Posted on April 14, 2011 by Stuart Simington

New pre-litigation requirements in the Land and Environment Court

On 1 April 2011,  the Civil Procedure Act 2005 was amended to include new requirements applying to parties prior to the commencement of civil proceedings.

Unlike the Supreme Court, the amendments apply to all civil disputes in the Land and Environment Court.

The amendments give rise to a number of practical issues and difficulties for Councils and developers as discussed below.

In summary, the amendments involve the following:

  • Pre-litigation requirements – a requirement that reasonable steps be taken to resolve a civil dispute by agreement, or, alternatively, to clarify and narrow issues in the dispute in the event that civil proceedings are commenced (s18E(1)).
  • Pre-litigation protocols – a provision enabling the making of pre-litigation protocols, setting out the reasonable pre-litigation steps for a specified class of disputes (s18C).
  • Requirement to participate – a provision to the effect that each person involved in a civil dispute may not unreasonably refuse to participate in genuine and reasonable negotiations or alternative dispute resolution processes (s18E(3)).
  • Protection of information – protection of information disclosed in accordance with Pre-Litigation Requirements and information disclosed in mediations (ss18F, 18O).
  • Dispute resolution statements – a requirement for an applicant commencing proceedings to file a dispute resolution statement (DRS) identifying the steps that have been taken to try to resolve or narrow the issues in dispute or, if no steps were taken, the reasons why no steps were taken (s18G). The respondent is also required to file a statement advising whether the respondent agrees to this DRS and providing any reasons for disagreement (s18H).

Reasonable steps include, but are not limited to:

  • notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute,
  • responding appropriately to any such notification by communicating about what issues are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute,
  • exchanging appropriate pre-litigation correspondence, information and documents critical to the resolution of the dispute,
  • considering, and where appropriate proposing, options for resolving the dispute without the need for civil proceedings in a court, including (but not limited to) resolution through genuine and reasonable negotiations and alternative dispute resolution processes,
  • taking part in alternative dispute resolution processes.

A failure to comply with the new requirements does not prevent the commencement of proceedings or affect the validity of proceedings (s18K), but it can be taken into account in relation to the costs of proceedings. In other words, a person who may otherwise have had to pay costs of proceedings may not have to do so if the other party did not comply with the pre-litigation requirements before the proceedings were commenced. In class 1 proceedings in the Land and Environment Court, it may mean that the usual rule that costs are not awarded except in unusual circumstances may not apply to a party that did not comply with the requirements.

Some practical issues for Land and Environment Court proceedings

  • Unlike a regular civil dispute (for example, a claim for damages) most disputes in the Land and Environment Court cannot be resolved by a commercial agreement between the parties.
  • For example, in judicial review cases,  where the decision maker has allegedly acted contrary to law in making a decision (eg granting a development consent for prohibited development) it is usually (s82A review aside) not possible for the decision to be corrected without the aid of the Court.
  • It follows that the most that pre-litigation discussions can achieve in many cases will be to narrow issues not avoid proceedings.
  • In merit appeals (such as an appeal against the refusal of a development application) the requirement for genuine and reasonable discussions is quite problematic. The Council is usually entitled to raise any contention on appeal even if it was not a reason for the original decision or discussed in an assessment report.  Therefore, will it be incumbent on the Council responding to a dissatisfied applicant’s correspondence in advance of s97 appeal to nominate the contentions that it will raise with a view to genuine dialogue about how they can be narrowed?
  • It is difficult to see how this is not covered by the obligation to engage in ‘genuine and reasonable negotiations’. Nevertheless, it is the reverse of current practice where the first step the council takes is to file a statement of facts and contentions about three (3) weeks after the proceedings are commenced.
  • The effectiveness of pre-litigation discussions will also, clearly, be dependent on the particularity of the correspondence. It is very difficult for a respondent to give a meaningful response to an applicant’s case unless it has been provided with all relevant particulars of the dispute.
  • Finally, the pre-litigation requirements will also, effectively, bring forward limitation periods. For example, there is a limitation period of only three (3) months after a development consent is advertised under s101 of the Environmental Planning and Assessment Act 1979 for certain legal challenges. It may not be possible to have meaningful correspondence with a consent authority on those matters in the time available before the limitation period expires.

The Chief Judge of the Court has advised the Land and Environment Court Users Group that the Court is considering whether any particular disputes should be excluded from the pre-litigation requirements. It will not be surprising if the court excludes various merit appeals and clarifies the precise requirements in relation to judicial review proceedings in a pre-litigation protocol.