Taking a legal action

If your business is involved in legal action or court action in NSW, it would be helpful for you to understand the procedures involved.

Set out below is Rays Lawyer’s guide to dealing with legal actions. It assumes that an event has occurred giving one party grounds to commence legal action against another, for example a person has not repaid a debt on time or breached a contract.

1. Someone makes a claim and starts a legal action

The plaintiff (also known as the applicant, who is the person making the claim against another party/person, known as the defendant or respondent) files a claim in court to take legal action. This claim will state in a summary form and in a chronological order (as far as possible), how the person thinks the other party has broken the law and how it has impacted them – such as misleading conduct, breach of contract, or some other cause of action. The claim will state what remedy the person is seeking, for example compensation plus interest and costs.

2. The defendant is served with the claim

After the plaintiff has filed the claim with the court, they are then required to notify the defendant within a specified time, which varies depending on the nature of the claim and which court the claim was filed. Providing  a copy of the claim to the defendant is known as ‘service’.

3. The defendant has the option of filing a defence and/or cross-claim

If a defendant files and serves a defence then this is where they should set out the basis upon which the plaintiff’s claim should not succeed. The defence should address each paragraph of the claim and either “admit” or “deny” each allegation within the paragraph.  If the defendant denies it, the allegation becomes an issue that needs to be proved by the plaintiff.  If the defendant admits it, the plaintiff does not need to prove this particular allegation.  The claim and the defence then form the basis of the proceedings upon which evidence and the trial will rely.

In addition, the defendant can also raise their own legal claim against the plaintiff or any other third party, which is known as a cross claim in NSW.  In Victoria, this is called a counterclaim.

If the defendant does not file and serve a defence in time (normally 28 days from the time  of service), then the plaintiff may apply for and obtain a default judgment.  If the plaintiff obtains a default judgment for a monetary sum, the plaintiff then can seek to enforce it against the defendant (by way of bankruptcy (if the defendant is an individual) or wind up (if it is a company).

4. Pleadings filed

The plaintiff’s statement of claim along with the defendant’s defence and any cross claims are together known as “pleadings.” All these need to be filed with the court.

5. Discovery

160531 Rays discoveryDiscovery is a court-ordered process whereby each party is required to put together a list of documents which they think relate to the case. Discovery does not happen in all cases. If you conceal documents, you may be punished by the Court and it may negatively affect your case.

You can sometimes issue a notice to produce to the other party to produce a copy of specific document(s) which would be relevant to the case but you do not have a copy of.  The requirements for this should be checked for the particular proceedings on foot.  Usually, the Uniform Civil Procedure Rules 2005 (“UCPR”) apply to the civil proceedings in all NSW courts.

6. Subpoenas

Parties may choose to issue subpoenas, these are court-based orders which force third parties (parties not directly involved in the case) to produce documents or appear in court.  Sometimes, this can be costly and time-consuming so this should only be used in exceptional cases.  The plaintiff is expected to be in possession of all necessary evidence to prove its case when the claim is filed.

If a subpoena is broadly worded, the party issuing this can be accused to be vindictive and on a “fishing expedition”, i.e. it only hopes to (miraculously) find relevant, helpful documents, which it did not have in possession to begin with.  In our experience, this occurs very rarely.

7. Affidavits

Parties will often be ordered to file affidavits which contain the evidence of their witnesses. Usually the defendant will then file an affidavit-in-reply.

The affidavits need to be set out in chronological order and very clear and concise.  They need to be accurate as far as possible.  Drafting affidavits can be time-consuming and will require many revisions since they need to prove or defend each allegation and be checked for any inconsistencies.  The last part is very important as they affect credibility of the witnesses and the accuracy of their memory of the matter.

8. Date set

After all these documents are filed then a court date is usually set.  This can range between 6 months to 3 years depending on the complexity of the case.

9. Pre-trial dispute resolution

Most court processes will require you to meet with the other party in some kind of mediation to see if parties can resolve the issue before it goes to trial.  Most cases settle on this step.  Many factors affect whether the cases settle such as the attitude of the parties, attitude and experience of their lawyers and the capability and background of the mediator.

10. Trial/Hearing

160531 Rays court roomIf the case proceeds to a hearing, each party makes its case and presents its evidence. Witnesses can be examined or cross-examined. A barrister and/or solicitor usually appears for each party, except in cases where a party chooses to be self-represented or in less serious cases (e.g. involving small claims in the local court).

The court will accommodate and look after self-represented litigants in regard to their lack of knowledge or experience of court procedures but this would not extend to how their cases are presented to the Court.

In a very rare case, however, we have seen a judge taking interest of the defendant’s presentation of its case at a very early stage of the proceedings and pointing out a possible (and ultimately successful) defence, which the defendant’s solicitor had not raised at that stage. This judge gave regularly lectures at a university and took interest in the parties’ cases. This would be very, very rare. In our view, this cannot be seen to be prejudicial to the plaintiff as it is in the interest of the justice that the possible defence be put in issue.

11. Judgment

After the hearing the judge or magistrate will make a decision, which is called a judgment. Sometimes this will be on the spot or otherwise reserved, i.e. they will take some time to decide and usually in the form of a written judgement.

12. Appeal

In most cases if you are not happy with a court’s decision then you have the option of applying to a higher court to appeal the decision (e.g. from Local Court to District Court or from Supreme Court to the Court of Appeal).

All information provided on this website including the above is for your reference only and does not constitute legal advice.  You should seek legal advices specific to your needs.

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