Joseph Gomes v Moono Constructions Pty Ltd

[2012] NSWSC 909

Supreme Court

New South Wales

Medium Neutral Citation:	Joseph Gomes v Moono Constructions Pty Ltd [2012] NSWSC 909
Hearing dates:	16 & 17 July 2012
Decision date:	31 July 2012
Jurisdiction:	Equity Division
Before:	Slattery J
Decision:	Specific performance granted of agreement to settle proceedings before the Consumer Trader and Tenancy Tribunal ("CTTT"). The terms of the CTTT settlement agreement were: that the defendant in these proceedings pay the plaintiffs in these proceedings the sum of $165,000 inclusive of costs; that the defendant provide certain identified technical certificates to the plaintiffs; and that process dismissing the CTTT proceedings be filed.
Catchwords:	EQUITY - Equitable remedies - specific performance - whether agreement made to settle proceedings (between house proprietor and builder) before the CTTT - what are the terms of such agreement - whether agreement should be specifically performed.
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 30 Consumer, Trader and Tenancy Tribunal Act 2001 (NSW)
Cases Cited:	Azzi & Ors v Volvo Car Australia Pty Ltd [2007] NSWSC 375 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 Grant v Grant [2012] NSWSC 725 Jones v Dunkel (1959) 101 CLR 298 Masters v Cameron (1954) 91 CLR 353 Sharjade Pty Ltd v RAAF (Landings) Ex Servicesmen Charity Fund Pty Ltd [2008] NSWSC 1347 Wentworth v Rogers & Anor [2004] NSWCA 109 York Air Conditioning and Refrigeration (Australia) Pty Limited v Commonwealth (1949) 80 CLR 11
Category:	Principal judgment
Parties:	First Plaintiff:- Joseph Gomes Second Plaintiff:- Leonor Gomes Defendant:- Moono Constructions Pty Ltd
Representation:	Counsel: First and Second Plaintiffs:- D.S. Weinberger; Ms T.K. Gordon Defendant:- G.M. Colman Solicitors: First and Second Plaintiffs:- Dan Maccallum, Maccallum Lawyers Defendant:- Robert Collings, MBA Lawyers
File Number(s):	2012/73263
Publication restriction:	No

EX TEMPORE Judgment

1. At about 4 pm on 1 June 2011 two groups of people left the Consumer, Trader and Tenancy Tribunal ("the CTTT") hearing and mediation rooms at 175 Castlereagh Street, Sydney. Householders, Joseph and Leonor Gomes, the plaintiffs, were in one group. Mr Tanious Rehayem and Mr Patrick Rehayem, respectively a director and the project manager of the defendant, builder Moono Constructions Pty Ltd ("Moono Constructions"), were in the other group. On their departure that afternoon Mr and Mrs Gomes thought that they had just settled at mediation existing CTTT proceedings between themselves and their builder. Moono Constructions says now that it did not settle those CTTT proceedings. The question for determination here is whether the CTTT proceedings were settled at mediation on 1 June 2011 and, if they were, what were the terms of the settlement.

1. Because these proceedings arise out of an alleged agreement at a CTTT mediation, the defendants take the point that by reason of the exclusionary provision of the Consumer, Trader and Tenancy Tribunal Act 2001 ("CTTT Act"), s 62, the Court cannot examine evidence of what happened at the mediation to determine whether there is a concluded agreement. But the parties in these proceedings took a sensible course about managing the evidence about this issue. They both proposed the idea of the Court hearing the whole proceedings as a voir dire on which the Court could look at all the voir dire evidence and decide upon the admissibility of that evidence in the proceedings at the same time as giving final judgment. This final judgment not only determines the proceedings, but it also decides the admissibility of the evidence to base that determination.

1. The plaintiffs' case is put in the alternative. The plaintiffs allege an oral agreement made on 1 June 2011 that the defendant agreed to settle the existing CTTT proceedings by paying to the plaintiffs $165,000 inclusive of costs together with the supply to the plaintiffs of certain technical certificates identified in a facsimile sent between the parties shortly before the mediation. The alternative claim is that there was a written agreement to the same effect made on or about 20 June 2011 but in the slightly more detailed form of a deed. The alternative case based on the written agreement was not really pressed at trial for the plaintiffs, and if I may say so, for good reason. The real contest was about what happened on 1 June 2011.

1. The facts are mostly agreed. But there are some important differences about what occurred at the mediation.

The Actors at the Mediation and their Differences

1. A little needs to be said first about who was involved at the mediation. The plaintiffs' solicitor, Mr Daniel Maccallum of Maccallum Lawyers, had the carriage of the negotiations on 1 June 2011 and gave evidence in the proceedings. Mr and Mrs Gomes did not give evidence. On the defendant's side its two directors Mr Tanious Rehayem and Mr Patrick Rehayem gave evidence. Mr Rodney Freeman, the defendant's barrister before the CTTT that day also gave evidence.

1. Two important actors on 1 June 2011 were not before this Court. The first was Mr Collings of M.B.A. Lawyers, the solicitor for Moono Constructions in the CTTT proceedings. But there was some silent evidence of what Mr Collings said and did on 1 June 2011. Mr Collings' file note recording what happened on 1 June 2011 became Exhibit E in these proceedings.

1. The other person who did not give evidence before this Court was the 1 June 2011 mediator, Mr Vrabac, a CTTT Tribunal Member. He had been asked whether he would give evidence. But he declined to do so.

1. There are three important stages in the chronology: the first is pre 1 June 2011; the next is what happened on 1 June 2011; and the third is some events subsequent to 1 June 2011. There was no contention about the subsequent events. But there is some disagreement between Mr Maccallum and Mr Freeman about what happened on 1 June 2011. The differences are of importance on two matters.

1. The first major difference between Mr Macallum and Mr Freeman relates to whether there was a formal statement made to the CTTT on the afternoon of 1 June 2011 about a settlement having been reached that day. The second major difference between these two witnesses relates to whether any negotiated settlement included a term that moneys agreed to be paid under the settlement would be paid within a period of 28 days.

1. There are conflicts between Mr Maccallum's and Mr Freeman's evidence on both these issues. It is therefore necessary for the Court to choose between their evidence. On the issue of whether there was an announcement to the CTTT of a settlement, I prefer Mr Maccallum's evidence that there was such an announcement over Mr Freeman's evidence that no such announcement was made. Mr Freeman appeared to the Court to have been upset about what had passed in the settlement negotiations between the mediator and his clients. He was concerned that communications directly between the mediator and his clients had undermined his own and his solicitor's authority with their clients. His anxiety about this issue made his evidence less reliable than that of Mr Maccallum, except in one respect. Mr Maccallum says that the agreed terms included the payment of the relevant sum within 28 days. I do not accept that that was agreed.

1. I conclude in these reasons that the plaintiffs and the defendant made an agreement on 1 June 2011 to settle the CTTT proceedings for the payment of $165,000 inclusive of costs to the plaintiffs, the giving of the identified technical certificates to the plaintiffs, and the filing of basic process in proper form concluding the CTTT proceedings. But I also conclude there was no agreement as to the timing of the payment of the agreed sum. But in the absence of an agreement as to the time to pay, the Court should imply a reasonable period. There is debate as to what and at what time the Court can look at to determine what is a reasonable period. But it is not necessary for me to enter that debate. Whether one looks at a reasonable time assessed at the time of the contract, or in light of the correspondence that passed post contract, the same conclusion emerges: a reasonable time is a period of about four months. The Court finds a term of the settlement that payment should be made by 1 October 2011.

Events Before 1 June 2011

1. The pre 1 June 2011 exchanges between the parties were brief. Moono Constructions undertook building work at the home of the plaintiffs, Mr and Mrs Gomes. The result of that work was unsatisfactory to all parties: unsatisfactory to Moono Constructions because it was not fully paid; and unsatisfactory to Mr and Mrs Gomes because they thought the work done by Moono Constructions was both incomplete and not up to an acceptable standard. These dissatisfactions led to the parties commencing two sets of proceedings in the CTTT.

1. Moono Constructions commenced CTTT proceedings on 7 August 2009 seeking recovery of unpaid moneys in an amount of $71,690 under its building contract with Mr and Mrs Gomes. Shortly afterwards, on 25 September 2009, Mr and Mrs Gomes commenced their own CTTT proceedings, alleging that the work done under the building contract was below the standard expected by the Department of Fair Trading and that the agreed works had not yet been fully delivered. The proprietors claimed completion and rectification costs of $150,502.

1. The CTTT itself prompted the 1 June 2011 mediation. On 19 April 2012 the CTTT ordered in both the Moono Constructions proceedings and in Mr and Mrs Gomes' proceedings, that the parties attend a mediation. In preparation for that mediation an important communication passed between Maccallum Lawyers (Mr Daniel Maccallum) and MBA Lawyers (Mr Collings), a facsimile transmission of 11 May 2011. Mr Maccallum recorded in this 11 May facsimile there were "'numerous certificates' outstanding and required by our client for the issue of a final occupation certificate". The list of certificates on this facsimile changed hands and was ticked and crossed in the course of the mediation. Mr Tanious Rehayem's cross-examination made clear that the ticked certificates on the list were still to be provided and were for Moono Constructions to procure. There were some that were not to be procured and these were crossed. This facsimile became a part of what I find to be the agreement made between the parties.

Events on 1 June 2011

1. All parties attended the CTTT hearing and mediation rooms at about 9 am on 1 June. Mr and Mrs Gomes and Mr Maccallum were present for the plaintiffs. Mr Tanious Rehayem and Mr Patrick Rehayem, respectively Moono Constructions' director and project manager were present for the defendant. Also present were Mr Robert Collings, the solicitor for Moono Constructions, and Mr Rodney Freeman, the company's barrister.

1. Shortly after the parties' arrival, Mr Nick Vrabac, a senior hearing member of the CTTT, entered the hearing room, introduced himself and explained that he had been appointed as the mediator that day. He asked the parties to go into different mediation consultation rooms, which they did.

1. Shortly after the parties gathered in their respective rooms Mr Maccallum raised the issue of the outstanding certificates referred to in the 11 May 2011 facsimile. A copy of that facsimile was provided to the mediator. I accept Mr Maccallum's account that Mr Vrabac took the document into the other consultation room to confer with the builder. He later returned to the plaintiffs' room and said to Mr Maccallum and Mr and Mrs Gomes, "I've spoken to the builder and he has marked the certificates that he can provide as part of the settlement". A copy of the document was handed back to Mr Maccallum by the mediator. That document shows quite clearly with identifying ticks the technical certificates that could be provided on settlement. The ticks relate to items 2, 3, 5, 7, 9 and 11 on the 11 May 2011 facsimile. There were some modifications in Mr Freeman's and Mr Rehayem's evidence to explain exactly what else could be provided. Mr Gomes gave instructions, in the presence of the CTTT member, to communicate back to the builder that it was possible for the plaintiffs to settle "if the builder promises to give us these certificates". I accept that the mediator communicated this back to the builder. As a result I conclude that the ticked technical certificates that would be provided in addition to any later agreed money payment were then agreed by both sides. The negotiations then proceeded.

1. A fairly lengthy process of position taking with offer and counter offer followed in the negotiations. Mr Maccallum recalls, and I accept, that during the afternoon the mediator eventually returned to the plaintiffs' room and said, "The builder puts a final offer to pay you $165,000 inclusive of costs plus provide the list of certificates". I accept the rest of Mr Maccallum's account that follows in this paragraph. Member Vrabac then left the room. Mr Maccallum says that he received instructions to accept that offer. When the mediator returned Mr Maccallum said on behalf of his clients to the mediator that the offer was accepted. Mr Maccallum also recalls that the mediator left the room and returned about 15 minutes later and communicated back to those in the plaintiffs' room, "The builder has agreed. The matter has settled. Congratulations, it is $165,000 inclusive of costs plus the agreed certificates."

1. But Mr Maccallum recalls, and I also accept this further part of his account, that at the time the mediator said those words Mr Freeman had come and stood next to him in the hallway. A further conversation then took place between the three of them to this effect:-

Mediator:"Okay, that's good. $165,000 inclusive and the list of certificates. We'd better go into my room and make some orders."

Freeman (mainly to Mr Maccallum):"Your people should be quietly pleased with that. If they had rejected that offer the builder was about to walk away."

Maccallum:"It is not much more than the builder's offer of $100,000 plus costs. I have just had to agree to waive my fees for today to get them $100,000 clear in their hands."

1. Mr Maccallum says that he and Mr Freeman then followed the mediator into his hearing room and he sat behind the bench to receive a formal announcement about the settlement.

1. At this point Mr Freeman's and Mr Maccallum's evidence diverges. Mr Maccallum says that Mr Vrabac sat behind the bench and Mr Freeman and he sat at the bar table. I accept this is what occurred. Mr Freeman did not recall any such formality. This was a moment of considerable importance to Mr Maccallum. He says, and I accept, that he had just agreed to waive his daily fee for that day in order to secure settlement for his clients. He was undoubtedly keen to ensure that the matter did finalise in some kind of formal way, if not in writing. I accept his evidence that he said in this formal forum before the bench, "Member, we are pleased to confirm that the matter has settled for $165,000 inclusive of costs with the builder also to provide the certificates marked on the list". I accept the next part of Mr Maccallum's account that Mr Freeman responded, "Yes member, that's correct. The builder may require an extra two weeks than usual, as someone is overseas with regard to outstanding certificates."

1. This announcement to the bench was a sufficiently formal statement of the agreement that had been made for it to be quite clear by that ceremony and by the presence of all parties, that Mr Freeman and Mr Maccallum were declaring mutually and without qualification to Mr Vrabac that a final agreement had been reached. This was in my view clear from the words used.

1. But Mr Maccallum says that he then went on to say to the member and Mr Freeman, "The builder should pay the moneys within the usual 28 days however , I agree to an extra two weeks for the certificates". Mr Freeman is said to have then agreed, "Yes, that is suitable".

1. I have difficulty in accepting Mr Maccallum's recollection about this particular part of the conversation. He was effectively cross-examined by Mr Coleman for the defendant on the quality of his memory on this point. Moreover, there is in my view insufficient support in the surrounding material to confidently conclude, in his otherwise reliable evidence, that this particular part of the conversation took place. There was no agreement to pay the agreed sum within 28 days.

1. But Mr Maccallum recalls that the member further said, "Okay, I'll make an order that the Tribunal notes that the matter has settled and that the parties are to file terms in the Tribunal with an extra two weeks for the provision of the certificates. That will give the builder time to pay the money and provide the certificates then the Tribunal can close the file". I accept this was said. The parties then left.

1. It is useful at this point to look at Mr Freeman's evidence about that afternoon. There is some startling confirmation of the plaintiffs' case in Mr Freeman's own evidence. He says in paragraph 5 of his affidavit, that Mr Vrabac informed him (Mr Freeman) that he had achieved a settlement of the matter as a result of a private conversation with Mr Tanious Rehayem and Mr Patrick Rehayem, during which they had accepted the Gomes' offer of $165,000. He recalls, and I accept, that the mediator said to him, "It's settled. Your clients have accepted to pay $165,000". But he reacted, he says, with some degree of passion to that statement, addressing the mediator with a common and vulgar colloquialism. But I am not sure that that is how events actually unfolded. I do find that the statement, "It's settled, your clients have accepted $165,000" was made by the mediator. But I am insufficiently confident of Mr Freeman's evidence to infer that he disputed the mediator's statement in the way that he said he did.

1. Mr Freeman denies communicating any offers of settlement or accepting any offers of settlement in the negotiations. He says that at all times communication was through Mr Vrabac and that those communications at best produced a non legally binding consensus that the parties accepted had to be formally documented before it would become legally enforceable. At the first stage of the parties' discussions I accept that this is correct. Mr Vrabac was speaking directly to Mr Patrick Rehayem and Mr Tanious Rehayem without the builder's lawyers being present. But I do not accept Mr Freeman's evidence that he did not then engage in the formal final hearing with Mr Vrabac in the CTTT hearing room, which Mr Maccallum says happened. I do not accept Mr Freeman's evidence that he did not mention in such a formal hearing the payment of the sum of $165,000 or the technical certificates. This is the moment in my view where what might otherwise have remained a non-binding and yet-to-be-documented consensus became binding by a formal unqualified and mutual statement to the bench that agreement had been reached.

1. Two pieces of written evidence were generated on 1 June 2011. They both support Mr Maccallum's version. The first is a 1 June 2011 file note of the absent Mr Collings. The note is to the following effect:-

"2:15Builders - offer $140K incl

Owners - " $175K "

Builders - " $145K "

Owners - " $170K "Mediator advised $165K to be offered by o/c - Discuss with RF

Builders - " $155K "

Owners - wont move from $170K

RF - summary - to proceed unknown at this stage. Our advice is not above $150K incl

Builders offer $160K final offer

Owners " $168K

Builders " $165K incl plus certificate

Accepted

14 days to file terms

(Poss $10K/mth for 6mths and then balance)"

1. The file note confirms Mr Maccallum's recollection. It can only be construed, in my view, as stating acceptance of the builder's offer to pay the owners $165,000 inclusive of costs plus the provision of the identified technical certificates and within 14 days to file written terms of settlement. Mr Collings' file note has all the other essentials within it, but is missing any reference to making payment within 28 days. That important feature of the claimed agreement is missing from this otherwise complete outline note. Its absence from Mr Colling's note is another reason why I do not accept Mr Maccallum's evidence about the making of an agreement as to 28 days for payment of the agreed sum. It is also difficult to accept that 28 days to pay was discussed or agreed, when Mr Collings' file note shows he is clearly musing (see the material above in the brackets) about the possibility of having six months to pay the balance in instalments.

1. There was no transcript of what happened in the Tribunal that day. Mr Maccallum thought what he and Mr Freeman said was being recorded. Mr Maccallum was mistaken about this. There is transcript of a later appearance. But no CTTT file record exists of what happened before the Tribunal on 1 June under the name of Mr Vrabac. This is the other contemporaneous written evidence that supports Mr Maccallum's version. The CTTT file in the Moono Constructions matter records:-

"Applicant Moono Constructions Pty Ltd

Respondent Jospeh Gomes and Leonor Gomes

On 01-Jun-2011 the following orders were made:

2.By Consent, on 01 June 2011 the hearing was adjourned to a date to be fixed by the Registrar.

2.The Tribunal notes the matter has settled. The parties to file terms in the Tribunal on or before 15 August 2011.

"A separate written notice of the new hearing date will be sent to you in the near future.

N Vrabac

Tribunal Member

01/06/11"

1. This is a file note of a settlement. The note is consistent with Mr Vrabac having been formally told, as Mr Maccallum says he was that the parties had agreed upon final settlement of the proceedings.

Conduct following the Mediation

1. The parties advanced, without objection, extensive communications about what happened after the mediation. This material spanned the period early June to early August 2011. It is admissible as to whether or not an agreement has taken place, but not as to the construction of that agreement: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 163-164 per Heydon JA.

1. On 3 June 2011 a further CTTT file notation was made in the other CTTT proceedings, the Gomes proceedings. The 1 June 2011 notation had been in the Moono Constructions proceedings. The 3 June 2011 file note was in the following terms:-

"On 01-JUN-2011 the hearing was adjourned to a date to be fixed by the Registrar.

The following procedural directions were made:

2.The Tribunal notes the parties will file terms with the Registrar on or before 15 August 2010. Builder to pay Homeowner the sum of $165,000 plus certificates mentioned in the Homeowner letter email B dated 11/5/11.

2.The builder's matter is to be dismisses- no orders as to costs.

A separate written notice of the new hearing date will be sent to you in the near future.

M Tiga

For the Registrar

03/06/11"

1. This file note records the essential terms of payment of the agreed amount and supply of the agreed certificates.

1. Mr Maccallum quickly drafted a deed of release and settlement. He sent his draft to Mr Collings on 3 June 2011, which provided:-.

"Settlement Sum

1.The Builder to pay the Home Owners the sum of $165,000.00 inclusive of all costs and expenses.

2.The Builder shall not become liable to make the above payment until 28 days after the date of this deed.

Settlement

3.The Builder will provide to the Home Owners' Private Certifier the Certicates per schedule ?? attached.

4.The payment of the settlement sum and provision of the Certificates will be a full and final settlement of all claims any of the parties have, or may have, against each other arising from the proceedings and matters referred to in the recitals.

Release

5.The Home Owners release the Builder, and the Builder releases the Home Owners, both parties releasing each other, from all past, present and future claims of any kind arising out of, connected with or incidental to the matters referred to in the recitals.

Bar to Proceedings

6.This Deed may be pleaded as a full and complete defence by any of the parties to any proceedings or claims arising out of the facts, matters and circumstances referred to in the Recitals.

...

Acknowledgment

10.The parties acknowledge that they enter into this deed fully and voluntarily on their own information and investigation.

11.The parties acknowledge that each of them has obtained independent legal advice in relation to this deed before each of them executed a copy of this deed."

1. Nothing seems to have occurred for about a week. Then on 9 June 2011 Mr Maccallum received an internal email from Mr Giles Chapman, a solicitor working in Mr Maccallum's office. The 9 June email reported that Mr Collings had called Mr Chapman: "Mr Collings is waiting on instructions from his clients who are auctioning off a property to pay for the settlement amount". This email is evidence of what Mr Collings said to Mr Chapman and is itself an admission against Mr Collings' client, Moono Constructions. It is evidence that Mr Collings (and I infer his client) thought that there was an agreement to settle the CTTT proceedings made the week before. That is the probable explanation for Mr Collings' choice of words to Mr Chapman, that his clients were arranging "to pay for the settlement amount".

1. The conclusion that Mr Collings accepted there was a concluded agreement is further supported by a conversation that Mr Maccallum had with Mr Collings, which conversation is largely recorded on Mr Maccallum's handwritten file note on the Chapman 9 June 2011 email. I accept Mr Maccallum's version of that conversation, which follows:-

"Mr Maccallum:'Robert, have you had a look at that Deed I sent you?'"

Mr Collings:'Yes, the Deed is OK. I will confirm the getting the certificates together.' 'We also need to have the usual consent orders to file'.

Mr Maccallum:'Yes, that's no problem'.

Mr Collings:'My client needs to sell a property by auction to provide the settlement money therefore he will need some more time.'

Mr Maccallum:'What is he wanting to sell?'

Mr Collings:'I will clarify the builder's proposal this week'."

1. Again, this is an admission on behalf of the defendant. Its solicitor was acknowledging a settlement in a definite sum, for which the "settlement money" was being arranged.

1. Nothing was heard for about another week. Mr Maccallum followed up the solicitors for the builder again on 16 June 2011, in an email to the following effect:-

"Robert

Please let me know regarding the deed and payment of the settlement monies asap.

My clients position is that the money & certificates are due within 28 days from the mediation i.e. by 29 June 2011.

Thanks

Dan"

1. The following day there was a response. Mr Collings telephoned the reception at Maccallum Lawyers. An internal email from the firm's reception to Mr Maccallum records what that conversation was. I infer that Mr Collings did in fact telephone and say in substance to the receptionist what is recorded in the receptionist's email. This is a further admission that a settlement had taken place and that the performance of that settlement was being discussed.

1. But yet again there was delay on the builder's side. Nothing else seems to have happened between Thursday, 16 June 2011 and early the following week. On Monday, 25 June 2011, Mr Maccallum wrote, in apparent frustration about the lack of communication from the other side, to the following effect:-

"Robert

I confirm my clients position is that $165,000.00 is payable by 29/6/11. What amount will be paid by this date? What are your clients comments regarding the deed?

If your client has something specific to put it should put it today in clear words.

Tomorrow I expect instructions to ask the CTTT to relist the matter asap.

Dan"

1. There were two communications on 20 June 2010. The first one was from Mr Chapman, who reported to Mr Maccallum that on another telephone call from Mr Collings in which Mr Collings had said as the email records:-

"Hi Dan,

Robert Collings just called.

He said he now has instructions concerning payment.

He said he will send you out a letter this afternoon about this.

Cheers

Joel Peter Chapman"

1. About midday M.B.A. Lawyers wrote to Maccallum Lawyers to the following effect:-

"We refer to your facsimile of today and advise that our client proposes to pay the $165,000.00 as follows:

1.The sum of $2,000.00 be paid on signing of the deed of release and settlement;

2.The sum of $2,000.00 be paid each calendar month from the date of the deed; and

3.The balance to be paid on or before 17 September 2011.

The above timetable is on the basis that our client has listed real estate for sale at auction on 23 July 2011. The other payments are a show of good faith.

As to the proposed deed we request that the above be incorporated and that both the CTTT matters be dismissed on the final payment.

We await your reply."

1. The MBA Lawyers' letter did not seem to be in the terms of a complete offer, but rather as to something that might go into a deed. But whatever its status, Mr Maccallum, sought on instructions on 22 June 2011 to renegotiate it. He said in an email that day:-

"Without Prejudice and in Confidence

Hi Robert

My client is quite upset and tells me the offer to pay $2,000 is rejected by as a joke. No mention of any of this at the mediation.

He wants all the money and certificates now and does not know why the builder cannot just borrow the money on the property.

What can we do to assist us in saving the settlement.

For my part if the builder was to agree to a judgment NOW of $165,000.00 and pay $65,000.00 NOW with certificates then I would recommend that to my client.

Please let me know asap.

Thanks

Dan Maccallum"

1. Further negotiations took place. These comprised a further rejection of the defendant's proposal on 1 July 2011 and a response on 6 July 2011. This correspondence demonstrated the builder had little commitment to a settlement.

1. Then that Mr Maccallum sent the 1 August 2011 letter which founded the plaintiffs' alternative claim:-

"Dear Sir,

We refer to the proceedings and advise as follows:-

1.The Home Owners' position is that the matter was settled at Mediation and that the Builder agreed to pay the Home Owners $165,000.00 and provide certain outstanding certificates.

2.With regard to the parties to file 'terms' with the Registrar, on 3 June 2011 the Home Owners provided the Builder with a draft Deed of Release & Settlement. The Deed properly reflected the settlement, was in a standard form and had no controversial terms that should have been disagreeable to the Builder. The Home Owners' position is that these 'terms' should have been agreed to by the Builder.

3.On 20 June 2011 by your letter the Builder effectively agreed to the above 'terms' other than requesting some minor amendments to the Deed reflecting a request by the Builder for time to pay.

4.The Home Owners hereby accept the Builder proposal as detailed in your letter dated 20 June 2010.

Please immediately acknowledge this fax and confirm the settlement.

If you have any queries please telephone the writer."

1. This Maccallum Lawyers attempted acceptance of a claimed 20 June 2011 offer from the builder was a little opportunistic and fails. When Mr Maccallum said on 1 August 2011, "The Home Owners hereby accept the Builder's proposal as detailed in your letter of 20 June 2010," the time for accepting that letter had already passed. Any offer had been rejected. Moreover, the M.B.A. Lawyers' 20 June 2011 letter was not a clear acceptance of the deed already sent. There was no further agreement made at that or any other time on the basis of the draft deed. But I find there was a binding oral agreement made on 1 June 2011.

What Evidence is to be Admitted

1. I admit all the evidence adduced as to what happened in the mediation on 1 June 2012. Mr Weinberger's arguments are persuasive that evidence of the agreement relied upon is not caught by CTTT Act, s 62 (4) and (5), or that there was implied consent within CTTT Act, s 62 (6) to the tender of that material.

1. The defendant relies upon the exclusionary provision in the CTTT Act, s 62, which provides as follows.

"62 Privilege

(1)In this section, "mediation session" or "neutral evaluation 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 neutral evaluation session, or

(b)a document or other material sent to or produced to a mediator or neutral evaluator, or sent to or produced at the Tribunal or the office of the Registrar, for the purpose of enabling a mediation session or neutral evaluation session to be arranged.

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

(a)at a mediation session or neutral evaluation session, or

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

(c)as provided by section 63.

(4)Evidence of any thing said or of any admission made in a mediation session or neutral evaluation 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 neutral evaluation 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 or neutral evaluation 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 63 (c)."

1. The defendant's contention is that CTTT Act, s 62(4) and (5) prohibit the use of anything said at the mediation. The plaintiff pointed to decisions on analogous legislation such as Civil Procedure Act 2005 (NSW), s 30 excluding from evidence the communications within a mediation: Sharjade Pty Ltd v RAAF (Landings) Ex Servicesmen Charity Fund Pty Ltd [2008] NSWSC 1347 per Bergin J (as her Honour then was) and Azzi & Ors v Volvo Car Australia Pty Ltd [2007] NSWSC 375 per Brereton J.

1. But for several reasons the evidence of events on 1 June 2011 that the CTTT proceedings were settled, is not caught by the CTTT Act, s 62(4) prohibition, or it comes within the exception to the prohibition in CTTT Act, s 62(6). As to the first of these, the ceremony of the CTTT Member, Mr Vrabac, in calling for a formal announcement of the terms of settlement in the CTTT hearing room was an important differentiation from the general course of the mediation. In my view the statements about the settlement Mr Maccallum made to Mr Vrabac when he was sitting on the bench was not a "thing said...in a mediation session" within CTTT Act, s 62(4). It was said in the CTTT's ordinary hearing room, a public place to which the parties were summoned by the CTTT member and with an expectation by at least Mr Maccallum that what was said there would be sound recorded. A summary of a part of what was said was indeed recorded in the CTTT's file note entered that day in the builder's proceedings. The oral statement I have found was made to the bench recorded all the essential terms of the agreement.

1. The 11 May 2011 facsimile does not quite so readily escape from CTTT Act, s 62 (5). But its creation raises interesting questions. Even though the facsimile was referred to in Mr Maccallum's oral statement to the bench outside the mediation session in the words "with the builder to provide the certificates marked on the list", it is still partially entangled in CTTT Act, s 62(5). The facsimile's existence is not explained by the mediation. As the facsimile declared itself, it was prepared as a preliminary to "the issue of a Final Occupation Certificate". I do not infer it was a "document prepared for the purposes of a mediation". It was prepared so the builder would know an important matter: what certificates the owners claimed would be needed before the relevant certifying authority might issue a final certificate. The typed text of the facsimile was all created on 11 May 2012 independently of the mediation. All that was added to the document on 11 May 2011 at the mediation were some handwritten ticks and crosses, "marked", to indicate what certificates could be supplied under a possible agreement. It is only these "marked" items that constitute the relevant "list" and were actually produced "in the course of the mediation session". But the marked facsimile was identified without objection to the CTTT orally outside the mediation session as a part of the parties' oral agreement. The admission into evidence of the 11 May 2012 facsimile may be authorised as a result of the application of CTTT Act, s 62(6).

1. But in any event CTTT Act, s 62(6) applies to all that passed between these parties at the mediation. In my view "the persons in attendance... at the mediation... consent[ed] to the admission of the document". Examining equivalent legislation, the former Supreme Court Act 1970, s 110P(6)(a) Hodgson JA reasoned in Wentworth v Rogers & Anor [2004] NSWCA 109 that a document prepared and signed in a mediation session, may itself constitute express or implied consent that it be admitted into evidence in proceedings taken with a view to enforcing an agreement contained in that document; that such consent can either be an express term of such a document or implied if a document is in a form ready to be filed in the proceedings: Wentworth v Rogers & Anor [2004] NSWCA 109 at [28].

1. The same reasoning can be applied to an oral agreement, provided the Court can be satisfied, as I am here, that it is clear that the oral agreement is intended to be legally binding and enforceable. Once that conclusion is reached the parties to the agreement must be taken permanently to consent to the agreement being disclosed at least for the purpose of it being enforced. This must be so, as Gzell J explained in Grant v Grant [2012] NSWSC 725 in relation to Civil Procedure Act 2005, s 29, so that equity can prevent a statute being used as a cloak for fraud: in this case to promote a fraud that an agreement to settle the CTTT proceedings had not been made.

1. As Hodgson JA reasoned in Wentworth v Rogers & Anor [2004] NSWCA 109 at [30], I am satisfied here that even if the statement to the CTTT bench on 1 June 2011 (and the document referred to in the statement) is to be taken as part of a "mediation session", the circumstances of the statement, recording as it does a legally enforceable agreement, imply consent to its (and the document's) later use in proceedings for enforcement of the agreement so made. It does not matter that the statement was oral, as it was a binding agreement. In my opinion the implied consent extends, as a result, to other statements to like effect during the mediation and before the formal statement was made to the CTTT. For these reasons in my view all the material adduced on the voir dire is admissible and the Court can have regard to it.

1. The next legal issue is CTTT Act, s 62(6) consent based upon what passed before Hammerschlag J in certain proceedings the defendant later brought to restrain the plaintiff's pursuing a statutory demand. But it is not necessary for me to deal with that material because of the consent that I have found otherwise arises from the events on 1 June 2011.

Agreement or Not?

1. This is a Masters v Cameron (1954) 91 CLR 353, at 360, class one agreement: one in which the parties "have reached finality in arranging all the terms of their agreement and intend to be immediately bound by the performance of those terms but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect". The 1 June 2011 events described earlier in these reasons point to the existence of a class one agreement: the formal, unqualified statement to the CTTT bench in the hearing room of a clear and complete set of terms stated to be a settlement agreement after a lengthy mediation. This is confirmed by the defendant's several subsequent admissions of a settlement through until July 2011.

1. Mr Maccallum continued to deal with Mr Collings after 1 June 2011 about the terms of the deed to be executed by the parties. It was put to Mr Maccallum in cross-examination that he did not assert in subsequent correspondence the existence of an oral agreement on 1 June 2011. Rather he continued to negotiate the terms of a possible deed. Mr Maccallum explained that he did not wish to be too aggressive in his dealings with the other side. I accept that evidence. A courteous and diplomatic approach between legal representatives is to be encouraged. I accept that that was actually Mr Maccallum's strategy. His failure to make that assertion in correspondence is not to be held against him. His dealings do not undermine the Court's conclusion that a Masters v Cameron class one agreement existed from 1 June 2011.

1. The defendant argues that because CTTT Act, s 48 assumes a settlement that may result in CTTT orders will be one made in writing and otherwise one within the powers of the CTTT, then the present consensus was not binding until in written form. But I do not agree with this contention. The parties' binding oral agreement on 1 June 2011 meant that if necessary legal remedies could be engaged to ensure the agreement was also expressed in a written form to perfect the performance of the settlement agreement.

1. Argument was put in final submissions about what Jones v Dunkel (1959) 101 CLR 298 inferences could be drawn on the evidence. But these arguments do not matter greatly. First, I do not draw any Jones v Dunkel inference against the defendants for not calling the mediator. I do not think he is naturally in any party's confidence such that one might expect him to be called in evidence by one side or the other.

1. As to the failure to call Mr Collings, I do not think what is to be inferred from his absence matters very much. Mr Collings' file note is in evidence. It gives a fairly complete and understandable account of what he records happened on 1 June 2011, which confirms the making of an agreement.

1. There was further debate about what inferences the Court could draw about the defendant's resistance to the plaintiffs' asking for documents from various other parties, including the CTTT. But I do not think that any inference against the defendant arises from that conduct. I have decided the case against the defendant because of what I saw and heard from Mr Maccallum and Mr Freeman and the other written materials before the Court.

The Terms of the Agreement

1. What were the terms of the agreement? It is to be inferred from what was said on 1 June 2011, that both sets of CTTT proceedings would be dismissed upon a payment by the builder to the plaintiffs of $165,000 inclusive of costs and supply of the technical certificates. There would then be a filing of terms sufficient to end the proceedings to create issue estoppels, whether or not there were formal releases. The filing of terms to dismiss the proceedings flows from the statement that the proceedings were "settled" and the 3 June 2011 CTTT file note that the builder's matter was to be dismissed.

1. The parties did not agree to payment within 28 days. The law will imply instead a reasonable time for payment: York Air Conditioning and Refrigeration (Australia) Pty Limited v Commonwealth (1949) 80 CLR 11, at 62, per Dixon J. That is about four months here. In an informal negotiation of this kind in a specialist tribunal I would not infer that a period of 28 days that might otherwise be a usual payment period in a superior court would be automatic. The informality of the occasion infers a more extended timetable.

1. The last term of the agreement is: that the ticked technical certificates in the 11 May 2011 email were to be supplied to the plaintiffs under the settlement agreement. There was clarification of the practical purpose of these certificates provided in the oral evidence of Mr Tanious Rehayem for the defendant.

1. I will direct the parties to bring in short minutes of order to give effect to these reasons. If there is any disagreement as to which technical certificates are to be supplied, that can be worked out in the course of any argument about the form of final orders. But the technical certificates to be supplied are the certificates ticked in the copy of the 11 May 2011 facsimile and identified earlier in these reasons.

Specific Performance

1. Should the agreement be specifically performed or not? All that must be done under the agreement, which has been found, is for the defendant to supply the technical certificates, for the defendant to pay the agreed sum and for written terms to be filed that comply with CTTT Act, s 48 dismissing the proceedings. There has been no discretionary reason advanced that would incline the Court not to grant specific performance. I will order the agreement to be specifically performed.

Conclusions and Orders

1. I direct the parties to bring in short minutes of order to reflect the reasons given. I will grant the relief sought by the plaintiffs in the terms described.

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