Stevenson v Landon Pty Ltd[2005] QDC 11

DISTRICT COURT OF QUEENSLAND

1. [1]
   The applicant/plaintiff seeks an order pursuant to r 320 of the Uniform Civil Procedure Rules 1999 referring her claim for damages for personal injuries to mediation.  The respondents/defendants oppose the making of such an order.

2. [2]
   It seems to be common ground between the parties that at the relevant time the plaintiff was a tenant in a caravan park managed and controlled by the second respondents who were the servants or agents of the first respondent.  The caravan park was situated on land owned by the first respondent.  The tenancy between the applicant and the first respondent was a tenancy agreement within the meaning of the Residential Tenancies Act 1994.  The respondents owed the plaintiff a general duty of care to ensure that the caravan park was fit for the purpose for which it was being used.  On 10 May 2001 the applicant was walking in the caravan park and on or about that date suffered a fractured right elbow requiring medical treatment and resulting in a minimal loss of the capacity for self-care and a permanent partial disability of the right upper limb.

3. [3]
   The applicant contends and the respondents deny that as the plaintiff was walking on a grassed area used as a footpath in the caravan park, on 10 May 2001, she tripped and fell on a tree root or stump protruding from the ground, and that her fall and resulting injury, together with consequential loss and damage, were caused by the negligence or breach of duty of the respondents.

4. [4]
   The respondents contend that the applicant’s fall and consequent injury did not occur in the manner alleged, or alternatively, if the applicant suffered injury as alleged, the injury was caused or contributed to by her own negligence.

5. [5]
   Proceedings against the respondents were commenced by the applicant in this court on 25 July 2002.  However, as a result of the coming into effect of the Personal Injuries Proceedings Act 2002, those proceedings were stayed.  The applicant subsequently served notices of claim on each of the respondents and the pre-court procedures required to be undertaken by the Personal Injuries Proceedings Act were carried out.

6. [6]
   On 9 October 2003, the matter proceeded to a compulsory conference but was unable to be resolved at that conference.  At the conclusion of the conference mandatory final offers were exchanged. 

7. [7]
   The pleadings have now concluded and each party has provided disclosure.  The applicant has served a statement of loss and damage and the respondents have served a statement of expert and economic evidence.

8. [8]
   R 320 of the Uniform Civil Procedure Rules 1999 provides as follows:

“[r320] When referral may be made

320 The court may also refer a dispute in a proceeding for mediation or case appraisal-

1. (a)
   on application by a party; or
2. (b)
   if the proceeding is otherwise before the court.”

The rules do not set out the circumstances in which a matter will be referred to mediation over the objection of one of the parties.

9. [9]
   Part 7 of the District Court of Queensland Act 1967 sets out provisions relating to ADR processes.  The objects of Part 7 of the Act are set out in s 89 as follows:

“89. The objects of this part are-

1. (a)
   to provide an opportunity for litigants to participate in ADR processes in order to achieve negotiated settlements and satisfactory resolutions of disputes; and
2. (b)
   to introduce ADR processes into the court system to improve access to justice for litigants and to reduce cost and delay; and
3. (c)
   to provide a legislative framework allowing ADR processes to be conducted as quickly, and with as little formality and technicality, as possible; and
4. (d)
   to safeguard ADR processes-

   1. by ensuring they remain confidential; and
   2. by extending the same protection to participants in an ADR process they would have if the dispute were before the District Court.”

10. [10]
    An “ADR process” is defined in s 90(1) of the District Court of Queensland Act 1967 as a “process of mediation or case appraisal under which the parties are helped to achieve an early, inexpensive settlement or resolution of their dispute.”  “Mediation” is defined in s 91 as “a process under the rules under which the parties use a mediator to help them resolve their dispute by negotiated agreement without adjudication.”

11. [11]
    The Court’s power to order reference to an ADR process is derived from s 97 of the District Court of Queensland Act 1967.  That section provides as follows:

“97.      (1) The District Court may require the parties or their representatives to attend before it to enable the court to decide whether the parties’ dispute should be referred to an ADR process.

2. (2)
   This section also applies if-

1. (a)
   a party applies to the District Court for an order referring a dispute to an ADR process; or
2. (b)
   the parties are otherwise before the District Court.

3. (3)
   The court may, by order (‘referring order’), refer the dispute for mediation or case appraisal.

4. (4)
   Without limiting the court’s discretion, the court may take the following matters into account when deciding whether to refer a dispute to case appraisal-

   1. (a)
      whether the costs of litigating the dispute to the end are likely to be disproportionate to the benefit gained;
   2. (b)
      the likelihood of an appraisal producing a compromise or an abandonment of a claim or defence;
   3. (c)
      other circumstances justify an appraisal.

5. (5)
   If the court decides to refer the dispute to a mediator under the Dispute Resolution Centres Act 1990, it is sufficient if the order appoints the director of a specified dispute resolution centre as mediator.”

12. [12]
    I was referred to the judgment of Samios DCJ in Barrett v Queensland Newspapers Pty Ltd & Ors [1999] QDC 150 (19 July 1999) where his Honour identified the factors which favoured referring an action for defamation to mediation as follows:

9. (i)
   his Honour was unable to conclude the mediation will not be successful;

2. (ii)
   the length of the trial was estimated at 10 days;

3. (iii)
   three of the four parties to the dispute were prepared to engage in mediation;

4. (iv)
   the second defendant offered to pay the plaintiff’s share of the costs of mediation, namely, 25% of the mediator’s costs and the cost of the venue;

22. (v)
    it is of the essence of mediation that a third party may be able to assist the parties to reach an agreement to resolve the dispute;

6. (vi)
   the application had been made early in the action before substantial costs had been incurred by the parties;
7. (vii)
   there is risk in litigation, and even though a party may wish to engage in litigation notwithstanding such risk, the implication of the provisions of the Act referred to above are that other parties ought not to be put at risk;
8. (viii)
   a suitable mediator with the necessary skill could be appointed to be the mediator.

13. [13]
    In the case under consideration a number of these factors cannot be said to favour making the order sought by the applicant.  The length of the hearing of the action is expected to be short and certainly nowhere near the 10 days required in Barrett.  There is no preponderance of parties to the dispute prepared to engage in mediation, unlike the situation in Barrett where three of the four parties were so prepared.  There has certainly been no offer to pay or contribute to the costs of the respondents in any mediation.  The application in the instant case has been made at a time when the pleadings are closed, disclosure is complete and liability issues have been identified, unlike the situation in Barrett where the application was made at a comparatively early stage in the action and before substantial costs associated with preparation for trial had been incurred.

14. [14]
    In Morrow v chinadotcom [2001] NSWSC 209 (28 March 2001) Barrett J, in deciding whether a matter should be referred to mediation over the objection of one of the parties, stated that:

“44. The clearly-stated preference of one party to continue with the litigation which that party sees as the most appropriate means of dispute resolution must cause a Court to think very carefully before compelling what, on the face of things, may well turn out to be an exercise in futility attended by delay and expense.  There will no doubt be some cases where such a course will be justified: where, for example, the Court perceives that emotional or other non-rational forces (including unreasonable intransigence) are at work and a proper sense of proportion may be introduced into the picture by the efforts of a third party skilled in conciliation.

45. The present proceedings involve commercial parties engaged in a commercial transaction.  They may be taken to possess a reasonable degree of business sophistication and acumen.  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.”

15. [15]
    Reluctance to refer a matter to mediation over the clearly stated preference of one party to continue with the litigation was also evident in the judgment of Lehane J of the Federal Court in Kilthistle No. 6 Pty Ltd (Receiver and Manager appointed) & Ors v Austwide Homes Pty Ltd & Ors [1997] 1383 FCA (10 December 1997).  His Honour stated that:

“In a case where a party to [a] proceeding – particularly a party whose concurrence ultimately will be needed if any real progress is to be made – is adamantly opposed to mediation on the basis of a considered view, as to which it leads evidence, that it will be both costly and futile, the Court is likely, I think, to be slow to order a referral to a mediator.”

16. [16]
    It was submitted on behalf of the applicant in this matter that the factual disputes are not complex; the respondents have not shown that mediation would be unsuccessful, but rather, the respondents have made their own decision not to participate in mediation; the number of lay witnesses is potentially six or more; the plaintiff’s claim excludes damages for economic loss and is unlikely to be large; the respondents have a common interest and common representation; the application is made as early as reasonably possible and the parties ought to have the opportunity of assistance from a skilled and experienced third party.

17. [17]
    It was further submitted on behalf of the applicant that the respondents would suffer no prejudice by a referral order to mediation because there are real prospects of settlement in mediation, regardless of how low the respondents may estimate those prospects; if the mediation is successful the outcome will remain confidential; if the mediation is unsuccessful some issues would probably resolve and the real issues in dispute would be clarified – in which case the cost of the mediation may be offset by saving the court’s time and the parties’ expense at trial; and if, as the respondents apprehend, the parties are too far apart to reach a settlement, the mediator may terminate the mediation if the mediator considers that further efforts will not resolve the dispute.

18. [18]
    On the other hand, counsel for the respondents submitted that in the present case efforts have already been made to resolve the dispute, without success, by virtue of the procedures laid down specifically for that purpose in the Personal Injuries Proceedings Act 2002.  It was further submitted that the respondents’ case is being conducted by an insurer with experience in defending claims of this nature and knowledge of the mediation process.  That insurer has formed the view that further attempts to resolve the matter by way of mediation would be futile and a waste of costs.  In these circumstances, it was submitted, there can be little to be gained by making an order compelling the respondents to attend at a mediation.

19. [19]
    I accept that in a case where one party to a dispute has formed the view that it does not wish to participate in the mediation process, particularly where that party is a commercial entity and where attempts have already been made to resolve the dispute by participation in a legislatively required process, the Court should be slow to order a referral to mediation.  In this case, notwithstanding the opinion of Ms Pullos, who I accept is an experienced solicitor, that a mediation would be useful in attempting to resolve some or all of the liability issues, I am not persuaded that there are any real prospects of settlement in mediation.  Were the matter to be referred by the Court to mediation and the mediation proved unsuccessful, it is likely that the parties will incur increased costs.  The matter is ready for trial and it is not suggested that there will be any delay in obtaining hearing dates.  In my view it is not appropriate in this case to order the matter be referred to mediation.  The application, therefore, is dismissed.  I will, if required, hear submissions with respect to costs in due course.