Southern Waste Resourceco Pty Ltd v Adelaide Hills Region Waste Management Authority [No 2] - [2019] SASC 191

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
SOUTHERN WASTE RESOURCECO PTY LTD v ADELAIDE HILLS REGION WASTE MANAGEMENT AUTHORITY [NO 2]
[2019] SASC 191
Judgment of The Honourable Justice Hinton
15 November 2019
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - ALTERNATIVE DISPUTE RESOLUTION - MEDIATION
Application for part-heard matter to be referred to mediation. The application was opposed. The length and cost of the trial had exceeded the parties’ expectations considerably. Negotiations in the past had failed. Recent increases in government levies provided some reason to think mediation might succeed as the consequential cost increases of disposing of waste to landfill might be avoided by recycling and remanufacturing which previously were cost prohibitive. Opposition to mediation was based on disruption to the trial and loss of trial time. Further, it was contended that experienced lawyers could be expected to negotiate effectively without the assistance of a mediator.
Held, granting the application, the trial having exceeded its previously estimated length, and future sitting days not being continuous but punctuated by sufficiently lengthy periods in which to conduct a mediation, any mediation should not disrupt the trial or preparation for trial. Circumstances had changed since the parties last attempted to negotiate an outcome which did result in an in-principle agreement but ultimately failed. With the assistance of an experienced mediator, and bearing in mind the incentive arising from the levy increases, the increases in the cost and length of the trial and that with the amendment of the defence to include contributory negligence the outcome was no longer an all or nothing proposition, it was appropriate to order that the matter be mediated notwithstanding the defendant’s opposition.
Environment Protection Act 1993 (SA), s 113; Local Government Act 1999 (SA), s 43; Supreme Court Act 1935 (SA), s 65; Supreme Court Civil Rules 2006 (SA), r 220; Supreme Court Civil Supplementary Rules 2014 (SA), r 207, referred to.
Australian Securities and Investment Commission v Rich [2005] NSWSC 489; Azmin Firoz Daya v CNA Reinsurance Co Ltd & Ors [2004] NSWSC 795; Baulderstone Hornibrook Engineering v Dare Sutton Clark and Ors [2000] SASC 159; Cawthorne v Olsen [2005] SASC 34; Dimento v Dimento [2007] NSWSC 420; Matthews v The Tap Inn Pty Ltd [2015] SADC 108; Morrow v Chinadotcom Corporation [2001] NSWSC 209, considered.

SOUTHERN WASTE RESOURCECO PTY LTD v ADELAIDE HILLS REGION WASTE MANAGEMENT AUTHORITY [NO 2]
[2019] SASC 191
Application
Hinton J:
Introduction

On 26 August 2016 on the application of the plaintiff, Southern Waste ResourceCo Pty Ltd (SWR), and over the opposition of the defendant, the Adelaide Hills Region Waste Management Authority (the Authority), I ordered that:
1.the proceedings be referred to mediation;
2.Mr Philip McNamara QC is to conduct the mediation or such other person as ordered by the Court or agreed by the parties;
3.the mediation be conducted prior to 21 October 2016; and
4.the costs of the mediation be borne equally by the parties.
My reasons for making those orders follow. A brief summary of the nature of these proceedings can be found in my reasons on the Authority’s application to amend its defence.[1]
[1] Southern Waste Resourceco Pty Ltd v Adelaide Hills Region Waste Management Authority [No 2] [2019] SASC 191.
The application to refer the parties to mediation
These proceedings were instituted on 19 February 2014. On 6 July 2015 the matter was listed for trial. Ten hearing days were set aside.
The trial commenced on 6 June 2016, but was postponed for the best part of two days to allow negotiations to take place. Those negotiations were unsuccessful and the trial resumed on 8 June 2016. Evidence was taken over 10 days. The trial was then listed for a further 20 sitting days on various dates between 22 August 2016 and 30 January 2017. At the time of hearing the present application the plaintiff had called five witnesses. It was anticipated that some may need to be recalled due to the amendment to the defence that I allowed. In any event the plaintiff expected to call at least four more witnesses including one expert witness. The defendant was likely to call up to nine witnesses including two experts. Cross-examination of the witnesses had been lengthy. I did not anticipate a different approach in relation to the bulk of the witnesses to come.
As mentioned SWR sought orders that the proceedings be referred to mediation pursuant to s 65 of the Supreme Court Act 1935 (SA) (SCA) and rule 207 of the Supreme Court Civil Supplementary Rules 2014 (SA) (SCCSR). SWR proposed that the mediation occur prior to 21 October 2016 with the trial set to resume on 31 October 2016. SWR nominated Mr Philip McNamara QC as mediator and proposed that the cost of the mediation be borne equally by the parties.
In support of the application SWR relied upon the third affidavit of James Alexander Levinson, sworn 15 August 2016. Mr Levinson is the principal of the firm Botten Levinson, and in that capacity was responsible for the conduct of this matter on behalf of SWR. In his affidavit, Mr Levinson stated that the commitment and resources of SWR, as well as the cost of the matter, had considerably exceeded that which was anticipated at the commencement of the trial. The length of the trial was also said to have exceeded both parties’ expectations.
Mr Levinson further deposed that from 1 September 2016 the levy payable under s 113 of the Environment Protection Act 1993 (SA) for each tonne of waste disposed of to landfill outside the Adelaide metropolitan area, such as to the Hartley and Brinkley landfills, was to increase from $28.50 to $38 per tonne. Similarly, the levy payable for waste brought from a council area within metropolitan Adelaide was to increase from $57 per tonne to $76 per tonne. He noted that, after the commencement of the hearing of this action, the State Government announced its intention to further increase the levy over the next four years. The metropolitan levy was to climb to $103 per tonne and the country levy to $56.50. It was said that the levy increase might affect the prospect of a successful mediation in this matter because it will place pressure on the market to decrease the volume of waste sent to landfill which, in turn, will mean the exploration of opportunities by the recycling industry that at present are cost prohibitive but which, with the increase in levy, may become viable.
The Authority opposed the application. The Authority’s reasons are outlined in the affidavit of its solicitor, Mr James Scott Linton Lumsden, sworn 17 August 2016. Mr Lumsden contended that any mediation would disrupt the course of the trial. Further, despite the action having been listed for some 11 months, at no time before the commencement of the trial did SWR propose that the matter be referred to mediation or a settlement conference. He said that the proceedings had already been delayed by two days taken up with settlement negotiations that were ultimately unsuccessful. Mr Lumsden considered that all of the currently available hearing dates ought to be utilised for the trial and that the conduct of a mediation would disrupt necessary trial preparation.
Mr Lumsden was also of the opinion that, to the extent that the parties wished to resolve the dispute, settlement negotiations undertaken between legal representatives in the usual way was an appropriate alternative to mediation. The experienced legal representatives retained by both parties were well placed to consider and advise in relation to any settlement proposal that was made. Lastly, Mr Lumsden denied that the foreshadowed increases in the waste levy provided good reason to think the prospects of a successful mediation or other commercial resolution of the matter had changed.
The applicable principles
Section 65(1) SCA provides:
Subject to and in accordance with the rules of court, the court constituted of a judge, or master or judicial registrar may, with or without the consent of the parties, or the registrar may, with the consent of the parties, appoint a mediator and refer a civil proceeding or any issues arising in a civil proceeding for mediation by the mediator.
In Baulderstone Hornibrook Engineering v Dare Sutton Clark & Ors, Perry J held that the power in s 65(1) to order mediation against a party’s wishes implicitly included power to compel the reluctant party to attend any mediation ordered:[2]
… clearly, the power to order a mediation without the consent of the parties in s 65(1) must, in the first place, carry with it the ability to do just that, namely, to order the mediation to take place, notwithstanding the failure by one party to consent. In the second place, I see no reason why the section should not be construed so as to empower the Court, whether the order is made by consent or not, to give such further orders as are necessary to make the mediation efficacious.
It is basic to any mediation that the parties involved attend. For that reason, in my view, it is implicit in s 65(1) that the Court has the power as an incidence of an order referring proceedings to mediation, to direct that the parties attend.
[2] [2000] SASC 159 at [5]-[6].
In Cawthorne v Olsen & Ors (Cawthorne)[3] it was suggested that exceptional reasons must be identified before the discretion to order mediation against the wishes of a party may be exercised. In my view to require that exceptional reasons be demonstrated is to impose a gloss on the language of s 65(1) SCA where no warrant exists to do so.
[3] [2005] SASC 34 at [16].
It has been said that a court should be slow to order mediation where a party demonstrates considered and adamant opposition to such course.[4] That may be so, but while a party’s attitude is a relevant consideration, it is not, as will be seen, determinative.
[4] Kilthistle No. 6 Pty Ltd & Ors v Austwide Homes Pty Ltd & Ors [1997] FCA 1383 at 6; Stevenson v Landon Pty Ltd & Anor [2005] QDC 11 at [19].
The matters to be considered in determining whether to make an order for mediation were outlined by Brereton J in Dimento v Dimento & Anor:[5]
… Essentially, the question of whether proceedings should be referred for mediation involves a weighing of the costs and procedural consequences which might be incurred by a mandatory mediation, the costs which may be avoided by a successful mediation, the prospects of success of mediation and the availability of alternative means to progress negotiations between the parties.
[5] [2007] NSWSC 420 at [2].
Respectfully I would add that the costs to be taken into account should not be confined to an estimation of financial cost to the parties. The human cost of litigation must also be taken into account as should the potential for savings to the administration of justice. Further, to the extent that alternative means to progress negotiations are to be considered, the skills of an experienced mediator should be thrown in the mix.
Self-evidently the exercise of the discretion vested in the Court by s 65(1) SCA involves a balancing exercise in the course of which conflicting factors must be weighed. A judge’s experience of litigation will play no small part.
Should the discretion be exercised and mediation ordered, rule 220 of the Supreme Court Civil Rules 2006 (SA) (SCCR) empowers the court to appoint a particular mediator and refer the action to him or her for mediation.
Can mandatory mediation be effective?
To compel a party to engage in mediation where it does not wish to may be thought to spell the doom of the mediation. A reluctant or recalcitrant participant can obviously defeat a mediation. That reason alone requires that a judge pause before compelling parties to incur cost in attending a mediation where one or more is opposed to such course.
In their book Mediation Law and Practice, David Spencer and Michael Brogan note that an oft-cited disadvantage of compulsory mediation is that while mediation can be coerced, the desire to settle cannot.[6] A lack of willingness to engage in mediation may impact not only the likelihood of achieving settlement, but also the effectiveness of any settlement. Indeed, there is authority that supports the notion that forced mediation has no benefit. In Morrow & Ors v Chinadotcom Corporation & Ors (Morrow), Barrett J commented that where parties do not see a benefit in mediation, there is nothing to gain from forcing them to do so:[7]
… Presumably they (and certainly their respective solicitors) are well aware of the potential benefits, in many cases, of mediation and other non-curial resolution processes. If, with the benefit of that knowledge and the advice of their solicitors, they do not all see sufficient value in resort to some alternative procedure of their own choosing there is, it seems to me, very little, if anything, that is likely to be gained by the Court compelling them to pay at least lip service to it.
[6] David Spencer and Michael Brogan, Mediation Law and Practice (Cambridge University Press, 2006) at 266-267.
[7] [2001] NSWSC 209 at [45].
Similarly in Cawthorne,[8] Perry J declined to order mediation on the basis that the parties had sufficient knowledge of their respective positions that settlement through private negotiations, not mediation, would be the appropriate avenue of settlement if it were to occur:
If the parties do not fully understand their respective positions and the strengths and weaknesses of their claim and defence in these proceedings at this stage, I feel that they never will.
They are, I am told, a long way apart. Although Master Withers thought the mediation had a reasonable prospect of resolving the matter, my extended experience of the abalone cases and my understanding of this case suggests to me that if it is going to settle, it will do so between now and the trial, without the assistance of a mediation.
[8] [2005] SASC 34 at [14]-[15].
There has been a significant shift in judicial attitudes regarding compulsory mediation. In Remuneration Planning Corporation Pty Ltd v Fitton Hamilton J commented:[9]
… This is an area in which the received wisdom has in my experience changed radically in a period of a few months. A short time ago there was general acceptance of the view adopted by Barrett J in the decision to which I have referred, that there was no point in a mediation engaged in by a reluctant party. Of course, there may be situations where the Court will, in the exercise of its discretion, take the view that mediation is pointless in a particular case because of the attitudes of the parties or other circumstances and decline to order a mediation. However, since the power was conferred upon the Court, there have been a number of instances in which mediations have succeeded, which have been ordered over opposition, or consented to by the parties only where it is plain that the Court will order the mediation in the absence of consent. It has become plain that there are circumstances in which parties insist on taking the stance that they will not go to mediation, perhaps from a fear that to show willingness to do so may appear a sign of weakness, yet engage in successful mediation when mediation is ordered.
[9] [2001] NSWSC 1208 at [3].
In Idoport Pty Ltd & Anor v National Australia Bank Ltd & Anor,[10] Einstein J ordered mediation over the objection of the defendant. In doing so, his Honour quoted extra-curial comments made by Chief Justice Spiegelman about the development of compulsory mediation:[11]
… In one sense, the idea of a compulsory mediation is a contradiction in terms. To be successful a mediation process requires consensus.
Notwithstanding the “contradiction in terms”, there are precedents for compulsion of mediation. Indeed any contractual arrangement which requires mediation, as is frequently the case, is in one sense a compulsion of this character, albeit one agreed consensually at a time when the possibility of dispute was far from the contracting parties’ minds. Some legislative schemes have included provision for compulsion. I refer in particular to the Farm Debt Mediation Act and the Retail Leases Act. The Federal Court and the Supreme Courts of South Australia, Victoria and Western Australia have for some time had power to refer matters to mediation over the objection of one or both of the parties.
[10] [2001] NSWSC 427.
[11] [2001] NSWSC 427 at [40].
Despite the ‘contradiction in terms’, it is no longer uncommon for courts to order mediation in the face of opposition by a party.[12]
[12] See, eg, Hopcroft v Olsen [1998] SASC S7009; Idoport Pty Ltd & Anor v National Australia Bank Ltd& Ors [2001] NSWSC 427; Waterhouse v Perkins [2001] NSWSC 13; Singh v Singh [2002] NSWSC 852; Higgins v Higgins [2002] NSWSC 455; Azmin Firoz Daya v CNA Reinsurance Co Ltd & Ors [2004] NSWSC 795; Australian Securities and Investment Commission v Rich [2005] NSWSC 489.
A party’s unwillingness to engage in mediation may not necessarily impede a successful mediation. The fact that the adversarial system has not traditionally lent itself to mediation and the fear that a willingness to engage in mediation may be construed as a sign of weakness[13] are potential reasons for reluctance to engage in mediation that can be overcome. There are, of course, other reasons which may prevent a successful outcome. Notwithstanding, often ‘reluctant starters’ become ‘willing participants’ as Spigelman CJ explained:[14]
No doubt it is true to say that at least some people, perhaps many people, compelled to mediate will not approach the process in a frame of mind likely to lead to a successful mediation. There is, however, a substantial body of opinion albeit not unanimous that some persons who do not agree to mediate, or who express a reluctance to do so, nevertheless participate in the process often leading to a successful resolution of the dispute.
I am advised that in Victoria no difference in success rates or user satisfaction between compulsory and non-compulsory mediation has been noted. Not all research or anecdotal evidence is to this effect.
It appears that, perhaps as a matter of tactics, neither the parties nor their legal representatives in a hard-fought dispute are willing to suggest mediation or even to indicate that they are prepared to contemplate it. No doubt this could be seen as a sign of weakness. Nevertheless, the parties are content to take part in the mediation conference if directed to do so by a Judge.
[13] Remuneration Planning Corporation Pty Ltd v Fitton [2001] NSWSC 1208 at [3].
[14] Spigelman CJ Address to LEADR Dinner, University and Schools' Club Sydney, 9 November 2000, cited with approval by Einstein J in Idoport Pty Ltd & Anor v National Australia Bank Ltd & Ors [2001] NSWSC 427 at [40].
Rule 207(5) SCCSR obligates parties to participate appropriately in mediation and to make genuine attempts to resolve the matters in issue, even if the order for mediation is made over objection. Ordinarily parties attend with their lawyers. Whilst parties may be entrenched, and their representatives equally entrenched, generally lawyers are all too well aware that fresh eyes often lead to fresh considerations.
It is also to be remembered that just as the law has seen significant growth in alternate dispute resolution, with that growth the skills of those who practice in the area have developed and been honed. The skilled mediator looks for the fresh angle, unappreciated by the parties, and endeavours to assist the parties to come to a realisation of their respective positions, laying bare the benefits or otherwise of compromise along the way.

As Einstein J said in Azmin Firoz Daya v CNA Reinsurance Co Ltd & Ors (Azmin),[15] parties vigilantly opposed to mediation may be surprised by the outcome:[16]
… Experience in the area of mediation throws up the fact that the process of mediation may even in major commercial litigation lead to quite unexpected results. From time to time the parties can find some form of unexpected way in which to achieve a compromise. From time to time the very circumstance that the compulsory mediation will cause the major players to have to listen to one another may have a cathartic effect. Particularly is this so when, as so very often will occur, hearing in person, the other side's point of view may change even an entrenched point of view.
[15] [2004] NSWSC 795.
[16] Azmin Firoz Daya v CNA Reinsurance Co Ltd & Ors [2004] NSWSC 795 at [12].
Accordingly, the prospects of success in mediation are not necessarily linked to the fact that mediation is compelled or to a party’s reluctance to participate. Further, that lawyers have endeavoured to negotiate without the assistance of a mediator without success does not mean that a mediation is likely to fail.
Submissions
SWR submitted that the Authority’s opposition, while relevant to the exercise of the discretion, should be afforded little weight. Counsel referred to a number of cases in which mediation had been ordered despite parties’ claims that mediation would be ‘futile’,[17] that they ‘may well not wish to attend or cooperate’,[18] and that they were so far apart ‘the difference between them could not be bridged’,[19] in particular New Idafe Incorporated v Barnard & Ors[20] and Oasis Fund Management v ABN Amro.[21] In the latter case, the plaintiff submitted that an early mediation was appropriate because the anticipated trial costs would be high and would likely create an obstacle to the conduct of any mediation at a later point.[22] The defendant, similar to the Authority, indicated a ‘considered preference to continue the proceeding’.[23] Brereton J considered an important factor to be whether the parties had sufficient information to undertake mediation not only in good faith but successfully.[24]
[17] Hopcroft v Olsen [1998] SASC S7009 at [26].
[18] Baulderstone Hornibrook Engineering v Dare Sutton Clark & Ors [2000] SASC 159 at [4].
[19] Hopcroft v Olsen [1998] SASC S7009 at [36].
[20] [2007] NSWSC 1107.
[21] Oasis Fund Management v ABN Amro [2009] NSWSC 967 at [11].
[22] [2009] NSWSC 967.
[23] Oasis Fund Management v ABN Amro [2009] NSWSC 967 at [2].
[24] Oasis Fund Management v ABN Amro [2009] NSWSC 967 at [3].
In the present case counsel for SWR submitted that the parties had attained a comprehensive understanding of each other’s case and had all the evidence needed to undertake mediation successfully.
Further, with respect to the unsuccessful outcome of previous attempts to negotiate, counsel contended that the insertion of a mediator and having had the opportunity to listen to the cross-examination of the plaintiff’s principal witnesses, provided reason for the parties to reconsider an alternative resolution to the matter. Further again, the fact that contributory negligence was now pleaded increased the potential for a successful mediation as, it was submitted, there was no longer an ‘all or nothing’ outcome for the parties to consider.
Counsel added that the cost of the litigation to the parties, which was expected to treble initial estimates, alongside the public expense associated with continuing the trial, provided good reason to order mediation. In this regard, the mediator’s fee of $500 per hour was a reasonable and comparatively small cost to incur within a commercial dispute of this nature, particularly in light of the further costs associated with the extension of the length of the trial from two to five weeks.
Counsel added that the short time to be spent out of court for the purposes of engaging in mediation would be worthwhile given it carries the prospect of an overall resolution. In response to the delay in making the application, it was contended that the application was issued at the earliest opportunity, shortly after the four further weeks of hearing time was set and shortly after the defence was amended.
Lastly, counsel submitted that the increase in the waste levy changed the landscape of the matter in that the levy would likely operate as a disincentive to dispose of waste to landfill and was likely to increase the demand for and value of recycling such as offered by SWR. Thus the change in levy may provide new avenues to explore as part of any resolution.
With respect to the practical issues associated with the mediation, the Authority, though opposing the application, was in agreement that Mr McNamara was an appropriate mediator to be appointed in the event that mediation was ordered.
Counsel for the Authority conceded that the original estimate of the length of the trial would be surpassed, and consequently, previous expense estimates would be exceeded. He did not accept, however, that that meant more money should be spent on the conduct of mediation.
He conceded that a common feature of many parties’ opposition to mediation was that they are so far apart and their differences so great that mediation would be futile.[25] That was not the position of the Authority. Indeed, counsel conceded that much of the force of his argument would fall away if the mediation was to occur at a later stage in proceedings, rather than the immediate dates proposed by SWR because of the possible risk to the next sitting days listed that mediation would pose. In other words, the primary basis for the Authority’s opposition was the postponement of the trial in the interim. Counsel submitted however, that the parties had already unsuccessfully attempted settlement and that the conduct of mediation would be unlikely to provide any benefit to the parties.
[25] See, eg, Hillig v Darkinjung Pty Limited [2008] NSWSC 409 at [3]; Baulderstone Hornibrook Engineering v Dare Sutton Clark & Ors [2000] SASC 159 at [4]; Hopcroft v Olsen [1998] SASC S7009 at [26].
Counsel agreed that the exercise of the discretion to order mediation was not restricted to exceptional circumstances. However, he submitted that some positive reason must exist for compelling the parties to attend mediation. He contended that none did. He pointed to Matthews v The Tap Inn Pty Ltd,[26] where the trial Judge decided against ordering mediation in the face of opposition and an imminent trial date. Counsel submitted that in that case, the Judge presumed that the parties, having reached the stage they had, and with the benefit of advice from experienced counsel, would have given consideration to all of the issues, weighed the risks and had a comprehensive understanding of the strengths and weaknesses of their own and the other party’s case.[27] In view of this, the Judge considered that mediation would be of little assistance to the parties. Counsel claimed that the same could be said in the present case and mediation would be unlikely to provide any benefit.
[26] [2015] SADC 20.
[27] Matthews v The Tap Inn Pty Ltd [2015] SADC 20 at [26].
Counsel referred to the failure of the parties to successfully reach a settlement following previous negotiations which caused the parties to lose one and a half days hearing time. Such loss, he submitted, should not be repeated again. Counsel was concerned that attending any mediation and related preparation would disrupt the trial and the defendant’s preparation for the lengthy cross-examination anticipated in the coming week.
Counsel also referred to the fact that the parties had previously reached an ‘in principle’ settlement as indicative of their capacity to settle the matter without the cost and interruption to the trial that a mediation would necessitate. He contended that it could be left to the parties to pursue settlement in the ordinary way.
Counsel pointed out that the application for mediation by SWR was issued more than six weeks after the last substantive event in the trial, and less than a week before the trial was to resume. He suggested that if SWR was truly minded to mediate, it would have made the application sooner. However, in acknowledgment of the Authority’s late submission of its amended defence, counsel did not press this point.
As to the impact of the increase in the waste levy, counsel contended that the levy had been in place for some weeks, if not months, and as such, the Authority had had sufficient time to properly consider its position with respect to the increased future costs associated with disposing of waste to landfill. The Authority’s position was that the increase in levy was of little relevance to the prospects of any mediation.
Consideration
From the evidence heard to the date of the application the parties were in a position to understand the respective strengths and weaknesses of the claim and defence. Counsel would have advised accordingly. The parties were then in a good position to participate meaningfully in a mediation. The examination and cross-examination of the plaintiff’s principal witnesses had afforded both parties sufficient information to make a realistic assessment of their respective positions and allowed a considered choice as to what they could and could not agree as part of any settlement.[28]
[28] Oasis Fund Management v ABN Amro [2009] NSWSC 967 at [11].
I did not think that the failure of the previous negotiations undertaken during what was intended to be the opening days of the trial presented as a convincing reason against ordering mediation. In Stevenson v Landon Pty Ltd, Newton DCJ dismissed an application for mediation where the application was opposed and the parties had already attempted to resolve the dispute out of court.[29] In that case, however, unlike the present matter, the length of the hearing and anticipated costs were relatively small and the insurer for the defendant was vehemently opposed to mediation, believing it would be futile. In Unconventional Conventions Pty Ltd v Accent Oz Pty Ltd (Unconventional Conventions),[30] Hamilton J granted an application that proceedings be referred to mediation over opposition and despite the fact that a previous mediation had proved unsuccessful. The fact that considerable time had passed and circumstances changed since the previous mediation led Hamilton J to think such course appropriate. He said:[31]
…a great deal of water has flowed under the bridge since the first mediation was held, perhaps sufficient for a compromise to be reached in the framework of a mediation on this occasion which was not possible before.
[29] [2005] QDC 11 at [19].
[30] [2004] NSWSC 1050.
[31] Unconventional Conventions Pty Ltd v Accent Oz Pty Ltd [2004] NSWSC 1050 at [5].
The circumstances in Unconventional Conventions are not dissimilar to this matter.
Over two months had passed since negotiations first took place in the present case. A considerable change in circumstances had since occured. The parties had had the benefit of hearing substantial examination and cross-examination of some of the plaintiff’s principal witnesses. The estimated length and cost of the trial had grown. Moreover, the defence had been amended and there was the possible incentive arising from the increase in the waste levy and foreshadowed future increases.
I was not convinced that mediation had no benefit to offer the parties. As Einstein J observed in Azmin, it is not unheard of for reluctant parties to ‘find some sort of unexpected way to achieve a compromise’[32] in mediation. There is potentially much to be gained. I accepted that the parties’ lawyers were more than capable of negotiating an agreement between themselves. But I did not accept that there was no value in a skilled and experienced mediator, as Mr McNamara is, to ‘reality test’ the positions of the parties. As I have said, fresh eyes bring fresh considerations.
[32] Azmin Firoz Daya v CNA Reinsurance Co Ltd & Ors [2004] NSWSC 795 at [12].
The evidence I had heard made it clear that the increase in the waste levy would affect the business operations of both parties. Mr Brown, Chief Executive of SWR, gave evidence that South Australia has an oversupply of landfill with the consequence that the market was very competitive. He said that the waste levy, at the right level, operated as a disincentive to disposing of waste to landfill. He stated that an increase in the waste levy entices remanufacturing or recycling of waste. This had proven to be the case in Sydney, which had the most expensive landfill levy in Australia. SWR and ResourceCo were experienced in recycling. Moving forward the Authority and the constituent councils would have to consider their involvement in the growing recycling industry and the nature of that involvement. I thought that herein lay fertile ground to explore opportunities linked to the possible resolution of the matter. In that regard I had in mind that commercial litigation was often resolved on a basis that involved no vindication of rights, but was purely practical and commercial. In the present case there was, it seemed to me, the added overlay that the Authority was an entity of local government, burdening its officers with the responsibility of doing what was ultimately in the best interests of ratepayers.
I did not think the cost of mediation, in light of anticipated and already expended costs, was a significant burden on either party. Counsel for the Authority submitted that it had been clear for some time to the Authority and SWR that previous expense estimates would be greatly exceeded. If that was so, the comparatively small cost of mediation paled in significance.
Relevant to the exercise of my discretion was the public expense associated with hearing lengthy proceedings of factual and legal complexity. Mediation had the potential to significantly reduce not only the parties’ costs but also the public expense associated with the administration of justice. In Australian Securities and Investment Commission v Rich,[33] Austin J faced a similar factual situation to that confronting this Court in that substantial costs had already been incurred by the parties and costs for the remainder of the trial far exceeded original estimates as the anticipated length of the trial continued to grow. Austin J considered that the public expense and burden on the Court’s resources associated with continued litigation was a sufficient reason to order the parties to mediation:[34]
Such a lengthy case, unexpectedly much more lengthy than was planned on the basis of ASIC's estimate, is placing strains on the Court's resources. Of course, if it is called upon to do so, the Court will provide the resources to ensure that the case is brought to its conclusion. But inevitably the allocation of the Court's resources to the extended hearing of this case is at the expense of the hearing and determination of other cases, and therefore there is an important public interest involved.
In my opinion, this combination of consumption of time, escalating costs and strain on the Court's resources provides an ample basis for the Court to exercise its power of mandatory mediation.
[33] [2005] NSWSC 489.
[34] Australian Securities and Investment Commission v Rich [2005] NSWSC 489 at [15]-[16].
While the expenses in the present matter were much less than that contemplated in Australian Securities and Investment Commission v Rich, I estimated that they would be substantial nonetheless. Although the incursion of the cost of mediation would be ‘unfortunate’ if the litigation nonetheless continued,[35] I was of the view that the public interest, coupled with the growing cost of the litigation, clearly supported the parties attempting a mediated outcome.
[35] Singh v Singh [2002] NSWSC 852 at [4].
The Authority’s opposition was largely founded on the loss of trial time and the interruption it would cause to the defence in their preparation for the then coming week. Counsel submitted that Mr McNamara would not have sufficient time to acquire a comprehensive understanding of the matter before either of the proposed mediation dates. Counsel for SWR pointed out that Mr McNamara’s usual practice was to hold pre-mediation conferences in which he plumbed the depths of the matter with each of the parties in the absence of each other, and identified the core issues before reviewing any written materials and proceeding to mediate. In my view, the preparation required for such a conference would still impede the defendant’s preparation. I was not inclined to order a reluctant party to engage in mediation without adequate preparation or to jeopardise trial preparation. Considerable thought and planning was required by both parties to develop commercial solutions to the matter. This was unlikely to occur if I compelled the parties to mediate in the coming week.
A further issue with regard to the timing of the mediation was the need for the parties to be represented at the mediation by persons with the authority to make binding decisions. That may have been a relatively straightforward matter for SWR but I thought perhaps not in the case of the defendant.
It occurred to me that if mediation was to occur after the imminent hearing dates and before the resumption of the trial later in the year, there would be no delay to the proceedings or interference with the Authority’s preparation for trial and the parties would have time to prepare for the mediation. The break between sitting dates offered, in the words of Austin J, ‘a natural “punctuation mark” in the hearing process’,[36] which provided an opportunity for the parties to attempt to arrive at a mediated resolution of the dispute. In my view to refer the matter to mediation was consistent with the obligation upon the court to ensure that it was conducted as expeditiously and economically as was consistent with the proper administration of justice[37] and the obligation on the parties to assist in the orderly progress of the proceeding.[38]
[36] Australian Securities and Investment Commission v Rich [2005] NSWSC 489 at [2].
[37] Supreme Court Civil Rules 2006 (SA) r 116(1)(b).
[38] Supreme Court Civil Rules 2006 (SA) r 113(1).
On 16 June 2016, being day five of the trial, I questioned whether the matter had been sent to mediation, and whether there may be value in doing so. Counsel responded in the negative. Noting their knowledge of the matter and experience as counsel I accepted their position and desire to proceed with the trial. I intimated that it would be a significant decision to order mediation contrary to their views. The plaintiff’s stance with respect to mediation, as evidenced by this application, had obviously softened. In all of the circumstances, I was of the view that the potential gains of mediation in this case outweighed the potential disadvantages. Notwithstanding the defendant’s opposition to the application, I ordered that the proceedings be referred to mediation.