Wentworth v Rogers & Anor [2004] NSWCA 109 (30 March 2004)

Last Updated: 5 April 2004

NEW SOUTH WALES COURT OF APPEAL

CITATION: Wentworth v. Rogers & Anor. [2004] NSWCA 109

FILE NUMBER(S):

40474/03

HEARING DATE(S): 30 March 2004

JUDGMENT DATE: 30/03/2004

PARTIES:

Katherine Wentworth - claimant

Gordon J. Rogers - 1st opponent

Toni Rogers - 2nd opponent

JUDGMENT OF: Hodgson JA

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): SC11094/95

LOWER COURT JUDICIAL OFFICER: Howie J

COUNSEL:

Mr. D. Officer QC for claimant

No appearance for 1st opponent

Mr. R. Lovas for 2nd opponent

SOLICITORS:

Russo & Partners, Arcadia for claimant

Dorrough Smart, Surry Hills for 2nd opponent

CATCHWORDS:

ALTERNATIVE DISPUTE RESOLUTION - MEDIATION - EVIDENCE - Document signed at mediation - Alleged to be a binding agreement - Admission into evidence opposed - Whether admissible.

LEGISLATION CITED:

Farm Debt Mediation Act 1994, s.15

Supreme Court Act 1970, ss.110N, 110P

DECISION:

Notice of Motion dated 9 March 2004 dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40474/03

HODGSON JA

Tuesday 30 March 2004

WENTWORTH V. ROGERS & ANOR.

Judgment

1 HODGSON JA: I am dealing with a Notice of Motion dated 9 March 2004, brought by Ms. Wentworth, seeking the vacation of directions that I have made in relation to procedural steps in the appeal in this case.

2 In support of the application, evidence has been led that a mediation took place on 9 December 2003 between Mr Rogers, Mrs Rogers, Ms. Wentworth and Mr Russo, with Mr Morling QC as mediator. On that occasion, Mr Rogers was represented by P Beazley, solicitor, Mrs Rogers was represented by R Lovas, barrister and Mr C Bermer, solicitor, and Ms. Wentworth was represented by Mr D Officer QC.

3 On 9 December 2003, a document was signed by the four parties to the mediation. However, disagreements have since arisen and Ms. Wentworth has commenced proceedings in the Common Law Division for specific performance of an agreement which she says is constituted or evidenced by this document.

4 In substance, her submission on this notice of motion is that the progress of the appeal should be postponed until the specific performance proceedings have been determined.

5 In support of the application, the document in question was tendered. It was objected to by Mr Lovas appearing for Mrs Rogers, on the basis of s.110P of the Supreme Court Act 1970. That section appears in Pt.7B of the Act entitled "Mediation," the purpose of which is, according to s.110H, to enable the court to refer the matters for mediation. The mediation that took place on 9 December 2003 in this case occurred pursuant to an order made by the court under s.110K of the Act, and accordingly was subject to the other provisions of Pt.7B. Those provisions include ss.110N and 110P, which are in the following terms:

110N Agreements and arrangements arising from mediation sessions

(1) The Court may make orders to give effect to any agreement or arrangement arising out of a mediation session.

(2) This Part does not affect the enforceability of any other agreement or arrangement that may be made, whether or not arising out of a mediation session, in relation to the matters the subject of a mediation session.

110P Privilege

(1) 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.

(2) Subject to subsection (3), the same privilege with respect to defamation as exists with respect to judicial proceedings and a document produced in judicial proceedings exists with respect to:

(a) a mediation session, or

(b) a document or other material sent to or produced to a mediator, or sent to or produced at the Court or the registry of the Court, for the purpose of enabling a mediation session to be arranged.

(3) The privilege conferred by subsection (2) only extends to a publication made:

(a) at a mediation session, or

(b) as provided by subsection (2) (b), or

(c) as provided in section 110Q.

(4) Evidence of anything said or of any admission made in a mediation session is not admissible in any proceedings before any court, tribunal or body.

(5) A document prepared for the purposes of, or in the course of, or as a result of, a mediation session, or any copy of such a document, is not admissible in evidence in any proceedings before any court, tribunal or body.

(6) Subsections (4) and (5) do not apply with respect to any evidence or document:

(a) if the persons in attendance at, or identified during, the mediation session and, in the case of a document, all persons identified in the document, consent to the admission of the evidence or document, or

(b) in proceedings instituted with respect to any act or omission in connection with which a disclosure has been made under section 110Q (c).

6 I considered it appropriate to admit the document on the voir dire, because I considered that its contents could be relevant to the question of its admissibility.

7 The case was argued on the basis that, if the court considered that the document may be admissible, Mrs Rogers would wish to put on evidence of what was said at the mediation in support of a submission that the document was not intended to be a final and binding agreement; and on the basis that, if I considered that the determination of this application required consideration of such evidence, I would permit it to be put on. This course was adopted as a convenient course in circumstances where, if that evidence was to be admitted, counsel appearing for the parties would almost certainly have to disqualify themselves, and the parties would then be left without representation or needing other representation.

SUBMISSIONS

8 Mr Officer QC for Ms. Wentworth submitted that the document in question, on its face, was exceedingly comprehensive and purported to resolve all questions between the parties. It was entered into by parties who had been engaged in litigation for many years, in front of an experienced mediator, with the parties having legal representation, and it was an appropriate document to finally resolve these longstanding disputes.

9 Mr Officer submitted that the intention of Pt.7B of the Supreme Court Act was to promote the settlement of disputes, and the purpose in particular of s.110P was to encourage frankness in mediation sessions and not to prevent the enforcement of an agreement arrived at during, or pursuant to, a mediation session. He submitted that this was shown by the terms of s.110N, providing for the enforcement of such agreements. Accordingly, Mr Officer submitted, an agreement that finally settled a dispute that had been mediated was not within s.110P, it not being a document prepared for purposes of the mediation or in the course of mediation or as a result of the mediation. Alternatively, he submitted that such an agreement must carry with it consent to the admission of such a document into evidence and, if necessary, a promise not to withdraw that consent.

10 Mr Officer submitted that this general approach was supported by cases that had been decided in relation to similar provisions in the Farm Debt Mediation Act 1994, namely, State Bank of New South Wales v Freeman NSWSC, Badgery-Parker J, 31 January 1996, Commonwealth Bank of Australia v McConnell NSWSC, Rolfe J, 24 July 1997, Bell v Mediate Today Pty Ltd. NSWSC, Barr J, 29 October 1998, and ANZ Bank v Ciavarella [2002] NSWSC 1186.

11 Mr Lovas for Mrs Rogers submitted, first, that this application was a repeat of a previous application, or applications that had been dismissed and should be rejected for that reason.

12 He submitted that the cases relied on were of questionable authority having regard to the decision of the Court of Appeal in Gain v Commonwealth Bank (1997) 42 NSWLR 252. He submitted further they were in any event distinguishable, in that those cases dealt with admissibility of a document on the basis that it constituted a final agreement entered into after mediation had been concluded. Here that matter was explicitly in question, and resolution of that question would normally require evidence of the conversations pursuant to which the document was signed, as discussed in cases such as Air Great Lakes Pty. Ltd. v. K.S. Easter (Holdings) Pty. Ltd. (1985) 2 NSWLR 309.

13 Mr Lovas submitted that, on its face, this document was an interim or draft document, referring to a deed that was to be made and leaving room open for further negotiations. He submitted that the document was signed before the mediation had ended, and it did not, as a matter of fact, bring the mediation to an end, there having been a further mediation. He submitted that the lack of finality of the document was supported by the questionable nature of some of the terms, in particular those purporting to give releases from future liabilities that may arise, and to exclude the operation of the Contracts Review Act; and Mr Lovas referred to the case of Novamaze v Cut Price Deli Pty. Ltd. (1995) 128 ALR 540.

14 He submitted that where, as in this case, the finality of the document, that is the question whether it was intended as a concluded agreement, was in issue, the only fair approach was to let in evidence of conversations as well as the document, or let neither into evidence. He submitted that effect could be given to the purpose of the Part and to s.110N of the Act through the exception provided in s.110P(6)(a); that is, the exception operating where relevant persons consent to the admission of the document or evidence. If the document itself expressed or implied consent to its admission in evidence, and particularly if it expressed or implied a promise not to withdraw that consent, then the document could be admitted and give support to orders under s.110N, even when one party later seeks to resist the putting into effect of the agreement.

FARM DEBT MEDIATION ACT

15 It appears that there are no cases at present dealing directly with s.110P of the Supreme Court Act. The cases cited dealt with s.15 of the Farm Debt Mediation Act which, at the time of the earlier decisions, was as follows:

15 Confidentiality of mediation sessions

(1) Evidence of anything said or admitted during a mediation session and a document prepared for the purposes of, in the course of or pursuant to, a mediation session are not admissible in any proceedings in a court or before a person or body authorised to hear and receive evidence.

(2) In this section, mediation session includes any steps taken in the course of making arrangements for a mediation session or in the course of the follow-up of a mediation session.

16 Although it is not directly relevant to the decision I have to make, I would note that as from 3 January 2003 a third sub-section was added to s 15 of the Farm Debt Mediation Act, in the following terms:

(3) This section does not apply to the following documents:

(a) Heads of Agreement,

(b) a contract, deed, mortgage or other instrument entered into as a result of, or pursuant to, Heads of Agreement,

(c) a summary of mediation under section 18A.

DECISION

17 In my opinion, the decisions relied on by Mr Officer are not determinative of the present case.

18 In Freeman, Badgery-Parker J merely expressed an opinion, obiter, that a document recording an agreement reached at a mediation was not to be regarded as prepared for purposes of in the course of or pursuant to a mediation session but "...as a document which came into existence after the mediation session had concluded," though he recognised that this opinion was difficult to reconcile with the words "pursuant to" appearing in s.15 of the Farm Debt Mediation Act.

19 In McConnell, Rolfe J expressed the opinion that Badgery-Parker J's view was prima facie correct, because otherwise a party could reach an agreement at a mediation and later refuse to abide by it, and preclude the agreement being tendered. However, again, this was obiter. In that case, it was not contended that s.15 prohibited the tender of a final agreement reached at mediation. Rolfe J discussed the problem that arose if one party submitted that a written document was affected by what had been said at the mediation, and suggested that the solution might be to exclude the written agreement under s.136 of the Evidence Act, unless the party tendering it consented to evidence of what was said being also admitted.

20 In Bell, Barr J was dealing with a magistrate's decision concerning a Notice to Produce, seeking production of any document evidencing terms of settlement or compromise in relation to certain specified proceedings. It appears that the terms of settlement or compromise were reached at or following a mediation session, and it appears that the proceedings to which the mediation related were in fact disposed of in accordance with that settlement. The question concerning the notice to produce arose in relation to later proceedings brought by a person who had acted for one of the parties in relation to the mediation, against that party. It is not clear whether the document or documents being called for by the notice to produce was a document or were documents actually produced at the mediation or, rather, were documents filed in court in order to dispose of the proceedings that had been settled as a result of the mediation. In any event, after referring to the two earlier decisions, Barr J said this:

Bearing in mind the purposes of the Act and the section, namely to make attendance at mediation in appropriate circumstances a condition precedent to the enforcement of a farm debt and, in order to further the parties' chances of agreeing at mediation, to preserve the confidentiality of things said and written, I think that their Honours' approach is correct. I acknowledge the difficulty referred to by Badgery-Parker J about what subs(2) means in its reference to steps taken "in the course of the follow-up of a mediation session", but I do not think that that expression includes the preparation of heads of agreement or terms of settlement. That is because by the time that step is taken, the mediation session has come to an end. The preparation of such documents does not "follow-up" the mediation session. Such documents are not prepared pursuant to a mediation session. I think that to construe the section so as to exclude from evidence terms of a settlement reached at a mediation would go beyond the purposes of the Act and might even defeat them, as Rolfe J has observed.

21 Finally, in Ciavarella, Macready AJ considered the admissibility of correspondence concerning a proposed settlement that had been engaged in after the mediation had concluded; and he held that these documents were not a follow up to a mediation session or prepared pursuant to a mediation session, so that s.15 did not apply.

22 In the present, case the document was signed at the mediation session itself, so in my view Ciavarella is distinguishable on that basis. As I have said, it is not clear whether the documents being dealt with in Bell were documents filed in court to dispose of the proceedings that had been settled, or documents signed at the mediation, or both. If the documents were in the former category, I would respectfully agree with Barr J that they were not documents relevantly prepared pursuant to a mediation session. However, if the documents were documents actually signed at the mediation I would respectfully disagree. If documents signed at the mediation session are to be considered as not affected by s.15 of the Farms Debt Mediation Act, it must be, in my opinion, on some basis other than that they are not prepared in the course of or pursuant to a mediation session.

23 In my opinion these decisions, and also the other two decisions in which there was obiter generally in favour of Mr Officer's submissions, have to be considered in the light of the Court of Appeal decision in Gain. In that case, the Court of Appeal held that, although exclusion of all evidence of matters said at a mediation session would place very severe limits on the ability of a party to challenge a mediation certificate given under the Act, nevertheless the provisions of s.15 excluding that material must be given effect to.

24 I do not think I am constrained by the cases to approach s.110P in any particular way. I think that what I have to do is to consider the words of s.110P and apply them as best I can. In my opinion, the document that has been tendered in this case is plainly a document prepared in the course of a mediation session and is also plainly a document prepared as a result of a mediation session. Accordingly, at least prima facie, it falls squarely within s.110P(5). If that prima facie position is to be overcome it must, I think, be because of some implied exception arising from the terms of s.110N, or alternatively by reason of some expressed or implied consent which activates the exception provided by s.110P(6)(a).

25 As to the former, it is put that, unless a document prepared as a result of the mediation session, which gives effect to an agreement between the parties concluded at the session, is admissible, then no effect can be given to s.110N. To put this around the other way, it is submitted, in effect, that s.110N disclosed a legislative intention that such documents should be admissible, an intention which should be considered as prevailing over s.110P(5).

26 There is considerable force in that submission, but I think it should be rejected. In the first place, work can be given to s.110N through the consent exception in s.110P(6)(a), to which I will come. Accordingly it seems to me that s.110N is not sufficient to create an implied exception to the plain words of s.110P(5). In addition, such an implied exception would not be limited to documents: if it existed, it would permit evidence of conversations at a mediation, said to constitute an agreement, to be tendered on the voir dire, and then admitted if the Court concluded that they did constitute an agreement. That position would not sit comfortably with s.110P and the policy underlying it.

27 Although the case of Gain was dealing with quite a different question, the Court of Appeal in that case considered the circumstance that it might be considered a denial of justice that a person, seeking to have invalidated a certificate gravely affecting that person's rights, should be unable to lead evidence of matters said to be the basis of the certificate; but the Court held that that consideration was not enough to outweigh the plain words of s.15 of the Farm Debt Mediation Act excluding the admission of that kind of evidence.

28 Turning then to s.110P(6)(a), in my opinion a document prepared and signed at a mediation session may itself express or imply consent that it be admitted into evidence in proceedings taken with a view to enforcing an agreement contained in that document. Certainly that could be an express term of such a document. Consent could well be implied: for example, if the document is prepared in the form of terms of settlement ready to be filed in the proceedings being mediated, one may, in those circumstances, perhaps imply a consent that the document be used in this way. Similarly, in my opinion, such a document may express or imply a promise not to withdraw that consent.

29 If that is the case, then a party tendering such a document can rely on the consent expressed or implied in the document itself, and can rely on an express or implied promise not to withdraw that consent. If a person who has given that consent and promised not to withdraw it, does purport to withdraw the consent, then, it seems to me, it would be a matter for the court dealing with the tender to decide whether or not it would, in effect, specifically enforce the promise not to withdraw the consent.

30 Applying that approach to this case, I think I must refuse admission of the document unless I am satisfied that the parties consented to the admission of this document in evidence, and perhaps also promised not to withdraw that consent. I do not think I can be so satisfied from this document. The document, in its terms, plainly contemplates the drawing up of a later deed, so the question whether the document itself is an immediately binding agreement raises issues of the kind discussed in Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353.

31 From the terms of the document itself, there is a real question whether what it amounts to is a consensus as to the substance of terms which are to be included in a future deed which is, if it is made, to be the agreement between the parties; or whether this document itself is intended to be an agreement that is immediately binding, albeit contemplating a more formal document to further formalise the agreement.

32 In considering this question on the basis of the document itself, I think there are aspects of the document that point towards the document being a consensus as to the substance of terms to be included in a later agreement, rather than a final agreement intended to be binding immediately. I think there are real questions as to the form and effect of terms purporting to release future claims and exclude the Contracts Review Act. The existence of these terms, and the questionability of their effect having regard to the principles discussed in Novamaze, rather points to a need for these matters to be further considered before a final agreement is reached.

33 In circumstances where the document itself does not give a clear indication as to whether it is a concluded agreement or a consensus as to terms to be included in a later agreement, and perhaps if anything points to the latter, the Court deciding the Masters v Cameron question would plainly be assisted by evidence of the circumstances in which the document was made in the way discussed in the Air Great Lakes case. The claimant does not seek to present such evidence.

34 Having regard to all these considerations, I am not affirmatively satisfied that this document did constitute a final agreement manifesting an intention to be bound. A fortiori, I am not satisfied that there was consent to this document being tendered in legal proceedings, nor that there was a promise not to withdraw any such consent.

35 For those reasons, I would not admit the document into evidence.

36 Since the document and its implications was the substantial matter on the basis of which Ms. Wentworth sought a review or variation of orders previously made, I think it follows that the application must be dismissed.

37 I extend the time for procedural steps in the appeal, which I think is presently set at 1 April, to 15 April. The only other order I make is, Notice of Motion dated 9 March 2004 is dismissed with costs.

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LAST UPDATED: 02/04/2004