Al Azhari, Ihab v 27 Scott Street P/L & Ors [2017] VSC 600
Mediation has become a popular method to resolve disputes, and with good reason. Depending on the circumstances, mediation can offer numerous advantages over traditional litigation. Many of these were explored in my previous article published in the Australian Banking & Finance Law Bulletin, which focused on ‘10 reasons why financiers should consider ADR’. Although some advantages canvassed in that article are specific to financiers, others are widely applicable – these include the flexibility, confidentiality and cost-effectiveness of mediation, as well as the increased perception of ‘fairness’ when compared with a court’s ruling in which the parties have no ability to be involved in decision-making. Despite its advantages, mediation – much like litigation – can be a tiring, stressful and even emotional process for the parties involved. As tempting as it might be to race through perceived ‘formalities’ at the end of a long day, it is critical not to rush through the process of documenting any settlement terms that have been agreed. A 2017 case highlights the level of precision that clients and their advisers need to apply once a settlement has been reached, and before everyone leaves the mediation rooms. Background Ihab Al Azhari and 27 Scott Street Pty Ltd attended a mediation to attempt to resolve a dispute over the financing and purchase of various properties. The parties settled at the mediation on written terms – or at least some of them thought they did. The dispute returned to the Victorian Supreme Court[1] after the parties could not agree whether the terms that they had all had signed were actually binding upon all parties. The handwritten settlement terms reached at the mediation included: 1. These terms of settlement are in summary form of terms to be more fully engrossed. 2. The parties agree to settle this proceeding on the following terms: a. the first defendant will transfer unencumbered the following properties in the development known as The Lonsdale situated at 27 Scott Street, Dandenong (‘the land’) i. Retail 1(a) at value of $440,500 ii. Retail 1(b) at value of $597,500