The recent Federal Court case of Worldwide Timber Traders
Pty Ltd v Brouwer (No 2)  FCA 447 examined the ability
of parties to enforce a settlement agreement negotiated during
The trial of the dispute between Worldwide Timber Traders Pty
Ltd (Worldwide) and Jan Willem Brouwer
(Brouwer) was set down for hearing on 9 April
2008. On the morning of the first day of trial, the parties agreed
to an adjournment for the purposes of mediation.
On 19 August 2008, Worldwide applied for judgment against
Brouwer on the basis of an agreement reached by the parties during
At the hearing of the judgment application, Brouwer's
solicitor made an admission to the Court that Brouwer had agreed to
pay Worldwide $17,500 to settle the proceedings. The parties both
agreed that a term of the agreement reached at the mediation was
that a deed of settlement be executed between the parties.
Worldwide also submitted that it was a term of the agreement
that Brouwer would consent to judgment being entered in favour of
Worldwide. Brouwer denied any such term had been agreed.
The matter was adjourned by the Federal Court on 19 August 2008
for the parties to finalise the terms of a settlement agreement so
that final orders could be made. However, Worldwide changed its
solicitors and on 10 February 2009 again requested that the Federal
Court enter judgment against Brouwer for the $17,500 pursuant to
Order 18 rule 4 of the Federal Court Rules, which states
that the Court may pronounce judgment or make any order on an
admission by a party where the applicant is entitled to that
judgment or order on the admission. Worldwide's request was
again based on the admission of Brouwer's solicitor.
Brouwer advanced a number of arguments opposing the application
that judgment should be entered. However, for the purposes of this
article, the following arguments are relevant:
Brouwer's admission in relation to the agreement could not
be taken to mean that there was a concluded and enforceable
the agreement was subject to execution of a formal deed, which
had not occurred.
The application was ultimately dismissed because the agreement
reached at mediation had not been concluded, in that it had not
been reduced to writing and the parties had not reached consensus
on all of the terms. Since the agreement had not been concluded, it
could not be enforced.
This case reinforces the need to keep all parties at the
mediation until settlement terms have been reduced to writing and
signed by all parties. On a practical note, it is prudent to
prepare a draft deed of settlement prior to mediation in
anticipation of any agreement reached and to arrange for electronic
access to the document during mediation so that it can be finalised
for signing by all parties.
Although it may be possible for a party to rely on an agreement
reached during mediation without an executed deed of settlement, a
party will be in a much better position to enforce the agreement if
the agreement has been reduced to writing and signed by all
parties, which will avoid any uncertainty in relation to the terms
of the agreement and ideally prevent the other party or parties
from arguing that the agreement has not been concluded.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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