Chapter 17

Preparing the case for hearing

In each of courts, tribunals and arbitrations, the following general steps are followed in preparing a case for hearing.

Stage 1: starting the dispute — statement of claim

This is the document that kicks off the court, tribunal or arbitration proceedings. It may also be called a points of claim. In jurisdictions that still use more old-fashioned language, it may also be called a writ. It should have four general sections (although it may not be marked clearly in sections in this way):

A short-form sample statement of claim follows.

This is not a perfect statement of claim and is a pretty fanciful example. They are very expensive oranges. I hate to think what the juice would cost!

As you will see, the statement of claim is a formal document that essentially tells a story. While it employs some official legal language, it sets out all the relevant facts and issues in relation to the dispute. If you read a statement of claim on the assumption it merely tells a story, much of the otherwise intimidating formality a document like this has will fall away and it becomes much easier to understand.

Stage 2: defence

The defence is the opportunity that the defendant or respondent has to tell its version of events. A defence should respond directly to the claim.

In a simple form defence there are essentially three responses, they are:

It is important to bear in mind that any admission is formal and binds the defendant. This means that the dispute on that issue no longer exists. For the purposes of the court proceedings the court considers that the point raised has been conceded and it is no longer an issue that needs to be determined.

A denial is an allegation that the contention in the statement of claim is not correct. It is contested, that is, a matter in dispute.

A non-admission is between the two. It means that the defendant/respondent does neither admit nor deny the allegation. It is putting the plaintiff to proof. That is, the onus is on the plaintiff to establish the allegation is correct. The defendant/respondent reserves its right to challenge the plaintiff/applicant on this point but it does not have the information to hand or is not in a position to make a clear and comprehensive denial of the fact.

Once the direct allegations have been responded to, a defendant/respondent may make further allegations.

These are often other matters it wishes to put in its defence that it considers to be helpful to it and are in addition to or further to the issues pleaded in the statement of claim. The defendant/respondent is not bound simply to reply in a straightforward and direct way. The defence allows it to relevantly raise any matters that are in its interest that the court should be aware of to assist in the determination of the dispute.

A specimen defence to the hypothetical statement of claim is set out below.

As you will see, the defence directly responds to the statement of claim.

Stage 3: cross or counter claim

Once proceedings are commenced by a plaintiff on a statement of claim, at the same time as the defence is filed the defendant/respondent may file a counter claim. This is generally known as a cross claim.

A cross claim is a document that sets out a claim that the defendant makes against the plaintiff. It may arise from the same issues as the statement of claim. It will look and sound a lot like the statement of claim itself. An example is set out below.

On the other hand it may make an allegation in relation to a claim that is unrelated to the matter the subject of the statement of claim. It may be a separate area of law and on totally different facts. The specimen cross claim below illustrates this point.

The third basis on which a cross claim may be drafted is to bring in new parties to the proceedings. This is called ‘joinder’. This is generally done when the defendant/respondent alleges that there is another party who is partially or entirely responsible for any liability that the defendant has to the plaintiff. It can be an allegation that the plaintiff has got the wrong person or that the real agent of destruction causing the breach or damage was the party who is newly joined. It is alleged the new party should be partially or ultimately responsible for the problems they have caused and the formal means of holding them to account in this way is by filing of the cross claim.

Below is a specimen cross claim of this kind:

These documents are collectively called pleadings. That is, they set out the pleas or allegations that the parties wish to make to the court. They are formal documents that allow the court to, in an easy and clear way, identify what the factual and legal issues are in the dispute. The pleadings are effectively closed when the defences and cross claims have been filed. The next stage is the collation of evidence.

Evidence

There are two primary stages in the evidence gathering process:

Stage 4: discovery

Discovery is a process where the parties to the dispute must gather all relevant documents they hold to be produced to and shown to their opponents.

This process disallows the famous Perry Mason golden-document tactic. Countless American TV shows have highlighted a lawyer waving a ‘smoking gun’ document in court that entirely confounds the other side’s case and causes them to lose publicly in a hail of embarrassment.

The system in operation in Australia works against this process. It is generally considered inappropriate that a magic document is disclosed at the last minute that, if it had come to the notice of the parties at some earlier time, would have saved costs and trouble in having a trial. If such a magical document exists, the earlier the party who is the ‘victim’ of it knows, the better. If they are sensibly advised and behave rationally they should either stop their claim or admit the claim the other side has made and allow everyone to move on to more prosperous and profitable things.

In current practice before the courts the discovery process operates as follows:

The process of discovery can be itself a fertile ground for dispute within litigation.

A further sanction for a party not doing its job properly in this context is that they often in time must eventually swear the affidavit that has the party itself or a representative of it telling the court, tribunal or arbitrator and the other party that there are no other relevant documents within the categories that they hold in their possession, custody or power. Of course swearing a false affidavit constitutes perjury.

However, in general terms there is a disinclination by a party to disclose material that it considers to be adverse. This does not matter. A party cannot withhold adverse information simply on the basis it does not wish the other side to see it because it will give them new confidence when proving their case. In fact, that is the very point of the process. Discovery cannot be selective or discretionary. If a document falls within a category that has been sought, it must be disclosed in the list.

Stage 5: telling the tale — affidavits and statements

Affidavits are written statements of evidence provided to a court that comply with the rules of evidence. As set out, the rules of evidence are restrictive and limiting. They do not allow for all types of information to be put before the court. Essentially, only information or conduct of which a witness has direct experience is relevant to be admitted.

The chief requirements of affidavits are:

• they have a formality of structure
• they should not contain conclusions of law (such as ‘we entered into a contract on 1 August 2000’)
• they must contain representations of fact from the direct experience of the witness
• any conversations must be in direct speech — that is, they should read like a movie script or a play.

Courts will generally order affidavits. The key element in the value of an affidavit from the court’s perspective is that it must be sworn on oath. That is, the witness must swear an oath that the contents of the affidavit are true. If they knowingly swear a false affidavit this constitutes perjury, the sanction for such an offence being jail. While it is quite rare for a person swearing an affidavit to go to jail, it is an order that is available to the court to make if it forms a view that the witness is baldly lying.

Because of the necessity to swear an affidavit on oath, it should be comprehensively and precisely reviewed by the person swearing it. Even though it is prepared by a lawyer in draft form, it is the witness’s evidence. There is no comfort for the witness in saying ‘but it was prepared by someone else’. It must be read and considered in absolutely minute detail by the witness. It is the witness’s document.

On the other hand, in a less formal context the court may order statements of evidence. These statements merely need to be signed by the witness. They are not verified on oath. They set out in broad terms the nature and type of evidence that the witness will give. They may or may not have the formality and precision of affidavits. It depends on the circumstances in which the court requests statements of evidence and the agreement between the parties what level of detail the statements will have.

Preparing affidavits is often the most crucial part in the litigation process. It is the stage where the allegations in the statement of claim, defence or cross claim are either backed up or not. If they are not, there are likely to be real problems for the relevant party. They cannot prove what they said they could in their pleading document.

This can be an extremely expensive and time-consuming part of the process. It is necessary for the lawyers and the party itself to ensure that every possible piece of evidence that advances the case is fully and properly set out in the affidavits. Any gaps or weaknesses in this regard will be possibly fatal at the trial.

Preparing affidavits can take a long time. The more witnesses, the more complex the process.

Importantly, witnesses must not confer as to their evidence. It is possible that at trial they will be asked questions about who they have spoken to in preparing their evidence. If they give evidence honestly that they have spoken to other witnesses in an attempt to ‘get their story straight’ there may be a strong submission made to the court that they are not a witness of truth and that their evidence has been tainted by this hot-housing process. The submission is likely to be that the court will not and should not accept their evidence on the basis that it has been either concocted or created by a ‘committee’. The emphasis in an affidavit is on the individual witness’s best and sole recollection of the relevant issues. The ‘workshopping’ of the content of affidavits is not only in breach of all relevant principles of law and practice, but is unwise in every sense.

In the process of finalising affidavits the parties should collate all documentary evidence they contend to support their case and that they wish the court to see in support. Generally speaking, those documents are put to the court through the witnesses. That is the witnesses annex or append documents to their affidavits by making direct reference to them in the document itself. This process is a kind of authentication or verification that the relevant email, letter or document was drafted and sent by a particular person to another on a relevant day. When a witness makes reference in that context to the document they are formally telling the court the document was either received or sent by them or they had a hand in the authorship of it.

As a general rule of thumb all documents that a party wishes to put before the court ultimately at the hearing should be through affidavits. The only real exception to this is documents produced by other parties who are not involved in the court case on subpoenas.

In a case in which oral evidence is provided by parties, the affidavit process is not necessary to a matter of the court order.

However, it is highly likely that documents that will look very much like affidavits will be prepared by the lawyers for either party but not given to the court or provided to the other side. It is generally important that the lawyers know with precision the story that the party is going to tell the court. On this basis they wish the witness to commit in writing what their likely version of events is going to be so that they have predictability and certainty in the running of the case.

Stage 6: hearing or trial

The hearing is when all the preparation culminates and the evidence is presented to the court, arbitrator or tribunal allowing them to finally make their decision.

Again, subtly different procedures apply in relation to court proceedings, arbitrations and tribunal hearings respectively. However there are common features to each.

There are generally five stages to a hearing. These stages can be relatively brief or can take a long time. The hearing can range from one hour from start to finish to multiple months in duration. The length of the hearing will generally be affected by the number of issues in the dispute and the amount of evidence. The smaller the number of issues and the fewer the statements or affidavits the more likely it is the case will take a short amount of time. While this is not an absolute rule, it is a general indication that in my experience has been a good guide.

Opening

Often the plaintiff will open the case to the judge, arbitrator or tribunal member. They explain the scope of the dispute, the issues involved and present a broad précis of the evidence lodged. The emphasis here is placed on being even-handed and explaining in fairly neutral and objective terms the issues before the court.

Sometimes the defendant/respondent will be given a chance to reply although this is fairly rare. If a fair rendering of the case has been made in the opening, generally a reply at this stage is not necessary.

Taking of the plaintiff’s evidence

In a case that involves affidavits each of the affidavits to be tendered is handed to the court/arbitrator/tribunal and admitted into evidence. This process may be relatively formal (court) or relatively informal (tribunal).

Where there are no written statements of evidence the witness is invited to give oral evidence as to their version of the facts and circumstances giving rise to the dispute. This is generally done by the lawyer for that particular party asking questions of the witness that are very open-ended in an attempt to elicit their evidence. These questions cannot have implied or assumed answers and must be in very general terms. The emphasis is placed on the witness giving honest and clear evidence as to their version of events. They are not to simply elicit evidence that is in the benefit of the plaintiff’s case at the sacrifice of the truth.

After the evidence of the plaintiff has been either lodged in documentary form or given orally, the other parties to the proceedings are generally offered the opportunity to cross- examine that witness. This involves asking questions of that witness that test their version of events in a more or less polite manner. Lawyers have a vast range of different cross-examination styles that lawyers have. Some are nursing and cajoling. Others are belligerent and hostile. Depending on the facts, the court may give a wide degree of latitude the person cross-examining as to the nature and terms of questions they may ask. They of course cannot ask about anything they want. It needs to be relevant to the matters in dispute and generally of assistance to the court, arbitrator or tribunal in deciding who is in the right or wrong.

During the course of the examination in chief or the filing of affidavits all relevant documents that the plaintiff wishes to be tendered to the court are to be provided.

Once all the evidence has been provided to the court the plaintiff wishes to tender or leave if the case is closed.

Defendant’s case

The defendant undertakes a similar process to that of the plaintiff. All their statements or affidavits are submitted to the court. All documents they wish to tender are in due course submitted to the court. Each witness, if they are giving oral evidence, provides their version of the facts and events in the same way as the witnesses for the plaintiff. They are cross-examined in a similar manner. Almost identical rules apply in relation to the admission or acceptance of evidence by the court.

Submissions

Once all the evidence has been accepted by the court, arbitrator or tribunal it generally then invites the parties to make submissions on the consequences of that evidence in the context of the issues pleaded in the case. This means that the representatives for the parties need to marry what they tell the court to what the issues are in the pleadings and the way in which the evidence has come out.

The submissions generally are concerned with who is to be believed on the respective versions of events and the consequences of those submissions. They can sometimes be called addresses.

At the end of the submissions generally the trial ends and either the judge, arbitrator or tribunal member comes up with a decision on the spot or ‘reserves’ their decision. A reserved decision means they wish to go away and consider the evidence, submissions and all the issues in relation to the case in coming to their conclusion.

Judgement

The final stage in the process is the court issuing a judgement on the matters in dispute.

There is a wide range of potential results that a court, arbitrator or tribunal may determine as being appropriate in normal circumstances depending on the nature of the issues, the evidence and the terms of the submissions.

In this context every case is different and subtle variations of fact in two otherwise similar cases may yield vastly different results.

Stage 7: appeals

Generally speaking there is an appeal mechanism in relation to decisions initially made. This is a complex and detailed area of the law and appeal rights vary in different courts, tribunals and under arbitration rules.

It is not possible to summarise efficiently each of those rules (without reducing the reader to extreme boredom!). However a common theme across all jurisdictions is that grounds of appeal need to be identified. It is necessary to clearly set out why the judge, arbitrator or tribunal member erred in making the decision they did. It is necessary to point to an error and not merely that you do not like the result.

Generally those errors need to be on matters of law. That is the judge, arbitrator or tribunal member did not properly apply the legal tests or misapplied some aspect of the law to the facts in the case. Generally you cannot appeal successfully on the basis the judge did not believe your story or simply got it wrong in your view of the facts.

Rarely do successful appeals rest if the judge, arbitrator or tribunal member has formed a view that the witnesses or a particular party was not credible or was not telling the truth. It is a matter that is generally within the province of the person hearing the evidence and appeal bodies are extremely loath to upset any findings of the person hearing the evidence in this way. The rights of appeal are a complex area and should be given close consideration both as to whether any appeal credibly rests as a result of the determination and secondly the prospects of succeeding on an appeal if brought.

Stage 8: settlement in the process — is it possible?

It is always possible to settle in the course of the determination of the dispute. In fact it is becoming a regular theme in courts, arbitrations and tribunals for the person determining the dispute to strongly encourage the parties to seek mediation or to discuss further potential resolution of the dispute during the course of the preparation of the hearing.

In broad terms the same rules apply as in a pre-proceedings negotiation. However, ordinarily you will have the support of your legal advisers in any negotiation that is undertaken once the proceedings have been commenced. They should and will be able to look after you in relation to strategy, tactics and ensuring that your interests are at all times and to the fullest extent possible protected during the course of the negotiations.

It would be a trap to think that just because you have been sued you still cannot resolve things.

Often commencing proceedings against another party is the ultimate trigger for resolving the dispute. Up until that time the counterparty’s approach is to put the person making the claim to the test in that they want to assess how firmly resolved they are. Once the claimant makes a statement to the counterparty that they are willing to have the case heard and finally determined, the defendant/respondent forms the view that the claim is credible and, in the face of proceedings, starts to seriously negotiate.

This technique should not be underestimated when you have a valid and sustainable claim against a counterparty who is obstinate or unwilling to negotiate a resolution of the dispute early on.

The hot tips

• Know your product — what do you need to do to perform your obligations and exercise your rights?
• Communicate astutely — there can be too much candour when a little will do. On the other hand, don’t try to mask the transparent truth.
• Make an informed decision on communication after thinking about the pros and cons of what you’re going to say.
• Contracts die in three ways — time passing, termination without breach or termination as a result of a breach. All are different and have different consequences. You should be conscious of each.
• The death of a contract is not always a case for mourning; however, consider the commercial implications of the contract ending and the position it leaves you in.
• When a dispute is brewing, do yourself and your lawyers a favour by gathering all the information you can. This is not necessarily a straightforward task — there are risks in not doing it the right way.
• Only consider settlement once you’ve gathered a significant amount of information in relation to the dispute and have a sense of the strengths and weaknesses of your position. Be prepared and considered in whether you embark on a settlement negotiation, let alone in the negotiation itself.
• Mediation is a useful tool but only if used properly and wisely.
• Having someone else deciding your dispute is necessarily uncertain and there is always risk.
• Don’t forget it’s your case and you should understand it as best you can. Be involved. If you don’t understand something, do your best to have the lawyers explain it to you in more user-friendly terms. Remember you are in the realm of the lawyers but that doesn’t mean you become as uninvolved in the process as a patient on the surgical table under a general anaesthetic.
• Lawyers can’t fix the facts — the most brilliant lawyer can’t win a case when the facts are in the other side’s favour. The winning and the losing of the case is almost always with you. Trust your lawyers to advocate your case as best you can; however, they are merely the engine that you fuel with instructions, data and detail.