Model Litigant Obligations: What are They and How are They Enforced?

Federal Court Ethics Seminar Series

Eugene Wheelahan[1]15 March 2016

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The "Model Litigant Policy"

1. The "Model Litigant Policy", as it is commonly described, is a Legal Service Direction issued by the Attorney-General pursuant to s 55ZF of the Judiciary Act 1903. It was first issued in 1999. The current version is Appendix B of the Legal Services Directions 2005.

2. I propose today to only focus on the Commonwealth Model Litigant Policy, although there are similar, but not identical, regimes in Victoria, Queensland, New South Wales, the Australian Capital Territory and the Northern Territory.

3. Paragraph 1 of the Commonwealth Direction states:

"Consistently with the Attorney-General's responsibility for the maintenance of proper standards in litigation, the Commonwealth and its agencies are to behave as model litigants in the conduct of litigation."

4. Paragraph 2 goes on to give content to the obligation stating:

"The obligation to act as a model litigant requires that the Commonwealth and its agencies act honestly and fairly by –"

5. It then sets out specific obligations, including such things as:

(a) dealing with claims promptly and not causing delay;

(b) making an early assessment of the prospects of a matter;

(c) paying legitimate claims without litigation;

(d) acting consistently in the handling of claims and litigation;

(e) endeavouring to avoid, prevent and limit the scope of litigation including by participating in alternative dispute resolution where appropriate;

(f) keeping the costs of litigation to a minimum by:

(i) not requiring the other party to prove a matter the Commonwealth or agency knows to be true;

(ii) not contesting liability if the real dispute is about quantum;

(iii) using appropriate methods to resolve litigation including settlement offers or alternative dispute resolution; and

(iv) ensuring that a person participating in settlement negotiations can settle on behalf of the Commonwealth or agency.

(g) not taking advantage of a claimant who lacks resources;

(h) not relying on technical defences;

(i) not appealing from a decision unless there are reasonable prospects for success or it is otherwise justified in the public interest; and finally

(j) apologising where the Commonwealth or agency has acted wrongfully or improperly.

6. Evidently, there is some overlap between these obligations and those under the Civil Procedure Acts and ss 37M-37P of the Federal Court Act 1975. Indeed, in 2007, Jonson J said in Priest v NSW:[2]

"In a sense, s 56 [of the Civil Procedure Act 2005 (NSW)] has the result that every litigant in civil proceedings in this Court is now a model litigant"

7. That statement may be true as far as the description "model litigant" goes. However, it is clear that some of the obligations imposed under the Model Litigant Policy go beyond those imposed on private litigants.

8. The additional obligations can be seen to be directed more to good governance and administration than mere conduct as a litigant in Court – examples include: acting consistently across cases; avoiding technical arguments; not appealing unless there are reasonable prospects or it is in the public interest; etc. Such restrictions do not apply to a private litigant – even if they are a large, well-resourced and repeat litigant.

9. This reflects the fact that the principles and justifications underpinning the Model Litigant Policy are rooted in the relationship between the Crown and its subjects. In the 1912 case of Melbourne Steamship Co Ltd v Morehead[3] Griffith CJ described the obligation of the Crown in litigation as:

"[T]he old-fashioned, traditional and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary."

10. This standard is said to apply because of the Crown's position as "the source and fountain of justice".[4]

11. In a modern day context it arises because of the responsibility on the Attorney-General (as "First Law Officer") for the maintenance of proper standards in litigation. As King CJ said in Kenny v South Australia,[5] the Court and the Attorney-General have "joint responsibility for fostering the expeditious conduct of and disposal of litigation".

12. In Hughes Aircraft Systems International v Airservices Australia,[6] Finn J said:

"There is, I consider much to be said for the view that, having no legitimate private interest in the performance of its functions, a public body … should be required as of course to act fairly towards those with whom it deals at least in so far as this is consistent with its obligation to serve the public interest (or interests) for which it has been created."

13. His Honour went on to observe that the obligation serves to:

(a) protect the reasonable expectations of those dealing with public bodies that they will act honestly and fairly;

(b) ensure public bodies exercise their powers for the public good; and

(c) require that public bodies act as "moral exemplars".[7]

14. Another common justification for the obligation is the litigation advantage brought by government because of its size, resources and expertise as a repeat litigant.

Enforcement

15. So how is the Model Litigant Policy enforced?

16. Section 55ZG of the Judiciary Act provides, in effect, that any person who may be a client of the AGS – for example, the Commonwealth, a Commonwealth Minster, a Commonwealth body, or an employee of the Commonwealth – must comply with the Legal Services Direction as well as any legal practitioner or firm of practitioners acting for such a person.

17. Importantly, subsection (2) provides:

Compliance with a Legal Services Direction is not enforceable except by, or upon the application of, the Attorney-General.

18. And subsection (3) provides:

The issue of non-compliance with a Legal Services Direction may not be raised in any proceeding (whether in a court, tribunal or other body) except by, or on behalf of, the Commonwealth.

19. So a question arises, therefore, what can a private litigant do if the Commonwealth or one of its lawyers breaches the Model Litigant Policy?

20. Well the first thing they can do is make a complaint through administrative channels. However, in many instances, a litigant will want more immediate redress from the Court. Here it becomes important to distinguish between a breach of the Model Litigant Policy itself, being the Direction issued by the Attorney-General (and which cannot be raised in court) and a breach of the model litigant obligation imposed on governments and their legal representatives under common law.

21. In this respect, Austen J held in ASIC v Rich[8] that the Legal Services Direction may be referred to as an aid to understanding the content of the common law duty.

22. There are a number of ways in which a Court may exercise their powers to redress a perceived breach of the common law obligation. For example, it may be a factor that weighs into the exercise of a discretion to grant a stay or adjournment, order discovery, order the calling of a witness, or various other interlocutory or procedural matters.

23. There are also cases where the court has made an adverse costs order against a government litigant at the conclusion of proceedings because of a perceived breach of the obligation.

24. In general, there is a growing tendency on the part of Federal and State courts and tribunals to enforce or exact the standard of fair dealing to be expected from government litigants in this way.

25. By way of example, in the case of Scott v Handley,[9] the Full Federal Court overturned the trial judge's decision to refuse an application for adjournment by the appellants (who were self-represented). The respondent, an officer of the Commonwealth, filed 3 lengthy affidavits 6 days before the trial – and 3 months after they were due under the trial directions. This fact was not relied upon by the self-represented appellants. The Full Court held that the respondent took advantage of the appellants' inability to articulate properly the basis for the adjournment and that, given his position of obvious advantage, this amounted to a miscarriage of justice.

26. In one of the Melbourne Voyager cases,[10] the NSW Supreme Court made adverse costs orders against the Commonwealth because of its delay in seeking to cross-examine the author of an expert report tendered by the plaintiff. It also criticized its approach to applications for extension of limitation periods in claims by former HMAS Melbourne personnel noting that, after 30 applications to the court, only 3 were successfully resisted. It referred to the common law model litigant obligation and the cases of Melbourne Steamship, Hughes Aircraft and Scott v Handley to which I have referred.[11]

27. In Mahenthirarasa v State Rail Authority of New South Wales (No 2)[12] the NSW Court of appeal made an adverse costs order against the Authority for, among other things, filing submitting appearances in the Supreme Court and then the Court of Appeal despite an invitation from the court to participate in the hearings. It held that it was inappropriate for the Court to be deprived of the assistance of the executive branch of government.

28. A survey of the cases reveals that the Courts have been willing to recognise common law obligations on government litigants that, in some instances, go beyond those set out in the Legal Services Direction. For example, courts have held that the obligation extends to:

(a) not adopting a strategy that aims to impair the other party's capacity to defend itself;

(b) not adducing late evidence, or withholding evidence until the commencement of the hearing;

(c) informing the court of the full circumstances of the case;

(d) providing accurate responses to factual inquiries from the other party's solicitors;

(e) bringing to the court's attention arguments of the other side where it appears the court has overlooked them;

(f) warning self-represented litigants about the consequences of failing to adduce critical evidence;[13]

(g) not claiming legal professional privilege simply to prevent documents falling into the hands of a potential claimant; and

(h) making appropriate concessions and not taking every point.[14]

Limits

29. It should be acknowledged, however, that there are limits on the obligation.

30. In Brandon v Commonwealth,[15] Whitlam J of the Federal Court said:

"While the Commonwealth is no doubt a behemoth of sorts, it is not obliged to fight with one hand behind its back in proceedings. It has the same rights as any other litigant notwithstanding it assumes for itself, quite properly, the role of a model litigant."

31. Similarly, in ABB Power Transmission Pty Ltd v ACCC,[16] the Full Federal Court found that the model litigant obligation did not prevent reliance by the ACCC on well-established legal privileges.

32. In ASIC v Hellicar,[17] the High Court overturned a finding by the NSW Court of Appeal that ASIC had breached its obligation to act fairly by not calling an important material witness who was available to it.

33. The Australian Law Reform Commission said, in 1999, when the Model Litigant Policy was first introduced:[18]

"the model litigant rules require fair play, but not acquiescence, and government lawyers must press hard to win points and defend decisions they believe to be correct"

34. The Direction itself states in one of the notes:[19]

"The obligation does not prevent the Commonwealth and its agencies from acting firmly and properly to protect their interests. It does not therefore preclude all legitimate steps from being taken to pursue claims by the Commonwealth and its agencies and testing or defending claims against them."

35. Nevertheless, as mentioned, it is not the Direction that private litigants may seek to enforce, rather it is the duties imposed by the courts which find their source in judicial pronouncement.

36. Private litigants should therefore be alert to the special obligations imposed on government litigants and be prepared to invite the Court to enforce or exact the higher standard that is expected of them.


[1] Barrister at the Victorian Bar.

[2] [2007] NSWSC 41 at [34].

[3] (1912) 15 CLR 333, 342.

[4] Sebel Products v Commissioner of Customs and Excise [1949] Ch 409, 413.

[5] (1987) 46 SASR 268, 273. See also: Appleby, "The Government as Litigant", UNSW Law Journal, Vol 37(1), 96.

[6] (1997) 76 FCR 151, 196.

[7] At 197.

[8] (2009) 236 FLR 1, [527].

[9] (1999) 58 ALD 373.

[10] Galea v Commonwealth of Australia (No. 2) [2008] NSWSC 260, [20]-[21].

[11] Commonwealth of Australia v Smith [2007] NSWCA 168, [124]

[12] (2008) 72 NSWLR 273.

[13] Comaz (Aust) Pty Ltd v Commissioner of State Revenue [2015] VSC 294, [78].

[14] See: Appleby, "The Government as Litigant", UNSW Law Journal, Vol 37(1), 106-8.

[15] [2005] FCA 109, [11].

[16] [2003] FCAFC 261.

[17] (2012) 247 CLR 345.

[18] Managing Justice: A Review of the Federal Civil Justice System [1999] ALRC 89, [3.139].

[19] Note 4.