Division cannot, where need be, move just as expeditiously in its general jurisdiction as in the Commercial List, or as any other division 17. However, the Equity Division has a set procedure for handling applications for expedition and expedition Judges are appointed on a rotating annual basis. The Division currently also operates on the general approach, which may be departed from as necessary, that the Judge who grants expedition will then proceed to hear the expedited case. The Commercial List Proceedings arising out of commercial transactions or in which there is an issue that has importance in trade or commerce are assigned to the Equity Division and may be entered in the Commercial List unless they are specifically excluded or assigned elsewhere by the Rules 18. The concept of a special list to deal with commercial cases in the ordinary courts of general jurisdiction may be traced to the 1895 Promulgation by the Judges of the Queens Bench Division, which provided in part that the newly created Commercial Causes List was to deal with "Commercial causes (including) causes arising out of the ordinary transactions of merchants and traders; amongst others, those relating to the constructions of mercantile documents, export or import of merchandise, affreightment, insurance, banking and mercantile agency, and mercantile uses." This is a narrower formulation in some respects than the modern concept of a commercial case 19. The modern rule is more liberal. The concept of commercial transactions 17 Cf Giorgi v European Asian Bank AG (unreported, Supreme Court Equity Division 3 March 1996) where McLelland J made the point that given the powers contained in Part 26 of the Rules, it is not to be presumed that proceedings will necessarily be dealt with more expeditiously in one Division than another. 18 SCR Part 14, rule 1 now UCPR rule 45.6 Page 4 of 34

5 accommodates the evolving needs of the mercantile community and changes in the nature of the commercial activities of the community 20. Almost immediately upon the creation of the new Commercial Causes List the Court of Appeal had occasion to consider the purposes of the list. In Baerlein v Chartered Mercantile Bank [1895] 2 Ch 488 Lindly LJ said inter alia:- "The commercial court has no more power to dispense with strict evidence, or to depart from the administration of the law in the ordinary way, than any other judge or court... If in a particular case the court is satisfied that the judges having peculiar knowledge of commercial matters and habitual practice in dealing with commercial matters and habitual practice in dealing with commercial documents and correspondence with commercial men will greatly facilitate the trial of that particular case, that is a reason for a transfer... [T]his case is likely to be fixed far better, far more quickly, far more economically and far more advantageously in every sense if it comes before a judge who has special skill and knowledge as to transactions of this nature, than if it keeps its place in one of the general lists." 21 MacFarlan J pointed out that the object of the establishment of the commercial court in England was that it should provide a forum for the litigation and resolution of disputes between merchants and traders who desired and were prepared to accept an early opportunity of having their disputes decided 22. The powers of the Court for the purpose of achieving a speedy determination were referred to by Moffitt P (with whom Glass JA agreed) in Stanley-Hill v Kool [1982] 1 NSWLR 460 at The commercial list Judge was said to be 19 Contrast the wording of SCR Part 14, rule 1, quoted in part earlier, which was based in turn on the former section 56 of the Supreme Court Act. 20 TSF Engineering Pty Ltd v Hill [1980] 2 NSWLR 105, 109; cf. Challenge Bank Ltd v Raine & Horne Commercial Pty Ltd (1989) 17 NSWLR 297 and other cases cited in Ritchie s Supreme Court Practice NSW [14.1.1]. 21 [1895] 2 Ch 488 at Witten v Lombard Australia Ltd (Supreme Court of NSW, Commercial Division, 25 May 1967). Page 5 of 34

6 "in a position to discern from the detail of what passes before him any tactical manoeuvre which seeks to exploit the ordinary procedures or rules of evidence and thereby directly delay or prevent the determination of the real question in dispute or thereby indirectly do so by subjecting the opposing party to the pressures of delay or expense. Accordingly, he is in a superior position to decide by what directions or orders any such manoeuvre can be neutralized and how best the true issue can be fairly determined with expedition." Section 76A of the Supreme Court Act now also explicitly provides that the Court [in any Division] may from time to time, give such directions as the Court thinks fit (whether or not inconsistent with the Rules) for the speedy determination of the real questions between the parties to civil proceedings 23 The duties incumbent upon legal advisers was emphasized by Rogers CJ Comm. Div.:- "The rules of court are structured to enable the judge in charge of the list to exercise his wide powers to ensure that the matter comes on with the greatest possible despatch, shorn of unnecessary side issues not truly in issue, but with all matters that are in issue clearly and readily tenderable. The judge's statutory obligation to provide a speedy determination cannot be discharged, if the parties fail to bring an action into the list at the time dictated by the rules, or fail to adhere to the directions, whether contained in the rules or given in the specific case from time to time by the judge. In other words, the somewhat special service provided by the court was intended to be available only to those who in turn complied with the requirements, insofar as they were called on to act. I appreciate that, with the exception of commercial organisations with their own legal departments, lay clients do not have any appreciation or understanding of their obligation. This merely reinforces the very heavy duty which the legal advisers owe, both the court and their clients. If they fail in the discharge of their obligation to comply with the rules and orders expeditiously, it will be the client that will suffer. As it is, the court can look only to the legal advisers." Now see Civil Procedure Act 2005, section 61(1) 24 TSF Engineering Pty Ltd v Hill [1980] 2 NSWLR 105 at 303. Page 6 of 34

7 Case Management The filing fee for an initiating process for entry in the Commercial List is more than twice the normal fee. The difference throws light on rationale for the different approaches adopted to case management. The Commercial Division provides a Judge to "case manage" each proceeding at regular intervals (noting that the Court endeavours to limit the number of directions hearings to the minimum necessary), from the first return of a Summons until the final hearing. Thus practitioners conducting proceedings in the Commercial Division will be required: (a) On the first return of the Summons, to identify the issues perceived to arise in the proceedings. These will usually be transcribed and noted by the Court. In the fullness of time, subject to changes to the issues being communicated to the Court (and appropriate leave being granted to add new issues and to make associated amendments to the so-called "pleadings" 25 ), parties will be held to the issues so identified. (b) On the first return of the Summons, to agree, or failing agreement, submit to a directions timetable which will usually include a date when the matter will next be before the Court for further directions and mention. (c) Thereafter to bring promptly to the Court's attention any failure to comply with previous directions and any changes to information previously communicated to the Court of any description, including new issues sought to be raised and questions of estimated time required for hearing, discovery issues, the progress of Statement preparation and the like. In other words, the Court keeps a close eye and hand upon the proceedings at regular intervals. 25 Although proceedings before the Commercial Division are commenced by summons, the form of the summons is calculated to identify the claims made, the nature of the dispute, the issues likely to arise and a summary of the plaintiff's contentions. Thereafter the defendants will usually be required to "plead" to the plaintiff's contentions. The whole exercise is aimed at shortly identifying the real and substantive issues sought to be litigated and the court is astute to examine carefully and prevent any attempt to set up false, specious or time-wasting issues. Page 7 of 34

8 (d) When the Court sees it as appropriate the matter will be allocated a hearing date 26. On occasion 27 the further timetable of directions will be worked in to suit a hearing date allocated. The Equity Division in its general jurisdiction only case manages a suit at Judge level: (a) (b) (c) (d) where the suit approaches hearing, at which time the Judge to hear the suit will hold a pre-trial directions hearing, where a particular case warrants special treatment by way of case management, e.g. because of unusual complexity or the number of parties involved, where a party specifically has the matter listed for directions before a duty Judge, 28 where a matter has received an order for expedition. PRACTICE IN THE EQUITY DIVISION Practice in the Equity Division is governed by the Rules and by Practice Note 43 (expedition list) and paragraphs 8 and 9 of Practice Note 46 (pre trial directions hearings) 29. A procedural table is printed at the end of this paper. 26 Such date may, in an exceptional situation, be given on the first return date of the Summons, usually such a date will be given when the court deems it appropriate having regard to such considerations as readiness for trial, likely issues and estimated hearing time required. 27 This would not be the usual procedure but could be appropriate in a particular situation. 28 Hence the court leaves it to the parties to adopt a measure of self-help in bringing a matter into the duty judge's list for directions at appropriate stages if required. 29 Now see Practice Note SC Eq 1 Page 8 of 34

9 Commencement of proceedings Different procedures apply to proceedings commenced by statement of claim and proceedings commenced by summons. Most equity actions are commenced by summons. In general, the plaintiff has the option of commencing by summons or statement of claim. 30 A summons is appropriate where the main issue is one of construction, or where there is unlikely to be a substantial dispute of fact 31, but plaintiffs choose their originating process for tactical reasons, and many actions commenced by summons involve significant factual disputes and complex legal issues other than matters of construction. An action must be commenced by statement of claim if the plaintiff claims relief mentioned in SCR Part 4 sub-rule 2(1) 32, including relief in respect of a trust not express and wholly in writing, or possession of land, but the plaintiff s choice of originating process is effectively restored if the plaintiff claims any relief mentioned in sub-rule 2(2) 33, including a declaration of right, an injunction, appointment of a receiver, orders relating to pre-trial preservation of property or relief for trespass to land. The court has power to order that an action commenced by summons continue on pleadings 34 or that the issues be defined by pleadings. 35 In the former case, all of the procedural rules applicable to actions commenced by statement of claim are engaged, including the requirement that evidence at trial be given orally rather than by affidavit 36. In the latter case, the action is still 30 SCR Part 4, rule 3 now UCPR rules 6.3 and SCR Part 4, rule 3 now UCPR rule UCPR rule UCPR rule 6.4(2) 34 Part 5, rule 11. now UCPR rule 6.6(2) 35 Part 5, rule Part 36, rules 1 & 2 now UCPR rule 31.1(2). The Court also has power to direct that oral evidence in chief or in cross-examination be taken by any audio-visual method or by telephone : rule 2A. now UCPR rule 31.3(1) Page 9 of 34

10 governed by the procedures applicable to actions commenced by summons and evidence at trial is given by affidavit 37 unless the Court otherwise orders 38. Every summons issued since 16 June 2003 must state a return date 39. Unless a specialist list is nominated, the summons will be returnable in Court 7A in the Registrar s 9:30 a.m. directions list, and will continue to be case-managed in that list until it is ready to be set down in a list for hearing. Absent special orders, a summons must be served at least five clear days before the return date and, if it is to be served outside New South Wales, the return date cannot be less than one month after the date of filing 40. The Registry will usually comply with a request for a particular return date for a summons or notice of motion, provided that the requested date gives sufficient time for service of the document in accordance with the Rules, and, if the summons or motion is to be heard in a particular list, the requested date is appropriate for that list. 41 If the summons or statement of claim makes a claim for damages, the solicitor must file with it a certificate of reasonable grounds in terms of sections 198J and 198L of the Legal Profession Act This also applies to subsequent pleadings of any party or other court documentation in terms of section 198L. Counsel must not act without the requisite belief in terms of section 198J. Claim for damages is not defined in the Act. It is not unusual to find common law claims for damages in the Equity Division combined with claims for equitable relief and Chancery itself had power in some cases to award damages, 43 but most purely equitable claims are not of that nature. Whether the certification requirement applies to a particular 37 Part 36, rule 3 now UCPR rule 31.1(1) 38 Part 5, rule 7 now UCPR rule 31.1(3) and (4) 39 Part 5, rule 3. now UCPR rule 6.15(1) Plaintiffs previously had the option of filing a summons without appointment for hearing and thereby engaging a default timetable under Practice Note Part 5, rule 3. now UCPR rule 6.15(3) 41 E.g., the Registrar s 9:30 directions list and the 11 am corporations list are generally heard every business day except Wednesdays. 42 Now see sections 345 and 347 of the Legal Profession Act See the discussion in McDermott, Equitable Damages, Butterworths Page 10 of 34

11 document in Equity proceedings depends on the characterization of the claims being made or resisted. Urgent and interlocutory relief If urgent interlocutory relief is necessary, the action is usually commenced by summons. One must always consider the nature and elements of the cause of action before commencing, but it is unwise to plead the cause in haste; it is usually better in an urgent case to put the evidence and prayers for relief before the Court and then to draft a considered pleading, if pleadings are required. The summons may contain prayers for interlocutory as well as final relief, and if so, it must be endorsed with a statement showing which relief is sought on an interlocutory basis. The alternative procedure of filing a notice of motion with the summons or statement of claim is regular but less convenient. If the normal time for service or return of the summons under the Rules is too long, an application should be made to the duty Judge for abridgement of time. The application is made by attending before the duty Judge with the summons to be filed, supporting affidavits showing the grounds for short service as well as the basis for the action, and draft orders providing for service of the documents (summons, affidavits and notice of the orders) on the defendant by a particular time. It may also be appropriate to seek orders concerning the permissible method of service 44 or other matters, which should be included in the draft orders. The solicitor should be equipped with the filing fee to be paid in the Registry; failing that, the solicitor must give a personal undertaking. If the plaintiff seeks ex parte relief, the application is made before the duty Judge. The procedure is the same as on application for abridgement of time, save that the plaintiff must prove its case for ex parte relief and comply with the strict standards of frankness and disclosure which such an application requires. Counsel should have instructions to give the 44 E.g. by fax, on solicitors for the defendant, &c. Page 11 of 34

12 usual undertaking as to damages. If such relief is granted, the summons is usually made returnable before the duty Judge at an early date. If ex parte relief is not sought or is denied but the plaintiff claims interlocutory injunctive relief, the correct procedure will be dictated by the circumstances of the case and the attitude of the parties. At the most urgent end of the spectrum, the plaintiff s solicitor will notify the defendant or the defendant s solicitor that the plaintiff will approach the duty Judge at a particular time to seek immediate interlocutory relief. Such an application will necessarily include abridgement of time limits and an order that the summons be made returnable instanter. It is essential that the defendant be given copies of the material on which the plaintiff intends to rely (summons, draft orders, affidavits) as early as possible. The plaintiff s evidence is likely to be limited and the defendant s non-existent. In a case of unusual urgency, a party may even be allowed to adduce oral evidence before the duty Judge. If the Judge considers it proper to grant an injunction on such short notice, the usual practice is to enjoin the defendant until a specified time and date rather than until further order. This allows the defendant time to mount a proper defence to the plaintiff s claim for interlocutory relief and protects the plaintiff in the interim. The duration of such interim injunctions is usually co-ordinated with further listing dates before the duty Judge; thus it is common to specify that the injunction shall expire at 4 p.m. on such a date. Many such claims for interim protection are resolved by negotiation between the parties resulting in shortterm undertakings to the Court in lieu of an injunction. There are any number of gradations of urgency and circumstance in cases where interlocutory relief is sought. If the plaintiff seeks interlocutory relief until further order, i.e. until the determination of the action, the Court will set short timetables for filing and service of evidence, for other preliminary steps such as the return of subpoenas and notices to produce, and for the hearing of the interlocutory application. This aspect of case management is likely to be conducted by the duty Judge or expedition Judge. The case may be stood over from time to time in the same list or before the same Judge, or be transferred to the Registrar for further management. Otherwise, directions preparatory to an interlocutory hearing may be made by the Registrar. In some cases it is possible to avoid the cost and extra court time of a contested interlocutory hearing by expediting the substantive action and/or setting an early trial date. This course may Page 12 of 34

13 be suggested by one or both of the parties, or by the Court itself. The perceived advantages for either or both parties vary from case to case. For example, a plaintiff who has good prospects of obtaining an interlocutory injunction may be advantaged by pressing for an interlocutory hearing and a longer timetable to enable thorough preparation for the trial if commercial realities suggest that an interlocutory judgment is likely to determine the practical outcome of the dispute; conversely, the defendant in such a case may press for an early trial date and offer undertakings in lieu of an interlocutory injunction. The guiding principle applied by the Court remains one of justice to both parties, and the Court may mould its procedures to the exigencies of a particular case. Expedition Practice Note 43 describes the practice of the Equity Division relating to expedition. 45 Applications for expedition are made by motion returnable any Friday before the expedition Judge. The application must be made promptly once the need for expedition becomes apparent. If it is clear at the outset that an urgent final hearing will be required, a claim for expedition should be filed in or with the summons. Affidavits in support of the motion for expedition should set out the facts giving rise to the need for urgent final hearing in priority over other cases in the Court s list. The practice is that the Judge who grants expedition also manages and hears the case. Case management takes the form of successive directions hearings. Directions may be expected to include matters such as exchange of affidavits or witness statements, notification of objections, and preparation of bundles of documents for tender. Discovery and interrogatories The general rule was that a party may interrogate as of right in a pleaded Equity case, subject to the limits in Part 24 rule 1. A notice to answer up to 30 actual questions could be served after 45 Now Practice Note SC Eq 1 Page 13 of 34

14 the close of pleadings until two months before call-over. The Court retained a general power to order 46 or disallow 47 interrogatories, and a party who wants to interrogate in an action without pleadings, or who wants to interrogate outside the as-of-right limits in a pleaded case, must obtain an order. [Under the UCPR, interrogatories are only available by order: see UCPR Part 22.] Discovery and consequent inspection of documents are no longer available as of right in Supreme Court actions. Present practice requires the party seeking discovery to formulate classes of documents for discovery and to seek the agreement of the discovering party or an order for discovery under Part 23 rule Categories for discovery are commonly formulated by reference to their relevance to particular facts in issue in the proceedings and/or by reference to the nature of the documents, which may include their age and provenance. Discovery may be sought in all actions, whether pleaded or not. Former Practice Note 64, paragraph (8) observed that discovery should rarely be necessary [in actions commenced by summons] because actions involving substantial disputes of fact will normally be commenced by statement of claim. It may also be argued that pleadings better define what facts are really in issue. Nevertheless, most litigants manage to agree on categories for discovery, whether their actions are pleaded or not; and if the matters in issue are unclear, the remedy is to order pleadings, not to refuse discovery. Part 23 rule 2 49 permits one party by notice to require another to produce for inspection up to 50 relevant, non-privileged, identified documents. In effect, this is inspection without discovery, for the list of documents is produced by the inspecting party. It differs from production on notice to produce or on subpoena in that the documents are produced between the parties, not to the Court. 46 Part 24 rule Part 24 rule UCPR rule UCPR rule Page 14 of 34

15 Evidence of witnesses Because most Equity actions are commenced by summons, evidence in chief of witnesses at trial is usually given by affidavit. 50 In an action commenced by statement of claim or continued on pleadings, evidence in chief at the hearing is to be given orally, subject to any contrary direction. 51 The Court may, of course, make orders for the filing and service of affidavits containing all evidence in chief in a pleaded case 52. The Court also has power to order the exchange of witness statements under Part 36, rule 4A 53. The maker of the statement must still be called as a witness, but the rule contemplates that the statement may be tendered as all or part of the witness s evidence in chief, and it prohibits the adducing of evidence the substance of which is not included in the statement without the leave of the Court. This accords with the general practice in the Commercial List 54 and formerly in the Commercial Division. The Court also has power to order or permit oral evidence in an action commenced by summons 55 - a power which may be used e.g. in the case of an unwilling witness who will not make an affidavit voluntarily. Directions and setting down for trial Procedural directions in an action commenced by summons are controlled by the Registrar, or by the duty Judge or Master if the action finds its way into his or her list and is not returned to the Registrar s list. When the action is ready, the Judge, Master or Registrar will enter it in a list for hearing. If procedural or other interlocutory orders are required in an action on pleadings, the moving party files and serves a notice of motion made returnable before the Registrar. Depending who 50 Part 36, subrules 3(2), 2(1) and the definition of trial in rule 1 now UCPR rule Part 36, rules 1 and 2, UCPR rule 31.1(2) 52 UCPR rule 31.1(3) 53 UCPR rule See the Usual Order for Hearing in Practice Note 100 now Practice Note SC Eq 3 55 Part 5, rule 7. Page 15 of 34

16 has jurisdiction to grant the relief sought, the motion will be referred to a Judge or Master or heard by the Registrar. Formerly, any party in a general Equity action on pleadings could file and serve a notice to set down for trial once the pleadings had closed 56. This made the action returnable before the Registrar in the 9:30 list 57 when the Registrar will deal with any outstanding procedural matters and, if it is ready, assign the case to a list for hearing. These provisions for setting down do not apply in the Commercial List or the Technology and Construction List, which have their own procedures, nor do they apply in practice to expedited cases because they are managed directly by the Judge who is to hear them. In considering whether an action is ready to be entered in a list for hearing, it is necessary to consider what directions should be made concerning the final preparation of the case, including (as may be appropriate) the notification, preparation and exchange of documents for tender, notification of objections, preparation of chronologies, outlines of submissions and documents for the Judge. This is particularly important if the case will be entered in the One Day List or the Masters List (see below). Matters in the Masters List are usually not subject to further pre-trial directions. There is no provision for jury trial in Equity, nor for hearing outside Sydney. However, in an appropriate case, a Judge may sit outside Sydney, and any application in that behalf should be made to the Judge listed to hear the case at the earliest opportunity. Lists for hearing Apart from the expedition list, there are effectively three non-specialist lists for hearing in the Equity Division. 56 Part 33, rule 5. If the defendant does so, an affidavit should also be filed deposing to the date of service of the defence in order to demonstrate that the pleadings are closed. See Ritchie s Supreme Court Procedure, [16,320]. 57 See Ritchie s Supreme Court Procedure, [16,320]. Page 16 of 34

17 One Day List From 2004 onwards the Short Notice List has been suspended and the practice which applied to that list has ceased. 58 Cases with a hearing time estimated to be a day or less are now put into a One Day List by the Registrar. The One Day List is called over by the expedition Judge at least once a month, usually on the last Friday of the month. At callover, the expedition Judge will fix cases for hearing before a Judge (the expedition Judge will not necessarily be the trial Judge for cases in the One Day List) and will seek the parties acceptance that the trial Judge will ration time if necessary to ensure that the matter concludes in one day. If no such acceptance is forthcoming, the matter may be placed in the next General List callover. [From 3 September 2007 the former call over for one day matters (short matters) has been abolished, so that hearing dates will be allocated by registrars, usually at the registrar s directions hearing.] The trial Judge may direct that there be a pre-trial directions hearing. General list The general list for hearing covers other actions for hearing by a Judge. After an action is placed in this list, the Court will give the parties notice of a callover before the Registrar. If the action appears ready for hearing the Registrar will fix a provisional date for hearing and, about four weeks in advance, a pre-trial directions hearing before the trial Judge 59 to be attended by counsel who is to conduct the case. The purpose of the pre-trial directions hearing is to confirm that the action really is ready for hearing, to identify matters which could affect its readiness (as to which counsel has a duty of frank disclosure) and make any appropriate directions. If the action does not appear ready, it may lose the hearing date. The pre-trial directions hearing is a last opportunity to order exchange of objections to affidavits, exchange of witness statements and expert reports, 58 Practice in the Short Notice List was governed by Practice Notes 46, paragraphs 1 to 7, which have not been formally withdrawn. See also Practice Note 93 in relation to short pro bono cases. now see Practice Note SC Eq 1, cl 46-49, Short Matters List. 59 Practice Note 46(8) now Practice Note SC Eq1, cl41. Page 17 of 34

18 preparation of bundles of documents, statements of issues and to deal with preliminary matters arising under the Evidence Act. 60 Associate Judges List Actions which may be heard by an Associate Judge are referred by the Registrar to the Associate Judges callover. A Judge or the Court of Appeal may also refer the whole or part of an action to an Associate Judge for hearing. 61 An Associate Judge conducts a callover approximately once a month. At each callover the Associate Judge will list matters, usually Family Provision Act applications, in a running list which will be for one week in the relevant period. Practice concerning affidavits and documents filed in Court Useful precedents for Equity pleadings and court documents may be found in Nevill and Asche, Equity Proceedings with Precedents (New South Wales) (Butterworths, 1981), still an excellent resource despite its age, also the classic English work, Atkin's Encyclopaedia of Court Forms in Civil Proceedings, a copy of which is held in the Bar Library, and the LexisNexis looseleaf/online service, Court Forms, Precedents and Pleadings New South Wales. Most evidence in chief in the Equity Division is given by affidavit. The Rules relating to affidavits are the same in all Divisions. Practitioners should be aware of the following rules and practice, mainly concerning affidavits and documentary evidence. o Documentary evidence to be tendered through or otherwise used in conjunction with an affidavit may be exhibited or annexed to the affidavit. Practitioners must be familiar with SCR Part 38 rule 4 62, which deals with this topic. o Exhibits are physically separate from the affidavit and are not filed in Court. They are identified by attachment of a certificate signed by the person before whom the affidavit is made. Exhibits may be original or, more usually, copy documents; if copies have been 60 Practice Note 46(9). 61 SCR Schedule D, Part 3, paragraph UCPR rule 35.6 Page 18 of 34

19 exhibited to affidavits, originals may be tendered at trial if necessary. Each exhibit must be produced and shown to the deponent at the time of making the affidavit (hence the traditional form of words referring to an exhibit in the body of the affidavit, now produced and shown to me and marked [ ] is [ ] ). Copies of exhibits must be served on each adverse party or the exhibits must be produced for inspection in accordance with Part 38 rule 4(6) 63. Subject to other arrangements for the provision of documents in advance to the Judge who is to hear a case, copies of exhibits should generally be delivered to the Judge s chambers within two days before an expected hearing to enable perusal prior to tender. o Annexures are copy documents which are physically part of the affidavit. They are identified by a certificate endorsed on the annexure (and not on a separate page) signed by the person before whom the affidavit is made The requirement that all pages of an affidavit be consecutively numbered includes the annexures. 64 Formerly, an affidavit which, including its annexures, exceeded 50 pages in length could not be filed without leave of the Court. o The page limit for affidavits was introduced in 1997 to combat a practice which had developed of filing thin affidavits with fat annexures, creating archival difficulties for the Registry and practical difficulties for the Judges when counsel expected them to navigate between badly organised affidavits, annexures and separately tendered documentary evidence. That practice was always incorrect. The former Part 38 rule 4 permitted annexures only where convenient, but for obvious reasons this was difficult for Registry staff to enforce. The point to be drawn from this is that documentary evidence must be intelligently presented with a view to the way in which it will be presented and managed at trial. o A well compiled, paginated and indexed bundle of documents greatly assists the conduct in Court of a case involving complex or voluminous documentation. If the most logical arrangement would integrate evidence tendered through multiple deponents, it is good practice to create a separate binder or Judge s book of documentary evidence organized chronologically, and sometimes also by subject matter, rather than by deponent. This 63 UCPR rule 35.6(6) 64 SCR Part 65, rule 3 now UCPR rule 35.6(3). Page 19 of 34

20 allows the documentary evidence to be managed independently of the order in which it is tendered. The index and contents should be agreed between counsel in advance, if necessary retaining the right to object to the tender of particular items. Sufficient copies should be printed for the Judge, a witness, and each of the parties legal representatives. o Witness statements do not create the same archival problems as affidavits because they are tendered as exhibits, and therefore returned after trial. Care must still be taken to ensure that documentary evidence is manageable and is intelligently presented to the Court. o An affidavit deposing to service of an affidavit should not annex a copy of the affidavit served, but should either exhibit that affidavit or (more conveniently) include a sufficient description of it. 65 o Under the SCR 66 affidavits were to be filed in the Registry at least two clear days before the proceedings were next before the Court. They should be indorsed in the top left margin BEFORE THE COURT ON [DATE]. An unfiled affidavit may not be used without leave. 67. o The Rules do not provide for notices for discovery, lists of documents, notices to answer interrogatories or answers to interrogatories to be filed; these documents should be served but not filed. They may be tendered if it is necessary to rely on them. o Every document filed in Court presents an opportunity to create an impression of competence and reliability. A responsible solicitor should personally proof-read all affidavits and other documents to be filed in Court for both form and content, including i) grammatical sense, spelling and syntax, ii) correct date marking of affidavits, 65 Part 38, rule 7A. now UCPR rule UCPR rule 35.9 now requires affidavits not to be filed unless filed in accordance with the rules, a Practice Note or by leave. Practice Note SC Gen 4 affidavits requires delivery of a tender bundle of documents to be relied upon, including affidavits, at least 48 hours prior to a scheduled hearing 67 Part 38, rule 6. Page 20 of 34

21 iii) iv) pagination, and compliance with the rules of evidence. o The personal engagement of litigants can lead to their insisting that assertions of marginal relevance be included in their affidavits. Legal practitioners are personally responsible for the content of evidence filed in Court. This responsibility can be tested by asking one s self, Would it be proper to ask this question at the hearing? Would it be proper to tender this evidence? Counsel also have a professional duty to ensure that affidavits do not include scandalous or irrelevant material. Counsel conducts the client s case, and not the client. It is right to consider the client s opinion about the conduct of a case, which may sometimes change ones own, for none of us is infallible; but if the client insists on a course that would insert evidence in an affidavit which one ought not adduce at hearing, counsel must resist the client s instructions. PRACTICE IN THE COMMERCIAL LIST Practice in the Commercial List is governed by SCR Part 14 and Practice Note , which prevail to the extent of inconsistency with general Equity and Supreme Court practice. 69 A table of time limits under the Usual Order for Hearing is printed at the end of this paper. The Commercial Division of the Supreme Court was established on 1 January, From its inception, proceedings in the Division were governed by Practice Note 39, which was made in express reliance on the power of the Court under section 76A of the Supreme Court Act to give directions which may override the Rules for the speedy determination of the real questions between the parties to civil proceedings. In 1988 the business of the Construction List in the Common Law Division came under the administration of the Judges of the Commercial Division, who applied a generally similar approach to both classes of litigation. Practice Notes 39 and 58 (Construction List) were reviewed and replaced with effect from 25 March, 1996, by Practice Note 89 (Commercial Division and Construction List). Practice Note 89 was referable to the 68 UCPR rule 45.6 and Practice Note SC Eq 3 69 Authorised by the Supreme Court Act, sec. 76A now Civil Procedure Act, sec.61(1). Page 21 of 34

22 authority and ethos of section 76A, and to the extent of any inconsistency it prevailed over the Rules. The jurisdiction of the Commercial Division was effectively transferred to the Equity Division by the repeal and replacement of the former SCR Part 14 with effect from 1 September, The previous practice of the Commercial Division continues in the Commercial List by virtue of Practice Note , which substantially reproduces the relevant provisions of Practice Note 89. Jurisdiction As noted above, proceedings which a) arise out of commercial transactions, or in which there is an issue that has importance in trade or commerce, and b) are not otherwise specifically assigned to the Court of Appeal, to the Equity Division or to any other nominated Division other than Common Law are assigned to the Equity Division and may be entered in the Commercial List subject to the provisions of Part Also assigned to the Commercial List are the majority of nonconstruction related appeals against awards under the Commercial Arbitration Act Commencement Proceedings in the Commercial List are commenced by summons in a special form 73 which incorporates a statement of issues and contentions and specifies a return date. One should usually draw the contentions so as to include the allegations that would be necessary in a statement of claim, while avoiding any temptation to prolixity, and to describe the relevant facts without the need strictly to observe the distinction between material facts and merely evidentiary 70 Now Practice Note SC Eq 3 71 SCR Part 14, rule 1 now see UCPR rule SCR Part 72A, r. 1A; cf. Part 14, r.4 now UCPR rules 1.16 and 45.8, Schedule 8, Part Practice Note 100, cl. 6 and Annexure 1 now Practice Note SC Eq 3, cl 8 Page 22 of 34

23 facts. The summons provides an opportunity to present the plaintiff s case clearly and persuasively. The summons and defence in Commercial List proceedings are court documentation in terms of section 198L of the Legal Profession Act The belief and certification requirements of sections 198J and 198L 75 apply if that document contains or resists a claim for damages. The summons must be served five days before the return date. 76 If this cannot be done, a fresh return date should ordinarily be obtained from the Registry or on the first or a subsequent return date before the Court from the presiding Judge and the summons amended accordingly. If urgent or ex parte relief is required before commencement or during the course of an action, arrangements for hearing by a Judge should be made with the Commercial List Clerk (tel or ), or if the Clerk is unavailable, with the Associate to the Judge administering the Commercial List. 77 Directions Proceedings in the Commercial List are managed by directions hearings. These are usually conducted by the Judge in charge of the List. The number of directions hearings is sought to be kept to a minimum consistent with the just, quick and cheap disposal of the proceedings. 78 Procedure at the first directions hearing is described in clauses 12 and 13 of the Practice Note 79, which respectively set out a checklist of matters of which the parties must be prepared to inform the Court and give examples of the kinds of directions commonly made. The procedure is flexible, the essential object of the first directions hearing being to identify the nature and scope 74 Now see section 347 of the Legal Profession Act Now see sections 345 and 347 of the Legal Profession Act Part 5, rule 4A(3) now UCPR rule Practice Note 100, clause 19 now Practice Note SC Eq 3, clause Practice Note 100, clause 14; SCR Part 26, rule 1 now Practice Note SC Eq 3, clauses 22 and 24, UCPR rule Practice Note SC Eq 3, clause 24 Page 23 of 34

24 of the dispute, to determine whether the action is appropriate to be heard in the Commercial List, to identify and refer appropriate questions under Part 72 80, to identify and refer appropriate cases for mediation, early neutral evaluation or other alternative dispute resolution, and to make directions for those matters and for other interlocutory steps in preparation of the action for hearing. Directions are usually given at the first directions hearing for the filing of a defence and an affidavit of facts and circumstances supporting the defence and any cross-claims. Common directions include timetables for pleadings, particulars, exchange of experts reports, conferences of experts and service of affidavits or witness statements. At subsequent directions hearings any remaining interlocutory matters can be dealt with. 81 It is necessary for parties to be represented at directions hearings by practitioners familiar with the action with sufficient instructions to inform the Court fully about the matter and with authority to make admissions and/or concessions, and it is necessary for opposing practitioners to have communicated with each other beforehand and prepared minutes of proposed directions (whether or not by consent). 82 The defence should avoid formality and either admit or deny the facts on which the plaintiff relies. 83 The pleading that the defendant does not know and cannot admit is not permitted in the Commercial List, nor is it proper under general principles of pleading. Any necessary additional facts should be properly pleaded and particularized, and the legal grounds for opposition to the relief claimed should be identified. 84 In truth, the principles set out in the Practice Note differ little from those adopted by the best pleaders in any event Now UCPR Part 20, Division 3, rules Practice Note 100, clause 14. now Practice Note SC Eq 3, clause Practice Note 100, clause 18 now Practice Note SC Eq 3, clauses 32 and Practice Note 100, clause 13(2) now Practice Note SC Eq 3, clause Idem. 85 The rule that a pleading should state the material facts, not mere conclusions of law, does not differ from Commercial List practice, because the pleading should be so drawn as to correspond to a recognisable cause of action, and in the case of a statutory cause of action should identify the statute. Page 24 of 34