Settlement of a Dispute – Documentation of Settlement Critical as to Ultimate Outcomes – Experience Counts

25/10/2023

At Watson & Watson we have been involved in more than a thousand disputes between various parties most of which have settled.

Numerous recent matters that we have undertaken and settled recently provide some highlights as to the benefits and dangers associated with the resolution and settlement. 

In our view, the settlement and documentation of the settlement is critical and paramount for a good outcome for our clients.

We consider each of these in relation the available alternatives. 

1. The desired outcome by our clients and what can be achieved.
2. The outcomes that can be achieved by way of settlement.
3. The outcomes that may be achieved in the prosecution or defence of proceedings and a determination or appropriate Court Orders being entered.
4. The process and documentation of a resolution.

Each of the above have consequences, benefits and to a degree detriments that must be considered.

A recent case demonstrates some critical issues that we considered and included in the Settlement Agreement and Consent Orders.  Some of these were critical and assisted us in defending a recent Application by the other party to re-open the case to change the Consent Orders and Terms of Settlement that was agreed and achieved on behalf of our clients. 

There were two critical clauses we inserted in the Settlement Terms and Consent Orders which did not relate to the commercial terms of settlement.  They related to procedural matters which had the effect of limiting the prospects of the other party re-opening the case. Without these clauses, our clients’ neighbour was more likely to be allowed to re-open the case and make further applications.

Brief Facts

We received instructions in late 2022 for the Owners of land who had been approached by the Owner of adjacent land seeking access to our clients’ land to allow the neighbour to carry out work on her land, who we refer to in this article as “our clients’ neighbour”.  Such access is available to a neighbour in the appropriate circumstances.  We have briefly referenced some of these for example, in our articles 28 October 2015 and 9 August 2023.

Our clients could not reach agreement with the neighbour and the neighbour made an Application to the Court for Access Orders to our clients’ land under the provisions of the Access to Neighbouring Land Act.  As with most cases and in particular, the case to which we refer to in this Article, this dispute settled.  However it settled on the date of the Hearing amongst other matters.  At the date of the Hearing, the case was delayed to allow for negotiations which were significant and prolonged.  Eventually agreement was reached which was reduced to writing and Consent Orders were made in the proceedings.  The Settlement was in similar terms that had been offered by our clients long before the Hearing date.  Additionally the neighbour agreed to pay our clients’ costs.

Within months of the Orders being made, the neighbour, being the Owner of the adjacent land, made an Application to the Court seeking to alter the previous Orders that had been made or alternatively, to make a new Application seeking additional access.

The new Application related to access to part of our clients’ land that was subject of the original Application, but not agreed to by our clients and was not included in the Consent Orders agreed and made. 

Under the Access to Neighbouring Land Act Section 24, the Court may vary or revoke an Access Order on Application by the Applicant for the Order or any other person affected by the Order.

There are other legislative avenues that can come to the aid of a party when one is considering Consent Orders and the method of resolution by those Consent Orders.  In this particular case, our clients were aided by our drafting of the settlement and Consent Orders. 

The Applicant claimed that there was a mistake in the Order.  Our clients’ opposed the Orders sought by the neighbour effectively for further access. The neighbour’s Application was dismissed on the first return date of the neighbour’s Application.

There are other issues that arise in relation to settlement of disputes.

In numerous Acts there are restrictions on a person (or entity) to contract out of those various provisions in those Acts.  For example, we refer to the Home Building Act 1989 and the Building and Construction Industry Security of Payment Act.  In those circumstances, often there is an attempt to contract out of the Acts.  It is not effective however you need to be aware of your options.

There are circumstances that will distinguish the effect of a Consent Order made without a Hearing or an Order which is made following a Hearing even if the terms of the Order seem to be the same.

Often in relation to settlement of disputes, one party will seek from the other party, something that the Court will not or cannot grant in the proceedings.  Some parties will not agree to such matters.  One example, is our Article in relation to Strata Matters 4 October 2023 where the Lawyer for the Owners Corporation sought from our client, an indemnity in relation to matters that were subject to the underlying issue, the subject of the proceedings.  The Court or Tribunal could not grant such an Order providing for such indemnity.  As we indicated in that Article, that clause was a “standard” clause which one sees in many Settlement Documentation. Following our advice, our client indicated that the indemnity clause was a deal breaker (for reasons which we explained to our client).  As it happened, the Owners Corporation accepted a settlement where there was no indemnity required from our client.

We have negotiated such matters in more than a thousand disputes over Richard Watson’s 40 years in practice in dealing with such matters.

Similar matters and issues arise in commercial disputes as distinct from building and construction or strata matters, in which we have acted in hundreds of cases.

If you find yourself in such circumstances or dispute, contact the experienced Lawyers at Watson & Watson by contacting Richard Watson an Accredited Specialist in Commercial Litigation (Building and Construction Stream) by contacting his Personal Assistant Shereen Da Gloria to discuss your matter and seek appropriate advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.