7 Deadly Sins of Litigation: Important pitfalls for practitioners to avoid

In the matter of Combined Projects (Arncliffe) Pty Ltd [2018] NSWSC 649

“There is a tendency for litigation to feed on itself…”

Ominously, the judgment commenced thus, reminiscent of Basten J’s first line in Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84.  The Court (Leeming JA) emphasised the need to be vigilant at all times to guard against this invidious tendency.  In his view, the interlocutory application before the Court was ‘a more extreme example’ of the inherently undesireable ‘autosarcophic’ nature of some litigation.  The application itself was somewhat unremarkable.  It had an ‘underlying aridity’ (it sought to strike out points of a defence, seek particulars and information).  But the judgment serves as a helpful reminder of rather elementary but vital practice and procedure pitfalls to avoid.

The First Defendant owns land Sydney, which is the subject of a large development.  The lots are in the process of being sold.  The Plaintiff owns 10 of the 20 issued shares in the First Defendant. The Second Defendant owns the remainder.

Sin 1: Pleadings should be well founded from the outset 

The Plaintiff commenced proceedings seeking to wind up the corporate Defendant.  They were abandoned.  The present proceedings are in the form of a ‘Further Amended’originating process.

Sin 2: Pleadings should not be unnecessarily lengthy

The pleading (345 paragraphs) is very large.  The Court noted the basic rules of pleading (which appeared to have not been complied with):

  • the party’s pleading must contain only a summary of the material facts on which the party relies (UCPR r 14.7)
  • a pleading must be as brief as the nature of the case allows (UCPR r 14.7).

Sin 3: Court books should not be overly large, must be tendered in sufficient time to the Judge and must be provided to the other side

A ‘large’ court book was tendered to the Judge’s chambers two days prior to the hearing. It was not provided to the other side which hampered their preparation efforts.  His Honour stated:

“It should be elementary for any solicitor involved in litigation in any court that material in contested litigation should not be provided to the court without the knowledge and consent of the other side.”

Sin 4: Particulars (and any disputes about them) are important at the commencementof the proceedings, not after evidence has been exchanged

Particulars of a party’s case are important where pleadings have been exchanged shortly after commencement, and if there are no affidavits or witness statements.  This litigation was completely different.  There has already been the substantial exchange of affidavits.   The orthodox approach of particulars crystalising the issues and identifying the parties’ cases was reversed in the way this litigation has developed.  The Court noted, ‘It very much calls into question the utility of having lengthy arguments about “pleadings” at a relatively late stage prior to the matter being heard on a final basis.’

Sin 5: Do not confuse applications for final relief with interim relief

An application was made for answers to eight questions relating to the sale of units in the development.  This application was made variously, including under section 247A of the Corporations Act.  It was rejected.  Section 247A authorises the grant of final relief to a shareholder, in the form of providing access to the company’s books.  The application was interlocutory, not final, and it was not for the access to particular books, but rather to answer eight specified questions.  It was wholly without basis.

Sin 6: Avoid unnecessary litigation 

This goes without saying. His Honour considered that the application fell within the category of case described by the High Court as ‘Unduly technical and costly disputes about non-essential issues’ (Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46 at [57]).

Many of the contested issues had been resolved informally a week prior to the hearing.  Leeming JA was troubled by the attitude of the parties, in part due to the extent to which ‘swathes of irrelevant material were sought to be tendered on the application’ – to which no reference was later made – and in part by the willingness to contest issues that are ‘so far removed from the real issues in the proceedings’.

Sin 7: Do not waste the Court’s time

Again, this goes without saying. His Honour noted that the unprompted abandonment of some of the allegations in the points of defence, and some of the requests for particulars, tended to confirm that two thirds of a day in court was not called for and it remains to be seen whether the interlocutory process was entirely devoid of utility.


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