9 ReSolution | Nov 2017
Settlement remorse: When will a court set aside mediated consent orders?
By Karen Ingram and Cecile Bester
Matsen v Superannuation Complaints Tribunal [2017] FCA 765
Factual background
In the initial proceedings, Mr Matsen appealed a decision of the Superannuation Complaints Tribunal relating to the payment of a death benefit from the superannuation fund of his deceased son. The Tribunal had ordered that the death benefit be distributed amongst Mr Matsen and two other people. Mr Matsen applied for the whole of the benefit to be paid out to him.
Mr Matsen and one of the other beneficiaries attended a court-ordered mediation in March 2016, with a Registrar of the Federal Court acting as mediator. During the course of the mediation, there was no direct contact between the mediating parties, as the mediator carried offers between them. Mr Matsen did not have legal representation during the mediation. The matter settled at the mediation, with the parties agreeing to distribute the benefit between them. Short minutes of order were signed, reflecting the agreement they had reached. The remaining parties (the third former beneficiary and the trustee of the superannuation fund) subsequently signed the short minutes of order.
In June 2016, the matter came back before the Court. Mr Matsen claimed that he no longer agreed to the short minutes of order (which had, by that time, been signed by all parties). As a result, the Court stood the matter over without making any orders.
In July 2016, the matter was again before the Court. On that date, Mr Matsen told the Court that he consented to the short minutes of order, even though he had been unwell and that influenced his decision to consent. However, there was no medical evidence to corroborate that he had been unwell. Mr Matsen also told the Court that he had "obtained some legal counsel" since the matter was last before the Court. On those bases, the Court made the signed orders by consent. The consent order was entered into the Court's records.
Mr Matsen's application to set aside the consent orders
In October 2016, Mr Matsen applied to the Court to set aside the consent orders made in July 2016. Mr Matsen claimed that the mediation was unfair, because he was unwell on the day and was not "up to the task" of negotiation. He was "locked in a most unsuitable room" and was in pain. He was unrepresented at the mediation, and considered that this had also left him at a disadvantage. He felt that the mediator had pressured him to continue the process. Further, he felt it was not appropriate that there was no "face to face" contact between him and the other mediating party.
Ultimately, Mr Matsen claimed that he had only signed the short minutes of order to enable him to leave the mediation and the Federal Court building.
- Australia -
Jennifer McVeigh, Consultant
Jennifer's expertise is in strategic thinking – applied to resolution of construction disputes, infrastructure and mining sector procurement contracts and project delivery.
A qualified mediator and arbitrator, Jennifer has 30 years’ experience in the construction industry including four years as the full time member of the Queensland Building Tribunal.
Across her disputes, contract, tender and project practice, she has a well-earned reputation for her holistic strategic thinking and risk identification expertise, developing tailored legal and commercial solutions to create value and reduce risk.
Jennifer’s expertise includes all forms of dispute resolution, security of payment issues and drafting, negotiating and advising on construction, mining and engineering contracts.
The recent Federal Court case of Matsen v Superannuation Complaints Tribunal [2017] FCA 765 concerned an application by Mr Matsen to set aside consent orders that had been signed by all parties following settlement being reached during a court- ordered mediation. The Court's decision reinforces the requirements that must be met if a consenting party wishes to set aside a consent order.