Case: Field v Commissioner for Railways for NSW [1957] HCA 92 ; (1957) 99 CLR 285
Outcome: followed
Field v Commissioner for Railways for NSW [1957] HCA 92 ; (1957) 99 CLR 285 , Dixon CJ, Webb, Kitto and Taylor JJ, in a joint judgment, said (at 291 292) The law relating to communications without prejudice is of course familiar. As a matter of policy the law has long excluded from evidence admissions by words or conduct made by parties in the course of negotiations to settle litigation. The purpose is to enable parties engaged in an attempt to compromise litigation to communicate with one another freely and without the embarrassment which the liability of their communications to be put in evidence subsequently might impose upon them. The law relieves them of this embarrassment so that their negotiations to avoid litigation or to settle it may go on unhampered. This form of privilege, however, is directed against the admission in evidence of express or implied admissions. It covers admissions by words or conduct. For example, neither party can use the readiness of the other to negotiate as an implied admission. It is not concerned with objective facts which may be ascertained during the course of negotiations. These may be proved by direct evidence. But it is concerned with the use of the negotiations or what is said in the course of them as evidence by way of admission. For some centuries almost it has been recognised that parties may properly give definition to the occasions when they are communicating in this manner by the use of the words "without prejudice" and to some extent the area of protection may be enlarged by the tacit acceptance by one side of the use by the other side of these words: see Thomas v. Austen [(1823) 1 LJ (OS) KB 99]; Kurtz &amp; Co. v. Spence &amp; Sons [(1888) 58 LT 438 , at p 441]; Paddock v. Forrester [(1842) [1842] EngR 146 ; 3 Man &amp; G 903 at p 919; [1842] EngR 146 ; 133 ER 1404 at p 1411]; Hoghton v. Hoghton [(1852) [1852] EngR 446 ; 15 Beav 278 at pp 314, 315; [1852] EngR 446 ; 51 ER 545 at p 559]; In re River Steamer Co.; Mitchell's Claim [(1871) LR 6 Ch App 822 at pp 831, 832]; Walker v. Wilsher [(1889) 23 QBD 335 at pp 337, 338]. Needless to say, the privilege is a matter to be raised by objection to the admissibility of the evidence. For the purpose of deciding such an objection the judge may take evidence on the voir dire . The Justices who delivered the joint judgment went on to hold that the question of whether the privilege attaches depends upon whether the communication formed part of the negotiations for the settlement of the action or was reasonably incidental to those negotiations ( Field 99 CLR at 292). In Korean Air Lines v Australian Competition and Consumer Commission (No 3) [2008] FCA 701 ; (2008) 247 ALR 781 , Jacobson J said (at [72] [74]): Communications made "in connection with an attempt to negotiate a settlement" The statutory requirement that the communication be "in connection with an attempt to negotiate a settlement" reflects the language used by the High Court in Field : at 293. There, Dixon CJ, Webb, Kitto and Taylor JJ contemplated that the privilege extends to cover communications that are reasonably incidental to negotiations. The effect of the authorities at common law is that the privilege applies to offers to negotiate and expressions of willingness to do so; it is not necessary that there be an offer capable of acceptance: Arnotts at 72 3. The same position applies under the Evidence Act . It is sufficient that the communication can be described as an "opening shot" in negotiations: GPI Leisure Corporation Ltd v Yuill (1997) 42 NSWLR 225 at 226.