DEFENDANT ASSERTS THAT AGREEMENT MADE DURING MEDIATION IS IMMEDIATELY BINDING, PLAINTIFF DISAGREES
BJP1 v Salesian Society Inc [2021] NSWSC 241 (19 March 2021)
This is a case where the parties participated in a mediation where the defendant asserts that there was an immediately binding agreement reached at mediation. The plaintiff disagrees.
Facts:
The plaintiff, who has been given the pseudonym BJP1, commenced proceedings claiming damages from the Salesian Society (Vic) Inc (“the defendant”). The plaintiff claimed that he had been sexually abused by a Salesian priest, whilst a resident at Boys Town Engadine (“Boys Town”) between 1978 and 1982.
On 3 October 2019, the Court made an order that the parties participate in a mediation. A mediation took place as had been arranged between the parties.
The defendant submitted that the Court would be satisfied that, immediately prior to the conclusion of the the parties made an immediately binding agreement, the terms of which included: (a) that the defendant agreed to pay the plaintiff the sum of $215,000.00 (inclusive of legal costs); and (b) the plaintiff agreed to settle his claim against the defendant.
In support of its submission that the agreement was intended to be immediately binding, the defendant pointed to the following objective circumstances as being relevant: (a) the fact that the agreement was reached in the course of a court ordered mediation; (b) the language used by the parties, coupled with the context in which it was used was only consistent with the conclusion that the agreement which was reached was intended to be immediately binding; (c) the mediator and the lawyers participating in the mediation who were conducting the settlement negotiations, were each experienced litigators whom the Court should infer knew the difference between words and phrases such as “settled” or “settled in principle”. The defendant submitted that the language and dealings between all parties both during the mediation and as reflected in later correspondence, did not indicate that the parties intended the agreement to be conditional on any future event, or only an in-principle agreement; and (d) the defendant argued that there were sufficient express terms of sufficient certainty to constitute a binding contract.
The plaintiff opposed the relief sought in the defendant’s Notice of Motion. The plaintiff submitted that in the present case there was no immediately binding agreement reached between the parties at the mediation because: (a) there were a multitude of terms in the 2020 Deed which are either essential or critical, and which were not discussed at the mediation; and (b) the conduct of the parties after the conclusion of the mediation was inconsistent with an intention to enter into a binding contract on that day.
Issue: Is the agreement entered into by the parties during the mediation process immediately binding?
Held:
The language during the mediation was clear. The defendant made a final offer. It was open to be accepted by the plaintiff or not. The plaintiff accepted that final offer. The mediator, consistently with what he had been told by each party during the course of the mediation, said that the matter was settled. He terminated the mediation. No expression was used by either party, such as “settled in principle” or “settled subject to the execution of a final deed” or “settled, subject to confirmation from the plaintiff once the proposed deed is received” or any words to that effect, which indicated that the settlement was in any way conditional or provisional.
The plaintiff told his solicitor, having been informed of the final offer from the defendant and what sum he would get clear after deductions, that the offer was a good one, he had considered it and discussed it with his wife and it was best to accept it. That acceptance instruction was not conditional.
Finally, it is clear that the plaintiff’s decision to not proceed with any further steps in the settlement was reached by him, and conveyed by him to his then solicitors, at a time prior to his receipt of the 2020 Deed. In other words, the plaintiff’s change of mind had nothing to do with the fact of, or terms of, the 2020 Deed.
Conclusion: The agreement reached at the mediation was intended by the parties to be immediately binding, and the plaintiff should be held to that agreement.
