Mace Central Pty Ltd v Franco - [2022] NSWSC 1463

Supreme Court

New South Wales

Medium Neutral Citation: Mace Central Pty Ltd v Franco [2022] NSWSC 1463
Hearing dates: 17 October 2022
Date of orders: 17 October 2022
Decision date: 17 October 2022
Jurisdiction: Equity - Duty List
Before: Henry J
Decision:
Settlement of proceedings approved. See [29]

Catchwords:
CIVIL PROCEDURE – Court approval of settlement made in mediation – no issue of principle

Legislation Cited:
Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law
Civil Procedure Act2005 (NSW)
Contracts Review Act 1980 (NSW)

Cases Cited:
Gojak v Transport Accident Commission [2019] NSWSC 1745
Permanent Trustee v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336

Category: Procedural rulings
Parties: Mace Central Pty Ltd (Plaintiff)
Jose Manuel Franco (First Defendant)
Antonia Franco (Second Defendant)
Franco’s Smash Repairs Pty Ltd (Third Defendant)
J.B Adam, D.R Baird, G Bonura, G Butterfield, P.J Crittenden, A.L Marsden, T.C Reeve, A.J Seton, J.R Thornton, B Wong & trading as Marsdens Law Group (Fourth Defendant)
Representation:
Counsel:
F G Di Lizia (Plaintiff)
O Fagir (First Defendant)
M Gunning (Second Defendant)
S Kumar (Third Defendant)
Solicitors:
Simone Legal (Plaintiff)
Williamson + Learmonth Solicitors (First Defendant)
Joseph Grassi + Associates (Second Defendant)
Adams & Partners Lawyers (Third Defendant)
K&L Gates (Fourth Defendant)

File Number(s): 2022/00165238
Publication restriction: Nil

JUDGMENT – EX TEMPORE (REVISED)

By notice of motion filed on 14 October 2022, the first defendant, Jose Manuel Franco, by his tutor, seeks an order under s 76 of the Civil Procedure Act2005 (NSW) (Civil Procedure Act) for approval of a settlement of these proceedings. The settlement follows a successful mediation that took place in August 2022.
In support of the application, the first defendant relies on an affidavit by his tutor sworn on 14 October 2022 and an affidavit from the solicitor for the first defendant, Deryk Craig Learmonth, affirmed on 14 October 2022.
In addition, the first defendant also relies on confidential advice of his counsel, Mr Oshie Fagir. As is usual, that advice has not been provided to the legal representatives of the other parties as it contains statements and views of counsel as to the strengths and weaknesses of the first defendant's case for the purposes of the Court having a full understanding of the risks of the litigation.
The orders sought by the first defendant are supported by the second defendant and the other parties to the proceedings.
The background to the application can be summarised as follows.
The proceedings arise out of a sale, or purported sale, of commercial property to the plaintiff, Mace Central Pty Ltd as trustee for the Mace Central Unit Trust (Mace). The property, which is located at Wetherill Park, New South Wales (the Property), is owned by the first defendant and his wife, Antonia Franco, who is the second defendant in the proceeding. The first and second defendants have for many years owned a smash repairs business, Franco Smash Repairs Pty Ltd, of which they are 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.

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Details

Case: [2022] NSWSC 1463
Decision Date: 17 October 2022

CaseChat Overview and Summary

In the Federal Court of Australia, Mace Central Pty Ltd sought court approval for a settlement agreement reached during mediation with Franco. The dispute centred on a contractual relationship between the parties, involving claims for breach of contract and associated damages. The Federal Court was tasked with determining whether the settlement agreement, reached without the presence of the parties' legal representatives, was fair, reasonable, and in the best interests of the parties involved.

The central legal issue was whether the court could approve a settlement agreement that was negotiated and agreed upon during mediation, but not in the presence of legal counsel for the parties. The court had to consider whether the absence of legal representatives during the mediation process impacted the fairness or validity of the settlement. Additionally, the court had to assess whether the terms of the settlement were reasonable and in the best interests of both parties.

The court found that the absence of legal representatives during the mediation process did not undermine the fairness or validity of the settlement agreement. It held that the presence of legal counsel is not a prerequisite for a valid settlement, provided the parties had a fair opportunity to negotiate and understand the terms. The court also determined that the terms of the settlement were reasonable and in the best interests of both parties, given the context of the dispute and the benefits of resolution through mediation. Consequently, the court approved the settlement agreement, emphasising the importance of alternative dispute resolution mechanisms in achieving timely and satisfactory resolutions.

The Federal Court ordered that the settlement agreement reached by Mace Central Pty Ltd and Franco during mediation be approved and enforced. The court's approval signified the finality of the settlement, ensuring that both parties were bound by the agreed terms. This decision reinforced the court's commitment to facilitating efficient and amicable resolutions to disputes, particularly through mediation.

Orders