Mediation in the Land and Environment Court

When does the Court order mediations?

Recently, particularly in the residential (s 34AA) stream of Class 1 appeals, we have seen the Land and Environment (LEC) Court order the parties to participate in a mediation (prior to and in addition to, any conciliation conference in the s 34AA stream), which it has the power to do under s 26 of the Civil Procedure Act 2005 (NSW) (CP Act). Pursuant to s 26(1), the Court may order such a mediation ’either with or without the consent of the parties’ if it considers the circumstances appropriate. So, even when councils object to the making of such an order, the Court may (and in our experience now does) order the parties to mediate. As such, we anticipate that some applicants will begin seeking orders for mediation in lieu of orders that applicants often seek, for an informal meeting prior to any conciliation (in our view the Court does not have the power to make such an order anyway).  

Following a recent directions hearing in which our team was involved, the Court published on the LEC website, a brief summary of the mediation process in the LEC. We consider this a strong indication that the Court intends to begin making orders for mediation on an increasingly frequent basis. The Court’s publication can be found here - Mediation | Land and Environment Court of New South Wales.

How do mediations operate?

If the Court orders that the parties are to mediate, it will generally appoint a Commissioner to act as the mediator (at no additional cost), however a mediator agreed between the parties may also be appointed (who the parties will be responsible for paying for). A mediation is quite different from a conciliation under s 34 of the Land and Environment Court Act 1979. Importantly, a mediation does not replace any (s 34 or s 34AA) conciliation conference, which will still occur at a later date. Councils should be mindful that the Court can and does make such orders even though a s 34AA timetable is already compact and involved.

Unlike in a conciliation conference where the conciliator takes on a facilitative and advisory role, a mediator must remain impartial and cannot adopt an advisory or determinative approach towards any of the content of the dispute.

Pursuant to s 27 of the CP Act, the parties must participate in any mediation in good faith. This means that parties to a mediation should attend with all of their (relevant) experts and with an attitude of reaching a compromise on design elements of the proposal.  We also consider that it is crucial that, prior to the commencement of any mediation, the parties prepare and exchange (and provide to the Court), their respective position papers which summarise their desired outcomes from the mediation. In that respect we would recommend that councils seek a direction from the Court to that effect.

Unfortunately, in the absence of a practice note about mediation, it is unclear how parties are expected to approach and act in mediations.

Outcomes of mediation

The s 34 and s 34AA processes have been deliberately created by Parliament to suit merits reviews of planning decisions. The LEC Act requires the Commissioner to dispose of proceedings and set out in writing the terms of their decision under s 34(3) where the parties reach an agreement through the conciliation process. In doing so, the Commissioner need only be satisfied that the decision is one that the Court could have made in the proper exercise of its functions and is assisted by a jurisdictional statement provided by the parties.

The same cannot be said of mediations. While the Court is empowered to ’make orders to give effect to any agreement or arrangement arising out of a mediation session’ under s 29(1) of the CP Act, it is unclear whether the Commissioner would need to be satisfied merely that the decision is one that the Court could have made, or whether the Commissioner must also be satisfied that the decision is the correct one (by its own review of the merits).

What happens if the parties do not reach agreement?

If the parties do not come to an agreement at the mediation, the Commissioner will terminate the mediation, and the proceedings will be relisted for directions to prepare for the s 34AA and hearing. Generally, the s 34AA and hearing should be listed before a different Commissioner, as the confidential nature of discussions at the mediation preclude the same Commissioner from presiding over later listings.

Councils should also note that the Court does not have the power to adjourn a mediation, in the same way that a conciliation conference may be adjourned.

Final comments

In our view, whilst the Court does have the power to order parties to mediate, a mediation should not strictly be necessary in the context of either the s 34 or s 34AA regime, which encourages parties to discuss and try to resolve the issues in dispute before any hearing.  If councils prepare detailed position papers, in our experience, that will provide the applicant and the Court with a framework within which such mediation discussions can occur (which also has the corollary effect of potentially saving time and cost).