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Active Preparation Leads to Better Mediation Results

After have deciding to mediate and selecting a mediator, each litigants’ focus should shift to preparation.  In our experience, mediation results improve significantly when the parties, not just the attorneys, come prepared for mediation.  This post offers 7 pointers for parties to follow when preparing for mediation with their lawyers.

  1. Participate in Drafting the Mediation Statement. The written mediation statement primarily serves to inform the mediator of the issues in the case, the parties’ respective positions, and the real points of contention.  Because the parties usually have a deeper understanding  of the factual and economic issues in a case, the parties themselves need to be involved in the process of finalizing the mediation statement.  The parties may suggest important points, such as a crucial missing fact or a tweak based on a business goal.
  2. Analyze the Parties’ Leverage. Depending on a variety of factors, such as the relative strength of the parties’ positions or time pressures facing a particular party, the parties may possess different types or amounts of leverage.  Spend some time speaking with counsel regarding which party has the upper hand, how, and why.
  3. Brainstorm in the Abstract and Specific. In thinking about resolutions to propose at mediation, think strategically.  And be specific.  Considering abstract concepts is helpful, but do not stop there.  Think about how specific terms may get fleshed out in the ultimate agreement.

For example, if a manufacturer is in a dispute with the designer of its Customer Relationship Management (“CRM”) system, the manufacturer may be willing to continue using the CRM if the software vendor will agree to provide technical support for a period of time.  That concept may be a crucial component of a mutually agreeable settlement, but the manufacturer should consider the necessary details – how many months or years would the technical support be needed, how many hours per week or month must the designer be willing to commit to, who at the vendor will provide the technical support, and will the technical support include adding features or providing updates?

Considering the details before mediation will highlight potential problems and increase the likelihood of reaching a concrete mediation settlement.

  1. Think Creatively. Resolving a case before trial, whether by traditional settlement or through mediation, has many benefits, such as avoiding potential liability from an adverse result, avoiding additional attorneys’ fees and litigation costs, ceasing interruptions of employees’ and leadership’s time, and relieving the emotional stress created by litigation.  Further, the American justice system does not often render “compromise” results.  Mediation, on the other hand, empowers the parties to employ self-determination.   For example, in a dispute with a supplier regarding the sale of goods, the parties could agree to a settlement that includes discounts, premiums or other accommodations in future transactions between the parties.  A judge or jury could not award such a remedy.
  2. Consider the Other Side’s Perspective. As the old saying goes, “you cannot understand another until you walk a mile in his or her shoes.”  Ask: if the opposing party performs this same analysis, what leverage will the other side perceive and what potential resolutions might be suggested?  Sticking points and pitfalls may become clear.  For example, in a warranty dispute, the seller may be much more interested in the message sent to other buyers by resolving the case at hand than the actual amount of money paid for the settlement.
  3. Set (Compromise) Goals Before Mediation. Litigants should approach mediation and their strategy with a goal in mind.  In the adversarial process, most want to “win.”  But one must ask, “What does winning mean in the context of mediation?”  Mediation is not a trial, and if one approaches mediation with the goal of “winning” by getting everything available at trial, mediation almost certainly will not be successful.  In other words, parties should seek to resolve the case on terms that are acceptable but not perfect.
  4. Communicate with Counsel. The lawyers almost certainly have been through mediation more times than the parties, and they can offer insight into the legal aspects of the case at play.  Hopefully, the lawyer may also serve as a business counselor based on his or her experience, helping to identify business goals and mediation tactics to align with those goals.  Most importantly, if the lawyer does not fully understand the client’s goals, he or she may utilize a strategy that is not best suited for reaching the desired outcomes.

The key takeaway is that the parties should work closely with their lawyers in preparing for mediation.  The foregoing are not step-by-step directions, but rather an outline to use in formulating the appropriate mediation strategy and goals.  Stay tuned for our next post, discussing tips for the day of mediation.

Source : The National Law Review 

For further information or a free consultation, please use this form to contact us.

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Restorative Justice & Family Mediation

For many people experiencing a family breakup as a result of domestic violence,  they look to the Family Law Courts for justice, perhaps not realizing this is not the venue where they will get justice.

The perpetrator of domestic violence often goes unpunished and for the victim going to Court there is some expectation that the Family Court system will finally give them that closure.    Unfortunately it is an unlikely outcome as the Family Court system is there to resolve disputes between the parties when it comes to property and parenting matters.

It is not a place where the victim can expect that the perpetrator will be finally brought to answer for the harm they have done, with cases involving Domestic Violence the offender more often than not does not get punished, an AVO is in place to hopefully prevent further violence but often there is no justice for the victim.

Would Restorative Justice help?
Restorative justice is a system of criminal justice which focuses on the rehabilitation of offenders through reconciliation with victims, it is an approach to justice that personalizes the crime by having the victims and the offenders mediate a restitution agreement.

For some perspective courtesy of Mediate BC Blog restorative justice can assist not only in Domestic Violence cases but also with cases of breach of trust and fidelity.  The author says… I have yet to mediate a family dispute that did not involve some kind of harm in addition to the very real and challenging problems confronting the participants. I suspect that this is true for you as well. About 15 years ago I was introduced to the idea that solving harm and solving conflict are two different things entirely.

The Justice Problem

How can we resolve the harm that occurred through accountability, amends and support? Here the person causing harm has moral obligation. 

The Conflict Problem

How can we negotiate a mutual solution to the mutually agreed problem? Here there is moral neutrality.

I believe it is this difference in the moral status of the participants that creates the need for different and distinct processes.

In my experience, and according to the material I have read, any Justice Problem is going to make solving the Conflict Problem more difficult. The truth of this was painfully apparent when I was working with one couple.

I was helping this couple with a parenting and financial agreement. They had been separated for 1 year and were primarily communicating through their 9-year-old son. Their separation occurred after an extremely harmful verbal attack. The wife had committed adultery years earlier and they had managed to remain together despite not dealing with some of the key factors leading up to and resulting from the infidelity. She was beginning to show some of the same behaviours that had occurred last time and the husband freaked out. Both acknowledged that this was a terrible outburst and was unacceptable.

Due to his shame and guilt and justified anger at her newest betrayal of their marriage, and her fear and shame at his reaction and how she had triggered it, they had stopped talking to each other. As co-parents they did have many conflict problems they needed to solve, so some communication was required. Thus the inappropriate use of their son as a go between.

I was aware of this trigger event when we started dealing with the co-parenting agreement, but they initially told me they wanted a conflict-focused process geared towards getting the co-parenting agreement done. It quickly became apparent that the trigger event was looming large and it was a huge problem barring our way forward.

I tested to see if a restorative process would be possible to resolve enough of the Justice Problem (his outburst) to proceed with the co-parenting agreement. Was he willing to take responsibility for his actions and communicate this with her? Yes he was. He was horrified at what he had done and deeply needed to express this. Was she open to communication with him about this and to hear his apology?  Yes she was, though for safety reasons she wanted it to be in written form and she wanted to be able to respond in writing. He was open to this process.

So I coached him on how to write a helpful apology letter and we worked through three drafts together. I delivered the final draft to her and sat with her while she read it. We talked some things through and then she went home to write her response. She shared a draft with me which was excellent and I passed that on to him and helped him process it. Both reported a significant sense of relief and resolution and an increased openness to communicate directly with each other.

We were then able to move towards completing the co-parenting and financial agreements.

This integration of a restorative process (dealing with the harm) with a conflict resolution process was able to get the participants unstuck and moving towards a better future as co-parents. There are many other methods and tools that restorative justice brings to Justice Problems that can help transform an intractable problem into a manageable one.

I often describe to my clients that they have a choice of what they want to deal with in a mediation with me.  We can deal with the justice issues and then deal with the conflict issues, or we can just deal with one or the other.

Given that many family problems are tied into abuse or unhealthy family dynamics it is a regular occurrence that I will need to remind clients of that choice:

Are we seeking justice or are we problem solving?

Sometimes we shift between the two dynamically.

If given permission, I will always deal with the justice issues first. Often I don’t get permission to work with the justice problem, so other supports are required for the person who caused the harm and the person who experienced it (sometimes these roles are shared by all). This is why I like to have a team of legal, health and financial professionals to equip my clients to cope with the often complex and high value problems they bring to me.

How have you thought about the moral status of your clients and the role of harm in solving Conflict Problems?

How do you work to overcome the barriers that Justice Problems bring to solving family disputes?

Contact us with the form below for a free initial consultation to see if Restorative Justice Mediation is an option for you.

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Financial abuse of the elderly is a growing problem for police, bank workers, and lawyers.

Newly established elder abuse hotlines are being swamped with calls, many of which relate to financial abuse.  Financial advisers, bankers and lawyers are all calling for new measures to address financial elder abuse and the Attorney General, Christian Porter, has flagged a ‘National Plan’ to address ‘elder abuse’ to be released later in the year.

So what should the new measures look like?
Click on the play button to listen to the broadcast on ABC Radio broadcast Presented by Hugh Riminton.

If you are experiencing elder abuse or know someone who is, contact us with the form below.

Mediation is a good way to seek a compromise resolution that preserves relationships. It gets parties who don’t agree to sit down and discuss their differences in a calm, controlled setting. Also, it’s generally less expensive than going through a trial and can keep the messy details of a case out of the public’s eye.

Mediating Elder Abuse Disputes

For elder abuse disputes among family, mediation can be a better way to resolve an elder abuse matter. It causes fewer hard feelings and may lead to a better understanding between parties (this is part of the idea). If you want to be able to sit down with that family member come the holidays, sitting down in mediation is the better option.

 

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When to Use Mediation for Elder Abuse

Mediation for Elder abuse
Mediation and litigation are two different ways to resolve legal disputes. While mediation is often a part of litigation, it doesn’t always have to be. Disputes can be mediated outside of litigation and lawsuits.

There are pluses and minuses for either choice, and either can be the better option depending on the case. If you’re in the midst of an elder abuse case, you may be wonder which one is right for you?

What Is Mediation?

Mediation is considered a form of ‘alternative dispute resolution.’ It involves a neutral third party who facilitates a discussion (between the parties to a legal dispute) focused on resolving the dispute. Over the last few decades, as a result of how successful mediation has become, more and more courts have required litigants participate in mediation or alternative dispute resolution before being allowed to move forward with a trial.

Mediation is a good way to seek a compromise resolution that preserves relationships. It gets parties who don’t agree to sit down and discuss their differences in a calm, controlled setting. Also, it’s generally less expensive than going through a trial and can keep the messy details of a case out of the public’s eye.

Mediating Elder Abuse Disputes

For elder abuse disputes among family, mediation can be a better way to resolve an elder abuse matter. It causes fewer hard feelings and may lead to a better understanding between parties (this is part of the idea). If you want to be able to sit down with that family member come the holidays, sitting down in mediation is the better option.

When Litigation Is a Better Choice

Yet some cases are simply going to trial due to the nature of elder abuse cases. It might involve significant, willful cases of neglect or abuse. Maybe it’s a particularly divisive case that has polarized a family and caused a lot of ill will. Or it might involve such disputed facts and understandings as to the situation that a judge or a jury has to decide it.

While most cases settle before trial, litigation is the traditional way of resolving legal disputes. It’s adversarial, with witnesses, evidence, cross-examination, and arguments. And it’s not to be taken lightly — lawsuits are serious, costly, and can ruin lives and relationships. But sometimes it’s necessary.

So What’s Best for You?

You might have, at some level, an emotional sense of what’s right for your case. Is this something you should work out, or is this something you should stand up for? It’s ok if you don’t know, and it can help to speak to a local mediator and a free consultation by filling in the form below.

Related Resources:

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Shuttle mediation for family violence cases

When there are allegations of family violence, all couples must attempt mediation before a court will grant a permanent family violence order.

The ACT Magistrates Court says that 95 per cent of family violence matters in the ACT are settled and only five per cent go before a magistrate for hearing.

So how does this system work and why is it so successful?

Click Here to listen to the ABC Radio National Program on Shuttle Mediation.

If you would like more information on how ADROnline can assist not only with Shuttle style mediation, but having it done online from the comfort and safety of your own home, fill in this form and we will contact you for a free consultation.

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Reasons To Try Child Custody Mediation

Child Custody Mediation

Child custody mediation provides parents with a valuable alternative to an adversarial divorce. Through the process of mediation, parents have the opportunity to work together and create a parenting plan that honors each parent’s unique contribution to their children’s upbringing.

Benefits Of Child Custody Mediation

Divorce is not commonly a good situation, but when there’s a child involved, the potential damage is not just about you. If you want to avoid as many tumultuous situations as possible and protect your child, child custody mediation is way to go. Through the mediation process, parents find a way, with mediator guidance, to work together and create a plan that honors the child and their upbringing. There are a number of advantages to working out child custody in this manner. Here are a few to consider.

Non-Adversarial Option

Child custody mediation is a collaborative effort that has one common goal in mind…the child and what is best for him or her. Unlike going to court, mediation focuses on the child and their best interests. Through the process, you can establish a parenting plan that allows both parents to be active and involved in the child’s life. Taking a former spouse to court and suing for custody can be a very messy situation.

Easier On Children

Contested divorces are hard on everyone involved and they can have a huge impact on the children in the picture as well. Despite good intentions, you realize that you have a lawyer and they are going to fight with all of their power to protect your interests.

Children can get caught in the middle of two sides fighting against one another. Child custody mediation, on the other hand, teaches your children that you and your former spouse can sit down, speak civilly, and work things out  where they are involved.

Mediators Are Neutral

Well-trained mediators are professionals who do not take sides. They want to help you and your former spouse work together in order to figure out a plan. You don’t have to rehash the past or reasons you split. Instead, you will move forward and figure out new ways to work together. A lawyer is going to be on one side or the other, but a mediator is neutral and in the middle.

Mediation Is Blame Free

Whether you are blaming one another for events leading to the divorce or not, mediation focuses on moving past those issues. You need to be able to work together in order to raise your child successfully. When using a mediator, you can set aside the blame game and focus on new skills that will help you collaborate as parents. The plan you come up with is something you will both agree on and stick to over the years.

Focus On The Future

Let’s assume that parties involved love their children and everyone wants what is best for them. The mediation process focuses on the future plans of the family and the future of the children. It creates a workable plan that allows children to have relationships with both parents in a meaningful manner. Looking ahead instead of into the past will help a new type of relationship form between the parents.

Mediation Reduces Conflict

A good mediator will help you and your ​ex develop new skills for communicating with one another. Over time, this will considerably reduce the stress on all of you. When you and your ex are no longer arguing over the past, it’s a lot easier to focus on what’s best for the children in the “here and now.”

Mediation Reduces Stress

The stress that weighs on you during a divorce can lead to insomnia, the inability to concentrate, and increased impatience with your children. As long as you remain in a constant state of conflict with your ex, this response is natural. Child custody mediation will lower your overall stress by giving you the tools to work through your conflicts and give you a hopeful outlook on the future.

Mediation Helps You Create an Effective Working Relationship With Your Ex

This is one of the most important aspects of learning to work together in raising your children. Through ​mediation, you will learn to communicate effectively with one another and create a workable plan for the future.

Mediation is less costly

When you work with a lawyer, you pay him or her by the hour to represent your interests. Since your ex is also paying a lawyer for to represent his or her interests, the amount of time it takes to reach a consensus builds and the end result becomes extremely costly.

Mediation creates a win-win result

The focus of mediation is to create a plan that is best for the children. We know that in non-abusive situations, it is best for children to have access to both of their parents. The process of child custody mediation side-steps a lot unnecessary arguing and helps parents create a working relationship through which the children can thrive.

Sources : South Bay Mediation, The Spruce

Finding A Mediator

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Elder abuse mediation could be based on child custody model, legal group says

Mediation an answer to Elder Abuse

The family law mediation model has an 80% success rate, National Legal Aid chairman says and it could help in cases of Elder Abuse.

Mediation services developed to deal with complex child custody disputes could be used to resolve cases of elder abuse if legal aid commissions are properly funded, the peak body for legal aid in Australia has said.

The mediation model was developed for use in family law cases and has an 80% success rate, the National Legal Aid chairman, Graham Hill, said.

Hill said the same model could apply to certain cases of elder abuse, particularly when parents are preventing an older person from seeing their grandchild, or in financial disputes where property has become shared.

The suggestion comes as part of a demand for more funding for civil law services to allow legal aid commissions to act in more cases of elder abuse.

“[Mediation] is so much better than court because court destroys relationships …whereas mediation tries to enhance relationships in a family setting,” Hill told Guardian Australia.

“We have put to the Attorney General’s Department that this service could be applied to cases of elder abuse, which can be quite sensitive with family involved.”

At the national elder abuse conference in Sydney on Tuesday the attorney general, Christian Porter, announced a national plan to tackle elder abuse, to be developed by the Council of Attorneys General.

The plan was a recommendation of a report by the Australian Law Reform Commission (ALRC) in June, and will include research to determine the scale of problem in Australia.

As of 2015, 15% of the Australian population was aged over 65. That’s expected to increase to 23% by 2055.

“So whatever the prevalence is, the absolute numbers will increase year after year after year,” Hill said.

Hill said legal aid commissions needed more funding to provide grants of aid and to conduct legal outreach services, which would allow lawyers to go to aged care homes and into the homes of people who are housebound by a carer, who may be the person perpetuating the abuse.

Last year, Australian legal aid commissions provided 1,500 grants of aid for legal representation, 4,000 duty lawyer sessions, and 17,000 instances of legal advice to people aged over 65.

“The family court has said that grandparents do have a right to have contact with grandchildren, but those rights are theoretical until legal aid has the funding to pay for a lawyer to go to court and get an order,” he said.

Porter said the national plan would include achieving national consistency on things such as powers of attorney. Victoria, Queensland, and New South Wales have no requirement for such powers to be registered, which means that financial providers are not able to check if a person who claims to have power of attorney for an older person actually does.

He said the government would also look at introducing a centralised complaint system for people such as bank workers to raise concerns of financial abuse.

“One of the problems that bankers face is that when they see this type of thing at the coalface – when they see suspicious behaviour, if you like – that there’s no centralised point at which they can make a complaint,” Porter said on 2GB radio on Tuesday. “Now, very often it’s appropriate to make a complaint to police, sometimes it might be a public trustee or a public advocacy office, but there’s no centralised way of doing that.”

The draft national plan is due at the end of the year.  In the meantime if you are experiencing elder abuse or know someone that is, why not contact us for a free initial consultation using the form below.

Source : The Guardian

Other Links to help with Elder Abuse

Victorian Government Elder Abuse Services.

Seniors Rights Victoria 

Elder Abuse Helpline

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Farm debt: Banking royal commission tipped to move on agribusiness mediation

Bloomberg

The banking royal commission is being urged put an end to the patchwork of state-based mediation schemes for agribusiness customers and establish a single national body for working through disputes with banks.

The move would deliver the time-poor inquiry headed by Commissioner Kenneth Hayne an easy win, with the current state-by-state system enjoying few supporters.

National Farmers Federation policy director Tony Mahar said the existing system, which only guaranteed farmers in Victoria, NSW and Queensland with access to a formal mediation service, was inadequate.

“It’s fragmented and unhelpful, what we need is a national approach for farmers and financial institutions.”

The Hayne royal commission is believed to be aware of the disjointed approach to mediation, drawing attention to the problem by dedicating two pages of its recent report on features of the Australian financial system to the issue, including the $68.6 billion in farm debt held by the big four banks.

The plights of farmers were not however specifically mentioned during the opening statements made by Commissioner Hayne and senior counsel assisting Rowena Orr, which signaled the royal commission would seek to explore misconduct in the home loans and consumer credit segments.

The idea of a national body has failed to get traction and was last seriously considered in 2014 when a drought and the ban on live exports conspired to put many farms under. Nationals leader Barnaby Joyce compelled the banks to attend a crisis meeting at the time and sketch out a workable solution.

Mr Maher said that a great deal of work had been done on the subject over the years, it had broad support among stakeholders and it was something the government should be able to deliver.

The establishment of a national farm debt mediation scheme was most recently recommended by the select committee on lending to primary production customers, which delivered its final report in December 2017.

It recommended a scheme based on the NSW model with a $10 million ceiling on loan amounts.

Australian Banker’s Association CEO Anna Bligh has also thrown her support behind a nationwide mediation scheme to resolve issues that crop up between farmers and their banks quickly and fairly.

“It shouldn’t matter whether you’re a farmer in Cootamundra, NSW or the Western Australian wheat belt you should be treated equally and have the same access to financial mediation” Ms Bligh said.

The newly established Australian Financial Complaints Authority (AFCA) which replaces both the Financial Ombudsman Service (FOS) and the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT) will have a ceiling for loans under dispute of $5 million.

This is a significant increase from the ceiling of $2 million FOS was previously subject to. Data from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) shows that a ceiling of $5 million would cover 99 per cent of loans in the rural sector.

Australian Small Business and Family Enterprise Ombudsman Kate Carnell has been critical of the banks for trying to cap the size of loans defined as small business loans and therefore eligible for mediation rather than more expensive legal proceedings.
Mr Mahar said if agriculture exports were to reach a target of $100 billion per year then processes needed to be established for when farms get into difficulty.

“We recognise that banking and farms are always going to be partners and nationally consistent approach will underpin this,” Mr Mahar said.

In the meantime,  while you wait for the Government to nationalize the Mediation system, if you need help now, contact us with the form below to arrange for a private and  confidential free consultation as to whether private mediation can help you with your Farm or Banking debts.

Source : Australian Financial Review

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The Lawyer who didn’t know CISG (International Commercial Law)

Introduction

This paper examines ‘Phil’ the hypothetical lawyer who didn’t study international commercial law, which is not necessary to complete a law degree.  Phil didn’t know the United Nations Convention on Contracts for the International Sale of Goods ‘CISG[1] applied to a contract of sale based on Victorian law.

The CISG[2] has been adopted worldwide by 84 States[3] becoming the governing law globally, covering international sales of goods since the 1st of January 1988 and adopted in Australia, in all states and territories, since April 1st 1989[4].

Autonomous Application.

The CISG is autonomously applicable to all Australian transactions involving the sale of goods internationally by virtue of Article 1 (1) as a result of Australia being a contracting State.  The Convention, which is now part of the municipal law of Australia, is not to be treated as foreign law which requires proof as a fact[5], the Provisions of the Convention have the force of law in Victoria[6] and prevail over any other law in Victoria to the extent of any inconsistency[7].

Despite three decades of operation few cases have considered CISG in Australia.  According to the Pace Law School, Institute of International Commercial Law, that maintain a CISG database of cases, their Country Case Schedule (last updated on the 25th of January 2016) contains links to some 3,152 cases where Courts in Member states have considered CISG, of those only 26 cases from Australia get a mention[8], similarly searches on Australian Legal Databases produce few results.

Australian application of the CISG has been criticized as still in the Australian legal outback[9], with criticism extending to suggest Australian lawyers have paid the CISG inadequate attention to their clients detriment[10].

The criticism has been savage, “the CISG has not been fully understood”[11] and “it is fair to say that the CISG is scarcely known in Australia.”[12] One has to wonder what chance would an Australian client have with an Australian lawyer who is not well versed in CISG?

The Lawyer Who Doesn’t know Part I – Does CISG apply?

If Phil relied on his knowledge of Australian Contract Law when drafting, choosing Victorian Law as the agreed law that governs the contract and thus invoking the Goods Act 1958 (Vic) ‘GAV’,     he may unwittingly have put his client into a position where the contract is subject to the CISG first and foremost, with Australian law only filling any gaps.

This is because the GAV provides that the CISG has force of law in Victoria, and prevails over any inconsistencies[13]. Even if a lawyer tries to avoid the CISG in the pleadings the Court may still apply the CISG due to the lawyer pleading incorrectly inapplicable domestic laws.

This was evident in Downs Investments Pty Ltd v Perwaja Steel SDN BHD [2001] QCA 433[14] where the contract stated any dispute to “be settled by the laws prevailing in Brisbane”[15] yet it was held that the CISG applied, stating

“As the respondent was in Australia and the appellant in Malaysia it was held that The United Nations Convention on Contracts for the International Sale of Goods, made relevant by the Sale of Goods (Vienna Convention) Act l986, applied to the transaction. The learned trial judge held on the evidence that the appellant had fundamentally breached the contract and assessed damages pursuant to Articles 74 and 75 of the Convention.”[16]

Then in Perry Eng P/L (Rec And Man Appt’d) V Bernold AG No. SCGRG-99-1063 [2001] SASC 15 (1 February 2001) ‘Perry[17] where Perry already entered default judgement and the hearing turned to damages, the contract provided:

“The Contract shall be deemed to have been made in the State of South Australia and all matters relating directly or indirectly thereto or arising directly or indirectly there from shall be governed in all respect by the Laws of the State of South Australia and the parties submit to the exclusive jurisdiction of the State of South Australia Courts.”[18]

The Court however took a different view, stating “However, there is a further complication that the Sale of Goods (Vienna Convention) Act 1986 (SA) applies to the dealings between the parties but the relevant provisions have not been pleaded in the plaintiff’s statement of claim. The statement of claim has been drawn up on the assumption that the South Australian Sale of Goods Act applies. This seems to me to be fatal to the plaintiff’s ability to proceed to judgment based on damages for breach of contract.”[19]

In response Perry contended “that it was not necessary to plead the specific provisions of the Sale of Goods (Vienna Convention) Act”[20].  Reliance was placed on Roder Zelt v Rosedown Park[21] but, Burley J did not accept this and distinguished the cases stating “in my view that case is not authority for the proposition contended for by the plaintiff. The trial Judge, von Doussa J, did not complete the hearing of the matter and did not then indicate that it was unnecessary to plead the statute.”[22]

Therefore it is clear that Roder Zelt can be easily distinguished, as held by Brumby J above.[23]  Ultimately it was held “That being the case, the Court cannot proceed to an assessment of damages based on the provisions of an Act of Parliament which the plaintiff acknowledges do not apply to the claim pursued by the plaintiff.[24]  Phil just lost his client damages.

The Lawyer who doesn’t know Part II – Domestic Pleadings.

In the case of Ginza Pty Ltd v Vista Corp Pty Ltd[25]Ginza[26] ordered contact lens solution from Vista subject to compliance with the Australian Therapeutic Goods Administration (‘TGA’) regulatory requirements including that the goods were sterile.

The TGA discovered bacterial contamination in its random testing and ordered the goods recalled.

A dispute between the Seller and Buyer ensued with Vista suing for full contract price and Ginza countered that no payment should be due with claims for breach due to non-conformity, negligence[27] and claimed damages for lost profits and lost goodwill as well as costs of recall[28].

Merchantable Quality.

Ginza argued express terms of compliance with TGA regulatory requirements and sterility were a condition of the contract and in the alternative implied terms of “merchantable quality and fitness for purpose” applied pursuant to the Sale of Goods Act 1895 (WA) or the CISG[29].

The problem with such an argument is that “merchantable quality” is not a CISG term[30], it comes from Common Law and Domestic Legislation, which the CISG is above autonomously and any interpretation of the Contract, as it is covered by CISG, ought to be read in light of CISG Article 35(2)(a) and global case law.

In this case the appropriate standard is “fitness for purpose” which requires the goods to be of specific standards[31] and non-conformity under Article 35(1) which requires compliance with “quality, quantity and description”.

If it was not so clear cut and the distinction was drawn between merchantable quality in reliance upon domestic law as opposed to fitness for specific purpose which is a narrower standard under the CISG, Phil’s client could face a controversial matter.

Phil might erroneously find in Ginza a reason to cite a non-CISG case in support of an argument of contamination[32] however, as Barker J considered, any pleadings ought to be made in light of the CISG on cases of non-conformity[33] and with CISG case law available which specifically deals with the issue of contamination, non-conformity and whether there was an obligation to take the goods,[34] Phil would be in trouble if he doesn’t know this.

Reasonable Time

Another issue Phil needs to consider, is notification under the CISG, even if the item does not conform with the specifications in the contract, the CISG requires that the Seller be notified within reasonable time or the right to claim is forfeited[35].

The CISG has been adopted into domestic legislation and because domestic law forms part of the agreement and applies CISG to a transaction even if the opposing party is not a CISG country so long as the choice of law is Australia, CISG applies, as held in  Playcorp Pty Ltd v Taiyo Kogyo Ltd [2003] VSC 108 ‘Playcorp’[36].

It has been held that CISG applies unless expressly excluded as noted by Bridge, “[t]here seems to be hardening in favour of the view that choice of law clauses in favor of the law of a Contracting State do not exclude the CISG”[37].

The trend in Australia in Commercial contracts for international sale of goods has been to opt-out of the CISG which in many cases may not be in the best interests of the client, who would be better served had CISG been the operative law[38].

Services can be captured by the CISG

The CISG can apply to services, not just goods, a client represented by Phil may be surprised to find that they may be liable for breach of a service contract pursuant to the CISG in certain circumstances[39], this is provided for in Article 3.
If an Australian Client supplied substantial materials to the Seller to transform and sell back to the Buyer, this might attract the CISG as it may be held the buyer is liable for the transformative process to the degree the quality of the materials supplied affects the quality of the product.  Where the value of the goods exceeds a 50% maximum threshold for transformation services[40], under CISG the seller may avoid responsibility.

When the service component is completed in Australia, Phil didn’t know that Arbitration clauses can be avoided in service contracts in certain circumstances, pursuant to S.106 of the Industrial Relations Act 1996 (NSW) on the grounds of being an unfair contract in terms of the effect the contract has on the Industry norms[41].

Australian Consumer Law may not apply

Goods bought for personal use are excluded under the CISG, as are stocks, shares, negotiable instruments and money, also ships, aircraft and the supply of electricity are excluded, as are auctioned goods and goods sold on execution of authority of law under Article 2.2.3.

Phil faces another problem with Article 2.2.4, he may not think the Convention applies and find himself captured by it regardless, because it was not explicitly excluded.[42] His arguments on common law contract validity and the effect which the contract may have on property if the goods sold, are excluded by the CISG[43].

If Phil relies upon such Australian cases when ultimately the CISG is the prevailing law, he may be applying precedents that globally have been criticized and have valid International precedents[44] from CISG cases and other external sources[45] used against him.  Much of Phil’s argument could be struck out[46] of court.

Phil didn’t know that the Interpretation of Legislation Act (1984) s.35 is in conflict with the CISG and to the extent of the conflict the CISG prevails, for start, the CISG has it’s own interpretive provisions in Article 7 that require it to be interpreted in light of its international character and the need to promote uniformity and good faith in international trade.

Article 7(1) CISG “excludes recourse to methodological theories of interpretation of domestic texts”[47] meaning use of domestic law in resolving interpretation of text covered by the CISG is explicitly excluded.  You can’t use domestic law to interpret CISG.

Phil is thrust into the CISG world where autonomous[48] interpretation[49] as seen in Playcorp where even if the other contracting party is from a Country that is not a member state of the CISG it still applies as Part of Australian Law which governs the Contract.  In doing so CISG is lifted autonomously above the domestic law and prevails in the event of inconsistencies.  It is to be interpreted under three CISG directives.  Having regard to the CISG’s International Character, promoting uniformity in application, and promoting good faith in International Trade[50].

Good Faith

Australian contract law has struggled to come to terms with “good faith” as a contract term[51], yet the CISG requires it in International Trade.

As Australia’s contract law values freedom of contract and economic independence, the High Court recently cast doubt upon whether good faith is an automatic term in contract law.[52]

However, in Australia, such an implied term appears to conflict with fundamental notions of caveat emptor that are inherent (statute and equitable intervention apart) in common law conceptions of economic freedom. It also appears to be inconsistent with the law as it has developed in this country in respect of the introduction of implied terms into written contracts which the parties have omitted to include.”[53]

“Good Faith” is not implied into a contract in Australia as it is with CISG, Phil might argue that good faith is not part of the contract as it is too vague and uncertain[54] as is the Australian position and that his client’s legitimate interests were being protected, which is not in breach of an express contractual term. Which in Australian contract law, he may be right, but here with CISG being the dominant law, that argument would fail.

Phil may find acting in good faith, in CISG terms, involves both parties acting in good faith, to each other, to the point of minimizing damages of the other party as much as favoring the party acting in its own “legitimate interests”,[55] to be seen as good faith.  To do an act that knowingly a party ought to realise is foreseeable to cause harm would be considered a breach of that good faith.

It would be easy to fall into the trap of relying on the Queensland decision of Downs Investments Pty Ltd (in liq) v Perwaja Steel SDN BHD [2002] 2 Qd R 462 ‘Downs’, which itself misinterpreted the application of the CISG in common law terms citing erroneously non-CISG cases of Robinson v Harman (1848) 1 Ex 850 and Hadley v Baxendale (1854) 9 Ex 341 ‘Hadley’ instead of focusing on Article 74 and International cases.  It’s a published decision that forms part of our Common Law after all.

However, CISG can be distinguished from our Common law in that Article 74 focuses on damages, and limits to it, to actual damages and lost profits for breach, and then limits it further to foreseeable damages which ought to have been known, the CISG views things from the perspective of the breaching party unlike our Common law and the cases cited in Downs which examines the ‘contemplation’ of both parties[56] this would not assist in a CISG argument.

To make things worse now for Phil, CISG Article 73 defines foreseeability as a ‘possibility’ whereas he relies on Common law in Hadley requiring ‘probability’. A significantly different standard of foreseeability, with ‘probability’ requiring the additional level of an objective reasonable person test of whether or not on the balance of probabilities it was more likely to happen, than not, that it is ‘probable’ that the event would occur.

Phil is in difficulty if his client is the one doing the breaching, the plaintiff just needs to prove that is was foreseeable, that it was possible, while Phil may argue to the wrong standard and cost his client avoidable damages.  Had Phil known the Court was obligated to determine the matter on CISG Jurisdiction, he may have submitted additional evidence to counter the foreseeability to a possibility standard.

Phil sees a case based on Victorian Law and relies upon the Goods Act (Vic) 1958 which requires that the goods be of a merchantable quality, where as now he finds himself in CISG Jurisdiction which requires fitness for intended purpose.

The higher standard of specific purpose requires that the seller disclosed to the buyer the specific purpose that the goods would be used for and required that the Seller confirm that the goods could meet that specific purpose as opposed to a merchantability standard, which just requires that the goods are fit for the general purpose they are intended for.

So while Phil argues that the goods the seller supplied were of merchantable quality, the buyer doesn’t care.  If the buyer asked can I use your microwave oven to melt glass safely? If the seller said yes, then it matters not that the microwave works perfectly for its general purpose it was intended for, if it can’t melt glass, it is not fit for the purpose.

In Conclusion;

Phil has a lot to learn.  A Corporate client with Phil as a lawyer would certainly be disadvantaged, a lawyer who has not studied CISG and International Commercial Law would be ill-equipped to advise a client on even drafting a contract, let alone litigating a dispute based on one.   Any commercial transactions in Australia involving the sale of goods internationally would need an experienced International Commercial Lawyer who is well versed in CISG.   As Australian Courts play catch up, they may entertain Phil and his arguments for a while, but if the dispute turned on application of the letter of the law, the Australian Courts will be obligated to follow the CISG and its application as a higher law when it comes to international contracts for the sale of goods.

 

Footnotes:
[1] United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980 ‘CISG’.

[2] Ibid.

[3] CISG: Table of Contracting States, accessed at http://cisg.law.pace.edu/cisg/countries/cntries.html on 02/01/2018 at 1.27pm.

[4] Sale of Goods (Vienna Convention) Act 1987 (Vic) (repealed) now found in the Goods Act (Vic) ‘GAV’ S.85, Sale of Goods (Vienna Convention) Act has also been incorporated into all other States and Territories and the Trade Practices Act 1974(Cth) S.66a, now found in Competition and Consumer Act (Cth) 2010 – Schedule 2 The Australian Consumer Law, s.68.

[5] Roder Zelt and Hallenkonstruktionen GMBH v Rosedown Park Pty Ltd. (1995) ACSR 153, op cit.

[6] GAV S.86.

[7] Ibid S.87.

[8] CISG Database Country Case Schedule accessed at http://cisg.pace.edu/cisg/text/casecit.html on 02/01/2018 at 1.35pm.

[9] Spagnolo, L., “The Last Outpost: Automatic CISG Opt Outs, Misapplications and the Costs of Ignoring the  Vienna  Sales  Convention  for  Australian  Lawyers” (2009)  10 Melbourne  Journal  of  International Law 141, at p.142.

[10] Ibid, David Fairlie, ‘A Commentary on Issues Arising under Articles 1 to 6 of the CISG’ (Paper presented at the United Nations Commission on International Trade Law (‘UNCITRAL’) and Singapore International Abitration Centre Joint Conference, ‘Celebrating Success: 25 Years United Nations Convention on Contracts for the International Sale of Goods’, Singapore, 22–3 September 2005).

[11] Benjamin Hayward, “The CISG in Australia–The Jigsaw Puzzle Missing a Piece” ‘Benjamin’, citing Zeller,

B., “Traversing International Waters” (2004) 78(9) Law Institute Journal 52, at p352.

[12] Ibid citing Finn, Justice P., “National Contract Law”, supra fn 7, at p.9.

[13] GAV S.85-87.

[14] Downs Investments Pty Ltd v Perwaja Steel SDN BHD [2001] QCA 433.

[15] Ibid at 21.

[16] Ibid at 2.

[17] Perry Eng P/L (Rec And Man Appt’d) V Bernold AG No. SCGRG-99-1063 [2001] SASC 15 (1 February 2001) ‘Perry’.

[18] Ibid at 15.

[19] Perry at 16.

[20] Ibid at 17.

[21] Roder Zelt-und Hallenkonstruktionen gmbh v Rosedown Park Pty Ltd & Anor [1995] FCA 275; 13 ACLC 776.

[22] Perry at 17.

[23] Ibid.

[24] Perry at 18.

[25] Ginza Pty Ltd v Vista Corp Pty Ltd  [2003] WASC 11 (Unreported, Barker J, 11 January 2003) ‘Ginza’.

[26] Ibid.

[27] Ginza at [12]–[13], [16]–[18]. A related action between Ginza and a corporation related to Vista, Kontack Pty Ltd was consolidated with this action. Counterclaimed commission fees were admitted and are not relevant to the current discussion: see ibid [20].

[28] Ibid at [21], [214]. On damages for loss of goodwill under art 74.

[29] Ibid at [13], [16].

[30] Ibid at [190].

[31] Ibid at [124], [153].

[32] Ginza at [131], [152].

[33] ICC Award No 6653 of 1993 (1993) (22 per cent of steel bars outside specified weight tolerances); Engines for Hydraulic Presses and Welding Machines Case (Landgericht Düsseldorf, Germany, 23 June 1994) and ICC Award No 8740 of 1996 (coal contained 20 per cent rather than specified 32 per cent dry matter).

[34] International Flavors & International Flavors & Fragrances Inc.  IFF & Fragrances (Netherland) B.V. v Ramon Sabater SA heard in the Spanish Court of Appeal Audiencias Provinciales May 24, 2012.

[35] Spagnolo, Lisa — “The Last Outpost: Automatic CISG Opt Outs, Misapplications and the Costs of Ignoring the Vienna Sales Convention For Australian Lawyers” [2009] MelbJlIntLaw 10; (2009) 10(1) Melbourne Journal of International Law 141, A maximum time of two years for notice is imposed by art 39(2) of the CISG. However, normally a much shorter period is imposed by the requirement that notice be given within a ‘reasonable’ time: see  Model Locomotives Case (Kantonsgericht Schaffhausen, Switzerland, 27 January 2004) §3c (reasonable time in art 39 depends on the type of goods); Person of Greece v Ed Fruit and Vegetables BV (Rechtbank Breda, Netherlands, 16 January 2009) [3.12] (watermelons subject to decay, inadequate notification if not within days).

[36] Playcorp Pty Ltd v Taiyo Kogyo Ltd [2003] VSC 108 ‘Playcorp’.

[37] Benjamin at 201, Footnote [63]-[65].

[38] Lisa Spagnolo, The last Outpost: Automatic CISG Opt outs, misapplications and the costs of ignoring the Vienna Sales Convention for Australian Lawyers, Melbourne Journal of International Law, Vol.10, ‘Spagnolo’.

[39] Ibid, Footnote [82].

[40] Ibid, Footnote [83]-[90].

[41] Metrocall Inc v Electronic Tracking Systems P/L (2000) 52 NSWLR 1.

[42] Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4),  [2009] FCA 522; (2009) 255 ALR 632,  “CISG was excluded by the words ‘Australian law applicable under exclusion of UNCITRAL law’ at [28].

[43] CISG Article 2.2.4(b).

[44] Benjamin Hayward, The CISG’s place in Australian Law – An incomplete jigsaw puzzle, The jigsaw puzzle missing a piece (2010) 14 VJ 193 – 222 at 211, ‘Benjamin’ at 222.

[45] Ibid.

[46] Spagnolo Pg.55, 57.

[47] Spagnolo at 211., Schlechtriem, P.,  “Article  7” in  Schlechtriem,  P.and  Schwenzer,  I.(eds),Commentary  on  the  UN Convention on the International Sale of Goods (CISG), 2ndEnglish ed, 2005, Oxford University Press, New York, p.93, at p.96, para.12.

[48] Benjamin at 211.

[49] Playcorp Pty Ltd v Taiyo Kogyo Ltd [2003] VSC 108 (Unreported, Hansen J, 24 April 2003) at 235.

[50] Ibid.

[51] Marcus S. Jacobs QC, Professor Katrin Cutbush-Sabine, Philip Bambagiotti The CISG in Australia-to-date: An illusive quest for global harmonisation?” at 9.2, accessed at https://www.cisg.law.pace.edu/cisg/biblio/jacobs2.html#35 on 01/09/2018 at 8.58pm, ‘Marcus’.

[52] Ibid at 9.4.2 citing Royal Botanic Gardens & Domain Trust, v South Sydney City Council,[41] Kirby J.

[53] Ibid.

[54] Aiton v Transfield [1999] NSWSC 996 (1 October 1999).

[55] South Sydney District Rugby League Football Club Ltd v News Ltd & Ors [2000] FCA 1541 (3 November 2000) at [393, 394].

[56] Benhamin citing Spagnolo, L., “The Last Outpost”, supra note 6, at p.178.

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Mediation service that separates warring couples experiences record demand

A mediation service that resolves family law disputes without going to court or requiring separated partners to see each other is experiencing record demand in South Australia.

The service includes a so-called “shuttle mediation” program, which uses a purpose-built facility in Adelaide that keeps the warring parties physically separated while their lawyers convey their concerns to an independent arbiter in a room that sits between them.

Here at ADROnline we have the ability to utilize a similar shuttle mediation program during the induction process to narrow down the disputed issues and then we use technology to deliver the Mediation service online.

Figures in the Legal Services Commission of South Australia’s annual report revealed demand for the service had increased by 22 per cent in the past year, and its success rate had climbed to 79 per cent.

Commission director Gabrielle Canny said the ability to keep the clients physically separated throughout the mediation process was a big advantage in some cases.

“We think the combination of being able to do a traditional mediation in family dispute resolution and then this shuttle mediation has led to the success rate that we’re seeing,” Ms Canny said.
Staying for the kids

For couples with children, ending an unhappy relationship is not always black and white.

“We find that the parties that have more complex issues, for example there might be a power imbalance or there might be sensitive issues, very much people who have been exposed to the trauma of family breakdown and are not coping well, they might prefer to do a mediation through … shuttle mediation.”

Ms Canny said the ability to prevent face-to-face contact between the parties helped to reduce the emotional and distressing impact of the process.

“The individuals, the mother and the father, are not having to face the other person and perhaps emotionally jeopardise the result, but they’re able to have it logically put by the lawyer and the chairperson would work through to try to get the best result for the children.”
Families can avoid length, costly court proceedings

She said the mediation process helped resolve legal disputes such as child custody arrangements faster than the often lengthy and emotionally taxing traditional court proceedings.

“It is really a service that should continue to grow because it helps separating parents avoid court proceedings, court proceedings and family law are expensive, lengthy and deeply distressing so it’s good for families and good for our community.

“The shuttle-style approach can help many couples reach a solution relatively quickly, rather than having to wait months or years for the matter to be dealt with in court.”

Ms Canny said the service would not be suitable for everyone and each couple’s circumstances were carefully assessed before any dispute resolution process would take place.

If you would like to find out more about our online mediation services click here to contact us.

Alternatively if you would like to talk to a Qualified mediator now….

Source : ABC News