Commonwealth of Australia v Shenzhen Energy Transport Co Ltd [2016] FCA 1606

FEDERAL COURT OF AUSTRALIA

Commonwealth of Australia v Shenzhen Energy Transport Co Ltd [2016] FCA 1606 File number: QUD 178 of 2013

Judge: DOWSETT J

Date of judgment: 31 August 2016

Catchwords: PRACTICE AND PROCEDURE – without prejudice material sought to be led at trial – where the matter will be best dealt with if left to the trial Judge

Date of hearing: 31 August 2016

Registry: Queensland

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Economic Regulator, Competition and Access

Category: Catchwords

Number of paragraphs: 4

Counsel for the Applicant: Mr M Scott QC and Mr C Young

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Mr D Keane

Solicitor for the Respondent: Thynne & Macartney

REASONS FOR JUDGMENT QUD 178 of 2013

BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant

AND: SHENZHEN ENERGY TRANSPORT CO LTD Respondent

DOWSETT J: 1 I need only provide brief reasons in this matter. The dispute between the parties concerns evidence to be led by the Commonwealth as to the history of negotiations between the parties, concerning the alleged liability of the respondent, some of which is said to have involved "without prejudice" communications. The Commonwealth seeks to lead such evidence in response to an allegation by the respondent that it (the Commonwealth) had failed to limit its loss by earlier remedial action. The Commonwealth seeks to rely on the negotiations as, in part, explaining such delay. Some part of the delay may be attributable to detailed scientific investigations which seem to have been closely associated with the negotiation process. 2 There appears to be little, if anything, in the "without prejudice" material which is inconsistent with the respondent's proposed defence of the case. Its primary concern seems to be that knowledge of the fact that negotiations occurred may compromise its position in the eyes of the trial Judge. In the course of argument, it has been suggested that the "without prejudice" material may also have some relevance in explaining the development of the expert scientific evidence and/or vice versa. In my view, it is quite unlikely that a trial Judge would be surprised or prejudiced by the fact that in major litigation, there had been serious attempts to negotiate a settlement. Indeed, we now expect that such negotiations will occur, and that the parties have an obligation to at least try to resolve the matters in dispute. 3 Although I would like to relieve the trial Judge of the burden of having to resolve this issue, I consider that it cannot be resolved at this stage by reference to the evidence as a whole concerning the course of conduct of negotiations. I would have expected that the parties' concerns could have been met by an appropriate agreed statement as to the course of negotiations between them, but no such solution has yet been identified. 4 In the event that I do not decide this issue, it will be for the respondent to raise it again when the affidavits are read at trial. I do not wish to pre-empt the trial Judge's view, but it might well be that the question of admissibility would not be determined on a blanket basis. It might rather be left to the parties to put relevant parts of the material to witnesses in cross-examination or re-examination. It may be that the Commonwealth is simply trying to facilitate this process by collecting all of the evidence together in one place. However that course has led to understandable concern on the part of the respondent. In my view, the matter will be best dealt with if left to the trial Judge to be dealt with as the evidence develops. In those circumstances, I decline to make the order sought with respect to the "without prejudice" material. Costs should be reserved to the trial Judge. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.