Owners Corporation Strata Plan 62285 & Ors v Betona Corporation
[2006] NSWSC 216
At a glance
Source factsCourt
Supreme Court of NSW
Decision date
2006-04-05
Before
Gzell J
Source
Original judgment source is linked above.
Judgment (7 paragraphs)
Introduction 1 The Owners Corporation Strata Plan 62285 and the owners of 16 residential units in a building at Vaucluse, Sydney brought proceedings against the developers and the builder, Betona Corporation (NSW) Pty Ltd, alleging various defects with respect to the construction of the units. Those proceedings were referred for mediation under the Supreme Court Act 1970, s 110K. The mediation was conducted on 5 April 2005 and on 6 April 2005. 2 On 5 October 2005, David Lewis Sachs, the solicitor for the Owners Corporation and the residents, sent a deed of settlement and release to all parties marked up with amendments proposed by them. It did not contain amendments proposed by other parties. 3 On 12 October 2005, Ian George, the barrister acting for Betona, sent Mr Sachs an email in which he said that Betona would not agree to pay Gleeson Consulting Pty Ltd a fee as it was already paying $15,000.00 for paving and taking responsibility for repairs. Gleeson had made a report on defects and necessary rectification work. 4 The marked up amendments to the deed provided in cl 1.1(b) that in lieu of rectifying portion of the work described in a report by Gleeson, Betona would pay the Owners Corporation and the residents $15,000.00. The marked up amendments also contained in cl 1.1(a) an acknowledgement by Betona that it would rectify the defects identified in a schedule to the deed. Clause 2.1(g) contained a warranty by Betona that it would enter into any necessary agreement with Gleeson and pay Gleeson's reasonable costs of carrying out the supervision and certification of the rectification of defects. Clause 2.2 required the Owners Corporation and the residents to provide Betona with access, storage and free power and water. 5 On 13 October 2005, emails were exchanged between Mr George and Mr Sachs in which Mr Sachs proposed that Gleeson's costs be shared equally. 6 On 21 October 2005, Mr Sachs had a telephone conversation with Sal Russo, Betona's solicitor, as follows: "Sachs: I have instructions to accept a contribution of $1,500.00 from Betona towards Gleeson's fees. Russo: Betona is prepared to pay up to $1,500.00. Sachs: My client will pay whatever he charges over $1,500.00. As far as they are concerned, if they want him to come to the site every day, they are prepared to pay for it. Let's agree on how the Deed is to be amended now so we don't have to go backwards and forwards. Russo: OK. Sachs: Have you got the last version in front of you? Russo: Yes. Sachs: If you go to clause 2.1(g), I will insert the words "$1,500.00 towards" between the words "pay" and "Gleeson's reasonable costs". Russo: I agree. Sachs: Then, if you go down to clause 2.2, I will include as the Owners' obligation that they will pay the balance. I suggest that I add "and shall pay the balance of Gleeson's reasonable costs referred to in 2.1(g) above". Russo: Agreed. Sachs: I have made the changes in my copy of the document and I will distribute it to everybody later today. Russo: Thank you." 7 Mr Sachs then had his client's counterpart of the deed as amended signed by the Owners Corporation and all the residents. Betona refused to execute the deed. It maintained that at no time had it agreed to undertake any rectification work to unit 13 and at no time did it instruct its lawyers to agree to undertake any such rectification work. The schedule to the deed sent out on 5 October 2005 included as a marked up amendment: "All of the works required to rectify the causes and consequences of leaks in and from the patios to units 13 and 14 and make good." 8 The Owners Corporation and the residents seek specific performance of the agreement in the deed. Admissibility of evidence 9 Betona submitted that the evidence of the conversation between Mr Sachs and Mr Russo, the emails and the marked up deed of 5 October 2005 were inadmissible and the consequence was that the summons seeking specific performance should be dismissed. 10 At the time the mediation was conducted, the Supreme Court Act 1970, s 110P(4) provided that evidence of anything said or of any admission made in a mediation session was not admissible in any proceedings before any court, tribunal or body. Subject to exceptions irrelevant for present purposes, s 110P(5) provided that a document prepared for the purposes of, or in the course of, or as a result of, a meditation session, or any copy of such a document, was not admissible in evidence in any proceedings before any court, tribunal or body. A mediation session was defined in s 110P(1) in the following terms: "In this section, mediation session includes any steps taken in the course of making arrangements for the session or in the course of the follow-up of a session." 11 Betona submitted that these provisions rendered the telephone conversation, the emails and the marked up deed, inadmissible because they occurred in the follow-up of the mediation hearing. Civil Procedure Act 2005 12 The Civil Procedure Act 2005 came into operation on 15 August 2005, after the conclusion of the mediation hearing but before the agreement reached between Mr Sachs and Mr Russo. Transitional provisions are contained in Sch 6. Clause 5(1) provides that, subject to cl 5(2), the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules 2005 apply to proceedings commenced before the commencement of that Act in the same way as they apply to proceedings commenced on or after that commencement. 13 That the mediation constituted a proceeding is clear from the terms of the Supreme Court Act 1970, s 110K under which the order for mediation was made. Under that provision the court was empowered to refer any proceedings, or part of any proceedings, before it, for mediation. 14 The Civil Procedure Act 2005, Sch 6, cl 5(2) enables the court with respect to proceedings commenced before the commencement of that Act to make such orders dispensing with the requirements of the Uniform Civil Procedure Rules 2005 and such consequential orders as are appropriate in the circumstances. 15 The Civil Procedure Act 2005, s 30(1) has a similar definition of mediation session to that contained in the Supreme Court Act 1970, s 110P(1). It also has in s 30(4) a replacement of s 110P(4) and s 110P(5). It provides: "Subject to section 29(2): (a) evidence of anything said or of any admission made in a mediation session is not admissible in any proceedings before any court or other body, and (b) a document prepared for the purposes of or in the course of or as a result of a meditation session, or any copy of such a document is not admissible in evidence in any proceedings before any court or other body."