Cook v Taing

Cook brought an action against Taing, seeking damages for breach of contract. After the parties attended mediation, they entered into a mediation agreement. The mediation agreement provided that if the parties did not reach a settlement within a certain time frame, the mediation agreement would cease to apply. Following the expiry of the time frame, the parties continued to negotiate. The negotiations included correspondence between the parties, and the parties represented to the court that the proceeding was settled. The mediator later reported to the court that there was no settlement. Cook subsequently sought a declaration that Taing had breached the mediation agreement. Taing argued that there was a binding settlement agreement that was not subject to a written contract.
The court was required to determine whether the mediation agreement continued to apply after the expiry of the time frame, whether the correspondence between the parties constituted a binding settlement agreement, and whether the parties complied with the court orders. The court held that the mediation agreement ceased to apply after the expiry of the time frame. The court further held that there was no binding settlement agreement as the parties did not reach a binding agreement. The court found that the parties had not complied with the court orders in that they did not file a written settlement agreement as required by the Supreme Court (General Civil Procedure) Rules 2005 (Vic). The court ordered that the proceeding be listed for directions and that the parties file a written settlement agreement if one existed.

The court further held that the parties had breached the mediation agreement by failing to reach a settlement within the time frame specified in the mediation agreement. The court ordered that Cook recover from Taing the costs of the mediation, as well as the costs of the proceeding up to the date of the judgment. The court held that the costs should be assessed on an indemnity basis, meaning that Taing would be responsible for paying all of Cook’s costs, including the costs of the mediation and the proceeding. The court noted that Taing had acted unreasonably in continuing to negotiate with Cook after the mediation agreement had ceased to apply, and that this conduct warranted an indemnity costs order.