Dorrian v Rushlyn Pty Ltd - [2010] FMCA 787

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DORRIAN & ANOR v RUSHLYN PTY LTD & ANOR

[2010] FMCA 787

TRADE PRACTICES – PRACTICE & PROCEDURE – Dispute as to whether parties attend for mediation or conciliation.

Trade Practices Act 1974, s.52
Federal Magistrates Court Rules 2001, rr.10 & 27
Federal Magistrates Act 1999, s.21

First Applicant:

COLIN EDWARD DORRIAN

Second Applicant:

SHARRON MAY DORRIAN

First Respondent:

RUSHLYN PTY LTD

Second Respondent:

ROBERT MARK JONES

File Number:

ADG 222 of 2010

Judgment of:

Lindsay FM

Hearing date:

5 October 2010

Date of Last Submission:

5 October 2010

Delivered at:

Adelaide

Delivered on:

5 October 2010

REPRESENTATION

Counsel for the Applicant:

Mr M. Hoile

Solicitors for the Applicant:

Belperio Clark

Counsel for the Respondent:

Mr Mylne

Solicitors for the Respondent:

McColm Matsinger Laywers

ORDERS

The within proceedings are referred to a Registrar in the Adelaide Registry of this Court for mediation in accordance with Rule 27 of the Federal Magistrates Court Rules 2001 at a date and time convenient to each of the parties BUT not more than six weeks from today’s date, such date to be advised in writing by the Registry, with the respondents at liberty to attend mediation by telephone if so advised.
The Respondents do serve upon the Applicants by not later than 13 October 2010 a request for further and better particulars and the Applicants do respond to same by not later than 25 October 2010.
Directions be adjourned to 22 November 2010 at 9.30am (SA time).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT ADELAIDE

ADG 222 of 2010

COLIN EDWARD DORRIAN

First Applicant

SHARRON MAY DORRIAN

Second Applicant

And

RUSHLYN PTY LTD

First Respondent

ROBERT MARK JAMES

Second Respondent

REASONS FOR JUDGMENT

This is the first return date on an application which is brought pursuant to section 52 of the Trade Practices Act relating to what is alleged is the misleading and deceptive conduct of the respondents with respect to the entry by the applicants into a franchise agreement. They have purported to rescind the agreement.
Being the first return date, the practice of the Court is to explore with the parties the utility of there being some kind of mediation before the matter is listed for trial. It turns out that each of the parties have expressed, in some degree, a willingness to enter into that process, but disagree as to who it should be that carries it out. I was told by the respondent’s counsel that there had been a series of initiatives taken, prior to this return date, to have the applicant agree to attending with a mediator appointed pursuant to those industry based arrangements. That opportunity was declined by the applicants without, as I understand it, them giving any reasons for their declining, and that was essentially the position that was taken before me today.
The applicants express a willingness though to participate in mediation or conciliation that takes place under the aegis of the officers of the Court and, especially, the Registrars of the Court.
As I understand it, the respondent’s position in relation to that is, it is their least preferred option. They give reasons in relation to the experience of the mediator who would be appointed pursuant to the industry based arrangements, as one reason for preferring an appointment of that nature, and they also point to that mediator making himself or herself available in Sydney, which is, if not, a median point between the states in which the parties are resident is at least something approaching that.
Rule 10 of the Federal Magistrates Court Rules 2001 speak of conciliation, and give me the power to order a conciliation conference with a Federal Magistrate - no one has proposed I do that for obvious reasons - a Registrar, or another person appointed by the Court for the purpose, and then goes on to give me a series of machinery provisions for putting that into place.
The Rules also give me the power to appoint a mediator and, if the identity of the mediator itself cannot be agreed, it gives power to the Registrar to appoint that mediator. That is to be found in Rule 27. That is the power to appoint the mediator or arbitrator and then mediation, in particular, is dealt with in 27.04, where:
Provided the parties cannot reach agreement, the Registrar must nominate a person and follow a procedure for going through that nomination.
The difference between mediation and conciliation: these are concepts that the Rules pick up from the Federal Magistrates Act 1999. In terms of distinguishing between the two different processes involved, the only assistance the Act gives is section 21, which talks about a series of primary dispute resolution procedures, including mediation and conciliation, but without giving any kind of description as to what each of those processes are.
The explanatory memorandum to the Federal Magistrates Act is, however, of more assistance. Paragraph 38 of the explanatory memorandum says that what became section 21:
Provides a definition of primary dispute resolution processes, which are defined to include a range of facilitative, advisory and determinative processes. Mediation and conciliation are facilitative processes, case appraisal and counselling are advisory processes and arbitration and neutral evaluation are determinative processes.
The explanatory memorandum refers to the National Alternative Dispute Resolution Advisory Council, (NADRAC), definitions of these various processes. Mediation, according to the NADRAC definition, which the explanatory memorandum picks up, is:
A process in which the parties to a dispute, with the assistance of a neutral third party (the mediator) identify the disputed issues, develop options, consider alternatives, and endeavour to reach an agreement. The mediator has no advisory or determinative role in regard to the content of the dispute or the outcome of its resolution, but may advise on, or determine the process of mediation whereby resolution is attempted.
Conciliation is defined as:
A process in which the parties to a dispute, with the assistance of a neutral third party (the conciliator), identify the disputed issues, develop options, consider alternatives and endeavour to reach an agreement. The conciliator may have an advisory role on the content of the dispute or the outcome of its resolution, but not a determinative role. The conciliator may advise on or determine the process of conciliation whereby resolution is attempted, and may make suggestions for terms of settlement, give expert advice on likely settlement terms, and may actively encourage the parties to reach an agreement.
I suppose, having read those definitions, I am a little the wiser as to the differing nature of the two processes. I think the key concept is that in ordering mediation the Court has no expectation of the mediator having an advisory or determinative role in regard to the content of the dispute or the outcome of its resolution. The conciliator is said to have that role, even though it is not a determinative role, as an advisory role in relation to those matters.
It seems to me, given the nature of this disputation of this commercial dispute that relates to the question of whether certain representations made during the course of the making of the agreement, and in relation to certain events antecedent to it, constitute misleading and deceptive conduct that it would be more appropriate for the attempted resolution of the matter to be conducted by a mediator.
So to the extent that the matter is important, and to the extent that there is meaningful difference between the two concepts, I would prefer to express myself in terms of appointing a mediator and, hence, be bringing into play the provisions of Rule 27 of the Rules of Court. That talks in terms of the Registrar nominating a person as the mediator, but the earlier part of the Rules go on to vest in the Court the powers that the Registrar would exercise.
Delegating the determination of the issue to the Registrar, who is only ever exercising the delegated judicial power of this Court, would give rise to the possibility of further time and money being expended on a de novo review of that decision, which would precisely the same decision I am making now. So my preference is to make the appointment myself.
In terms of the identity of the mediator, there is very little criteria it seems to me, for me to apply in resolving such a dispute. It is not an adjudication that the Court is accustomed to having to make. I think the only guide to the appointment should be for me to make the appointment that is likely to incur the least cost to the parties, at this stage, and is likely to lead to the possibility, at least, of a narrowing of the issues and bringing a recalcitrant party along to the kind of industry based conciliation or mediation, to which Mr Mylne referred to, does not seem to be likely to maximise the opportunity of some kind of outcome, even if not a complete agreement, then at least a narrowing of the issues in dispute.
It is a finely balanced matter, but I think on balance, the first step the Court should take in the matter, is to order the parties to attend court based mediation and I will so order.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Lindsay FM

Date: 21 October 2010