Singh v Singh

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5239/99 BALJINDER SINGH v ANIL SINGH & ORS JUDGMENT 1 HIS HONOUR: This is an application for an order for proceedings to be referred to mediation under s 110K of the Supreme Court Act 1970. The parties to these unfortunate proceedings are all persons of Indian birth or descent but Australian citizens. They were once friends, engaged in some business dealings together, but unhappily have fallen out disastrously. These proceedings obviously have serious financial consequences for all of them and as is not unusual in cases of former friends falling out, there are strong feelings of bitterness. 2 Despite the advice that he has had that I shall shortly set out, the plaintiff remains opposed to engaging in a mediation. The beliefs and feelings that lead him to that attitude have been succinctly set out by his solicitor, Mr Beazley, in a useful short submission he has prepared, and which has been admitted into evidence as Exhibit A1. The statements from that submission, which I propose to quote, either reflect the evidence which has been led before me, or insofar as they do not appear in that evidence, the defendants for the purposes of this application do not contest the accuracy of the statements. Those statements are as follows: "The Plaintiff believes that profits were siphoned out of the company by the first and second defendants, by amongst other things, paying members of the Defendants' family as employees, who did not work in the shop or did not work the hours claimed.

The plaintiff does not understand how the borrowings were so high with the turnover that was made. The Plaintiff disputes the comp-any [sic] records are as they should be.

All facts are disputed by all parties. The Plaintiff feels strongly that he wants an opportunity to cross-examine the first and second defendants and expose the truth. The Plaintiff believes the Defendants want a mediation to avoid being cross-examined and to reduce the Plaintiff's limited resources; [sic]

The defendants want a mediation. The Plaintiff believes this will further exhaust his resources as the parties are so far apart and the dispute could not be resolved.

The Plaintiff has been counseled [sic] as to the likely length and cost of the hearing and that if the dispute can be settled to his financial benefit in one day, that is the best course. The Plaintiff remains of his belief; [sic]

If a mediation is ordered by the Court, the Plaintiff contends that a former judge be appointed so that the Plaintiff can feel he has had a proper hearing; and ……" 3 The culture of the Court in relation to the perceived usefulness of compulsory arbitrations has shifted radically in the comparatively short period since s 110K 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 Limited v National Australia Bank Limited [2001] NSWSC 427, a very large commercial case, Einstein J made orders for mediation over opposition, as did I in Remuneration Planning Corporation Pty Limited 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 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."

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. 5 Although I have no doubt that Mr Beazley has explained to the plaintiff the reputation of the Registrars in this Division for skill and success in the conduct of mediations, again it is not that I do not understand the plaintiff's feeling that, if there is to be a mediation, it should be before a person of the standing of a former Judge of this Court. But the provision of a mediator of this sort is expensive. The plaintiff's solution is that an expensive mediator should be appointed and the defendants, who desire the mediation, be ordered to pay the mediator's costs in any event. Whilst I do not leave out of account either the plaintiff's feelings in this regard or the standing and skill in mediation of some of the former Judges who act as mediators in this town, when I consider that skilled and experienced mediators are available within the Court without that expense being incurred and with a very good record of success, I do not feel that I ought refer the matter to be mediated by a former Judge. I have taken into account that the plaintiff claims himself to be of small means. Whilst the evidence points to perhaps some greater means in the defendants, it does not show that they are rich men. 6 What the parties are agreed on is, if I should come to the view mediation should be ordered and before a Registrar, the mediation should be before Registrar Berecry (at present Acting Master Berecry), who has indicated himself available to preside over such a mediation in February next year. The parties are agreed that that is a satisfactory time. 7 The question of costs has been agitated before me. The defendants have submitted that the plaintiff ought to be ordered to pay the costs of the motion as he has resisted compulsory mediation but has failed. I am of the view that the best course to be followed in all the circumstances of the case is that, for the moment, the costs of the motion ought be reserved to await the outcome of the mediation, and if necessary, the proceedings. 8 Short minutes should be brought in to encompass my decision.

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