The State as a Model Litigant: Recent Analyses by the Courts: Challenges for Government Lawyers

The State as a Model Litigant: Recent Analyses by the Courts: Challenges for Government Lawyers Ian Freckelton SC I.Freckelton@vicbar.com.au Barrister, 616 Crockett Chambers Melbourne, 92257666

The ethical basis of the Model Litigant • obligation. • 2. The content of the obligation • 3. Applications of the obligation • by the courts • 4. Practical challenges of abiding by the • obligation.

An Australian Origin of the Doctrine: Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 at 342, Griffith CJ • “I cannot refrain from expressing my surprise that [a purely technical point of pleading] should be taken on behalf of the Crown. It used to be regarded as axiomatic that the Crown never takes technical points, even in civil proceedings, and a fortiori not in criminal proceedings.”

Dale Boucher “An Ethical Code… Not a Code of Conduct” (1996) 79 Canberra Bulletin of PublicAdministration 3 at 4. • The meaning of [model litigant] is sometimes expressed as being firm but fair. Sometimes, too, I have heard the obligation described as one of being fair and reasonable… [Some commentators] seem to reason that commercialisation means doing what your clients want without any questioning on a professional level at all and that being the model litigant means that you try not to win. We do not agree with that

GA Del Pont, Lawyer’s Professional Responsibility in Australia (2006, Thomson) 296-297. • [G]overnment lawyers’ conduct must be above reproach and be seen to be above reproach. … In conducting litigation government lawyers should act in an exemplary fashion and in a manner indicative of those standards that lawyers representing private litigants should seek to emulate.

Model Litigant Thinking in Context • Non-adversarial justice • Restorative justice • Therapeutic jurisprudence • Justice as a service • Dispute resolution in broader context • Litigation involving government seen as distinct from other forms of litigation

The Victorian Model Litigant Guidelines:http://www.justice.vic.gov.au/resources/3/4/34fd7f00459fb2b0b6a2b6e6d4b02f11/revisedmodellitigantguidelines.pdf The obligation requires that the State of Victoria, its Departments and agencies: (a) act fairly in handling claims and litigation brought by or against the State or an agency; (b) act consistently in the handling of claims and litigation; (c) deal with claims promptly and not cause unnecessary delay; (d) make an early assessment of: (i) the State’s prospects of success in legal proceedings; and (ii) the State’s potential liability in claims against the State; (e) pay legitimate claims without litigation, including making partial settlements of claims or interim payments, where it is clear that liability is at least as much as the amount paid; (f) consider seeking to avoid and limit the scope of legal proceedings by taking such steps, if any, as are reasonable having regard to the nature of the dispute, to resolve the dispute by agreement, including participating in appropriate dispute resolution (ADR) processes or settlement negotiations;

The Victorian Model Litigant Guidelines (g) where it is not possible to avoid litigation, keep the costs of litigation to a minimum, including by: • not requiring the other party to prove a matter which the State or the agency knows to be true; • not contesting liability if the State or the agency believes that the main dispute is about quantum; • taking such steps, if any, as are reasonable to resolve such matters as may be resolved by agreement and to clarify and narrow the remaining issues in dispute; and • monitoring the progress of the litigation and, where appropriate, attempting to resolve the litigation, including by settlement offers, offers of compromise and ADR; (h) when participating in ADR or settlement negotiations, ensure that as far as practicable the representatives of the State or the agency: • have authority to settle the matter so as to facilitate appropriate and timely resolution; and • participate fully and effectively. (i) do not rely on technical arguments unless the State’s or the agency’s interests would be prejudiced by the failure to comply with a particular requirement; (j) do not take advantage of a claimant who lacks the resources to litigate a legitimate claim; (k) do not undertake and pursue appeals unless the State or the agency believes that it has reasonable prospects for success or the appeal is otherwise justified in the public interest; and (l) consider apologising where the State or the agency is aware that it or its representatives have acted wrongfully or improperly.

The Victorian Model Litigant Guidelines:Notes • In essence, being a model litigant requires that the State and its agencies, as parties to litigation, act with complete propriety, fairly and in accordance with the highest professional standards. • The obligation to act as a model litigant may require more than merely acting honestlyand in accordance with the law and court rules. It also goes beyond the requirement for lawyers to act in accordance with their ethical obligations. • The obligation does not prevent the State and its agencies from acting firmly and properly to protect their interests.

Moline and Comcare [2003] AATA 827 at [6], Mr Sassella SM, Dr Miller M: the ethical underpinning • The Commonwealth in its dealings with its citizens occupies a powerful and privileged position. The judiciary has long recognised that this power imbalance imposes special obligations on the Commonwealth not to abuse its power. Indeed, in its dealings with its citizens the Commonwealth is held to standards higher than those of private individuals or corporations. …The Crown should not submit late evidence, even if technically such a course is open

Scott v Handley [1999] FCA 404 at [44]-[45], Spender, Finn & Weinberg JJ • The courts have, for example, spoken positively of a public body's obligation of "conscientious compliance with the procedures designed to minimise cost and delay”; and of assisting "the court to arrive at the proper and just result”. And they have spoken negatively, of not taking purely technical points of practice and procedure of not unfairly impairing the other party's capacity to defend itself; and of not taking advantage of its own default

Scott v Handley [1999] FCA 404 at [46], Spender, Finn & Weinberg JJ • In the present instance [the Commonwealth] (i) was in a position of obvious advantage in relation to unrepresented litigants; (ii) was significantly in default in complying with procedures designed to secure the fair and orderly preparation of the matter for hearing; (iii) served the affidavits on the appellants at an extremely late date with the consequential likely impairment of their capacity to prepare properly for a final hearing

Scott v Handley [1999] FCA 404 at [46], Spender, Finn & Weinberg JJ (iv) did not inform his Honour of the default and of its possible consequences; and (v) took advantage of the inability of the appellants to articulate properly the basis for, and to secure, an adjournment. In our view the conclusion is inescapable that the second respondent has fallen considerably short of the standard properly to be expected of the Commonwealth.

Yong Jun Qin v the Minister for Immigration & Multicultural Affairs [1997] FCA 495, Beaumont, Burchett & Goldberg JJ • Obligation to avoid court error • If it appeared to the Crown that a court lacked jurisdiction, the Crown was not only justified, but bound, to draw the possible absence of jurisdiction to the attention of the court.

The Obligation used as a Sword • There is a growing propensity of parties opposed by Government to accuse it (often gratuitously and emotively) for tactical reasons of being in breach of its Model Litigant obligations. • The forensic attempt is to transmogrify the ethical obligations into an offensive weapon

Argo Pty Ltd v A-G (No 4) [2006] TASSC 22 at [80]-[81], Blow J • Counsel for the plaintiffs made a submission to the effect that the Crown has a duty to act as a model litigant; that a model litigant would have consented to an order … • I do not accept that a model litigant would have consented to the application. This is a case in which the Crown and the TDA face a substantial risk of an unfair trial as a result of delays over many years which, to a large extent, are attributable to the plaintiffs.

Woodcroft-Brown v Timercorp Securities Ltd (in liq) [2011] VSC 427 at [255], Judd J • The Defendants contended that ASIC had not disclosed its true case in a timely fashion through its s of cl and particulars. • Held that in civil penalty proceedings brought by a model litigant a court should not allow the case to change shape during the trial without any proper reconsideration of the pleadings, if there is an identifiable risk of prejudice to the defendants in terms of having a a fair opportunity to meet the case presented against them.

Environmental East Gippsland Inc v VicForests (No 2) [2009] VSC 421 at [35], Forrest J • There is no force in the submission by EEG that VicForests, in making its submission as to the provision of security, was acting contrary to a model litigant. Not only was there no evidence as to the contents of the code or as to whether it applied to VicForests, it seems to me that this is not an issue for the Court to determine on an application such as this.

Groser v Equity Trustees Ltd [2008] VSC 163 at [49]-[50], Habersberger J • I agree with the submission on behalf of the A-G that the A-G’s status as a model litigant is irrelevant to the issue of costs.

Morgan v State of Victoria [2008] VSCA 267, Nettle & Ashley JJA, Pagone AJA • Victoria’s position was hardly that of the model litigant which it purports to be and should have been. Throughout, whatever be the explanation for it, Victoria’s position towards the appellant was very aggressive, repayment being sought prematurely and otherwise inappropriately, and contempt proceedings being threatened on several occasions and ultimately being brought when on proper analysis contempt could not be established.

Solak v Registrar of Titles [2011] VSCA 279 at [86]-[88], Warren CJ, Neave JA, Hargrave AJA • The Registrar’s conduct in the second proceeding and in this appeal fell short of these high standards. As I have explained, the Credit Code point was so tenuous that this alone suggests that the Registrar should not have attempted to rely on it. • However, what makes the Registrar’s reliance on the Credit Code point even more unacceptable is the fact that, if successful, the Credit Code point would significantly undermine indefeasibility of registered mortgages. It would cut across the policy of the TLA. It would increase the risk to lenders, who may pass on the cost to borrowers. • It is puzzling that the government agency entrusted with administering the Torrens system would advance the Credit Code point. Furthermore, the Registrar appears to have forgotten that he is administering a beneficial fund. The purpose of the fund is not to accumulate money but to provide compensation to persons who are deprived of an interest in land by the operation of the indefeasibility provisions. The Registrar’s primary role is to ensure that persons who are entitled to compensation receive it. The responsibility to protect the fund from unmeritorious claims is not paramount. The Registrar ‘has no legitimate private interest of the kind which often arises in civil litigation. [He] acts, and acts only, in the public interest’.[

Slaveski v State of Victoria [2010] VSC 569 at [93]-[95], Kyrou J • The State is well-resourced and aspires to act as a model litigant. The Court is entitled to expect that the State will have a detailed understanding of its discovery and document retention obligations, and that it will comply with those obligations in a timely manner. In this proceeding, that expectation was not fulfilled. • Although in my Substantive Judgment I concluded that the deficiencies in the State’s discovery and document retention caused only short-term inconvenience to Mrs Slaveska and to the Court and did not result in any substantive prejudice or unfairness, those deficiencies were sufficiently serious that the Court ought to take them into account in exercising its discretion in relation to costs. • In all the circumstances, it is appropriate to reduce any costs awarded in favour of the State by 10 per cent to reflect the Court’s displeasure in relation to the deficiencies in the State’s discovery and document retention.

Noone, Director of Consumer Affairs Victoria v Operation Smile [2011] VSC 153 at [12], Pagone J • The overriding duty for the Court must be to achieve justice between the parties and to ensure that it is satisfied that the burden which a party bears is adequately and reliably discharged. A government official exercising a statutory function or duty shares a common interest with the Court in co-operating to achieve the correct result

Noone, Director of Consumer Affairs Victoria v Operation Smile [2011] VSC 153 at [14], Pagone J • In some cases it may be incumbent upon those appearing for the represented party to assist the Court in its task of ascertaining the rights of the parties. That may, in an appropriate case, require those appearing for the represented party to draw attention to matters that might reasonably bear upon the Court’s decision which, in a case where all parties were represented, could be expected to be referred to by the opposing practitioners. It is only the parties, and not the Court, who know the facts which do or could bear upon the Court’s decision and deliberation. The Court should be confident that what the represented party seeks is justified and should be confident of having received all proper assistance including in having had drawn to its attention matters that might be adverse to what is sought but which the Court ought fairly to consider even if only to reject. The Court should expect such assistance especially in cases where the party with representation has a duty, or is expected, to act as a model litigant. In this case it would have been of assistance for the Director’s submissions to have drawn attention to matters in the text and content of the defendants’ impugned statements that might reasonably have tended against the conclusions otherwise urged upon me by the Director. In most cases where such a task is undertaken by legal practitioners for a represented litigant it will benefit, rather than harm, the case of the party for whom the practitioners appear since it will provide a more secure foundation for what is sought by ensuring that what will have been relied upon will, to some extent, have been “tested”. • See too Pagone, Justice Tony --- "Speech - The Model Litigant and Law Clarification" (VSC) [2008] VicJSchol 17.

Model Litigant Obligations and Rigorous and Effective Conduct of Litigation • Model litigant obligations are not a mandate for weakness, capitulation or preparedness to submit to bullying or unfair criticism • It remains appropriate for the State to contest litigation assertively and robustly • The Guidelines should be regarded not as an unwelcome straitjacket but as a liberation from the pressures of unreconstructed adversarial litigation styles

Need for Awareness of Content and Purpose of Model Litigant Guidelines • With use of term (like natural justice, and resort indiscerningly to “the Charter”) as a diffuse mechanism for critique and even vilification, need to be able to respond by reference to Guidelines and key authorities.

Areas of particular vulnerabilityfor government litigation • Pleadings • Discovery • Timeliness • Lack of focus • Oppressive conduct of litigation • Use of media / confidentiality • Failure to assist unrepresented litigants sufficiently • Opting against ADR

Effectively implementing model litigant behaviour • Mindfulness of the inequality of power • Adoption of mindset of • Humility, • Tolerance and patience, • Efficiency, • Attentiveness, • Transparency, • Cost-consciousness, and • Helpfulness toward other parties and the court.

Model Litigant Behaviour • Avoidance of sharp practices • Awareness of need to behave and be seen to behave in an exemplary fashion, including attempting to resolve disputation through ADR, assist the court and other parties (especially the unrepresented)

The State as a Model Litigant: Recent Analyses by the Courts: Challenges for Government Lawyers