Higgins v Higgins

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1744/00 LILA HIGGINS V JOHN MICHAEL HIGGINS & ANOR JUDGMENT (ex tempore; revised 21 May 2002) 1 HIS HONOUR: These proceedings relate to a property at Camden in which the plaintiff has resided since about 1982. The plaintiff is the mother of the first defendant and mother-in-law of the second defendant. The property was acquired in the name of a company with which the defendants were associated, although the plaintiff claims that she contributed to the purchase money. The company which acquired the property went into liquidation about 1984 and then the defendants took a transfer of the property from the company in liquidation. Subsequently, the property was used to secure various advances, and the plaintiff says she became aware that the property had been transferred into the defendants' name in 1998 when a valuer attended the property, and she then commenced the present proceedings. She is seeking declaratory and other relief to establish that the property is held in a substantial portion in trust for her and that the defendants acquired the property on notice of that trust. The defendants say the plaintiff by proxy approved the sale and transfer of the property to them and they rely on laches and delay. They deny that in the circumstances of the case the plaintiff has obtained any proprietary interest in the property. 2 The plaintiff is aged 76 and in failing health. She has a serious heart condition and is developing problems with her sight. The evidence before me today indicates that the plaintiff's physical state has become much worse over the past 12 months as a result of the strain and stress caused on her by the proceedings. She only has two sons and she says the dispute has torn her family apart. She has not seen or talked to the son who is the first defendant, or his wife, her daughter-in-law, for over three and a half years. 3 The case has been set down for expedited hearing on 24 and 25 June 2001 before Palmer J of this Court. However, the plaintiff has come to Court today on an application filed on 7 May 2002 for an order pursuant to s 110K of the Supreme Court Act 1970 (NSW) and Pt 26 of the Supreme Court Rules that the proceedings be referred to mediation. Today's application is opposed by the defendants. 4 Section 110K was introduced by amendments to the Supreme Court Act which took effect in the year 2000. It gives the Court a discretion to refer proceedings for mediation or neutral evaluation with or without the consent of the parties concerned. An annotation to the section in Ritchie's Supreme Court Procedure says that in the absence of an agreed mediation regime, there probably would be relatively few occasions for the compulsory referral of proceedings to mediation. However, referral may be appropriate where the Court is satisfied that the parties' approach to the resolution of the proceedings is being unduly influenced by emotional or irrational considerations, the effect of which might be minimised by a skilled mediator. 5 It appears the approach to compulsory mediation has evolved since the were powers granted in the year 2000. In Morrow v chinadotcom Corp [2001] NSWSC 209 (28 March 2001) Barrett J refused to order a reluctant party to mediate on the basis that if mediation was not engaged upon willingly, the process would be pointless and would likely to be a waste of money. However, in Idoport Pty Limited v National Australia Bank Ltd [2001] NSWSC 427 (23 May 2001) Einstein J made orders for mediation of massive litigation after the case had commenced, notwithstanding that the mediation process would be long and expensive and the prospects for success were not high. In Remuneration Planning Corporation Pty Limited v Fitton [2001] NSWSC 1208 (14 December 2001) Hamilton J, in the course of deciding what orders should be made for mediation, notwithstanding the opposition of one of the parties to mediation in one of the matters before him, reviewed the other authorities and said: "A short time ago there was general acceptance of the view adopted by Barrett J ... 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." 6 In my view, all of the cases point to the single conclusion that the Court's discretion under s 110K 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. 7 In the present case, it is relevant that the plaintiff is an elderly woman whose health is deteriorating, partly because of the continuation of these proceedings. Her evidence is that she would like to try to resolve the dispute before it goes to hearing, presumably so that the family may be reconciled in her declining years. 8 The desirability of making every reasonable effort to achieve that outcome is, to my mind, obvious. The order would not be made, however, even given those circumstances, if I believed that there was no plausible prospect of success in the process of mediation. 9 On that matter, my decision is not helped by objections that have been taken to some of the evidence that the plaintiff sought to place before me. The evidence related to some without prejudice attempts at settlement. The defendants objected to that evidence under s 131 of the Evidence Act 1995 (NSW). Unfortunately, s 131 does not have any exception to allow evidence to be admitted going to matters relevant to the exercise of a discretion to order mediation. It seemed to me, therefore, when objection was taken to the admissibility of that evidence, that it was inadmissible under s 131, and I excluded it. The result is, however, that I have no clear insight into how far the parties have gone in their own informal attempts to reach a compromise. I have competing assertions about that matter and all I know is that the parties have had discussions. One side says there is room for further discussion. 10 In the circumstances, and on balance, my conclusion is that there is a sufficient possibility that when faced with the prospect of mediation, both parties may approach the matter in the spirit of compromise, that I ought to make an order giving the parties one last chance of avoiding the more confrontational outcome that would result from a fully contested final hearing. I cannot conclude, in other words, that mediation would be hopeless, or anything like hopeless on the state of the evidence before me. I bear in mind the remarks of Hamilton J quoted above. 11 When the application was heard this morning, I indicated to the parties that I needed to have some further evidence with respect to the cost of mediation and the availability of an appropriate mediator, so I adjourned the matter until this afternoon. Now, I have affidavit evidence which indicates that the parties are available on 17 June and there is a mediator available on that day who is prepared to conduct the mediation pro bono. It appears likely that the mediation will be over within a day. The defendants have not submitted that the identified mediator would be an inappropriate person. Indeed, there is evidence of a substantial number of other mediators identified by Leadr, and in respect of none of them has it been contended that the person would be an inappropriate mediator. I am therefore satisfied that a mediator can be found and that a mediation can take place at a very moderate cost by no later than 17 June 2002. I shall frame my orders so that if the parties can arrange for a mediator at an earlier time suitable to all of them, the mediation can take place sooner rather than later. 12 In the event that mediation is successful, further costs will be minimised. On balance, therefore, it seems to me that the proper way to exercise my discretion in the special circumstances before me now is to make an order for mediation. 13 I should say that other submissions were put to me which, in the circumstances, I regard as rather less weighty. There was some argument about whether there were delays in bringing the case to trial, and whether the plaintiff was responsible for some or all of those delays. It seems to me even if she was, the order should still be made. 14 It was also contended that the plaintiff initiated the present proceedings without warning and that negotiations should have happened much earlier than the present time. That may be so, but in a sense, that it is beside the point. The real point is whether anything constructive is be done now to avoid a contested hearing of a kind that would irretrievably drive a wedge deeper into the relationships within this unhappy family. I accept that the Idoport and Remuneration cases are distinguishable on their facts. I have cited them for the general principles to which I have referred. The basis of my decision is the exercise of my discretion on the facts of this case. 15 My orders are - (1) Order that the proceedings be referred for mediation. (2) Order that the mediation be undertaken by John McDermott on 17 June 2002 at the offices of Messrs Gilbert and Tobin Solicitors, or before any mediator listed in Annexure A or paragraph 3 to the affidavit of Benjamin Keenan, sworn on 20 May 2002 at such time prior to 17 June and in such place, as the parties may agree. (3) Liberty to apply to the Equity Duty Judge on 24 hours notice. (4) Costs reserved. **********

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