New South Wales Supreme Court CITATION : NSW Couriers Pty Limited v Newman & Ors [2002] NSWSC 1172 CURRENT JURISDICTION: Equity Division Commercial List FILE NUMBER(S) : SC 50097/01 HEARING DATE(S) : 27 November 2002 JUDGMENT DATE : 27 November 2002 NSW Couriers Pty Limited (Pltf) Richard A Bobb (4D) PARTIES : David Woo (4D) Katherine Chow (4D) Keo Chui (4D) JUDGMENT OF : McClellan J T D Castle (Pltf) COUNSEL : P J Dowdy (3D) J Lawson (4D) Atanaskovic Hartnell (Pltf) SOLICITORS : Deacons (3D) Corrs Chambers Westgarth (4D) CATCHWORDS : COMMERCIAL LIST - Mediation - application to vacate date appointed for mediation - general observations on the duty of legal practitioners in relation to the efficient management of matters in the Commercial List particularly the need to consider at an early stage the possibility of negotiation between the parties or a formal mediation DECISION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST McCLELLAN J WEDNESDAY 27 NOVEMBER 2002 50097/01 NSW COURIERS PTY LIMITED v NEWMAN & ORS JUDGMENT – On application by fourth defendant to vacate proposed mediation 1 HIS HONOUR: This matter comes before me this morning on the application of the fourth defendant. 2 The proceedings were commenced in August 2001. As I understand the position, it is suggested that a sum in excess of $1.7 million was lost when cheques were fraudulently converted. The plaintiff claims against the ANZ Bank and a firm of accountants, which is the fourth defendant. The proceedings were filed in the Commercial List but have not made satisfactory progress. 3 On 26 November I made directions which provided for the filing of an amended statement of claim with amended defences. The evidence of the third and fourth defendants is to be provided by February next year. As a consequence, the matter will not be ready to be allocated a hearing date until at least March. The likelihood, therefore, is that it will be almost two years from the commencement of these proceedings before they can be finally resolved. That is altogether too long a period of time for a matter in the Commercial List. 4 On the last occasion the matter was before me I raised with the parties the question of whether or not they had considered mediation of the dispute. Having regard to the nature of the dispute, it seems to me to be a matter suitable for mediation. 5 The parties responded positively to my suggestion, which included an indication that an attempt should be made to endeavour to resolve the problem before the end of this year. 6 The parties made inquiries and were able to secure the services of the Honourable Trevor Morling QC, a most experienced mediator. They agreed upon a time for the mediation, being 3 December 2002. However, apparently those advising the fourth defendant did not appreciate, when agreement was reached on that date, that there would be difficulty in obtaining instructions so that the fourth defendant could participate in the mediation in a meaningful way. 7 Before me this morning the fourth defendant has asked to be relieved of the obligation to mediate on 3 December. This was opposed by the plaintiff and the Bank. Following discussion, the fourth defendant does not seek to pursue its request and the parties are agreed that the mediation should proceed as arranged. 8 It is possible, perhaps likely, that the fourth defendant will not have instructions which would enable its representatives to reach any final agreement on the day appointed for the mediation. However, I have no doubt, having regard to the nature of the dispute, that considerable progress could be made, and it is quite possible that the position of the fourth defendant can be accurately identified, thereby shortening the time within which effective instructions might be obtained. 9 Leaving those matters to one side, there is another matter of considerable concern which is highlighted by these proceedings. As I have said on previous occasions, in other jurisdictions, before you can commence proceedings in the equivalent of the Commercial List in this Court, the parties have to certify that they have undertaken a mediation process. Provisions to that effect are in place in other jurisdictions to ensure that parties who are in dispute apply adequate resources to attempting to resolve the matter before marshalling their own resources and engaging the resources of the Court in contested litigation. 10 It is apparent to me, that in many instances in New South Wales, there is an expectation that mediation in a major commercial matter is only appropriate, and should only occur, after the matter has been readied for a hearing. That means, of course, that the parties have, by that stage, expended, sometimes very large sums of money settling complex pleadings, in marshalling the documentary material, and otherwise preparing the matter. If a matter can be resolved at an early stage, much of those costs could be saved not to mention the saving in court resources. However, under the prevailing "culture" the possibility of an early resolution of the dispute appears in some cases to be overlooked or given little emphasis. 11 In identifying the problem, I express no criticism of individual practitioners, either involved in the present matter or in other matters. 12 All practitioners, particularly those practicing in the Commercial List should be mindful, at every stage of proceedings, of the possibility that direct negotiation including formal or informal mediation might bring a resolution of their clients' problems. Proper discharge of a practitioner's obligations to his or her client and the court, requires the practitioner to inform the client of the possibility of negotiation and to raise the possibility with the opposing parties' representatives, before significant costs have been incurred in the preparation of the matter. 13 There will be many occasions, particularly where the parties expect to have a continuing business relationship, when a "commercial solution" may be appropriate and where the parties do not require a resolution which in every respect imposes legal principle on the outcome. Unless the parties' advisers facilitate settlement discussions, the inclination for many litigants will be to "leave the matter to the lawyers". This may occur through ignorance of the opportunity for mediation, or because of a concern that to suggest compromise may indicate weakness. Sometimes an initial determination to "win at all costs" will diminish when the reality of the litigation burden is apparent and an acceptable compromise is presented. 14 Experience indicates that business people, who are appraised of the likely cost of litigation in terms of money and time, with the potential for ongoing damage to business relations, may be amenable to compromise, either before an experienced mediator or in some les formal circumstances. It is the responsibility of the legal profession to ensure so far as it is able that the opportunity for these discussions is provided at an early stage of the proceedings. 15 There is no need for further orders in the present matter at this stage. ********** Last Modified: 12/19/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.