FEDERAL COURT OF AUSTRALIA
Viscariello v Najjar [2025] FCA 655
File number: SAD 92 of 2022 Judgment of: CHARLESWORTH J Date of judgment: 19 June 2025 Catchwords: CONTRACT – proper construction of an agreement relating to the costs of a mediation – whether the respondent is liable in contract to pay the applicants’ costs of legal representation at and in connection with the mediation Cases cited: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Masters v Cameron (1954) 91 CLR 353
Western Export Services Inc v Jireh International Pty Ltd (2011) 282 ALR 604; HCA 45
Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 42 Date of hearing: 17 June 2025 Counsel for the Applicants: Mr Heinrich Counsel for the Respondent: Mr McCarthy Solicitor for the Respondent: Wadlow Solicitors Pty Ltd ORDERS
SAD 92 of 2022 BETWEEN: JOHN VISCARIELLO
First Applicant
ADELAIDE CONNECTION PTY LTD (ACN 169 947 317)
Second Applicant
AND: WALID NAJJAR
Respondent
ORDER MADE BY:
CHARLESWORTH J
DATE OF ORDER:
19 JUNE 2025
THE COURT ORDERS THAT:
1.The parties are to confer with a view to reaching an agreement as to the quantum to be awarded to the applicants having regard to the reasons delivered today, together with any extant issue of costs of this proceeding.
2.In the event that agreement as to quantum and costs is reached, on or before 23 June 2025, the applicants are to submit a minute of order specifying the consent orders sought on the originating application, such minute to provide for the finalisation of this proceeding and the vacation of the order in paragraph 4.
3.In the event that agreement as to quantum and/or costs is not reached, on or before 23 June 2025, the respondent is to file and serve an affidavit specifying the nature and extent of the disagreement.
4.Any dispute notified in accordance with paragraph 3 is set down for hearing at 3.30pm (ACST) on 27 June 2025 with one hour set aside.
5.Liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
CHARLESWORTH J
The original parties to this action engaged in a mediation on 5 September 2024 pursuant to a Mediation Agreement executed two days prior. Adelaide Connection Pty Ltd (ACN 169 947 317) is a party to the Mediation Agreement. The mediation encompassed the claims originally made in this proceeding as well as litigation in the District Court of South Australia in which Adelaide Connection was the plaintiff. The primary claims in both proceedings were resolved on terms set out in a Deed of Settlement dated 16 October 2024.
The parties are now in dispute as to the proper construction of the Mediation Agreement insofar as it contains provisions dealing with the parties’ own costs of and incidental to the mediation. The…
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- AGLC
- Viscariello v Najjar [2025] FCA 655
- Case
- [2025] FCA 655
- Decision Date
CaseChat Overview and Summary
The court examined clause 14 of the Mediation Agreement, which dealt with mediation costs and expenses. The heading of clause 14 indicated that it covered a broad range of mediation-related costs and expenses, including legal representation. Clause 14.1 specified that the mediator's costs were those outlined in Item 2.1 of Schedule 2, while clause 14.2 related to other costs associated with the mediation, such as venue hire. Clause 14.3 provided that unless otherwise stipulated in Item 2.3 of Schedule 2, the parties would each pay half of the mediator's costs and other expenses. Clause 14.4 stated that the parties would bear their own costs and expenses, including legal representation. The central dispute was whether clause 14.4 had been displaced by any agreement and stipulation in Item 2.3 of Schedule 2. The court held that for any alternate position to be established, it must be both agreed and stipulated, which had not occurred.
The court found that Najjar was liable to pay the applicants' costs of legal representation during the mediation. The reasoning hinged on the interpretation of clause 14.4, which required an agreement and stipulation to displace the requirement for each party to bear their own costs, including legal representation. Since no such agreement and stipulation were found in Item 2.3, the court ruled in favour of the applicants. Consequently, the applicants were to confer with Najjar to reach an agreement on the quantum of costs to be awarded. If an agreement was reached by 23 June 2025, the applicants were to submit a minute of order specifying the consent orders sought. If no agreement was reached, Najjar was required to file an affidavit detailing the nature and extent of the disagreement, which would be set down for hearing on 27 June 2025.
Orders
Orders of the court
1. The parties are to confer with a view to reaching an agreement as to the quantum to be awarded to the applicants having regard to the reasons delivered today, together with any extant issue of costs of this proceeding.
2. In the event that agreement as to quantum and costs is reached, on or before 23 June 2025, the applicants are to submit a minute of order specifying the consent orders sought on the originating application, such minute to provide for the finalisation of this proceeding and the vacation of the order in paragraph 4.
3. In the event that agreement as to quantum and/or costs is not reached, on or before 23 June 2025, the respondent is to file and serve an affidavit specifying the nature and extent of the disagreement.
4. Any dispute notified in accordance with paragraph 3 is set down for hearing at 3.30pm (ACST) on 27 June 2025 with one hour set aside.
5. Liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Additional arguments raised by the parties are encompassed in the reasoning that follows.CONSIDERATION Both parties referred to headings in the Mediation Agreement as relevant to its proper construction. Considered in light of its heading, clause 14 is directed to the subject matter of “mediation costs and expenses”, a phrase that encompasses a variety of subject matter, discernible from each of the sub-clauses. The purpose of clause 14 is to allocate between the parties the burden of the various “mediation costs and expenses” referred to in it. The words of the heading indicate that the concept of mediation costs and expenses is broad, so as to include the costs associated with parties’ legal representation. Clause 14.1 defines the “mediator’s costs” as those (and only those) described in Item 2.1 of Schedule 2. By Schedule 2 (as varied), the parties agreed what those costs were. Argument proceeded on the sensible basis that the phrase “mediator’s costs” encompassed the fees that the mediator charged for his services. Clause 14.2 is concerned with “[a]ny other costs associated with the mediation”. For the purposes of that sub-clause, the parties specified in Item 2.2 of Schedule 2 the costs of the hire of a venue. Clause 14.3 commences with the words “Unless otherwise stipulated in Item 2.3 of Schedule 2”. Had there been nothing stipulated in Item 2.3, the agreed position would have been that the parties “will each be liable to pay half of the mediator’s costs and other expenses set out in Schedule 2”. The reference there to the mediator’s costs and other expenses set out in Schedule 2 may be fairly understood to refer to the costs and expenses referred to in clause 14.1 and clause 14.2, as described by the parties in Items 2.1 and 2.2. The circumstance that the three parties might each pay half of the costs and expenses referred to in clause 14.3 was not the subject of any discrete submission. Mr Najjar accepted that he had agreed to pay all of the expenses referred to in that clause and he has done so. Clause 14.4 deals with the subject matter of the parties’ “own costs and expenses of the mediation” including the parties’ costs of their legal representation. The disputed question is whether the requirement that each party pay their own costs has been displaced by reason of it having been otherwise “agreed and stipulated” in Item 2.3 of Schedule 2. As Counsel for Mr Najjar acknowledged, for the purposes of clause 14.3 of the Mediation Agreement, a “stipulation in Item 2.3 of Schedule 2” can be made by way of a cross-reference within Item 2.3 pointing to any other clause or Item. That being the case, it must follow that a stipulation for the purposes of clause 14.4 can be made in the same manner. I accept the submission that in order for there to be any alternate position to that specified in clause 14.4 the alternative must be both agreed and stipulated. That construction accords with the natural meaning of the words of clause 14.4.