[2001] ANZ ConvR 341
Southern Waste Resource Co Pty Ltd v Adelaide Hills Region Waste Management Authority [No 2] (2019) 135 SASR 150
Source
Original judgment source is linked above.
Catchwords
[2001] ANZ ConvR 341
Southern Waste Resource Co Pty Ltd v Adelaide Hills Region Waste Management Authority [No 2] (2019) 135 SASR 150
Judgment (2 paragraphs)
[1]
JUDGMENT
The plaintiffs, Rosario and Antonia Aversa, commenced these proceedings against the first defendant, then known as Roads & Maritime Services but now called Transport for New South Wales (TfNSW), by summons filed on 9 October 2019. At that stage, TfNSW was the only defendant.
The plaintiffs are the owners of a number of properties at Haberfield. The proceedings arise out of the construction by TfNSW of the WestConnex project. As part of that project, TfNSW caused a vertical subdivision of the plaintiffs' properties to be created by the registration of plans by the Registrar General, so that TfNSW could compulsorily acquire substratum lots that were formerly part of the vertically undivided properties owned by the plaintiffs, for the purpose of constructing a tunnel needed for the completion of the project. The essential underlying issue in the proceedings is whether TfNSW has avoided paying compensation for the resumption of the substratum lots that it created under the plaintiffs' properties, because it classified the road to be constructed through the tunnel as a public road, which would not have given rise to a right to compensation in the plaintiffs, when it was always intended by TfNSW to be a tollway, which had the effect of excluding it from the definition of a public road. The plaintiffs' claims for relief in the context of the applicable legislation raise complex issues that need not be addressed in these reasons.
The plaintiffs have filed a second amended summons in which they claimed the following primary relief (there may be some errors in the wording of the prayers as the amended summons that has been provided to the Court is not entirely clear):
1. A declaration that the defendant is liable to pay compensation under s 120 and/or s 129 of the Real Property Act to the Plaintiffs Lands (the interests in substratum land identified in the Statement of Claim) in respect of the purported compulsory acquisition of their lands said to be pursuant to section 177 of the Roads Act 1993 and/or the purported subdivision of those Lands by the First Defendant and leave pursuant to 132(2)(b) of the Real Property Act for that purpose.
2. [Deleted].
3. Further and in the alternative a declaration that the purported Substratum Subdivision (as detailed in Deposited Plan 1252731 and Deposited Plan 1252252, see Schedule 1) of the Plaintiff's Lands is not valid in that it contained an error on the face of the record by purporting to contain a statement of intention to dedicate a public road under s 48 of the Roads Act when the purpose was not for the dedication of a public road under the Act ("the False Declaration").
4. [Deleted].
Further and in the alternative, a declaration that the purported Subdivision was not validly authorised to be registered by s 9 of the Roads Act because there was no true statement of intention to dedicate the specified land as a public road.
5. A declaration that at the time of the making of the False Declaration, the First Defendant knew that the False Declaration was false; or in the alternative; knew that the statutory formalities for executing the dealings, the subject of the statement of intention, had not been satisfied; or in the further alternative and made the said False Declaration recklessly without caring whether they were true or false.
6. Further and in the alternative, a declaration that:
a. The plaintiff is entitled to an estate in fee simple in the Substratum Subdivision of the Land.
b. The plaintiff is entitled to be registered as the proprietor of the estate in fee simple in the said Substratum Subdivision Land.
7. Further in the alternative to prayer [6], a:
a. declaration that the First Defendant holds the whole of the Substratum Subdivision of the Land, on trust for the Plaintiffs;
b. an order that the defendant execute a memorandum of transfer under the Real Property Act in registrable form transferring the Substratum Subdivision of the Land to the Plaintiffs.
8. A declaration that the use of the Land described in the purported Substratum Subdivision as Lots (see Schedule 1) by the Defendant is a trespass.
9. A declaration that the function of carrying out the construction of a road for the purposes of the WestConnex project being conferred on RMS, by operation of s 64(1A) and 71 of the Roads Act, is null and void in circumstances where the Mainline Tunnel, pursuant to the Declaration is not a 'road' by virtue of s 52(3) of the Roads Act.
The plaintiffs have joined as a second defendant the Registrar General of New South Wales. It is not necessary to refer further to the position of the Registrar General in these reasons, as the Registrar General was joined in order to be bound by the determination by the Court of the dispute between the other parties, and has taken a passive stance in relation to the application by the plaintiffs that is the subject of these reasons.
The plaintiffs filed a statement of claim on 30 March 2020. The relevant current pleadings are now the plaintiffs' amended statement of claim filed on 5 June 2020 and TfNSW's defence filed on 19 June 2020.
On 16 March 2022, Parker J delivered judgment on a dispute in these proceedings in which TfNSW resisted the production of certain documents following the service upon it of a notice to produce by the plaintiffs: see Aversa v Transport for New South Wales [2022] NSWSC 277. His Honour set out by way of background to his reasons the following summary of the issues in these proceedings.
[7] The plaintiffs in the proceedings, and the respondents to the motions, are Rosario and Antonia Aversa, a couple who own two residential properties at Haberfield. Subterranean areas of their land have been acquired by TfNSW for the purpose of a motorway tunnel as part of the State Government's WestConnex project. The Aversas allege that the acquisition process was unlawful.
[8] The WestConnex project was announced in 2012. It is a 33 kilometre motorway which will link western and south-western Sydney with the airport and Port Botany. It is being constructed in several stages. Construction began in 2015.
…
[15] The transactions which concern the plaintiffs' land, and which are the subject of these proceedings, took place in 2019. Purporting to act in accordance with its statutory powers under the Roads Act, TfNSW lodged an application with the Registrar General to effect a vertical subdivision of the plaintiffs' land. The subdivision divided the land into surface and subterranean lots. The subterranean lots were to be used for the WestConnex tunnel and associated works. The plans were registered by the Registrar General in March and April 2019. Then, in the exercise of TfNSW's compulsory acquisition powers, it resumed the subterranean lots. The resumption took place in November.
[16] The use of this procedure is explained by s 62(2) of the Land Acquisition (Just Terms Compensation) Act 1991. It provides that where subterranean land is resumed for the purpose of a tunnel, no compensation is payable except where the tunnelling affects the surface land (or existing mines or workings). It is not suggested that the Aversas' land has been, or will be, affected by the tunnelling works for WestConnex. Thus, they are not entitled to compensation for the resumption of their subterranean lots.
…
[19] The notice to produce which resulted in the applications now before the Court was the subject of an interlocutory judgment by Lindsay J in September last year: Aversa v Roads & Maritime Services [2021] NSWSC 1047 . I will refer to this judgment as "J1".
[20] The proceedings came before Lindsay J on an application by TfNSW to set parts of the notice aside. His Honour refused the application. He concluded that the notice was issued for a legitimate forensic purpose (J1 [116]-[121]). It did not involve "fishing" (J1 [129]-[132]) nor was it oppressive (J1 [133]-[137]). His Honour did, however, acknowledge that some of the documents caught by the notice might be the subject of claims for public interest immunity or legal professional privilege, and directions were made which eventually resulted in the present applications coming before the Court (see J1 [144]-[145]).
[21] The claims by the Aversas are legally complex and to some extent novel. Numerous defences have been pleaded or foreshadowed. Based on the way in which the parties' cases were articulated before him, Lindsay J identified a list of issues, or potential issues, at J1 [102]. His Honour also quoted at J1 [103] a statement of the Aversas' case in submissions by their counsel.
…
[23] The Aversas' claim fastens on the subdivision of their land which preceded its compulsory acquisition (see generally J1 [44]-[54]). The contention is that TfNSW's power to effect the subdivision depended upon the land in question being dedicated as a "public road" (Roads Act 1993, s 9). As required by s 9 and the Conveyancing Act 1919, s 195C(1)(d), the plan lodged by TfNSW with the Registrar General contained a statement that the subdivided subterranean land was required for a "freeway".
[24] A freeway is a type of "public road" under the definition of that term in the Roads Act. But WestConnex is a tollway which is not a "public road" (Roads Act, s 52(2)).
[25] In Cappello v Roads and Maritime Services (2019) 100 NSWLR 259, another case involving the compulsory acquisition of subterranean land at Haberfield for the purposes of WestConnex, the Court of Appeal held that the compulsory acquisition of the land was valid even though the acquisition was carried out for the purposes of constructing and operating a "tollway" rather than a "public road". But this was because the power of acquisition was limited only by the "purposes of" the Roads Act. Those purposes went beyond the construction of public roads and included the construction of tollways. The decision is not necessarily a barrier to the Aversas' claim in these proceedings, which attacks a prior stage of the compulsory acquisition process: see J1 [62].
[26] TfNSW accepts that the statement made in the application to the Registrar General about the purpose of the subdivision was in fact wrong, but says that it was a mistake. The plaintiffs say to the contrary. They say TfNSW must have known that the statement was false. The plaintiffs characterise TfNSW's conduct in making the statement and lodging it with the Registrar General as fraudulent.
[27] The Aversas put their claim in three ways. The first is for compensation under the Real Property Act 1900. Such compensation is available for loss and damage arising from fraud, or as a result of deprivation of an interest in land as a consequence of fraud (see ss 120, 129).
[28] The Aversas also contend that the resumption of their subterranean land was ineffective because of TfNSW's prior "fraud". They claim damages in trespass for the unauthorised use of what remains, on their case, their land.
[29] Alternatively, the Aversas seek equitable relief. They contend that if the resumption of their subterranean land was legally effective, the consequence of TfNSW's "fraud" is that the land is held by TfNSW on trust for them. They seek an account of profits from TfNSW.
This Court does not know the circumstances that caused Parker J in [26] to record that TfNSW accepted that the statement made in the application to the Registrar General was wrong in fact, although it was claimed to be a mistake.
It will help an understanding of the position taken by TfNSW on the notice of motion to set out aspects of the Lindsay J's summary of the issues in these proceedings in Aversa v Roads and Maritime Services [2021] NSWSC 1047, that was referred to by Parker J at [20]. Of the 18 questions into which Lindsay J distilled the issues, the following are the most significant for present purposes:
[102] Upon a review of the pleadings and submissions on the current motion, questions which (with some overlapping) present themselves for closer attention in definition of questions of dispute (as between the plaintiffs and the first defendant) include the following, if not others:
…
(c) QUESTION 3: Was the first defendant's acquisition of land defined by reference to Lots in Deposited Plans incorporating "Deposited Plan Administration Sheets" containing false statements of intention on the part of the first defendant affected by those false statements?
(d) QUESTION 4: If the answer to Question 3 is in the affirmative:
(i) was the first defendant's acquisition of land invalid, liable to be set aside or liable to be made the subject of an order (under section 138 of the Real Property Act) for rectification of the Land Titles Register?
(ii) if the answer to (i) is in the negative, is the first defendant bound by its statements of intention to use the land for a freeway?
…
(g) QUESTION 7: What is the nature of the plaintiffs' allegation of "fraud" in all its dimensions? Is it limited to "administrative fraud" (as explained in SZFDE) or does it extend, for example, to "fraud" within the meaning of the Real Property Act, section 42?
(h) QUESTION 8: What, if any, significance would there be in a finding that the process leading to acquisition of the plaintiffs' land was affected by "fraud"?
(i) QUESTION 9: Did the first defendant obtain an indefeasible title upon its registration, under the Real Property Act, as proprietor of the plaintiffs' substratum land?
…
As will be seen, one of the grounds upon which TfNSW resisted the Court referring the proceedings to mediation was its stated wish to be cleared of the allegation that it had fraudulently misled the Registrar General by the circumstances in which it obtained registration of a vertical subdivision of the plaintiffs' land.
The proceedings have been listed for hearing on 9 October 2023 before me with an estimate of three days. The Court was informed that the parties' evidence is complete.
By notice of motion filed on 15 November 2022, the plaintiffs sought an order under s 26 of the Civil Procedure Act 2005 (NSW) that the proceedings be referred to mediation.
TfNSW has strongly opposed that order being made by the Court.
By some mischance, the proceedings were listed for hearing without provision having been made for the determination of the plaintiffs' notice of motion. This matter was brought to my attention as the trial judge, and on 17 April 2023 I listed the plaintiffs' notice of motion before me on 13 July 2023, when it was heard. Given the considerable amount of time that has elapsed since the notice of motion was filed, I will have to address the possibility that there may now be insufficient time for any mediation that may be ordered to take place to be a court-annexed mediation. I will return to this issue below.
At the hearing, the plaintiffs relied upon affidavits by David John Thomson made 15 November 2022 and Mark Shumsky made 8 February 2022 and written submissions by their counsel, Mr Shane Prince SC and Dr Simon Blount. TfNSW relied upon an affidavit of Ryan Andrew John McGowen made on 27 February 2023 and the written submissions of its counsel Mr G Sirtes SC and Ms LM Johnston.
The Court's power to refer these proceedings to mediation, notwithstanding the opposition of TfNSW, is found in s 26 of the Civil Procedure Act 2005 (NSW), which relevantly provides:
26 Referral by court
(1) If it considers the circumstances appropriate, the court may, by order, refer any proceedings before it, or part of any such proceedings, for mediation by a mediator, and may do so either with or without the consent of the parties to the proceedings concerned.
(2) The mediation is to be undertaken by a mediator agreed to by the parties or appointed by the court, who may (but need not be) a listed mediator.
…
The obligation imposed upon parties to a mediation to participate in good faith is relevant to the exercise of the Court's power to refer proceedings to mediation without the consent of a party, as the Court is entitled to weigh in the exercise of its discretion to make the referral the likelihood that the dissenting party will nonetheless act in good faith, so that the mediation may be successful notwithstanding its opposition. Section 27 of the Civil Procedure Act provides:
27 Duty of parties to participate
It is the duty of each party to proceedings that have been referred for mediation to participate, in good faith, in the mediation.
As is generally the case, in deciding whether to exercise its power in s 26 of the Civil Procedure Act, the Court must implement the overriding purpose of that Act, as relevantly set out in s 56, as follows:
56 Overriding purpose
(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.
(3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court.
…
In determining how to exercise its power conferred by s 26 of the Civil Procedure Act, it will be useful for the Court to bear in mind the following observation by Austin J in ASIC v Rich [2005] NSWSC 489 about a material extra-curial statement by Spigelman CJ (s 110K of the Supreme Court Act 1970 (NSW) being a precursor of s 26 of the Civil Procedure Act):
[18] Speaking extra-curially shortly after the introduction of s 110K, Spigelman CJ pointed out that the new section expressly says that the power to make a reference may be exercised with or without the consent of the parties, and he added:
It appears that, perhaps as a matter of tactics, neither the parties nor the legal representatives in a hard-fought dispute are willing to suggest mediation or even to indicate that they are prepared to contemplate it. No doubt this could be seen as a sign of weakness. Nevertheless, the parties are content to take part in the mediation conference if directed to do so by a judge. There is a category of disputants who are reluctant starters, but who become willing participants. It is to that category that the new power is directed…
Authority does not provide particularly clear guidelines as to when it will be appropriate for the Court to refer proceedings to mediation notwithstanding the absence of consent by a party. It appears that the Court has a discretion that must be exercised judicially that will depend upon the specific circumstances of each case, and an exercise of judgment by the Court as to the likelihood that the overriding purpose will be served by the referral such that the risk of the additional costs imposed by the parties of being forced to participate in the mediation are justified. This is a judgment that must be based on experience, as the Court will rarely have objective evidence that is sufficient to enable it to make a truly educated forecast as to the prospects of success of the mediation. Furthermore, experience has now demonstrated that the process of mediation is worthwhile on an overall basis although its prospects of success in a particular case are usually unpredictable.
The initial approach of the courts to the prospect of a party being compelled to take part in a mediation without its consent was as stated by Barrett J (as his Honour then was) in Morrow v Chinadotcom Corp [2001] NSWSC 209; [2001] ANZ ConvR 341, where he said:
[44] The clearly stated preference of one party to continue with the litigation which that party sees as the most appropriate means of dispute resolution must cause a Court to think very carefully before compelling what, on the face of things, may well turn out to be an exercise in futility attended by delay and expense. There will no doubt be some cases where such a course will be justified: where, for example, the Court perceives that emotional or other non-rational forces (including unreasonable intransigence) are at work and a proper sense of proportion may be introduced into the picture by the efforts of a third party skilled in conciliation.
[45] The present proceedings involve commercial parties engaged in a commercial transaction. They may be taken to possess a reasonable degree of business sophistication and acumen. Presumably they (and certainly their respective solicitors) are well aware of the potential benefits, in many cases, of mediation and other non-curial resolution processes. If, with the benefit of that knowledge and the advice of their solicitors, they do not all see sufficient value in resort to some alternative procedure of their own choosing there is, it seems to me, very little, if anything, that is likely to be gained by the Court compelling them to pay at least lip service to it.
[46] While the abstract pros and cons of compulsory mediation have been discussed elsewhere (see, for example, D. Spencer, "Mandatory Mediation and Neutral Evaluation: A Reality in New South Wales", (2000) 11 ADRJ 237), the Court's task in a particular case is to assess the situation before it. My assessment in this case is that mediation forced upon one of the parties, rather than voluntarily embraced by all of them, would be unlikely to achieve anything useful. I note in passing that a similar assessment by Cox CJ in Burke v Humphrey 18 December 2000 [2000] TASSC 178 caused him to observe that an order for compulsory mediation would have been inappropriate, even if the Tasmanian rule of Court purporting to allow the making of such an order had not been ultra vires.
However, judicial sentiment on the issue soon began to evolve. In Idoport v National Australia Bank Ltd [2001] NSWSC 427, Einstein J said:
[47] Notwithstanding the defendants stated attitude to the application which is that a mediation would be futile, as the plaintiffs have pointed out, it is important to bear in mind the fact that following the making of an order for mediation there is imposed upon both parties a statutory obligation to mediate in good faith. Some examination of the case law and academic writings dealing with the statutory requirements and dealing with the essential or core content of an obligation to mediate in "good faith" was given in Aiton Australia v Transfield Pty Ltd [1999] 153 FLR 236 [Einstein J delivered on 1 October 1999] [Leave to appeal to the Court of Appeal refused]. That judgment at p268 included the following:
"In my view, the authorities and academic writings referred to above demonstrate that while the content of any good faith requirement depends on context (statutory or otherwise) and the particular factual circumstances, it is possible to delineate an essential framework for the notion of 'good faith' such that the requirement of 'good faith' in cl 28 is sufficiently certain for legal recognition of the agreement…
…
[49] Whilst I have clear reservations as to the utility of a court ordered mediation in circumstances in which the defendants so very strongly submit that
(a) the very measure of the plaintiffs' claims, and
(b) the chasm between the respective perceptions as to the plaintiffs' prospects of success,
combine to show that there is simply no room for negotiations in good faith, I have to take into account the whole of the unusual circumstances of this unusual litigation.
To my mind, and in the exercise of the court's discretion, as long as the hearing is effectively not disrupted, it is appropriate to accede to the plaintiffs' application for the court ordered mediation. In this regard the continued rollout of the plaintiffs' witnesses is presently anticipated to continue into the early months of 2002.
This evolution in judicial attitude was advanced by Hamilton J in Singh v Singh [2002] NSWSC 852, where his Honour said:
[3] The culture of the Court in relation to the perceived usefulness of compulsory arbitrations has shifted radically in the comparatively short period since s110K was introduced. In Morrow v Chinadotcom Corp [2001] NSWSC 209, Barrett J refused to order a reluctant party to engage in mediation on the basis that, if mediation were not engaged upon willingly, the process would be pointless and likely to be a waste of money. However, in Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427, a very large commercial case, Einstein J made orders for mediation over opposition, as did I in Remuneration Planning Corp Pty Ltd v Fitton [2001] NSWSC 1208. In that case I made the following comment on the change in the perceived wisdom relating to this subject matter at [3]:
"This is an area in which the received wisdom has in my experience changed radically in a period of a few months. A short time ago there was general acceptance of the view adopted by Barrett J in the decision to which I have referred, that there was no point in a mediation engaged in by a reluctant party. Of course, there may be situations where the Court will, in the exercise of its discretion, take the view that mediation is pointless in a particular case because of the attitudes of the parties or other circumstances and decline to order a mediation. However, since the power was conferred upon the Court, there have been a number of instances in which mediations have succeeded, which have been ordered over opposition, or consented to by the parties only where it is plain that the Court will order the mediation in the absence of consent. It has become plain that there are circumstances in which parties insist on taking the stance that they will not go to mediation, perhaps from a fear that to show willingness to do so may appear a sign of weakness, yet engage in successful mediation when mediation is ordered."
That passage was quoted with approval by Austin J in Higgins v Higgins [2002] NSWSC 455, where his Honour concluded at [6] as follows:
"In my view, all of the cases point to the single conclusion that the Court's discretion under s110K is very wide and the Court should approach an application for an order without any predisposition, so that all relevant circumstances going to the exercise of the discretion may properly be taken into account."
In that case his Honour also ordered references to mediation over opposition. Mr Smallbone, of counsel for the defendants in this case, informs me that in that case, in which he was also engaged, the mediation ordered by Austin J was successful. In Yoseph v Mammo [2002] NSWSC 585 Barrett J ordered a mediation, indicating that a significant factor in his decision in Chinadotcom had been that the parties there had been sophisticated commercial parties, unlike those in Yoseph.
[4] I do not sweep aside heedlessly the feelings of the plaintiff as conveyed so frankly to the Court by Mr Beazley. However, in my view, despite those stated feelings, a real possibility of settlement by mediation cannot be excluded, and the success of such a process would be of enormous benefit to all the parties. In the plaintiff's case, I have no doubt that the advantages from his point of view, explained to the plaintiff by Mr Beazley, are entirely real. Another advantage of settlement that must not be forgotten is that, where there is bitterness between parties, whatever the result of a trial, there must always be the risk of an appeal, with the prolongation of conflict and enmity, the continuing uncertainty in the lives of all involved and the chasing of an ever increasing burden of costs. Whilst it will be unfortunate if some additional costs are incurred in a mediation and yet the whole litigious process goes on, in my view the rational course is to compel mediation to be tried. I propose to order that the matter be referred for mediation.
In Daya v CAN Reinsurance Co Ltd [2004] NSWSC 795, Einstein J added:
[12] Where one has a very clear stand taken by a respondent to an application for compulsory mediation plainly enough the Court must pay particular care to the reasons for that position being taken. On the other hand, the clear imperative is for the Court to stand back from the position taken by both parties on such applications and, in exercising the discretion to order or to refuse to order the section 110K compulsory mediation, to look at the situation in perspective. Experience in the area of mediation throws up the fact that the process of mediation may even in major commercial litigation lead to quite unexpected results. From time to time the parties can find some form of unexpected way in which to achieve a compromise. From time to time the very circumstance that the compulsory mediation will cause the major players to have to listen to one another may have a cathartic effect. Particularly is this so when, as so very often will occur, hearing in person, the other side's point of view may change even an entrenched point of view. [cf Aiton v Transfield (1999) 153 FLR 236 where the requirements of mediation in good faith were examined]
In Southern Waste Resource Co Pty Ltd v Adelaide Hills Region Waste Management Authority [No 2] (2019) 135 SASR 150; [2019] SASC 191 Hinton J said in relation to this "significant shift in judicial attitudes regarding compulsory mediation" (footnotes omitted):
[23] Despite the 'contradiction in terms', it is no longer uncommon for courts to order mediation in the face of opposition by a party.
[24] A party's unwillingness to engage in mediation may not necessarily impede a successful mediation. The fact that the adversarial system has not traditionally lent itself to mediation and the fear that a willingness to engage in mediation may be construed as a sign of weakness are potential reasons for reluctance to engage in mediation that can be overcome. There are, of course, other reasons which may prevent a successful outcome. Notwithstanding, often 'reluctant starters' become 'willing participants' as Spigelman CJ explained:
No doubt it is true to say that at least some people, perhaps many people, compelled to mediate will not approach the process in a frame of mind likely to lead to a successful mediation. There is, however, a substantial body of opinion albeit not unanimous that some persons who do not agree to mediate, or who express a reluctance to do so, nevertheless participate in the process often leading to a successful resolution of the dispute.
I am advised that in Victoria no difference in success rates or user satisfaction between compulsory and non-compulsory mediation has been noted. Not all research or anecdotal evidence is to this effect.
It appears that, perhaps as a matter of tactics, neither the parties nor their legal representatives in a hard-fought dispute are willing to suggest mediation or even to indicate that they are prepared to contemplate it. No doubt this could be seen as a sign of weakness. Nevertheless, the parties are content to take part in the mediation conference if directed to do so by a Judge.
More recently, Ward CJ in Eq (as her Honour then was) said in Mehcur v Mehcur [2021] NSWSC 1252:
[31] In New Idafe Incorporated v Barnard [2007] NSWSC 1107 at [17], Brereton J, as his Honour then was, when considering whether to refer the parties in that case to mediation, noted that "even where parties are in entrenched positions, mediation often narrows the gap between them". In Application of Perpetual Trustee Co Ltd; Re: Estate of the late Evelyn Mary Dempsey (No 2) [2016] NSWSC 1718 at [25] , Slattery J considered the nature of the proceedings, the parties involved, the issues that remained to be decided and whether there was a real prospect of a mediated resolution that would be in the best interests of the parties as relevant to the decision of whether that case was appropriate for referral to mediation. The overriding purpose in s 56 of the Civil Procedure Act should also be kept in mind.
The plaintiffs ask the Court to exercise its power in s 26 of the Civil Procedure Act to refer the proceedings to mediation because they are ordinary landowners with a young family who find themselves to be plaintiffs in proceedings that have been on foot for many years and have involved a number of interlocutory hearings. The plaintiffs wish to invoke the process of mediation in order to avail themselves of the possibility of achieving a satisfactory compromise with TfNSW.
The plaintiffs referred to aspects of the "Model Litigant Policy for Civil Litigation" to which TfNSW is required to adhere. In particular:
3.2 The obligation requires that the State and its agencies, act honestly and fairly in handling claims and litigation by:
a) dealing with claims promptly and not causing unnecessary delay in the handling of claims and litigation;
b) paying legitimate claims without litigation, including making partial settlements of claims or interim payments, where it is clear that liability is at least as much as the amount to be paid;
…
d) endeavouring to avoid litigation, wherever possible. In particular regard should be had to the NSW Civil Procedure Act 2005 which provides that the overriding purpose of the Act is to facilitate the just, quick and cheap resolution of the real issues in civil proceedings;
…
f) not taking advantage of a claimant who lacks the resources to litigate a legitimate claim…
The plaintiffs also relied upon a document called "Mediation" published on the website of the Department of Communities and Justice, which included the observation that mediation may be unsuitable if the party dealing with the State does not feel safe when communicating with the other participants, or where there is a power imbalance that means one or more of the participants is not able to participate equally in the process and negotiate on their own behalf effectively. The plaintiffs submitted that there was no reason in this case that was consistent with the policies adopted by the State as to why a mediation of these proceedings should not take place.
TfNSW resisted the Court making an order referring the proceedings to mediation primarily on the ground that the plaintiffs had alleged fraud against TfNSW which extended to the State of New South Wales, through TfNSW, having engaged in a widespread fraud in the process of constructing the WestConnex project. It submitted that this is not a private dispute that is amenable to being settled behind the closed doors of a confidential mediation process. TfNSW is entitled to vindicate itself and defend the claim against it in an open forum of justice. TfNSW submitted that any compromise of these proceedings by TfNSW will necessarily carry with it an implication that the claims had some merit, or at a minimum that TfNSW desired to keep them out of court and beyond the gaze of the public that funds TfNSW.
TfNSW also submitted that, on the advice that it had received, it had formed the view that the plaintiffs' case was entirely devoid of merit on the facts and the proper interpretation of the relevant statutory provisions. That had the effect of engaging clause 3.2(b) of the Model Litigant Policy, which has been set out above. In the application of that policy, TfNSW submitted that it could not make any offer at a mediation to compromise the plaintiffs' claim that involved paying any money to the plaintiffs, because that would involve making a partial settlement that was inconsistent with the requirement that "it is clear that liability is at least as much as the amount to be paid". That is because it is TfNSW's advice and opinion that the plaintiffs' case has no prospects of success so that TfNSW has no liability at all to the plaintiffs.
The plaintiffs responded to this submission by relying, first, upon the observation of Barrett J in Hillig v Darkinjung [2008] NSWSC 409, where his Honour said:
[8] The aim of mediation is to break down entrenched positions where they exist. There seem to be entrenched positions here, but whether that will continue to be the case from 2 May 2008, I cannot tell. Mediation is a means not of determining who is right and who is wrong, or who has a strong case and who has a weak case, or whether one entrenched position is to prevail over another. It is a means of seeking to lead the parties to an agreed solution of one kind or another.
Secondly, they cited the following extract from the judgment of Campbell J (as his Honour then was) in Lidoframe Pty Ltd (as Trustee for Logan Cypress & Framing Trust) v New South Wales [2006] NSWSC 1262:
[7] ... The experience of the Court with s 110K Supreme Court Act 1970, and now with s 26 Civil Procedure Act 2005, has been that compulsory mediation can be a useful tool for the resolution of disputes, even disputes that at first sight look intractable. Thus, there have been orders for mediation even when one of the parties is opposed to mediation: Remuneration Planning Corporation Pty Ltd v Fitton; Fitton v Costello [2001] NSWSC 1208; Higgins v Higgins [2002] NSWSC 455; Singh v Singh [2002] NSWSC 852. There have also been orders for a second mediation, when a first mediation has failed, but there has been a material change in the circumstances: Unconventional Conventions Pty Ltd v Accent Oz Pty Ltd [2004] NSWSC 1050. Even if parties have genuinely tried to resolve a dispute by negotiation between solicitors, and failed, that does not mean that the different dispute-resolution process involved in mediation is unlikely to succeed.
The final word from senior counsel for the plaintiffs in oral submissions was to highlight the plaintiffs' position that the responsible course of action is to permit the parties to sit around a table and see whether the claim can be resolved, having regard to the risk to the plaintiffs of losing their family home and their children's patrimony.
Although the Court's decision whether or not to order that a mediation take place over the opposition of one of the parties should not depend upon the Court's assessment of the level of uncertainty in the outcome of the proceedings and each party's prospects of success, it would in many cases be unrealistic for the Court to ignore the benefit of its experience in making an assessment of whether a mediator may be able to facilitate a resolution of the dispute. In this case, however, I have no sense at all of the likely outcome of the proceedings, or whether there is any chink in TfNSW's self-perceived armour that might be brought to bear at a mediation. It seems to be implicit in TfNSW's adamantine opposition to a mediation taking place that it assumes that the only outcome that could be palatable to the plaintiffs would be a substantial payment of compensation by TfNSW. The Court should not assume that that is the plaintiffs' position. It is a matter of long experience that parties to litigation can lose their enthusiasm and resolve and seek a way out that limits ongoing risks rather than produces substantial victory. The Court does not know what the position of the plaintiffs will be at a mediation and it makes no assumptions in that regard.
Although there is no general rule, I think that the Court should be favourably disposed towards facilitating the possibility of a mediated solution in proceedings between ordinary citizens and the State. That is what I will do in this case.
It will be necessary for the plaintiffs' legal advisers to correspond with the Registry to determine whether it is feasible and convenient for a court annexed mediation to be arranged in this case. Ordinarily, the Court will hesitate to order a reluctant party to incur the costs of a private mediation. In the circumstances I will defer dealing with this issue until I am advised whether or not a court annexed mediation can take place. If that cannot be arranged, I will entertain an application for an order for a private mediation upon terms to be determined. The parties should submit appropriate short minutes of order to my Associate.
[2]
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Decision last updated: 03 August 2023