Statutory privileges

Communications made in an ADR process may also be inadmissible in subsequent legal proceedings on the basis of statutory inadmissibility provisions. These provisions override common law privileges to the extent of any inconsistency. Statutory privileges may be found in specific provisions, such as those dealing with ADR processes ordered by courts and tribunals, or they may be in the form of general provisions in Evidence Acts. Specific provisions will usually override general provisions contained in Evidence Acts.

172 Tapoohi v Lewenberg and Ors (N° 2) [2003] VSC 410 (21 October 2003).

173 Law Institute of Victoria, Mediation – A Guide for Victorian Solicitors (1995) 41.

174 G Hurley, ‘Mediation where a party represents the Australian Government: are there limits to confidentiality’

(2006) 17 Australian Dispute Resolution Journal 29, 31.

175 Law Institute of Victoria, Mediation – A Guide for Victorian Solicitors (1995) 41.

176 Re Stanhill Consolidated Ltd [1967] VR 749, 752.

177 Attorney-General (Northern Territory) v Maurice (1986) 69 ALR 31, 39.

178 See F Crosbie, ‘Aspects of confidentiality in mediation: a matter of balancing competing public interests’ (1995) 2 Commercial Dispute Resolution Journal 51, 62.

179 Buttes Gas and Oil Co v Hammer (No 3) [1980] 3 All E R 475 and Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 289; Szhwy v Minister for Immigration and Citizenship [2007] FCAFC 64.

4.3.1 Federal legislation

There is a range of federal legislation affording statutory privilege to things said or done during ADR processes. Some of the most significant include s131 of the Evidence Act 1995 (Cth), s53B of the Federal Court of Australia Act 1976 (Cth), s34E of the Administrative Appeals Tribunal Act 1975 (Cth), and s94D of the Native Title Act 1993 (Cth). Some aspects of these provisions, and case law concerning them, are canvassed below. A more comprehensive list of relevant federal legislation is in Appendix 4.1.

Evidence Act, s131

Section 131 of the Evidence Act provides that evidence is not to be adduced of communications made in, or documents prepared in connection with, an attempt to negotiate or settle a dispute. It is a provision of general application to proceedings in federal courts, unless its operation is excluded by a more specific admissibility provision.

Section 131 provides a substantial number of exceptions (see Appendix 4.1). Many of the exceptions have a basis in common law (eg ‘without prejudice’ privilege), but some exceptions modify the common law. Where it applies, s131 has been held to leave no room for the application of without prejudice privilege under the common law.

Section 131 was considered by the Federal Court in Silver Fox Co Pty Ltd v Lenard’s Pty Ltd.¹⁸⁰ There, the Court admitted into evidence a mediation agreement which contained several express confidentiality clauses. The agreement was admitted because it was held to fall within the exception to inadmissibility set out at paragraph 131(2)(h). That exception permits admission into evidence of communications or documents that are relevant to determining liability for costs. The decision confirmed that paragraph 131(2)(h) overrides any confidentiality clauses in an ADR agreement, no matter how unambiguous the agreement. Mansfield J took the view that the public policy justification for ss131(1) of the Evidence Act is to prevent communications about settlement negotiations being adduced into evidence ‘for the purpose of influencing the outcome on the primary matters in issue,’¹⁸¹ and that:

The effect of s131(2)(h) is to expose that issue to inspection when costs issues only are to be resolved....There is no apparent public interest in permitting a party to avoid such exposure by imposing terms upon the communications, whether by the use of the expression ‘without prejudice’ or by a mediation agreement.¹⁸²

Thus, once the substantive issues in dispute have been determined by a court, it was held that there is no public policy reason why documents and communications could not then be admitted for the purpose of determining liability for costs.

NADRAC does not think there should be a blanket, unqualified exception to the inadmissibility of ADR communications simply because, for example, a dispute relates to a question of costs. For that reason, NADRAC prefers a more restrictive approach to exceptions to the general rule.¹⁸³

180 Silver Fox Co Pty Ltd v Lenard’s Pty Ltd [2004] FCA 1570.

181 Silver Fox Co Pty Ltd v Lenard’s Pty Ltd [2004] FCA 1570, 36.

182 Silver Fox Co Pty Ltd v Lenard’s Pty Ltd [2004] FCA 1570.

183 See the discussion at section 4.6.2, under ‘Exceptions’. Further, in NADRAC’s view, the costs exception in s131 is undesirably broad.

Federal Court Act, s53B – and its relationship to without prejudice privilege In Pinot Nominees Pty Ltd v Commissioner of Taxation,¹⁸⁴ the Federal Court dealt with the interaction between the inadmissibility provisions of the Federal Court Act and s131 of the Evidence Act. The case concerned the admissibility of evidence of offers of compromise exchanged during court-referred mediation. A party sought to lead evidence of these exchanges on the question of costs. The Court held that, because the mediation was court-referred under s53A of the Federal Court Act, s53B of that Act prevented the admission of the evidence. The Court further held that a party could rely on an offer of compromise made in a ‘without prejudice’ letter sent to the other party after the mediation. The effect of this decision is to:

• reduce the chances of a mediator becoming involved in a dispute about a party’s conduct at the mediation, appropriately separating the mediation from the actual court proceeding

• diminish any expectations that it is the mediator’s role to sanction bad conduct by a disputant (while recognising that it is the mediator’s role to assess the conduct of parties to ensure the effectiveness of the mediation). This allows the mediator to preserve the integrity of their particular role, and to be perceived by the parties as doing so, while also preserving the possibility of adverse consequences for a party’s unreasonable conduct, and

• properly position with the aggrieved party responsibility for seeking redress for another disputant’s poor conduct during ADR.¹⁸⁵

Native Title Act, ss94D(4)

Subsection 94D(4) of the Native Title Act provides that evidence may not be given, and statements may not be made, in the Federal Court concerning words or acts at a mediation conference conducted by the National Native Title Tribunal on referral from the Court. This is, however, subject to the parties’ agreement to the contrary unlike the provisions of the Federal Court Act, discussed above. The provision only deals with admissibility in the Federal Court. In its submission to this reference, the National Native Title Tribunal observed that the Act provides for several statutory exceptions to the conferral of inadmissibility:

First, if the Tribunal member conducting the mediation considers that a party to a

proceeding does not have a relevant interest in the proceeding, the member may refer to the Court the question of whether the party should cease to be a party to the proceeding. The

‘without prejudice’ restriction does not apply to the extent that words spoken or acts done at a mediation conference relate to that question....

Second, subsection 94P(4) also provides that the ‘without prejudice’ principle does not apply where the member conducting the mediation reports to the Court what he or she considers to be a breach of the requirement for parties and their representatives to act in good faith in relation to the conduct of mediation. This is discussed further under ‘conduct obligations’ below.¹⁸⁶

184 Pinot Nominees Pty Ltd v Commissioner of Taxation [2009] FCA 1508.

185 Submission – Federal Court of Australia, 3-4.

186 Submission – National Native Title Tribunal, 4.

4.3.2 State and territory legislation

Each state and territory has legislative provisions preventing verbal or documentary communications made in an ADR process from being admissible in subsequent litigation.

These provisions also contain extensive exceptions. Some of the provisions are cast broadly enough to relate to all ADR processes, while others refer to specific ADR processes, such as mediation. Very few of these statutory arrangements have been judicially considered.

However, there is extensive discussion of some of these provisions in some New South Wales cases.¹⁸⁷

The table in Appendix 4.2 sets out a selection of these provisions. As with state and territory legislation regarding the confidentiality of ADR communications (considered in Chapter 3 (Confidentiality)), the scope of protection against admissibility varies greatly.