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New South WalesSupreme Court

CITATION : Owners Corporation Strata Plan 62285 & Ors v BetonaCorporation (NSW) Pty Ltd & Ors [2006] NSWSC 216

HEARING DATE(S) : 20/02/06 JUDGMENT DATE : 5 April 2006

JUDGMENT OF : Gzell J

DECISION : Evidence admitted. Specific performance of agreement ordered.

CATCHWORDS : EVIDENCE - Admissibility and Relevancy - Whether the tender of an agreement to the terms of a deed of settlement and release agreedto after a mediation is governed by the Civil Procedure Act 2005, s

29(2) or the Supreme Court Act 1970, s 110P(4) and s 110P(5) -Whether the Civil Procedure Act 2005, Sch 6, cl 5(1) or cl 10(a)applies - Whether agreement on the deed occurred in the course of the follow-up of the mediation and hence during the mediationsession as defined in s 110P(1) - Whether solicitor not instructed toagree to deed had ostensible authority to do so - Whether he should

be relieved from mistake or misapprehension under Harvey v Phillips(1956) 95 CLR 235 at 243 - Whether case within first category inMasters v Cameron (1954) 91 CLR 353 at 360-361 - Whether

discretion against ordering specific performance should be exercised

LEGISLATION CITED : Supreme Court Act 1970Civil Procedure Act 2005Uniform Civil Procedure Rules 2005Farm Debt Mediation Act 1994

CASES CITED : Gain v Commonwealth Bank of Australia (1997) 42 NSWLR 252Wentworth v Rogers [2004] NSWCA 109State Bank of New South Wales v Freeman, unreported, NSWSC,31 January 1996Commonwealth Bank Australia v McConnell, unreported, NSWSC,24 July 1997Bell v Mediate Today Pty Ltd, unreported, NSWSC, 29 October

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1998ANZ Banking Group Ltd v Ciavarella [2002] NSWSC 1186Donellan v Watson (1990) 21 NSWLR 335Harvey v Phillips (1956) 95 CLR 235Masters v Cameron (1954) 91 CLR 353Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd(1986) 40 NSWLR 622

Sinclair Scott & Co Ltd v Naughton (1929) 43 CLR 310Locnere Pty Ltd v Jakks Bagel & Bread Co Pty Ltd [2003]

NSWSC 1123 National Benzole Co Ltd v Gooch [1961] 1 WLR 1489Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573Harvey v Phillips (1956) 95 CLR 235

PARTIES : Owners Corporation Strata Plan 62285 & Others- PlaintiffsBetona Corporation (NSW) Pty Ltd - 1st Defendant

Lido Real Estate Pty Ltd - 2nd DefendantExell Street Holdings Pty Ltd - 3rd DefendantBirzulis Associates Pty Ltd - 4th DefendantDescon Management Pty Ltd - 5th Defendant

FILE NUMBER(S) : SC 6026/05

COUNSEL : Mr T G R Parker SC - PlaintiffsMr D Officer QC/ Ms V Culkoff - 1st Defendant

SOLICITORS : Sachs Gerace Lawyers Pty Ltd - PlaintiffsRusso & Partners - 1st DefendantHolding Redlich - Mr Wrobel (2nd & 3rd Defendants)Minter Ellison - Ms Rivkin (4th Defendant)Collin Biggers & Paisley Lawyers - Mr Stanton (5th Defendant)

IN THE SUPREME COURTOF NEW SOUTH WALESEQUITY DIVISION

GZELL J

WEDNESDAY 5 APRIL 2006

6026/05 THE OWNERS CORPORATION STRATA PLAN 62285 & ORS v BETONACORPORATION (NSW) PTY LTD & ORS

JUDGMENT

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Introduction

1 The Owners Corporation Strata Plan 62285 and the owners of 16 residential units in a building atVaucluse, Sydney brought proceedings against the developers and the builder, Betona Corporation(NSW) Pty Ltd, alleging various defects with respect to the construction of the units. Those proceedings

were referred for mediation under the Supreme Court Act 1970, s 110K. The mediation wasconducted on 5 April 2005 and on 6 April 2005.

2 On 5 October 2005, David Lewis Sachs, the solicitor for the Owners Corporation and the residents,sent a deed of settlement and release to all parties marked up with amendments proposed by them. Itdid not contain amendments proposed by other parties.

3 On 12 October 2005, Ian George, the barrister acting for Betona, sent Mr Sachs an email in which hesaid that Betona would not agree to pay Gleeson Consulting Pty Ltd a fee as it was already paying$15,000.00 for paving and taking responsibility for repairs. Gleeson had made a report on defects andnecessary rectification work.

4 The marked up amendments to the deed provided in cl 1.1(b) that in lieu of rectifying portion of thework described in a report by Gleeson, Betona would pay the Owners Corporation and the residents$15,000.00. The marked up amendments also contained in cl 1.1(a) an acknowledgement by Betonathat it would rectify the defects identified in a schedule to the deed. Clause 2.1(g) contained a warranty

by Betona that it would enter into any necessary agreement with Gleeson and pay Gleesons reasonable

costs of carrying out the supervision and certification of the rectification of defects. Clause 2.2 requiredthe Owners Corporation and the residents to provide Betona with access, storage and free power andwater.

5 On 13 October 2005, emails were exchanged between Mr George and Mr Sachs in which Mr Sachs proposed that Gleesons costs be shared equally.

6 On 21 October 2005, Mr Sachs had a telephone conversation with Sal Russo, Betonas solicitor, as

follows:

Sachs: I have instructions to accept a contribution of $1,500.00 from Betonatowards Gleesons fees.Russo: Betona is prepared to pay up to $1,500.00.Sachs: My client will pay whatever he charges over $1,500.00. As far as theyare concerned, if they want him to come to the site every day, they are

prepared to pay for it. Lets agree on how the Deed is to be amended nowso we dont have to go backwards and forwards.Russo: OK.Sachs: Have you got the last version in front of you?Russo: Yes.Sachs: If you go to clause 2.1(g), I will insert the words $1,500.00 towards

between the words pay and Gleesons reasonable costs.

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Russo: I agree.Sachs: Then, if you go down to clause 2.2, I will include as the Ownersobligation that they will pay the balance. I suggest that I add and shall paythe balance of Gleesons reasonable costs referred to in 2.1(g) above.Russo: Agreed.Sachs: I have made the changes in my copy of the document and I willdistribute it to everybody later today.

Russo: Thank you.

7 Mr Sachs then had his clients counterpart of the deed as amended signed by the Owners Corporationand all the residents. Betona refused to execute the deed. It maintained that at no time had it agreed toundertake any rectification work to unit 13 and at no time did it instruct its lawyers to agree to undertakeany such rectification work. The schedule to the deed sent out on 5 October 2005 included as a markedup amendment: All of the works required to rectify the causes and consequences of leaks in and fromthe patios to units 13 and 14 and make good.

8 The Owners Corporation and the residents seek specific performance of the agreement in the deed.

Admissibility of evidence

9 Betona submitted that the evidence of the conversation between Mr Sachs and Mr Russo, the emailsand the marked up deed of 5 October 2005 were inadmissible and the consequence was that thesummons seeking specific performance should be dismissed.

10 At the time the mediation was conducted, the Supreme Court Act 1970, s 110P(4) provided thatevidence of anything said or of any admission made in a mediation session was not admissible in any

proceedings before any court, tribunal or body. Subject to exceptions irrelevant for present purposes, s110P(5) provided that a document prepared for the purposes of, or in the course of, or as a result of, ameditation session, or any copy of such a document, was not admissible in evidence in any proceedings

before any court, tribunal or body. A mediation session was defined in s 110P(1) in the following terms:

In this section, mediation session includes any steps taken in the course of making arrangements for the session or in the course of the follow-up of asession.

11 Betona submitted that these provisions rendered the telephone conversation, the emails and themarked up deed, inadmissible because they occurred in the follow-up of the mediation hearing.

Civil Procedure Act 2005

12 The Civil Procedure Act 2005 came into operation on 15 August 2005, after the conclusion of the

mediation hearing but before the agreement reached between Mr Sachs and Mr Russo. Transitional provisions are contained in Sch 6. Clause 5(1) provides that, subject to cl 5(2), the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules 2005 apply to proceedings commenced before thecommencement of that Act in the same way as they apply to proceedings commenced on or after thatcommencement.

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13 That the mediation constituted a proceeding is clear from the terms of the Supreme Court Act 1970,s 110K under which the order for mediation was made. Under that provision the court was empoweredto refer any proceedings, or part of any proceedings, before it, for mediation.

14 The Civil Procedure Act 2005, Sch 6, cl 5(2) enables the court with respect to proceedingscommenced before the commencement of that Act to make such orders dispensing with therequirements of the Uniform Civil Procedure Rules 2005 and such consequential orders as areappropriate in the circumstances.

15 The Civil Procedure Act 2005, s 30(1) has a similar definition of mediation session to that containedin the Supreme Court Act 1970, s 110P(1). It also has in s 30(4) a replacement of s 110P(4) and s110P(5). It provides:

Subject to section 29(2):(a) evidence of anything said or of any admission made in amediation session is not admissible in any proceedings beforeany court or other body, and(b) a document prepared for the purposes of or in the course of or as a result of a meditation session, or any copy of such adocument is not admissible in evidence in any proceedings

before any court or other body.

A material difference between the regime under the former legislation and that under the

Civil Procedure Act 2005 is the subjection of the embargo to the operation of s 29(2).

16 The Civil Procedure Act 2005, s 29(1) replaces the Supreme Court Act 1970, s 110N(1). It provides that the court may make orders to give effect to any agreement or arrangement arising out of amediation session. Section 29(2) is a new provision, no doubt designed to overcome the problem thatarose in Gain v Commonwealth Bank of Australia (1997) 42 NSWLR 252 and in Wentworth v

Rogers [2004] NSWCA 109 to which reference will be made later in these reasons. It is in thefollowing terms:

On any application for an order under this section, any party may callevidence, including evidence from the mediator and any other person engagedin the mediation, as to the fact that an agreement or arrangement has beenreached and as to the substance of the agreement or arrangement.

17 It was submitted on behalf of the Owners Corporation and the residents that even if Betonasargument that the agreement reached between Mr Sachs and Mr Russo occurred in the course of thefollow-up of the mediation hearing and therefore within the mediation session as defined, the Civil

Procedure Act 2005, s 29(2) entitled them to adduce evidence of the agreement.

18 If the provisions of the Civil Procedure Act 2005 apply, I am of the view that that must be theresult.

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19 The Civil Procedure Act 2005, Sch 6, cl 10(a) is relied upon by Betona for the submission that theSupreme Court Act 1970, s 110P applies to the agreement reached between Mr Sachs and Mr Russo.It provides:

Subject to this Schedule and the regulations:(a) anything begun before the commencement of this Act or theuniform rules under a provision of the old legislation for which

there is a corresponding provision in this Act may be continuedand completed under the old legislation as if this Act had not

been enacted.

In my view that provision does not apply to the instant circumstances. Its application issubject to the Schedule and the Schedule contains cl 5(1). But more significantly, cl 10(a)enables the continuation to completion of a step under the Supreme Court Act 1970. Inthis case completion has already occurred. The mediation hearing concluded in April 2005and, even if the mediation session continued until the 21 October 2005 discussion betweenMr Sachs and Mr Russo, there is now no step with respect to the mediation session that isto be continued and completed. There is no incomplete action with respect to the mediationsession to which cl 10(a) can apply.

20 In my view, therefore, the evidence tendered by the Owners Corporation and the residents of themarking up of the deed with their variations, of the agreement of the Owners Corporation and theresidents to pay all but $1,500.00 of the Gleeson fee, and the conversation between Mr Sachs and Mr Russo of 21 October 2005 are admissible.

Supreme Court Act 1970

21 If, as I think, the Civil Procedure Act 2005 applies, it is unnecessary for me to determine thearguments that the Supreme Court Act 1970 rendered the evidence inadmissible. But if I be wrong inmy view, I express my opinion on this issue as well.

22 In support of its submission that the Supreme Court Act 1970, s 110P(4) and s 110P(5) renderedthe conversation between Mr Sachs and Mr Russo, the emails and the marked up deed inadmissible,reference was made to Rajski v Tectran Corporation Pty Ltd [2003] NSWSC 476 in which Palmer Jrejected the tender of a number of documents relating to the conduct of a mediation.

23 Reference was also made to Wentworth in which Hodgson JA rejected the tender of a documentsigned by the parties during a mediation. At [28] his Honour indicated that such a document mightexpress or imply consent that it be admitted into evidence in proceedings taken with a view to enforcingan agreement contained in the document. His Honour concluded, however, that the documentcontemplated the drawing up of a later deed so that whether it was immediately binding raised issues of the kind discussed in Masters v Cameron (1954) 91 CLR 353.

24 The documents in question in both those cases arose, or related to events, at a mediation hearing.The documents and conversation here in question occurred well after the completion of the mediationhearing.

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25 Betona submitted that the documents in question and the conversation took place in the follow-up of the mediation hearing and were consequently made in the mediation session as defined, with the resultthat the exclusionary provisions in s 110P(4) and s 110P(5) of the Supreme Court Act 1970 applied.

26 Somewhat inconsistently, senior counsel for Betona tendered in evidence Mr Sachs history of hisdealings with Betona between 8 April 2005 and 23 August 2005, but then submitted that that evidencewas inadmissible. He submitted that it would be artificial to determine admissibility in the absence of thathistory.

27 On 8 April 2005, Mr Sachs sent an email to a number of recipients, including Mr Russo, stating:

I enclose a further discussion draft of Heads of Agreement. This is based onthe version that Malcolm Davies distributed, but incorporates what Iunderstand to be the balance of the agreement achieved at the mediation.

On 26 May 2005, Mr George said: Betona agrees that the mediation resulted in anagreement that only required documentation. It was submitted that agreement had beenreached at the mediation subject only to a little tinkering. It was submitted that theseexchanges confirmed that the other evidence was in the course of the follow-up of themediation and, in consequence, inadmissible.

28 In my view, the extent of the variations in the marked up deed could not be described as meretinkering. The history of Mr Sachs dealings with the representatives of Betona show considerableexchanges in developing the terms with which the parties ultimately agreed.

29 Notwithstanding the expressions by Mr Sachs and Mr George that agreement had been reached atthe mediation, later events show that that was far from the case and considerable negotiation took placethereafter. Those negotiations did not have their origin in agreement reached at the mediation hearing.They arose in the course of subsequent negotiations as to the appropriate terms of the deed. The factthat negotiations as to appropriate terms continued well after the mediation hearing concluded, indicatesthat no agreement as to those terms occurred at the hearing.

30 To follow-up connotes something done to reinforce or develop an initial action. I would not havethought that the process of negotiating appropriate terms of the deed, subsequent to the conclusion of mediation hearing, constituted a follow-up of action taken at the mediation hearing. No doubt it might besaid that an agreement to agree was reached at the mediation hearing. But the process of arriving at finalagreement constituted, in my view, a set of new negotiations between the parties. They did not hark

back to the mediation session. When Mr Sachs and Mr Russo spoke on the telephone they were notreferring back to terms agreed at the mediation session. They were seeking to finally resolveamendments to earlier heads of agreement proposed by the Owners Corporation and the residents andexcluding amendments proposed by other parties.

31 In the absence of some form of reference back to the events of the mediation hearing, I am of theview that the conversation between Mr Sachs and Mr Russo could not be described as something saidin steps taken in the course of the follow-up of the mediation hearing. Nor could the emails and the

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marked up deed be described, in my view, as documents prepared for the purposes of, in the course of,or as a result of steps taken in the course of the follow-up of the mediation hearing.

32 In consequence, I am of the view that neither the emails and the deed were made for the purposes of,in the course of, or as a result of a mediation session, nor the telephone conversation between Mr Sachsand Mr Russo was made in a mediation session in terms of the Supreme Court Act 1970, s 110P(1)

and the embargoes against the giving of that evidence in s 110P(4) and s 110P(5) do not apply.

33 I am fortified in this decision by earlier authority under the Farm Debt Mediation Act 1994, s 15(1)which provided that evidence of anything said or admitted during a mediation session and a document

prepared for the purpose of, in the course of, or pursuant to, a mediation session was not admissible inany proceedings in a court or before a person or body authorised to hear and receive evidence. Section15(2) contained a definition of a meditation session in the like terms to the Supreme Court Act 1970, s110P(1).

34 In State Bank of New South Wales v Freeman , unreported, NSWSC, 31 January 1996, Badgery-Parker J at 17 expressed the opinion, as an obiter dictum , that a document prepared at the conclusionof a mediation recording an agreement reached at the mediation was to be regarded as one that cameinto existence after the mediation session had concluded.

35 In C ommonwealth Bank Australia v McConnell , unreported, NSWSC, 24 July 1997, Rolfe J at28 agreed with Badgery-Parker J because otherwise a party could reach an agreement at a mediationand later refuse to abide by it and preclude the agreement from being tendered.

36 These sentiments are consistent with what Hodgson JA said in Wentworth about implied consent toa final written agreement reached during a mediation hearing being admitted into evidence in proceedingstaken with a view to enforcing the agreement contained in the document.

37 In Gain , one argument sought to be raised was that no reasonable administrator in the position of the New South Wales Rural Assistance Authority could have concluded that a satisfactory mediation hadtaken place. That argument depended, however, upon evidence of what had occurred during themeditation. The Court of Appeal concluded that the Farm Debt Mediation Act 1994, s 15 renderedthat evidence inadmissible, notwithstanding, as Cole JA observed at 262, that the effect of s 15 was toseverely restrict any capacity to mount successfully a challenge by way of judicial review because itexcluded the tendering on such a challenge of the material referred to in that section. That is not thesituation in the instant circumstances where what was sought to be tendered occurred months after themediation hearing had concluded.

38 In Bell v Mediate Today Pty Ltd , unreported, NSWSC, 29 October 1998, Barr J was concernedwith a notice to produce documents in relation to a mediation. Having referred to Freeman and

McConnell his Honour said at 6:

Bearing in mind the purposes of the Act and the section, namely to makeattendance at meditation in appropriate circumstances a condition precedentto the enforcement of a farm debt and, in order to further the parties chances

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of agreeing at mediation, to preserve the confidentiality of things said andwritten, I think that their Honours approach is correct. I acknowledge thedifficulty referred to by Badgery-Parker J about what subs (2) means in itsreference to steps taken in the course of the follow-up of a mediationsession, but I do not think that that expression includes the preparation of heads of agreement or terms of settlement. That is because by the time thatstep is taken, the mediation session has come to an end. The preparation of

such documents does not follow-up the mediation session. Such documentsare not prepared pursuant to a mediation session. I think that to construe thesection so as to exclude from evidence terms of a settlement reached at amediation would go beyond the purposes of the Act and might even defeatthem, as Rolfe J has observed.

39 It was submitted that his Honours decision was wrong. I reject that submission and endorse what hisHonour said. He was dealing with a document brought into existence after the conclusion of themediation hearing.

40 Macready AJ allowed in evidence correspondence concerning a proposed settlement engaged inafter the meditation had concluded, in ANZ Banking Group Ltd v Ciavarella [2002] NSWSC 1186.His Honour held that the documents were not a follow-up to a mediation session.

41 Counsel for Betona sought to tender position papers prepared before and for use at the mediationhearing. In my view those papers came into existence as steps taken in the course of makingarrangements for the mediation session in terms of the definition in the Supreme Court Act 1970, s110P(1) and are inadmissible in terms of s 110P(5).

42 There was some suggestion in written submissions on behalf of Betona that a mediation agreement for the purposes of the administration of the mediation, setting out the basis for the appointment of themediator, his functions, the conduct of the meditation and other relevant matters would be tendered inevidence. That tender did not, however, occur. Had it, I would have rejected the document as one

prepared for the purposes of, or in the course of, a mediation session.

43 There was some suggestion that the document was admissible under the Supreme Court Act 1970,s 110Q. But that section is confined to disclosure of information by a mediator.

44 The consequence is, that had I to consider the matter under the Supreme Court Act 1970, I wouldhave admitted the emails, marked up deed and evidence of the conversation between Mr Sachs and Mr Russo as not falling within the exclusionary provisions of the Supreme Court Act 1970, s 110P(4) and s110P(5) but would have excluded the position papers under s 110P(5) and also the mediationagreement had it been tendered.

Solicitors Authority

45 Bernard Geoghegan was the sole director of Betona. He swore in an affidavit that at no time did heinstruct his lawyers to agree to undertake any rectification work to the unit 13 patio, and at no time did

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Betona agree to undertake any rectification work to unit 13. The marked up deed required Betona tocarry out that work.

46 Mr Russo signed consent orders on 25 August 2005 in which it was noted that matters that were notresolved at the mediation had since been resolved. Mr Geoghegan said he would not say that Mr Russolacked instructions to sign that document.

47 In Donellan v Watson (1990) 21 NSWLR 335 at 342, Handley JA noted that a solicitor retained toconduct litigation ordinarily had both implied and ostensible authority to bind the client to a comprise of those proceedings, and any instruction from the client that restricted the solicitors authority to comprisethe proceedings would only affect the other party if on notice of that restriction. There was no suggestionthat Mr Sachs or anyone else on behalf of the Owners Corporation and the residents were aware of anyrestriction on Mr Russos ability to compromise the proceedings.

48 Betona sought to rely upon Harvey v Phillips (1956) 95 CLR 235 at 243 where the High Courtcontrasted the situation before it with a case where a comprise had been agreed upon by counsel actingonly in pursuance of his apparent or implied authority from his client but, owing to a mistake or misapprehension, in opposition to his clients instructions or in excess of some limitation that had beenexpressly placed on his authority. In such a case, in all events until the judgment or order embodyingcomprise had been perfected, authority existed in the court to refuse to give effect to, or act upon thecompromise and, perhaps, to set it aside.

49 But Mr Russo did not give evidence and no basis was established for any mistake on his part. I see

no reason to depart from the ordinary rule that Mr Russo had the ostensible authority to bind Betona tothe agreement.

Masters v Cameron

50 In Masters v Cameron (1954) 91 CLR 353 at 360-361 the High Court, in an often quoted passage, identified three different situations in which parties in negotiation reach agreement that the termsof their negotiation should be dealt with by a formal contract:

It may be one in which the parties have reached finality in arranging all theterms of their bargain and intend to be immediately bound to the performanceof those terms, but at the same time propose to have the terms restated in aform which will be fuller or more precise but not different in effect. Or,secondly, it may be a case in which the parties have completely agreed uponall the terms of their bargain and intend no departure from or addition to thatwhich their agreed terms express or imply, but nevertheless have made

performance of one or more of the terms conditional upon the execution of aformal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until theyexecute a formal contract.In each of the first two cases there is a binding contract: in the first case acontract binding the parties at once to perform the agreed terms whether the

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contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in thesecond case a contract binding the parties to join in bringing the formalcontract into existence and then to carry it into execution Cases of the thirdclass are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any bindingeffect of their own.

51 In Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at628, McClelland J suggested a fourth class additional to the three mentioned in Masters as recognised inSinclair Scott & Co Ltd v Naughton (1929) 43 CLR 310 at 317:

One in which the parties are content to be bound immediately andexclusively by the terms which they had agreed upon whilst expecting to makea further contract in substitution for the first contract, containing, by consent,additional terms.

52 Betona submitted that the case fell within the third category. Locnere Pty Ltd v Jakks Bagel & Bread Co Pty Ltd [2003] NSWSC 1123 was cited. In that case, following a conciliation conference inthe Industrial Commission, Schmidt J noted:

1. Proceedings have been compromised between the parties.2. Subject to the entry by the parties into a mutually agreeable Deed, theApplicant to file a Notice of Discontinuance.3. Liberty to apply on three days notice.

It was submitted that the case fell within the first category of Masters . Palmer J rejectedthat submission. There was no evidence as to the terms that were actually agreed at theconciliation conference and, more importantly, the note taken by Schmidt J indicated thatwhat was done at the conciliation conference was not regarded as final and effective toresolve the dispute between the parties.

53 In my view the contrary is the case in the instant circumstances. The terms of the marked up deedhad been agreed by the Owners Corporation and residents subject to the variation with respect to theGleeson fees. The conversation between Mr Sachs and Mr Russo, which was not challenged in cross-examination, made it clear, not only that as between the Owners Corporation, the residents and Betona,finality had been reached in agreeing upon all the terms of the bargain, but also that those terms wereaccurately stated in the deed of settlement and release when the two further amendments were made toit.

54 In my view, on 21 October 2005, Betona became bound by the terms of the deed of settlement andrelease as further amended on that day regardless of whether it executed that document.

Discretion

55 Betona submitted that I should not order specific performance of the agreement as it was contrary tothe undisputed evidence of Betona that it never agreed to the inclusion of the rectification work on unit13. It was submitted that it would unfairly operate to create an injustice to Betona and, rather then put an

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end to the litigation, it could potentially operate to create further litigation. It was further submitted that itwould be contrary to the express intentions of all parties as documented in the mediation agreement. Ihave already mentioned that that agreement was not in evidence.

56 In National Benzole Co Ltd v Gooch [1961] 1 WLR 1489, a defendant agreed to abandon anappeal. His solicitors drew up a document requesting that the appeal be dismissed and struck out of the

list. There were added in writing the words: with no orders as to costs. The defendants solicitorsendorsed the document: we consent for the solicitors for the plaintiff. Subsequently, the defendantwished to restore the appeal. The Court of Appeal held that the appeal remained on foot until the formalorder was drawn up and entered. Until that point was reached, the court had a discretion to withdraw its

previous instructions in relation to the order and make such orders as it thought fit. But because thematter was not a mere consent, but a contract between the parties, consideration for which was noorder as to costs, in the absence of grounds on which it could be alleged that the agreement was void or voidable, it was not a proper case for the court to exercise its discretion to restore the appeal. At 1494,Diplock LJ said:

Here, as my Lords have pointed out, there was an agreement entered into between the parties for good consideration similar to an agreementcompromising an action. It was conceded by Mr Percival that there were nogrounds on which it could be alleged that that agreement was either void or voidable. It was one which would stand.While I agree with my Lords that this court has a full discretion as to what itwill do until the final order is drawn up, I find it difficult to conceive of anycase where it would be a judicial exercise of that discretion to allow a party togo on with an appeal after having entered into a binding contract for good

consideration not to do so.

57 That passage was cited with approval by Kirby P with whom the other members of the Court of Appeal agreed in Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573 at 579-580.

58 In the instant circumstances there was an agreement of compromise for valuable consideration and Isee no appropriate basis upon which to exercise a discretion against making an order for specific

performance.

Conclusion

59 In my view, the Civil Procedure Act 2005, Sch 6, cl 5(1) and not cl 10(a) applies to the proceedings and the emails, the marked up deed of settlement and release and the conversation betweenMr Sachs and Mr Russo of 21 October 2005 are admissible under s 29(2). The agreement reached

between the solicitors on that day was not, in my view, in the course of the follow-up of the mediationand did not occur in the mediation session as defined in the Supreme Court Act 1970, s 110P(1) andwould not have been excluded from evidence had s 110P(4) and s 110P(5) applied. Mr Russo had

ostensible authority to agree to the terms of the deed of settlement and release and there was noevidence of any mistake or misapprehension on his part that would enliven what was said in Harvey v

Phillips (1956) 95 CLR 235 at 243. In my view the agreement falls within the first category in Mastersv Cameron (1954) 91 CLR 353 at 360-361. I do not see any basis for exercising a discretion againstordering specific performance.

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60 I will order that the deed of settlement and release as amended by agreement on 21 October 2005 be specifically performed. I will hear the parties on the appropriate terms of such relief and I will hear the parties on costs. I direct the parties to bring in short minutes of orders reflecting these reasons.

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