Case: Damberg v Damberg [2001] NSWCA 87 (2001) 52 NSWLR 492
Outcome: followed
In Damberg v Damberg [2001] NSWCA 87 (2001) 52 NSWLR 492 at [148] [160], Heydon JA (as his Honour then was), with whom Spigelman CJ and Sheller JA agreed, engaged in a lengthy examination of the question whether, and to what extent, admissions or agreements between the parties could bind a court. At [148], Heydon JA identified the problem as being 'the extent to which the parties, by their conduct of proceedings, can prevent the court from deciding a case in accordance with the law or the facts.' At [149], his Honour acknowledged that the pleadings define the issues in a civil case, and that a party failing to plead a claim or defence will generally be unable to rely on it at a later time. His Honour then proceeded to discuss the various ways in which admissions of fact can be made: informal out-of-court admissions at [151]; formal admissions in answer to interrogatories at [152]; and formal admissions pursuant to rules of court at [153]. His Honour pointed out that each kind of admission can be contradicted by other evidence, or the court can choose not to act on the admissions. At [154], his Honour said: 'A party may admit allegations made in pleadings by the opposing party, and may do so either expressly or by non-traverse. The effect of such admissions is to narrow the issues in dispute: they can thus have the effect of restricting the evidence to be tendered and can prevent evidence being called to the contrary.' 45 Heydon JA then mentioned concessions by a solicitor before a trial or by counsel during a trial, or admissions ordered by a court as an alternative to filing evidence to the contrary within a specified time. His Honour also made reference to a statutory power permitting agreed statements of facts. At [155], his Honour said: 'There are significant limitations on the extent to which the use of the above facilities can compel a court to decide a case on a basis contrary to fact.' 47 In Symes v The Proprietors Strata Plan No 31731 [2003] NSWCA 7 at [45] , Heydon JA (with whom Sheller JA and McClellan J agreed) referred to Damberg , saying: 'It is true that there are cases where the courts are averse to pronouncing judgments on incorrect factual hypotheses, because to do so amounts to the giving of advisory opinions and to encouraging collusive litigation: see the cases discussed in Damberg v Damberg [2001] NSWCA 87 ; (2001) 52 NSWLR 492 at [148] - [160] . However, these perils do not exist here. It has not been demonstrated that the hypothesis that No 3 wall was common property is plainly incorrect. There is some evidence that it was incorrect; on this appeal evidence strongly pointing in the contrary direction has been filed. Courts commonly act on admissions in relation to matters of fact which might be disputed if the parties desired to do so, but which they have chosen to arrive at a compromise about.' 49 In my view, to confine the non-acceptance of admissions on the pleadings to circumstances in which their falsity has been established would be too stringent a rule. I recognise that it is important that a party whose allegations in the pleadings have been admitted ought to be entitled to rely upon those admissions. Too great a willingness to depart from those admissions would lead to the lengthening of trials and to uncertainty in the administration of justice, both of which are very undesirable. It seems to me, however, that Heydon JA's formulation of the test in Damberg is the appropriate one, namely that the Court can (and perhaps should) decline to act on admissions when there is 'reason to doubt their correctness', or 'reason to question the correctness of the facts admitted or agreed.' 50 In a case such as the present, there are particular public policy reasons for adopting this less stringent test. The size of this piece of litigation, and the expense of retaining solicitors and counsel to conduct a full-scale defence in a long trial, provide a powerful incentive to the making of admissions, in the hope of securing leniency. In a case in which admissions on the pleadings are made by parties who lack the resources to conduct lengthy litigation in their own defence, the Court should be more ready to put aside the admissions if they appear to be unreliable. Further, in a case such as this, allegations are made of the existence, and the giving effect to, of arrangements or understandings between various parties. There is no alleged arrangement or understanding the existence of which is admitted by both (or, in one instance, all three) parties to it. At best for the ACCC, one party to an alleged arrangement or understanding has admitted the existence, and the implementation, of that arrangement or understanding. The other alleged party (or, in one instance, two parties) to each such admitted arrangement or understanding has defended itself against the allegation. In those circumstances, if the applicant fails to prove against the non-admitting party (or parties) the existence of the arrangement or understanding, then there is a considerable risk that the processes of the Court will be brought into disrepute, if the Court should be required to find against the admitting party that the arrangement or understanding existed and was implemented, but finds in favour of the denying party (or parties) that it did not exist. Members of the public would have some difficulty in understanding how the Court, in a civil case, could reach such contradictory findings. Again, this provides a substantial reason for refusing to act on admissions on the pleadings if, in the light of the evidence, those admissions may be unreliable. 51 Another factor pertinent to a case such as the present is that an admission may amount to a concession as to a matter of law, or a conclusion on a matter of mixed fact and law. If the law is complex, or there is difficulty in determining on which side of an indistinct line the particular facts fall, it is necessary to be wary of accepting an admission conflicting with conclusions drawn on the evidence, and with the benefit of full submissions as to the law.