Pittorino v Meynert (as Executrix of the Wills of Guiseppe Pittorino (Dec) and Guiseppina Pittorino (Dec))
[2002] WASC 76
PITTORINO -v- MEYNERT (as Executrix of the Wills of GUISEPPE PITTORINO (DEC) and GUISEPPINA PITTORINO (DEC)) & ORS [2002] WASC 76
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 76 | |
| Case No: | CIV:2012/1999 | 25 & 26 SEPTEMBER 2001 & 12-15 FEBRUARY 2002 | |
| Coram: | SCOTT J | 12/04/02 | |
| 30 | Judgment Part: | 1 of 1 | |
| Result: | Application to set aside mediation agreement dismissed | ||
| A | |||
| PDF Version |
| Parties: | ELIZABETH GLORIA PITTORINO FERNE PETA MEYNERT (as Executrix of the Wills of GUISEPPE PITTORINO (DEC) and GUISEPPINA PITTORINO (DEC)) CATERINA PITTORINO VITTORIA PITTORINO UMBERTO PITTORINO |
Catchwords: | Procedure Supreme Court procedure Application by plaintiff to set aside mediation agreement Cross application by first defendant for declaration that terms of settlement at mediation are binding Allegations by plaintiff of oppression, illness and undue pressure at time of mediation Contention that executor provided insufficient and inaccurate details of assets at mediation |
Legislation: | Inheritance (Family and Dependants Provisions) Act 1972 |
Case References: | Commercial Bank of Australia Ltd v Amadio & Anor (1983) 151 CLR 447 Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 Ella v The Queen (1991) 103 FLR 8 Haines v Carter [2001] NZLR 167 Markovina v The Queen (No 2) (1997) 19 WAR 119 McKenzie v Edmondson (1996) 15 WAR 391 North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd & Anor [1979] 1 QB 705 R v Birks (1990) 19 NSWLR 677 Universe Tankships Inc of Monrovia v International Transport Workers Federation & Ors [1983] 1 AC 366 Von Schulz & Anor v Morriello [1998] QCA 236 W J Green & Co (1984) (as Trustee for the W J Green Family Trust) & Ors v Wilden Pty Ltd & Ors, unreported; Library No 970186; 24 April 1997 Dalmation Nominees Pty Ltd v Marinovich, unreported; SCt of WA (Murray J); Library No 980670; 20 November 1998 Dent v Moore (1919) 26 CLR 316 Ellwood v Darling Downs Investments Pty Ltd (1988) 18 FCR 510 General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6 Gillett v Abbott (1838) ER 112 7Ad & E1 665 Hart v O'Connor [1985] AC 1000 In re Van Laun; Ex parte Chatterton (1907) 2 KB 23 Jones v Dunkel (1959) 101 CLR 298 Kinch v Walcott [1929] AC 482; [1929] All ER 720 R v Elworthy (1868) LR1 CCR 103 Roberts v Gippsland Agricultural and Earth Moving Contracting Co Pty Ltd [1956] VLR 555 Specktor v Lees [1964] VR 10 Webb v Australian Agricultural Machinery Pty Ltd (1990) 6 WAR 305 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- 12-15 FEBRUARY 2002
- Plaintiff
AND
FERNE PETA MEYNERT (as Executrix of the Wills of GUISEPPE PITTORINO (DEC) and GUISEPPINA PITTORINO (DEC))
First Defendant
CATERINA PITTORINO
Second Defendant
VITTORIA PITTORINO
Third Defendant
UMBERTO PITTORINO
Fourth Defendant
(Page 2)
Catchwords:
Procedure - Supreme Court procedure - Application by plaintiff to set aside mediation agreement - Cross application by first defendant for declaration that terms of settlement at mediation are binding - Allegations by plaintiff of oppression, illness and undue pressure at time of mediation - Contention that executor provided insufficient and inaccurate details of assets at mediation
Legislation:
Inheritance (Family and Dependants Provisions) Act 1972
Result:
Application to set aside mediation agreement dismissed
Category: A
Representation:
Counsel:
Plaintiff : Mr M J Bateman
First Defendant : Mr L Tsaknis
Second Defendant : Mr D S Rawlinson
Third Defendant : Mr M Curwood
Fourth Defendant : Mr A S Stavrianou (until 12/2/02)
Solicitors:
Plaintiff : Batemans
First Defendant : Gibson Tovey Mills
Second Defendant : David Rawlinson
Third Defendant : Arns & Associates
Fourth Defendant : Hammond Worthington
Case(s) referred to in judgment(s):
Commercial Bank of Australia Ltd v Amadio & Anor (1983) 151 CLR 447
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40
Ella v The Queen (1991) 103 FLR 8
Haines v Carter [2001] NZLR 167
Markovina v The Queen (No 2) (1997) 19 WAR 119
McKenzie v Edmondson (1996) 15 WAR 391
North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd & Anor [1979] 1 QB 705
R v Birks (1990) 19 NSWLR 677
Universe Tankships Inc of Monrovia v International Transport Workers Federation & Ors [1983] 1 AC 366
Von Schulz & Anor v Morriello [1998] QCA 236
W J Green & Co (1984) (as Trustee for the W J Green Family Trust) & Ors v Wilden Pty Ltd & Ors, unreported; Library No 970186; 24 April 1997
Case(s) also cited:
Dalmation Nominees Pty Ltd v Marinovich, unreported; SCt of WA (Murray J); Library No 980670; 20 November 1998
Dent v Moore (1919) 26 CLR 316
Ellwood v Darling Downs Investments Pty Ltd (1988) 18 FCR 510
General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6
Gillett v Abbott (1838) ER 112 7Ad & E1 665
Hart v O'Connor [1985] AC 1000
In re Van Laun; Ex parte Chatterton (1907) 2 KB 23
Jones v Dunkel (1959) 101 CLR 298
Kinch v Walcott [1929] AC 482; [1929] All ER 720
R v Elworthy (1868) LR1 CCR 103
Roberts v Gippsland Agricultural and Earth Moving Contracting Co Pty Ltd [1956] VLR 555
Specktor v Lees [1964] VR 10
Webb v Australian Agricultural Machinery Pty Ltd (1990) 6 WAR 305
(Page 4)
1 SCOTT J: In this matter two summonses were heard together. The first was a summons by the first defendant for a declaration that the parties have agreed to terms of settlement in accordance with the terms of settlement annexed in a schedule to the application of 15 June 2001.
2 The first defendant seeks orders to facilitate the carrying out of the terms of settlement.
3 The second summons, filed on 6 July 2001 on behalf of the plaintiff, in part is an application to set aside the agreement purportedly reached at a mediation conference on 25 September 2000. That summons also seeks other orders which are not relevant for the purposes of these proceedings.
4 In the plaintiff's summons the plaintiff seeks to set aside the mediation agreement on the following grounds:
(a) The plaintiff was not effectively legally represented at the mediation conference on 25 September 2000 in that she had lost the confidence of her former solicitors prior to the conference and received no advice or proper advice;
(a)(i) The purported agreement made on 25 September 2000 was and is unconscionable;
(b) The learned Deputy Registrar, who presided over the said conference, was aware at all material times of the said loss of confidence referred to in (a) abovementioned;
(c) The learned Deputy Registrar was wrong in law when she sought to influence the plaintiff by giving her advice on the compromise in her position as Deputy Registrar;
(d) The mediation conference was conducted at an excessive length of time and with acrimony, and most of it directed to the plaintiff;
(e) The plaintiff suffered a ruptured cyst during the said conference and her request for an adjournment and to be excused from further attendance should have been granted;
(f) The first defendant, as trustee for the estates, had failed to provide all of the parties prior to the said conference with a full and accurate statement of all accounts of assets and liabilities, including a full statement of accounts of income received by the estate since the dates of death of both deceased.
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5 Other grounds did not relate to the matters that were the subject of the present hearing.
6 Objections were taken by each of the defendants to the plaintiff's affidavits which have been considered and where appropriate the paragraphs which are not admissible have been struck out.
7 I indicated to counsel that I would make rulings in relation to the admissibility of the paragraphs of the affidavit under challenge. In relation to the affidavit of 6 July 2001 sworn by the plaintiff, I have made rulings on a copy of that document supplied under cover of a letter from Gibson Tovey and Mills, solicitors, of 8 February 2002.
8 It is first necessary to outline the background of the matters which give rise to this application.
9 The plaintiff was one of four children of Giuseppe and Giuseppina Pittorino ("Mr and Mrs Pittorino"). Giuseppe Pittorino died on 2 June 1997 and Giuseppina Pittorino died on 16 December 1997. Probate of Giuseppe Pittorino's will was granted on 12 August 1998 and probate of Giuseppina Pittorino's will was granted on 6 April 1999. Each of those wills is annexed to the copy of probate, being exhibits 16A and 16B in this action.
10 Both Mr and Mrs Pittorino appointed the first defendant, Ferne Peta Meynert ("Mrs Meynert"), executrix of their respective wills. Ms Meynert is a certified practising accountant and had been the accountant for Mr and Mrs Pittorino for many years.
11 Mr and Mrs Pittorino operated a crayfishing business with a number of fishing boats. The fourth defendant was the skipper of one of those boats, "Mascot".
12 Each of the wills of Mr and Mrs Pittorino also appointed Ms Meynert as trustee of the Pittorino Family Arrangement Trust to replace a company, Leafdale Pty Ltd ("Leafdale"). Each of the wills of Mr and Mrs Pittorino left their son, Umberto Pittorino, one half of a fishing boat, "Mascot" LFB284.
13 As to the balance of the estate, each of Mr and Mrs Pittorino left their respective estates to the trustee upon trust after payments of debts and funeral expenses to the trustee of the Pittorino Family Arrangement Trust. Mr and Mrs Pittorino also established the Pittorino Family Trust which held two properties and a number of rock lobster pot entitlements.
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14 It is not necessary in the course of these reasons to discuss the terms of the trusts, except to say that they were discretionary trusts.
15 In relation to the wills of each of the deceased, I accept the evidence of the executrix, Ms Meynert, to the effect that the wills of Mr and Mrs Pittorino were structured so as to enable the crayfishing business conducted by the fourth defendant, Mr Pittorino, to continue. No doubt for that reason half of the fishing boat, Mascot, was devised to their son, Umberto Pittorino, the fourth defendant, who was the skipper of the Mascot and who managed the crayfishing business prior to the death of and following the death of his parents.
16 The plaintiff and the second and third defendants are the daughters of Mr and Mrs Pittorino and the fourth defendant is Umberto Pittorino, the only son of Mr and Mrs Pittorino.
17 Following the death of Mr and Mrs Pittorino the plaintiff and the third defendant each decided to bring proceedings under the provisions of the Inheritance (Family and Dependants Provisions) Act 1972. It is not necessary to refer in any detail to those proceedings in the course of these reasons except insofar as they form part of the narrative of the events leading up to the present application.
18 The applications arise out of mediation conferences that were conducted by a Registrar of this Court seeking to mediate the inheritance applications made by the plaintiff and the third defendant. The mediation conferences convened in relation to those applications occurred at the Supreme Court on the 7th and 25th days of September 2000. It is common ground that on 7 September 2000, the first day of the mediation conference, the plaintiff was represented by Malcolm McCusker QC ("Mr McCusker") and a solicitor, Elizabeth O'Sullivan, of Murcia and Associates, the plaintiff's then solicitor ("Ms O'Sullivan").
19 No resolution of the matters was finalised on 7 September 2000 and the conference reconvened on 25 September 2000. On that occasion the plaintiff was represented again by Mr McCusker and Ms O'Sullivan, although Mr McCusker had to leave the conference at lunchtime because of other commitments. The plaintiff was thereafter represented on that day by Ms O'Sullivan alone.
20 The application arises out of an agreement purportedly reached at mediation on 25 September 2000. That agreement was reduced to writing and can conveniently be found as annexure FPM2 to the affidavit of Ferne Peta Meynert sworn 10 August 2001. A typed copy of that document has
(Page 7)
- been prepared, but counsel for the plaintiff, on the hearing of this application, objected to the typed document being taken into evidence on the basis that it was not an accurate reproduction of the handwritten agreement. The typed copy has been referred to only to the extent necessary in order to clarify particular words which are difficult to decipher in the handwritten copy.
21 I should also add for the sake of completeness that on 12 February 2002 counsel for the plaintiff amended the application by adding the ground A(i), that the purported agreement made on 25 September (2000) was and is unconscionable.
22 By way of procedure the first defendant's application for declaratory relief was treated as the principal application. The two applications, of course, overlap.
23 It is common ground that at the conclusion of the mediation on 25 September 2000, after a handwritten document was prepared in consultation between all the solicitors present at the mediation, both the solicitors and their clients signed the document. The one exception was that Caterina Pittorino, the second defendant, authorised her solicitor to sign the document on her behalf with the consent of the Registrar because she had personal commitments to attend to.
24 The plaintiff is the only party who challenges the mediation agreement and seeks to set it aside. The fourth defendant, through his solicitors, has taken a neutral position in relation to this application and neither called nor gave evidence. The other defendants each seek to support the mediation agreement and, as I understand their position, would wish to give effect to it.
25 At the commencement of the mediation conference on 7 September 2000 one of the difficulties was that no accurate figures as to the value of the estate of Mr and Mrs Pittorino had been produced. The parties wanted an up-to-date and accurate valuation of the estate in order to facilitate the mediation. The first defendant arranged for the real estate to be valued by an estate agent (albeit a drive-by valuation). When the mediation resumed on 25 September 2000, the parties worked from a valuation prepared by the first defendant shown as FPM1 to the first defendant's affidavit of 21 September 2000. According to that affidavit, the total value of the estate was $13,437,292. The assets consisted of a number of residential properties in Fremantle and Lancelin, together with three fishing vessels and their accompanying rock lobster licences. In addition, there were
(Page 8)
- some bank accounts and term deposits. By far the most valuable item in the estate was the value of the 420 rock lobster entitlements (being 440 licences) each valued at $27,000.
26 Before dealing with the evidence in detail it was, in my view, common ground that Mr and Mrs Pittorino wished the crayfishing business to continue after they had died. That does not appear to be disputed in the evidence, but it is established by the evidence of the executrix, Ms Meynert. In my view, it is clear, both from the way the trusts were structured and the wills of the two deceased, that they intended the fishing business to continue with their son, the fourth defendant, continuing in the fishing industry in which the family had been engaged for many years. In that respect it is not insignificant that both Mr and Mrs Pittorino left one half of their interest in the fishing boat Mascot to the fourth defendant. The evidence establishes that the fourth defendant has continued in the fishing industry as skipper of the fishing boat Mascot and intends to continue to do so.
27 It is also of some significance that the fourth defendant, together with the first defendant, employed the second defendant to assist with the running of the crayfishing business. The employment of the second defendant in that capacity was a matter of concern to the plaintiff who considered that she was equally capable of doing the work which the second defendant was undertaking and she would also have liked to have been similarly employed.
28 It should also be mentioned in passing that the fourth defendant was the sole director of Leafdale, the trustee of the Pittorino Family Arrangement Trust.
29 It is then necessary to turn to the evidence called in support of these two applications.
30 The first witness called was the first defendant. The reason was that the first defendant presented her case for declaratory relief. The second and the third defendants then presented their cases and the plaintiff's case was last. That was a convenient way of dealing with the issues.
31 Counsel for the plaintiff challenged Ms Meynert's evidence in cross-examination on the basis that, as an executor, she should have adopted a position of impartiality. It was put to her in cross-examination that she had aligned herself with the second and fourth defendants in opposition to the position of the plaintiff and third defendant. That attack, in my view, was quite unjustified. Insofar as Ms Meynert's evidence is
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- concerned, in my view, the witness was trying to carry into effect what she understood the wishes of each of the testators to be, namely, to keep the fishing business together as far as possible, but otherwise treat the children of the deceased equally but in accordance with the wills. In that respect, of course, the fourth defendant had been bequeathed the fishing boat Mascot and was the sole director of Leafdale so that in real terms he had a greater degree of control of the assets than any of the other defendants. I do not accept the suggestion put to Ms Meynert in cross-examination that she was exhibiting a partiality towards the second and fourth defendants.
32 A further criticism of Ms Meynert was based upon the fact that the second and fourth defendants had purchased townhouses in Hough Street, Attadale. The evidence establishes that they had each purchased townhouses in their own names, but there was no evidence to suggest that the funds from the estates of the deceased had been used to fund those purchases. Ms Meynert's evidence was that the purchases had been funded through borrowings and that the borrowings had been backed by Leafdale.
33 Ms Meynert agreed that she had employed the second defendant, Caterina, to work as assistant manager of the fishing business at an income of $30,000 a year. Her evidence was, that had Caterina not performed that work, she would have done the work herself and the cost to the estate would have been well in excess of the $30,000 per year that Caterina was paid. I accept that evidence.
34 Whilst Ms Meynert accepted that to take part in these proceedings when she was the executrix of the deceased's estates was unusual, she explained her position by saying that she saw that as being the best way of ensuring that the wishes of the testators were carried out. In other words, as I understand her evidence, she saw part of her role as executrix as being to ensure that the crayfishing business was not split up, sold or dealt with in such a way that the business would not survive. For that reason her approach to the litigation was consistent with her role of trying to give effect to the intentions of the testators. In that respect I accept her evidence.
35 As I have said earlier in these reasons, the focus of the application was upon the mediation conference conducted on 25 September 2000. Ms Meynert was at that conference as the executrix of the estate and her evidence establishes that she participated in making offers to both the plaintiff and the third defendant. Those two parties, of course, had lodged
(Page 10)
- inheritance claims against the estate. Accordingly, in my view, there was no impropriety in Ms Meynert participating in the negotiations to settle those claims against the estates.
36 It should be noted that the agreement that was ultimately reached at the mediation conference was that the plaintiff should receive $250,000 within seven days of the agreement, being part payment of a total cash component of $1,000,000. In addition to which she would receive three properties, namely, 26 and 28 Chalmers Street, Fremantle, together with 113 Attfield Street, Fremantle. Her sister Vittoria, the third defendant, who had also lodged a claim was to receive a cash component of $1,000,000, plus two properties.
37 Until close to the end of the mediation conference it was proposed that the plaintiff would receive the $1,000,000, plus two properties. Ms Meynert's evidence was that the plaintiff rejected that offer and said that she needed additional money to cover her legal fees. As a consequence, Ms Meynert suggested that the plaintiff be given a third property, namely, the property at Attfield Street, Fremantle. As Ms Meynert expressed it in her evidence, that property was not required for the purpose of the fishing business. Ms Meynert's evidence was that the plaintiff and her legal adviser, who at that stage was Ms O'Sullivan, wanted the additional property, as I have said, so as to allow for the plaintiff's legal fees. Ms Meynert agreed to that suggestion to meet the plaintiff's requirements. In addition, when the agreement was finally drawn up, it provided that $250,000 of the $1,000,000 was to be paid to the plaintiff within seven days of the date of the agreement. That money was in fact paid by the estate to the plaintiff's solicitors who deducted their legal fees and forwarded the balance to the plaintiff. As I understand the evidence of the plaintiff, she has used that money, but she says that if her application to set aside the mediation agreement is successful, she will arrange to refund that amount to the estate.
38 The significance, however, of Ms Meynert's evidence concerning the Attfield Street property is that it was offered to the plaintiff in order to meet the plaintiff's requirements that she have additional assets to cover her legal fees. In other words, it was the plaintiff's request that this property be added to her share and which she agreed to. Significantly the third defendant, Vittoria, was only allocated two properties in the agreement.
39 At the second mediation the plaintiff brought with her her own valuation of each of the houses and based upon her valuations the three
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- properties she received, together with the $1,000,000, put the value of her allocation from the estates at $2,000,000.
40 Ms Meynert's evidence was that when the agreement was signed, there was no pressure on the plaintiff to sign the agreement, but because the matter was settled at around about 7 pm that night, the parties were anxious to finalise the matter once the plaintiff had decided to sign the agreement. Ms Meynert's evidence was that at no time was she told by the plaintiff that the plaintiff was in pain or that she was not a willing party to the agreement.
41 I will deal with the circumstances leading up to and surrounding the signing of the mediation agreement in due course.
42 There is some significance also in the evidence of Ms Meynert that after agreement was reached the solicitors involved for each of the parties drew up a written contract. In the end that process was unwieldy so the solicitors selected the most legible copy which they all worked upon. Ms Meynert's evidence was that the agreement was explained to the plaintiff before she and her solicitor, Ms O'Sullivan, each signed the document.
43 The second defendant, Caterina Pittorino ("Caterina"), also gave evidence. Caterina was also at the mediation conference on 25 September 2000 but had to leave to attend to personal matters prior to the mediation agreement being signed. Before she left the mediation she checked with the Registrar conducting the mediation to ensure that it was satisfactory for her solicitor to sign the agreement on her behalf and she said, and I accept, that the Registrar agreed that she could do so. Accordingly, she said that she left the mediation at about 6.45 pm on that date.
44 Caterina's evidence traced the history of the negotiations between the parties that led up to the offer of $1,000,000, plus the properties to be chosen by the plaintiff and the third defendant. Caterina's evidence was that the mediation conference was conducted without acrimony but that it was a mediation directed towards achieving an acceptable compromise. Caterina denied that the mediation was a "battle royal", as suggested to her by counsel for the plaintiff.
45 Caterina's evidence was that towards the end of her involvement in the mediation conference on 25 September she went to see her sister Elizabeth who was with her solicitor, Ms O'Sullivan. She said, and I accept, that her sister Elizabeth was crying "because she wanted me to help her and said she needed a hand to pay her legal fees". Caterina told
(Page 12)
- the plaintiff that she had no authority to increase the offer and would have to speak with her brother Umberto (the fourth defendant) about the matter. She said that after that conversation with the plaintiff she and her brother sought advice from the executrix (the first defendant) and it was the first defendant who suggested that the Attfield Street property could be included in the offer to the plaintiff.
46 Caterina's evidence was that the Registrar had said to her during the course of the afternoon that the plaintiff's solicitor was talking to the plaintiff to make her see sense. However, Caterina made it clear that from her point of view the Registrar was neutral as between the plaintiff and the other parties.
47 Importantly also, Caterina testified that when the plaintiff asked for an increased offer in order to cover her legal fees, she queried the plaintiff as to the amount of her legal fees and was told that they were $150,000. She said, and I accept, that Ms O'Sullivan said, "If you can help Elizabeth with her legal fees, the whole situation can be wrapped up."
48 It was following that conversation that the offer to the plaintiff was increased to include the Attfield Street property.
49 Caterina also testified that before she left the mediation she saw the plaintiff in the foyer of the building using a mobile phone. No details have been given as to the contents of that phone call or as to whom the plaintiff phoned, but I accept that the plaintiff did use a mobile phone to call somebody prior to signing the mediated agreement.
50 Importantly, after the increased offer was made the plaintiff was still hesitant to accept the offer. It would appear that the time was then approaching 6.45 pm. Caterina's evidence was that when the plaintiff was reluctant to accept the increased offer, the solicitor for the first defendant said to her, "I've had enough. We will see you in court." Whilst, in my view, it is difficult to determine the exact words that were said, I accept that the solicitor for the first defendant did say words to the effect that he would see the plaintiff in Court. I will later deal with the plaintiff's evidence concerning that comment and the way in which, in my view, she embellished those words to suit her case.
51 Two other matters that should be mentioned about Caterina's evidence are: firstly, she never saw any loss of confidence between the plaintiff and her solicitor and, secondly, she was never told by the plaintiff that the plaintiff was in pain or unwell. Had the plaintiff been as ill as she said in her evidence she was, in my view, she would have said so to one,
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- if not both, of her sisters. She did not, however, do so. Again I will deal with the plaintiff's evidence with respect to that aspect of the matter in due course.
52 I should add at this point that it is common ground that in order for the estates to meet the liability to the plaintiff and the third defendant if the mediated agreement is to stand, borrowings of some $3,300,000 will have to be undertaken by the estate. As I have already indicated, the plaintiff was paid $250,000 within seven days of the mediation agreement. Some of that amount was deducted by her solicitors to cover legal costs and the balance remitted to the plaintiff for her own use.
53 Whilst it is not clear what the borrowings of $3,000,000 by the estate are to fund, on the evidence before me it is at least possible that the loans in relation to the Hough Street properties purchased by the second and fourth defendants will be refinanced through that loan. Details of the loan that is proposed have, however, not been identified beyond the fact that the total borrowings of the estate will be $3,300,000.
54 The third defendant also gave evidence in these proceedings. In dealing with her evidence it is important to note that she had also lodged an application under the Inheritance (Family and Dependants Provisions) Act 1972, as had the plaintiff. In that respect her interests were similar to those of the plaintiff in the course of the mediation negotiations.
55 The third defendant also signed the mediation agreement and accepts that she is bound by it. Her evidence was that she was happy with the offer that was made to her and she was anxious to finalise the agreement, receive her share, and continue with her life. The third defendant, Vittoria Galati-Rando ("Mrs Rando"), testified that the second day of the mediation was conducted under what she described as "normal pressure". She said:
"It was a very stressful time as we were coming towards the end when it was proposed to what I would get. I felt relieved but I know there was the pressure of the day, which is probably quite normal."
56 Mrs Rando also said that there was no threats or bitterness exerted towards her, nor did she feel that she was threatened.
57 Mrs Rando accepted that in her affidavit she had said that her brother, the fourth defendant, had said that he would kill her if she would do anything like her sister Elizabeth (the plaintiff) was doing. She said
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- that she did not regard that as a physical threat or a threat of physical violence but rather a verbal threat.
58 The thrust of Mrs Rando's evidence was that she was concerned to see the matters involving the family resolved. She was happy with the offer made to her and agreeable to the matter being resolved on that basis. Her concern was to get the family back together again so that, hopefully, they would resume their relationships as a happy and close-knit family.
59 From the list of properties that were shown to the plaintiff and to the third defendant, the third defendant selected the two properties that she was to receive.
60 Towards the end of the mediation proceedings the third defendant says that she noticed that her sister had been away from the mediation room for quite a while. She said that the Registrar asked her, "Would you like to go in and see your sister and speak to her?" and she said she agreed to do so. She says at that stage, when she went to see her sister, she herself had a splitting headache, which is not surprising in view of the length of the mediation on that day. She said that when she went in and saw the plaintiff, "Elizabeth had paperwork all over the table and she was all upset and she had her lawyer over the other side. It looked like they were in conference looking at figures and things."
61 Mrs Rando said that when she spoke to the plaintiff, the plaintiff said to her words to the effect, "I'm not happy with the deal. We've been robbed deluxe. It's not fair; they haven't come up with the figures."
62 Mrs Rando said that the plaintiff was angry and upset and was not happy with the offer that she had received. She said that her sister was querying the accuracy of the figures and said she wanted more time to sort things out. Importantly, in my view, Mrs Rando said that she said to the plaintiff, "Not many people at your age would get what you got, Liz." Mrs Rando said that the plaintiff was angry with everyone on that day.
63 I should add at this point that I accept the evidence of Mrs Rando that it was she who said to the plaintiff, "Not many people at your age would get what you got." The plaintiff's evidence, which I will discuss later, was that this was part of a remark made to her by the Registrar, not by her sister. However, in my view, it was Mrs Rando who made that remark to the plaintiff. I will come to the reason for reaching that conclusion in due course.
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64 In cross-examination counsel for the plaintiff put to Mrs Rando that it was the Registrar who said to Elizabeth Pittorino, "Not many people who are 36 years of age come out with what you got today." Mrs Rando replied, "They were my words and I still stand by my words today."
65 Importantly, also, Mrs Rando denied that the plaintiff ever said to her that she was feeling unwell or that she had a burst cyst and wished to go home.
66 Mrs Rando said in her evidence that at one stage the Registrar said that the plaintiff and her solicitor had "had words". Mrs Rando said that she did not hear the Registrar say, "The two Lizzies are at loggerheads."
67 In viewing the evidence overall, in my view, at one stage the plaintiff's solicitor became distressed and was crying. I accept that briefly and in an attempt to comfort her the Registrar either put an arm around her or touched her on the shoulder. As to that, I can see no impropriety whatever in the Registrar treating a distressed solicitor in that way. Counsel for the plaintiff would have this Court accept otherwise, but I expressly reject the plaintiff's contention in that regard.
68 Mrs Rando's evidence was that after the plaintiff had been to the toilet and at the stage at which all the parties were about to leave the building the plaintiff asked all the parties, "Where are you going?" and said that she had agreed to sign the deed.
69 Finally, in dealing with Mrs Rando's evidence, as I have said, the plaintiff and the third defendant had some identity of interest in that each had lodged an application pursuant to the Inheritance (Family and Dependants Provisions) Act against the estate. In that respect, in my view, had the plaintiff been unwell, as she said she was, or confused as to what the offer to her was, I would have expected her to have said so to Mrs Rando. The fact that no such complaint was made to Mrs Rando is, in my view, a fact of some significance.
70 The third defendant also called as a witness the solicitor who acted for the third defendant at the mediation. That solicitor was not acting for the third defendant at the hearing of this application. The solicitor, Robert Guerrini ("Mr Guerrini"), testified that he was one of the people who signed the mediation agreement. He said that the last parties to sign were Ms O'Sullivan and the plaintiff. He said that the agreement made its way around the mediation table until ultimately it reached the plaintiff and her solicitor for signature.
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71 Importantly, Mr Guerrini's evidence was that prior to the commencement of the mediation on 7 September 2000 he heard Mr McCusker advise the plaintiff that the potential range for settlement of her claim was between $1,000,000 and $2,000,000 but probably closer to the $2,000,000 range. He said that he heard Mr McCusker advise the plaintiff that $2.5 million was probably out of reach.
72 Mr Guerrini's evidence was that at around 7 pm on the second day of the mediation conference, that is, 25 September 2000, the parties had packed up to go home and had reached the elevator waiting for the lift to come. He said that the plaintiff emerged from her room and asked the parties where they were going and that she was told by someone (who Mr Guerrini could not identify) that the parties were leaving as the matter could not settle. He said that the plaintiff indicated that she was ready to settle and wanted to sign the papers. As a consequence, the parties went back to the conference room and resumed their positions.
73 Mr Guerrini said that after the parties were in the conference room the plaintiff said something (which he did not hear or understand) but he saw Mr Tsaknis, counsel for the first defendant, close his briefcase and he recalls Mr Tsaknis saying something to the effect of, "If you want to settle it, sit down. If you don't, let's go home."
74 Mr Guerrini's evidence was that the comment made by counsel for the first defendant was, in his view, not out of line, nor was it in any way unprofessional.
75 Mr Guerrini also indicated that he was never told that the plaintiff was ill or in pain.
76 Importantly also, Mr Guerrini was of the view that there was nothing particularly remarkable about this mediation compared to other mediations that he had attended. In cross-examination Mr Guerrini accepted that this mediation had gone on for a considerable period. The first day of the mediation had concluded, he said, at around about 6 pm and on this day it was around about 7 pm when the matter concluded.
77 Mr Guerrini accepted that the mediation conference was divided into two camps in that the plaintiff and her legal advisers and the third defendant and himself were one group and opposed to the other parties. Bearing in mind that the plaintiff and the third defendant were each claimants against the estate, that is hardly surprising.
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78 Mr Guerrini's evidence was that he did not see any breakdown of the relationship between the plaintiff and her solicitor, but he did hear the plaintiff suggest that her brother, the fourth defendant, was "being mean". Mr Guerrini said that he did not hear any yelling in the course of the mediation and that he considered that the Registrar was compassionate to both the plaintiff and the third defendant and their solicitors. Mr Guerrini's evidence was that the Registrar made it plain that she was not in a position to advise the parties and that it was for the solicitors to fulfil that role. Importantly, Mr Guerrini also said that he did not hear the Registrar say, "For a girl of 36 $1,000,000, plus three houses was a substantial sum which not many 30-year-olds had." Mr Guerrini also said that he did not recall any comment to the effect that the third defendant was a "wise woman". However, for reasons that I will come to, I am of the view that the Registrar did say something complimentary about Mrs Rando after Mrs Rando said to the plaintiff words to the effect, "Not many people who are 36 years of age come out with what you've got."
79 Broadly speaking, I accept Mr Guerrini's evidence that there was nothing particularly exceptional about this mediation. Mr Guerrini accepted that most mediations are conducted under some pressure and that he did not think there was anything extraordinary either about the length of time in which this mediation was conducted or the circumstances of it. Mr Guerrini had heard no complaints by the plaintiff that she was in pain or that she did not understand the contents of the mediated agreement, and the substance of his evidence was that there was nothing unusual in the way this agreement was concluded.
80 I turn then to the plaintiff's evidence. In dealing with the plaintiff's evidence, I should make it clear that I prefer the evidence called on behalf of the defendants to the evidence of the plaintiff. That is not to suggest, and I do not suggest, that the plaintiff has in any respect told lies or that any of her evidence was deliberately untruthful. As will become apparent in the course of these reasons, in my view, the plaintiff was prone to distort and exaggerate matters because she had become so intensely emotionally involved with them. That is apparent both from remarks that she attributed to the Registrar which, in my view, were not said and in relation to the way in which she distorted a remark made by counsel for the first defendant at the end of the mediation conference when the parties were about to leave via the lift. I am also of the view that the plaintiff grossly exaggerated her pain and suffering on the day in question and exaggerated the confusion which she says that she felt.
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81 It is to be kept in mind that at the proceedings on 7 September and on the morning of 25 September the plaintiff was represented not only by a solicitor but also by an eminent Queen's counsel. It is clear from Mr Guerrini's evidence that she had received advice, particularly from senior counsel, so that she was well aware of her legal position. No doubt the likely outcome of any proceedings in the Supreme Court would have been coloured by the fact that Mr and Mrs Pittorino left their estates to trustees of discretionary trusts so that the outcome of the plaintiff's claim was by no means certain.
82 The plaintiff, in her evidence, said that two weeks prior to giving evidence in the Supreme Court, that is, two weeks prior to 12 February 2002, she had what she described as a relapse of the same pain that she had had on the afternoon of 25 September 2000. She said that on this latter occasion she had been taken by ambulance to the Royal Perth Hospital and received treatment. Counsel for the plaintiff produced a medical report from the Royal Perth Hospital in which a number of possible causes were outlined. That report, of course, related to the plaintiff's condition when admitted to that hospital on 28 January 2002.
83 The report from Dr Mincham was marked for identification in the course of these proceedings and I indicated that I would later rule upon its admissibility. I have reread the report and the plaintiff's evidence concerning her symptoms on 25 September 2000 and I am quite unable to conclude that the report marked for identification D has any relevance to the plaintiff's condition on 25 September 2000. In any event, there was no definitive diagnosis made on 28 January 2002 of any assistance in determining whether or not the plaintiff suffered from any illness on 25 September 2000. The report will not be admitted into evidence.
84 The substance of the plaintiff's evidence was that on the afternoon of 25 September 2000 after senior counsel left the mediation conference, she said, "All the acrimony and the whole stance of the whole day changed and all the tension was pointed towards myself" (transcript 286). The plaintiff's evidence was that in her eyes the Registrar had sided with the other parties at the mediation conference. She was of the view that the Registrar was telling her what was best for her in terms of reaching a settlement.
85 The plaintiff's evidence was that when she signed the document, she was not sure what she signed and that she was stupefied. The plaintiff said that she pleaded with the Registrar for an adjournment and that she was desperate to get out of the building. She said that she was bemused,
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- confused and in a traumatised state and, as she expressed it, she would have signed her own death warrant. She said she did not even remember signing the agreement.
86 The plaintiff's evidence was that she had taken two Panadeine Forte tablets in the course of the afternoon and that she was just very, very frightened and that she had pleaded and pleaded with the Registrar to let her go home but that she could not get out of the building. She said in her evidence that she was feeling so poorly that she did not understand what was going on and that she did not know what she was doing.
87 The plaintiff's evidence given at trial, particularly under cross-examination, should be compared with her affidavits. What is clear, in my view, is that the plaintiff, because of her highly emotionally charged state, has convinced herself that some of the things which she says in her evidence happened, in fact did happen. A comparison between the plaintiff's evidence in her affidavits and her evidence under cross-examination reveals the extent to which the plaintiff has distorted the events of the afternoon of 25 September 2000.
88 In the course of her evidence the plaintiff stressed the excruciating pain that she suffered on the afternoon of 25 September. As I have said, it is remarkable that, if she was in such pain, she never told either of her sisters about it and she never sought any medical treatment for it.
89 The plaintiff, in her affidavit sworn 6 July 2001, exhibit C, said of her medical condition:
"I was in extreme stomach pain. I began to get very painful stomach cramps. I was in extreme pain and pleaded to my solicitor to advise the learned deputy registrar that I could no longer continue and to seek an adjournment not only because the pain began to worsen but to seek further advices from senior counsel concerning the latest turn of events. I pleaded to be allowed to go home but this fell on deaf ears as far as my former solicitor was concerned."
90 In her evidence the plaintiff said that it was her solicitor who said to her, "It's probably a ruptured cyst," that was causing her pain. Significantly, the plaintiff did not call her solicitor to give evidence and her conclusion that she suffered from a ruptured cyst appears to have been a suggestion that emanated from her then solicitor.
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91 The plaintiff also said that she never requested the advance of $250,000 from the $1,000,000 that she was to be paid. In that respect I accept her evidence that it was her solicitor who asked for that money to be paid within seven days to cover legal fees. There is a reference to the $250,000 advance in the mediated agreement which reflects the plaintiff's solicitor's request. I do not accept the plaintiff's evidence that she had no knowledge of that advance of $250,000 as being part of the mediated agreement. In addition, as I have already said, that money was paid and the balance of it after deduction of legal costs has been paid to the plaintiff. Accordingly, part of the mediated agreement has already been put into effect and, as I have said, although the plaintiff offers to repay the money she has received, no such repayment has as yet occurred.
92 The plaintiff's evidence was that she found out about the advance of $250,000 after the agreement was entered into.
93 The plaintiff's evidence was that she was not aware of the value of the property that was assigned to her by the mediated agreement, but her evidence was that it was well under a quarter share of the estate. Again with respect to that evidence, in my view, it is clear that the plaintiff went to the mediation conference on 25 September 2000 with a list of values of the properties in the estates and she would have been well aware of the value of the offer that was ultimately made to her. In that respect, of course, I accept that the total value of her share under the mediation agreement was less, and considerably less, than a quarter of the value of the estate, but nonetheless it was well within the range of settlement that senior counsel had indicated to the plaintiff that her claim was worth.
94 Significantly, as well, in my view, the plaintiff did not terminate the services of her solicitors after the mediation conference. The correspondence produced in evidence indicates that the solicitors who were acting for the plaintiff at the conference continued to act for her for a considerable period after the conference was concluded. It was only some time the following year that the plaintiff engaged her present solicitors.
95 The plaintiff's evidence was that at the time of the mediation and in the course of the settlement discussions she was extremely confused. I accept that it is likely that she was confused because, having heard her evidence, it is clear that her emotional involvement with the matters the subject of the litigation was such that it is likely that she became confused about the significance of many of the things that were being said to her on that day. Nonetheless, I am of the view that the plaintiff would have been
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- well aware of the value of the offers that were made to her and the offer that she ultimately accepted after consultation with her solicitors.
96 Whilst I accept the plaintiff's contention that the value of the assets of these estates was not precise in that there was no sworn valuations of each of the houses and other pieces of real estate, the fact of the matter is that there is never a finite value of an asset of that type. In addition, as the evidence establishes, the value of each of the crayfishing licences varies from season to season so that the value can vary from one date to another. I accept, however, that the values that were used for the purposes of the mediation represented a fair value of each of the items concerned and the mediation was conducted by all parties on that basis.
97 The plaintiff also contended in her evidence that she asked the Registrar conducting the mediation for an adjournment on many occasions. She said that her request in that respect was refused. Again in relation to that evidence I am of the view that the plaintiff may well have asked her solicitor to adjourn the mediation conference. Her evidence, however, suggests that it was not the solicitor that she asked for the adjournment but that she directly asked the Registrar to adjourn the conference. In my view, in that respect the plaintiff's evidence is confused and it is more likely that any such request was made to her solicitor and not to the Registrar. I do not accept her evidence that the Registrar was told either that she was in extreme pain or that she required an adjournment.
98 The plaintiff also said in the course of her evidence that when she was in excruciating pain and in circumstances where she was sitting in a room with her own solicitor and the Registrar, her solicitor said to her, "Come on, Elizabeth. Come on," and when she replied, "I want to go home," her solicitor said, "Stop acting like a spoilt child."
99 As I have already said, the plaintiff's evidence was the Registrar said to her, "If I was a 36-year-old single female and had been offered the sum of $1,000,000 and some real estate on top of it … This was something that the average 36-year-old female does not have and I should look very carefully at the position and accept the offer."
100 As I have already said, in my view, the comment about the plaintiff's age and her position was a comment made by her sister Vicki who would have had that information. I do not accept that it was said by the Registrar and, in my view, the plaintiff has transposed this remark to the Registrar in support of her case.
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101 I would also note in passing that the plaintiff, in her evidence, says that at the end of the conference counsel for the first defendant said to her, "I'll see you in court and cut you up." It is to be noted that the plaintiff in her affidavit sworn 6 July 2001 in par 5.1 said:
"I was threatened by the other solicitors that if I did not agree to the compromise, I would receive nothing and they would 'see me in court'. That expression was used by counsel Leo Tsarkis [sic] acting for the first defendant who had a habit of slamming his briefcase down on the mediation table to emphasise his annoyance."
102 It is to be noted that nowhere in that affidavit does the plaintiff say that Mr Tsaknis said to her that he would "cut her up" as part of that comment. This, in my view, is just another example of the way in which the plaintiff has distorted comments made to her in such a way as to support her case.
103 The plaintiff also says in her evidence that the Registrar had tried to comfort her when she asked the other parties to come back. She said in her evidence that the Registrar "just sort of hugged me and was sort of telling me, in other words, to say, 'Look, for a girl your age that's pretty good money. No-one else has got that and you can't guarantee (that you would get that sort of money).'" Again, in my view, this is another example of the way in which the plaintiff has distorted events to suit the point of view that she wishes to present. It may well be on the totality of the evidence that when the plaintiff was showing some signs of distress, the Registrar touched her on the shoulder, but I do not accept either that the Registrar was giving her advice, or was acting towards her, in what the plaintiff would say, was a motherly fashion. On the evidence, I am satisfied that the Registrar did put her arm around the shoulder of the plaintiff's solicitor when the plaintiff's solicitor was in tears, but I do not accept that anything beyond that occurred.
104 I would add that the plaintiff, in her evidence, accepted that outside the mediation room and at the lift, as I have earlier said, she may have made a phone call to her friend but no details of that phone call have been given.
105 I would add that, in my view, after signing the mediation agreement in the presence of her solicitor and after going home and having a night's sleep, the plaintiff decided that she had not received what she then considered was her fair share of her parents' estate. She says that the
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- following day she phoned Mr McCusker, but I note that he was not called as a witness. She says that she told him that she was not happy with the agreement. In my view, that is consistent with the plaintiff having signed and accepted the agreement and the following day after sleeping on it, having decided that the agreement was no longer acceptable to her.
106 The plaintiff, in her evidence, also said that the Registrar, when talking to her, used the expression "look, girlie" when trying to persuade the plaintiff to accept the offer made to her. Again this was not mentioned in her affidavit and, in my view, is an example of the kind of distortion which the plaintiff has displayed throughout her evidence.
107 If, as the plaintiff says, she had lost confidence in her solicitor before the mediation agreement was finalised, it is remarkable that she did not tell anybody of that loss of confidence or seek an adjournment on that basis. In addition, in my view, it is also remarkable that she continued to use the services of the same solicitor for some months after the mediated agreement was finalised. That is evidenced by the correspondence which the same firm of solicitors wrote on her behalf in the months following the mediation agreement.
108 It is significant also that the plaintiff, following the mediation agreement, sent a fax to her brother saying that she would accept $2.5 million in settlement of her claim. In my view, that is also consistent with the plaintiff having had second thoughts after the mediation agreement was entered into.
109 Having determined the factual issues in the case, it is then necessary to turn to the legal principles that govern this matter. In doing so, it should be kept in mind that the plaintiff's case is that the mediation agreement should fall in its totality. Should that happen, the settlement reached by the third defendant would also fall away. That is important in the context of this case where the third defendant has, in her evidence, indicated that she is quite content with the agreement that was reached on her behalf.
110 So far as I am aware, this is the first time in Western Australia that an agreement reached at a mediation conference has come under challenge. Counsel have been unable to find any case that deals with the circumstances presently under consideration.
111 Counsel referred to the matter of W J Green & Co (1984) (as Trustee for the W J Green Family Trust) & Ors v Wilden Pty Ltd & Ors, unreported; Library No 970186; 24 April 1997 which concerned an offer
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- of settlement said to have been made at a mediation conference but where acceptance was not concluded at that conference. That is, of course, a different factual situation to the one under consideration here where it is said that an agreement was reached at mediation, reduced to writing, signed by each of the parties concerned and concluded at the end of the mediation hearing. With that distinction in mind, however, in Green's case Parker J said at 16:
"The issue of whether the offer to settle was sufficiently certain such that its acceptance could constitute a binding agreement is raised for determination. A concise statement of the relevant law to be applied in order to determine this issue can be found in Thorby v Goldberg (1964) 112 CLR 597. At 607 Menzies J said:
'I would say that I do not think the law to be applied is in any doubt and I agree with and will apply the following statement of that law from the dissenting judgment of Sugerman J. He said:
"It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the Court is unable to attribute to the parties any particular contractual intention."'"
113 For present purposes it is sufficient to note that the mediation agreement was signed, as I have said, by all the parties bar one and by their solicitors at the end of the mediation conference.
114 If, as the plaintiff says, when the mediation agreement was signed she had lost confidence in her solicitor, that is not apparent from the
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- mediation agreement itself. The agreement was signed, as I have said, not only by the plaintiff but also by Ms O'Sullivan, her solicitor. The only party who did not sign the agreement was the second defendant who, with the consent of the Registrar, authorised counsel to sign on her behalf.
115 In Queensland in Von Schulz & Anor v Morriello [1998] QCA 236 the Full Court of Queensland, comprising Pincus and Thomas JJA, Mackenzie J, had occasion to deal with a case where a party to a mediation conducted before a Queen's counsel sought to set aside the mediation agreement on the basis that there was no valid settlement of the case in circumstances where an agreement was concluded at the end of the mediation and signed by the respective solicitors for the parties. A number of grounds were raised by the appellants in that case to challenge the validity of the settlement reached.
116 In the judgment of the Court their Honours said at page 5:
"On the material which has been presented to the Judges against whose orders the appellants seek to bring appeals no error is shown. A settlement agreement is proved along with apparent assent and affirmation of the appellants followed by their repudiation of it and the assertion of gross impropriety against the appellants' former solicitors. On any view those solicitors had the ostensible authority to bind the appellants to a settlement (Waugh v H B Clifford & Sons Ltd [1982] Ch 374; Insbury v Craig [1990] 1 Qd R 309) and they did so. As between the appellants and the respondents there is no basis to challenge the agreement on the ground of lack of authority. Insofar as the appellants' desire to invalidate the agreement on the ground of fraud or conspiracy, no evidence was presented or foreshadowed that could make out these allegations."
117 As indicated by the grounds of the application, the plaintiff also contends that she was not effectively legally represented at the mediation conference on 25 September 2000 in that she had lost confidence in her former solicitors prior to the conference and received no advice or proper advice.
118 As I understand that ground of the application, it is contended by counsel for the plaintiff that she was incompetently represented by her solicitor on the afternoon of 25 September 2000 in reaching the mediated agreement. There is no ground of the application which suggests that the plaintiff's solicitors displayed flagrant incompetence in their conduct of
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- the mediation: Markovina v The Queen (No 2) (1997) 19 WAR 119 at 140; McKenzie v Edmondson (1996) 15 WAR 391 at 402; Ella v The Queen (1991) 103 FLR 8; R v Birks (1990) 19 NSWLR 677.
119 In any event, I am of the view that the plaintiff has failed to establish either loss of confidence in her solicitors or that she was not properly represented at the mediation conference on 25 September 2000.
120 The amended ground for the plaintiff's application, ground (a)(i), challenges the mediated agreement on the grounds of unconscionability.
121 In the Commercial Bank of Australia Ltd v Amadio & Anor (1983) 151 CLR 447 the High Court had occasion to deal with a case where the respondents were Italian migrants of advanced years with limited knowledge of written English. The respondents were asked by the appellant bank to execute a mortgage to guarantee moneys owing to the bank by their son. The bank was aware that the son was in a parlous financial situation and the respondents were mistaken about the extent in duration of their liability under the guarantee. They would not have executed the document had they known the truth of its contents.
122 In that case Mason J said at 461:
"But relief on the ground of 'unconscionable conduct' is usually taken to refer to the class of case in which a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from some special disability or is placed in some special situation of disadvantage, eg, a catching bargain with an expectant heir or an unfair contract made by taking advantage of a person who is seriously affected by intoxicating drink. Although unconscionable conduct in this narrow sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position."
123 In the same case Mason J said at 466:
"In deciding whether the bank took unconscientious advantage of the position of disadvantage in which the respondents were
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- placed, we must ask, first, what knowledge did the bank have of the respondents' situation?
Mr Virgo was aware that the respondents were Italians, that they were of advanced years and that they did not have a good command of English. He knew that Vincenzo had procured their agreement to sign the mortgage guarantee. He had no reason to think that they had received advice and guidance from anyone but their son. In cross-examination he conceded that he believed that Vincenzo had acted in the 'role of adviser/explainer' in relation to the transaction and referred to him as acting 'in his capacity as dominant member of the family'. Mr Virgo also knew that, in the light of the then financial condition of the company, it was vital to Vincenzo to secure his parents' signature to the mortgage guarantee so that the company could continue in business. It may have been obvious to Mr Virgo, as to anyone else having knowledge of the facts, that the transaction was improvident from the viewpoint of the respondents. In these circumstances it is inconceivable that the possibility did not occur to Mr Virgo that the respondents' entry into the transaction was due to their inability to make a judgment as to what was in their best interests, owing to their reliance on their son, whose interests would inevitably incline him to urge them to sign the instrument put forward by the bank."
124 Similar views were expressed by Deane J at 474 and 477.
125 For the plaintiff's ground of unconscionability to be made out, one of the matters that the plaintiff needs to establish is that the defendants had knowledge of the plaintiff's disability. For the reasons that I have already expressed in dealing with the facts, even if the plaintiff did suffer from some disability on the day in question, such as the ill-health from which she said she suffered and her lack of confidence in her solicitors, there was no acceptable evidence that any of the defendants were fixed with knowledge of that disadvantageous position of the plaintiff. In view of the findings of fact which I have made earlier in these reasons, I do not accept that the plaintiff's physical disabilities were such that she could not properly be party to the agreement and I do not accept that the legal advice given to her throughout the day on 25 September 2000 was in any way inadequate. Nor do I accept that the plaintiff communicated to anybody at the conference either the fact that she was ill, if that was the case, or a loss of confidence in her solicitor.
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126 As to the third ground of the application, there is no evidence apart from the plaintiff, whose evidence I reject, that the Registrar was aware of any loss of confidence between the plaintiff and her solicitor.
127 As to ground (c), I do not accept that the Deputy Registrar sought to influence the plaintiff by giving her advice on the compromise. As to that aspect, counsel have brought to my attention the textbook Mediation: Principles Process Practice by Laurence Boulle and, in particular, ch 5 which deals with the roles and functions in mediation. I accept that it would not be proper for a mediator to bring improper pressure to bear on any party to a mediation. That is a difficult and sometimes delicate role for a mediator to fulfil in that the mediator will from time to time convey offers made by one party to another. I accept that in some cases body language and the way in which a mediator expresses himself or herself may give rise to concern. In this case, however, having heard all of the evidence, I am quite unable to conclude that the mediator conducted herself other than with the utmost propriety. The fact that the plaintiff expressed concern about the way in which the mediator conducted the mediation, in my view, is a reflection on the plaintiff's own emotional instability and the fact that she visited upon the Registrar the consequences of her own emotional shortcomings.
128 As to ground (d) of the grounds of the application, I accept that the mediation in this case was conducted over a long period of time. As I have already said, the mediation was conducted over two separate days and on the second of those days the mediation did take a long time. I do not, however, accept that the mediation was conducted with acrimony nor that acrimony was directed to the plaintiff.
129 As to ground (e), there is no evidence of any description that the plaintiff suffered a ruptured cyst during the mediation conference. As I have said, the suggestion of a ruptured cyst allegedly came from the plaintiff's solicitor and the plaintiff did not seek any medical treatment at the conclusion of the conference on 25 September 2000. I do not accept that the plaintiff sought an adjournment from the Registrar, although it may well be that the plaintiff asked her solicitor to seek an adjournment. There is no acceptable evidence to suggest that the Registrar was ever asked to adjourn the mediation conference either because of the plaintiff's health or for any other reason.
130 The final ground for the application set out earlier in these reasons deals with the failure by the first defendant to provide proper accounts of the assets and liabilities of the estates of Mr and Mrs Pittorino. As to that
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- ground of appeal, in my view, adequate information was provided at the conference. The plaintiff brought along her own valuations of the real estate and the first defendant had a statement of assets and liabilities from which all of the parties worked on the day in question. I am quite unable to conclude that this ground for the application is made out. In addition, I would add that the fact that the plaintiff accepted the sum of $250,000 pursuant to the terms of the agreement after the agreement was reached and after any duress or pressure upon her had subsided is a further indication that she accepted the terms of the agreement: Haines v Carter [2001] NZLR 167 at 191; North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd & Anor [1979] 1 QB 705.
131 In Universe Tankships Inc of Monrovia v International Transport Workers Federation & Ors [1983] 1 AC 366 the House of Lords was dealing with a case of economic duress. Lord Diplock said at 384:
"It is, however, in my view crucial to the decision of the instant appeal to identify the rationale of this development of the common law. It is not that the party seeking to avoid the contract which he has entered into with another party, or to recover money that he has paid to another party in response to a demand, did not know the nature or the precise terms of the contract at the time when he entered into it or did not understand the purpose for which the payment was demanded. The rationale is that his apparent consent was induced by pressure exercised upon him by that other party which the law does not regard as legitimate, with the consequence that the consent is treated in law as revocable unless approbated either expressly or by implication after the illegitimate pressure has ceased to operate on his mind."
132 Whilst in this case it has not been suggested that there was any economic duress, it has been suggested that there was undue pressure exerted on the plaintiff. Even if that was to be made out, and in my view it has not been, there was no pressure on the plaintiff at the time at which she accepted the balance of the sum of $250,000, which she realised was paid pursuant to the terms of the mediation agreement.
133 In my opinion, therefore, the plaintiff's case, even put at it highest, would not be a basis for setting aside the mediation agreement: see Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 per McHugh JA at 45 - 46.
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134 In the end result, therefore, the plaintiff's application to set aside the mediation agreement will be dismissed and the first defendant's application will be allowed. The mediation agreement should stand. I will hear the parties as to the appropriate orders to give effect to these reasons.
135 As I have said earlier, there remains a question as to the construction of the mediated agreement which is yet to be argued. I will hear from the parties as to the orders necessary for the remaining issues to be determined.
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