Atkins v iiNet Pty Ltd - [2019] SASC 83

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
ATKINS v IINET PTY LTD
[2019] SASC 83
Judgment of The Honourable Justice Bampton
24 May 2019
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - ALTERNATIVE DISPUTE RESOLUTION - MEDIATION
EQUITY - SETTLEMENTS - RECTIFICATION, REVOCATION, RESCISSION AND CANCELLATION
EQUITY - GENERAL PRINCIPLES - MISTAKE
EQUITY - GENERAL PRINCIPLES - UNCONSCIONABILITY, UNCONSCIONABLE DEALINGS AND OTHER FORMS OF EQUITABLE FRAUD
Appeal against a decision of a Magistrate refusing to set aside a settlement agreement – where appellant entered into settlement agreement reached at the conclusion of a Court appointed mediation – whether the Court should exercise its discretion to set aside a settlement agreement.
HELD, in dismissing the appeal – there are no grounds upon which to set aside the settlement agreement.
Harvey v Phillips (1956) 95 CLR 235; Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366; Australia and New Zealand Banking Group v Karam (2005) 64 NSWLR 149; Matsen v Superannuation Complaints Tribunal [2017] FCA 765; Commercial Bank of Australia v Amadio (1983) 151 CLR 447; Petelin v Cullen (1975) 132 CLR 355, applied.
Taylor v Johnson (1983) 151 CLR 422, discussed.
Thorne v Kennedy (2017) 91 ALJR 1260, considered.

ATKINS v IINET PTY LTD
[2019] SASC 83
Magistrates Appeal: Civil

BAMPTON J: Paul Atkins issued Magistrates Court proceedings against iiNet Pty Ltd (“iiNet”) alleging that iiNet had failed “to supply vital essential services” pursuant to a mobile plan whilst he and his family were in Russia. Mr Atkins’ wife, Regina Atkins, issued separate Magistrates Court proceedings also alleging breach of contract against iiNet.
On 27 March 2018, a Magistrate referred the parties in the proceedings commenced by Mr Atkins and the parties in the proceedings commenced by Mrs Atkins to the Magistrates Court mediation service for mediation. A Notice of Mediation was sent to the parties stating that the mediation was listed for 14 May 2018 at 2.00 pm. Attached to the notice was the Magistrates Court Practice Direction concerning mediation, conciliation and arbitration.
The course of the mediation
On 14 May 2018, the parties attended the court-ordered mediation. Mr Atkins and Mrs Atkins attended in person. iiNet was represented by its general legal counsel, Mr Antony Moffatt, and a member of its customer service team, Mr Brett Niemann. The mediation commenced at 2.00 pm and concluded at or around 4.30 pm.
During the mediation, the proceedings commenced by Mr Atkins settled and a settlement agreement was signed by Mr Atkins and Mr Moffatt. The proceedings commenced by Mrs Atkins also settled during the mediation and a settlement agreement was signed by Mrs Atkins and Mr Moffatt.
The straightforward one-page settlement agreements each recorded that iiNet was to pay the amount of $300 and that “neither party is to take out any further litigation regarding this matter”. The…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Atkins v iiNet Pty Ltd

Details

AGLC: Atkins v iiNet Pty Ltd [2019] SASC 83
Case: [2019] SASC 83
Decision Date: 24 May 2019

CaseChat Overview and Summary

Atkins v iiNet Pty Ltd involved an appeal against a decision of a Magistrate who refused to set aside a settlement agreement entered into by Mr. Atkins. The case was heard in the Supreme Court of South Australia. Mr. Atkins had entered into a settlement agreement at the conclusion of a Court-appointed mediation, and he sought to have the agreement set aside. The legal issues before the court included whether the Court should exercise its discretion to set aside the settlement agreement and whether there were grounds for doing so, such as mistake, duress, or unconscionability.

The court found that there were no grounds upon which to set aside the settlement agreement. The settlement agreement was read to Mr. Atkins prior to his signing it, and the court was satisfied that he comprehended what was read to him. This was supported by his actions following the signing of the settlement agreement, including providing his bank account details to iiNet to facilitate payment of the settlement monies and the settlement of his wife's claim at the same mediation. The court held that Mr. Atkins' dyslexia and learning disability did not prevent him from understanding the effect of straightforward documents and legal proceedings, particularly with extra time and support. While Mr. Atkins may have felt pressured to settle his claim at the mediation and was unhappy with the mediation process, the court found no grounds available as a matter of law upon which to set aside the settlement agreement. The appeal was dismissed.

The court's decision highlights the importance of the voluntary and binding nature of settlement agreements and the limited circumstances in which a court may intervene to set them aside. It also underscores the need for parties to carefully consider the terms of any settlement agreement before entering into it, and to seek clarification or assistance if they are unsure about any aspect of the agreement.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The settlement agreement was read to Mr Atkins prior to his signing it. I am satisfied that Mr Atkins comprehended what was read to him, taking into account his actions following the signing of the settlement agreement. Mr Atkins’ actions in providing his bank account details to iiNet to facilitate payment of the settlement monies and the settlement of his wife’s claim at the same mediation are significant factors against a finding that Mr Atkins entered the settlement agreement under a serious mistake about its contents in relation to a fundamental term.Conclusion Mr Atkins presented his case on appeal in an articulate and intelligent manner. He made clear submissions, followed the arguments made by counsel for iiNet, and responded to the questions I asked of him. In my view, with extra time and support in reading documents and checks to make sure he comprehends what is being said or what he has read, Mr Atkins is capable of understanding the effect of straightforward documents and legal proceedings. I accept that Mr Atkins may wish that he had not entered into the settlement agreement. I accept that Mr Atkins may have felt pressure to settle his claim at the mediation and is unhappy with the mediation process. However, having undertaking an assessment of the evidence and the arguments on appeal there are no grounds available as a matter of law upon which to set aside the settlement agreement. I dismiss the appeal.ANNEXURE A – MEDIATION PRACTICE DIRECTION11.(1) What is the process of mediation?Mediation is a process in which the participants, with the assistance of a mediator, identify the issues in dispute, develop options, consider alternatives and endeavour to reach an agreement. A mediator has no advisory or determinative role in relation to the content of the dispute. The mediator will make the process clear before it commences. (2)What are the benefits of mediation?Mediation gives parties to a dispute an early opportunity to settle the dispute in private - saving costs, time and stress.It encourages effective communication under the direction of an impartial mediator, and is often more conducive to maintaining ongoing relationships.(3)Prior to mediationWhen the Court refers a matter to mediation the parties must indicate if they wish to choose a mediator from the Court panel and notify that choice to the Manager Mediation Unit within 7 days. The Manager Mediation Unit shall contact any chosen mediator or if none is chosen s/he shall nominate one and contact the mediator to arrange a time and place for the mediation to occur and notify the parties of that time and place. The parties must file all discovered documents with the Court 7 days before the mediation. A party may be excused from filing documents if it would be considered unduly onerous to do so. See rule 71(6) of the Rules.(4) What happens during the mediation? The mediator will begin by explaining the process and any ground rules.The mediator will give each party a chance to explain what they think the problem is. All parties will be given an opportunity to be heard and to respond.The mediator will assist the parties to identify the key issues in dispute.The mediator may talk to the parties separately to clarify issues and discuss settlement options. These private sessions are confidential and the mediator will not disclose anything said in those sessions without consent.Parties can request to speak to the mediator privately and confidentially at any time during the mediation.Mediation is voluntary and therefore any party may withdraw at any time.(5)ConfidentialityAnything discussed during the mediation cannot be used in a trial of the matter. The mediation will not be recorded. See section 67C of the Evidence Act 1929 and section 27(3) of the Magistrates Court Act 1991.However, an agreement reached at mediation may be produced in a hearing, for example, if the other party does not comply with the terms of the settlement.By entering the mediation process the parties agree that they must not disclose to others what was said or done during mediation or disclose any confidential documents produced in the process. They may in addition be asked to sign a confidentiality agreement.At the conclusion of the mediation, the notes of the parties and/or their legal representatives must be provided to the mediator, who will destroy them. The notes will not be kept on the Court file.(6)Cost of MediationThe costs of the mediator will be 2% of the amount claimed (for claims between $25,000 and $100,000) or $500 (for claims under $25,000).See The mediator’s costs will be paid by the parties in equal shares unless the Court orders otherwise.The costs of mediation are to be paid directly to the Court not less than 14 clear days before the date fixed for the mediation.If the parties do not have the means to pay for mediation, the Court may provide mediation at no cost.(7)Recording the outcomeIf the parties reach agreement on any aspect of the matter, including any factual matters that are agreed, the mediator will assist the parties to record the agreement before leaving the mediation.The mediator may adjourn the mediation if s/he has the view that the there is good cause. If this is to a date beyond the next court date the mediator must report the adjournment and reason for it to the Court before that court date. Once the mediation is complete the mediator must report to the Court:that the mediation took place;any agreement made;any other matters that the mediator considers appropriate; and forward her or his invoice for the scale or other fee ordered by the Court.All communication by the mediator to the Court will in first instance be to the Manager Mediation Unit.(8)Further informationRule 72 of the Magistrates Court Rules provides more detail on some of these matters.See

Ratio Decidendi

Legal Principle Established

I accept, as described by Ms Gorgula, that Mr Atkins’ dyslexia compromises his reading comprehension skills and his ability to retain the information he reads. I accept that reading requires significant cognitive effort on his part and that he is likely to re-read information a number of times to accurately comprehend the information. I accept that Mr Atkins would rely on the opportunity to work through problems visually and his specific learning disability can exacerbate difficulties he has with comprehension of information, retaining numbers, sequencing information and as a result processing information requires great effort.Consideration The High Court in Harvey v Phillips[1] said that a settlement order is similar to a contract which cannot be set aside unless there are grounds on which it can be said to be void for example illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake or undue influence. In other words, a party to a settlement agreement cannot ask the Court to set aside the agreement because they have had a change of mind or because of they are of the view that they did not get a good enough deal.[1] (1956) 95 CLR 235 at 243-244.Duress Mr Atkins alleges that he and his family had been the subject of a death threat made by Mr Moffatt at some point before the mediation. Mr Atkins submits that the interaction between Mr Atkins, his wife, and Mr Moffatt at the mediation resulted in his wife bursting into tears. Mr Atkins further submits that, due to Mr Moffatt needing to leave the mediation to catch a flight to Sydney, the mediation was rushed.[2] Finally, Mr Atkins submits that the mediator told him that he had to settle at the mediation and that the mediator’s conduct impacted upon his decision to settle at the mediation.[2] Mr Atkins made submissions from the bar table that Mr Moffatt had scheduled a flight at 6:00 pm on the date of the mediation, which would have required him to leave the mediation at 4:30 pm in order to arrive at the airport one hour prior to the departure time. Mr Moffatt strenuously denies in the Moffatt affidavit the allegation that he made any death threats. Mr Atkins explained to me during the hearing of the appeal that the threat he alleged was made by Mr Moffatt occurred when he received an anonymous phone call and it was while he was in the mediation “sitting there, looking at him, I realised, in my opinion, it was him ... which scared me”. Mr Atkins acknowledged to me that he had no proof of a death threat being made by Mr Moffat. In Universe Tankships Inc of Monrovia v International Transport Workers Federation,[3] Lord Scarman explained that there are two elements of duress: “(1) pressure amounting to compulsion of the will of the victim; and (2) the illegitimacy of the pressure exerted”. The development of the law of duress encompasses threatened or actual unlawful conduct:[4] The vagueness inherent in the terms “economic duress” and “illegitimate pressure” can be avoided by treating the concept of “duress” as limited to threatened or actual unlawful conduct. The threat or conduct in question need not be directed to the person or property of the victim, narrowly identified, but can be to the legitimate commercial and financial interests of the party. Secondly, if the conduct or threat is not unlawful, the resulting agreement may nevertheless be set aside where the weaker party establishes undue influence (actual or presumptive) or unconscionable conduct based on an unconscientious taking advantage of his or her special disability or special disadvantage, in the sense identified in Commercial Bank of Australia Ltd v Amadio.It will suffice to consider whether any pressure was exerted on Mr Atkins illegitimately.[3] [1983] 1 AC 366 at 400. Though his Lordship was in dissent, this articulation of the elements has been universally adopted, see Australia and New Zealand Banking Group v Karam (2005) 64 NSWLR 149.[4] Australia and New Zealand Banking Group v Karam (2005) 64 NSWLR 149 at 168 per Beazley, Ipp and Basten JJA cf the contemplation of lawful act duress in Thorne v Kennedy (2017) 91 ALJR 1260 at [26]–[29] per Kiefel CJ, Bell, Gageler, Keane and Edelman JJ and at [70]–[73] per Nettle J.