As most legal practitioners will know, it is an expectation of the Court that parties in a dispute will engage in some form of alternative dispute resolution (ADR), such as mediation. However, mediation can sometimes then be treated as a simple procedural step to get through and move on from.

Parties may simply turn up to a mediation with little to no intention of resolving the matter or narrowing the issues in dispute, which can be very frustrating for those parties who attend with a genuine intention to resolve the matter and achieve a commercial outcome.

Often, there are no adverse consequences for those parties who do not treat the process with sufficient seriousness. However, there are times when parties are reminded that engaging in mediation carries obligations and failure to comply may result in those consequences.

This issue was recently considered in the matter of The Owners – Strata Plan 93105 v Richard Crookes Constructions Pty Ltd [2025] NSWSC 935.

In this matter, the defendants successfully sought an order for costs against the plaintiff on the basis that the plaintiff did not properly engage in a Court-ordered mediation.

Decision

The plaintiff brought proceedings against the defendants in relation to the installation of aluminium composite cladding used in the construction of the plaintiff’s common property nine years prior. In or about March 2025, Stevenson J ordered that the parties engage in mediation to be held in July 2025.

That mediation was held on 2 July 2025 at the office of the defendants’ solicitors. The defendants’ solicitors, personal representative, and experts attended. However, a personal representative of the plaintiff did not attend. The mediation was cancelled by the mediator as a result, and the defendants sought orders for costs.

Importantly, the mediator provided an email report to that effect, which was accepted by the Court. The email report also detailed several other failures by the plaintiff to comply with ordinary requirements, including the provision of a position paper by a particular time and informing the mediator of which personal representative would be in attendance.

The Court also rejected the plaintiff’s arguments that, although a personal representative was not in attendance, they could seek instructions via telephone and their experts were available by AVL and noted that the plaintiff did not dispute the content of the report from the mediator.

On that basis, the costs of the aborted mediation were ordered against the plaintiff.

There were additional arguments as to whether a lump sum costs order should be made, but the Court refused to make such an order on the basis that there was insufficient evidence. Accordingly, that issue will be dealt with by a costs assessor.

What does this mean?

This matter highlights the importance of mediation in our Court system, and the potential adverse consequences for parties who fail to take it seriously. Resolving matters at mediation relieves pressure on the Courts, where time is already at a premium, and can bring certainty and significant cost savings to parties in dispute.

All parties have an obligation to engage in Court-ordered mediation in good faith. A mediator can terminate a mediation and make a report to the Court if this obligation is breached, and a costs order may be made against the defaulting party.

Turks, its partners, and its lawyers are experts in ADR. One of the writers, Lachlan Wilson, is a NSW Law Society Accredited Specialist in Dispute Resolution and regularly attends mediations and informal settlement conferences on behalf of clients to achieve a commercial resolution of disputes and avoid unnecessary legal costs associated with proceeding to a hearing.

Should any aspect of this alert raise issues for you, please do not hesitate to contact us.