Fermiscan Limited v Veronica Jean James [2009] NSWSC 462

New South Wales Supreme Court

CITATION : Fermiscan Limited v Veronica Jean James [2009] NSWSC 462

HEARING DATE(S) : 25/05/09, 26/05/09, 27/05/09, 28/05/09, 29/05/09 JURISDICTION : Equity Commercial List

JUDGMENT OF : McDougall J at 1

EX TEMPORE JUDGMENT DATE : 25 May 2009

DECISION : See paragraph [15] of the judgment.

CATCHWORDS : EVIDENCE - privilege - settlement negotiations - whether proceedings are "to enforce an agreement... to settle" prior dispute.

LEGISLATION CITED : Evidence Act 1995

CASES CITED : Asciak v Australian Secured and Managed Mortgages Pty Limited (2008) 66 ACSR

Fermiscan Limited (First Plaintiff) PARTIES : Fermiscan Australia Pty Limited (Second Plaintiff) Fiberscan Pty Limited (Third Plaintiff) Veronica Jean James (First Plaintiff)

FILE NUMBER(S) : SC 50044/08

COUNSEL : A S Martin SC / S Wells (Plaintiffs) C D Wood (Defendant)

SOLICITORS : Piper Alderman (Plaintiffs) Middletons (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

McDOUGALL J

25 May 2009 (ex tempore – revised 25 May 2009)

50044/08 FERMISCAN LIMITED & ORS v VERONICA JEAN JAMES JUDGMENT - on admissibility of evidence; see p 40

1 HIS HONOUR: The plaintiffs make a number of claims against the defendant. One group of claims relates to a deed of release and settlement made between the plaintiffs and the defendant in December 2006. As the recitals to that deed make clear, it was intended to settle certain proceedings commenced by the plaintiffs (as applicants) against the defendant (as respondent) in the Federal Court of Australia. 2 The claims that the plaintiffs make include the claims advanced by prayers 10 and 11 of the summons filed on 26 March 2008. Prayer 10 claims an order restraining the defendant from disparaging, or making statements or taking actions which tend to injure or damage, the reputation, standing, trade, business, or diagnostic tests of one or other of the plaintiffs or the abilities of their respective directors, officers and employees. Plainly enough, that claim is referable to cl 5 of the deed of release and settlement: a clause that has been referred to in an earlier ruling that I gave on admissibility of evidence. 3 Prayer 11 of the summons claims payment of the sum of $700,000. Plainly enough, that is referable to cl 2.3 of the deed of release and settlement. By that clause, the defendant agreed to pay two of the plaintiffs jointly that sum ($700,000) on certain conditions. 4 The defendant wishes to read an affidavit sworn by the solicitor who acted for her back in 2006, Mr McCowan. Mr McCowan seeks to give evidence of certain discussions that took place between him and the plaintiffs' solicitor at the time, Mr Toltz, and Mr Carr of the plaintiff. The plaintiffs object, on the ground that if the evidence were admitted, it would be in contravention of s 131(1) of the Evidence Act 1995: That subsection prohibits, among other things, the adduction of evidence of a communication between persons in dispute in connection with an attempt to negotiate a settlement of that dispute. There is no doubt that the material of which Mr McCowan seeks to give evidence falls within s 131(1). 5 However, Mr Wood of counsel, for the defendant, points to s 131(2)(f). Section 131(2) provides that subs (1) does not apply in certain circumstances. One of those is described in paragraph (f): "The proceeding in which it is sought to adduce the evidence is a proceeding to enforce an agreement between the persons in dispute to settle the dispute, or a proceeding in which the making of such an agreement is an issue."