Specialized Bicycle Components Incorporated v Sheppard Industries Limited [2011] NZSC 123 12 October 2011 (NZ Supreme Court)

application for leave to appeal – granted

The approved ground for the appeal was whether the respondents were precluded by the terms of the mediation agreement and/or the confidentiality agreement from adducing the disputed evidence.

***the matter was settled prior to the Supreme Court hearing.

Sheppard Industries Ltd v Specialized Bicycle Components Inc [2011] NZCA 346 26 July 2011 (NZ Court of Appeal)

appeal from High Court decision preventing appellants from adducing certain communications in evidence – terms of agreement to mediate – without prejudice privilege – s57 Evidence Act 2006

Court held that it is not possible to contract out of s57 and, even if it were possible, the agreement would not necessarily be effective given the parties’ ability to vary or waive its terms. Appeal allowed.

Specialized Bicycle Components Inc v Sheppard Industries Ltd CIV-2009-404-8020 19 November 2010 (NZ High Court)

application for stay – application for strike-out – terms of agreement to mediate – without prejudice privilege – s57 Evidence Act 2006

Issue to be determined was whether the defendants might adduce evidence of communications made in the course of mediation. The Court held that the defendants were restrained from adducing certain evidence on the basis that they had contractually agreed those communication would be inadmissible in the terms of agreement to mediate.

***overturned on appeal [2011] NZCA 346

McCosh v Williams CA275/02 12 August 2003 (NZ Court of Appeal)

mediator liability – interpretation of settlement – med-arb – negligence – jurisdiction – Fair Trading Act – exclusion of liability clause

Court held that mediator did exceed his jurisdiction as he had engaged in the task of attempting to “correct” the agreement rather than interpret it. However, it was not found that he acted negligently nor was there a breach of the Fair Trading Act. The exclusion clause relied on did not extend to the process of adjudication concerning the settlement agreement. Appeal dismissed.

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