Alternative Dispute resolution in NSW

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Alternative dispute resolution in NSW. write Role Play Scenario (Mediation). In August 2021, David and Sarah were having lunch and they started to talk about David’s ‘flipping’ business. He explained to Sarah that the current property market was booming, and he had been able to make almost $900,000 profit in the last financial year from flipping houses. He explained to Sarah that it was a reasonably easy business idea where he purchases rundown properties, at a cheaper market price and resells them within 3 months of the date of purchase. During this 3-month period, he renovates the property to an acceptable standard and has always been able to make a healthy profit.

David told Sarah that he had good connections in the construction industry, and he had been able to flip 5 properties in the last 2 years, and no project had ever run outside the scheduled time frame of 3 months. He also told Sarah that the market was very strong, interest rates were unlikely to be raised any time soon and it was the perfect time to get into the “flipping game”. He also offered to help Sarah by referring her to reliable contractors that he used.. He told Sarah that “he guaranteed that she would make a profit”.

Sarah had been able to save almost $100,000 and she had been thinking about her next project to make some more money on the side. On 2 January 2022, Sarah decided to purchase a property in Kellyville, Sydney, and ‘flip’ it. She borrowed $600,000 from the bank and purchased the property for $700,000 and David advised her that renovating the property it would cost a further $100,000.

The property was a double-storey, 4-bedroom house on about 450 meter square block. Sarah knew that if she could complete the ‘flip’ within 3 months the property could be sold for $1.1 million. Sarah contacted David who sent her a list of a few contractors that could help her renovate the property. After making a few phone calls, she finally contacted Chris, from Your House Renovations Pty Ltd. David had spoken very highly of Chris in the past.

Chris agreed to inspect the property to provide a quote. Chris attended the property in Kellyville with Sarah on 29 January 2022. He walked through the house with Sarah and agreed to complete the entire renovation for $80,000. He agreed to do the following: 1. Install a new kitchen including the fittings and new appliances; 2. Remove the old tiles and install new tiles throughout the entire property; 3. Renovate the downstairs bathroom by installing new tiling, vanity, showerheads and waterproofing the bathroom; 4. Remove the asbestos in the backyard shed and install a new shed; 5. Install new Gyprock throughout the property. However, Chris said that he did not have any painters on staff and that Sarah would have to find her own painter. Chris said he could have the entire work completed by 30 March 2022.

Sarah was thrilled as she thought it would take longer. Sarah agreed on the contract price of $80,000 and Chris asked that she pay a $20,000 deposit. Sarah signed the contract and paid the deposit on 3 February 2022. Sarah then looked at David’s contractor list and called Steven from Dodge Paintings Pty Ltd. Steven attended the Kellyville property on 5 February 2022 and inspected the property with Sarah.

Sarah explained to Steven the work that Chris had agreed to complete and the expected finish date. She also told him that she needed someone to paint the entire house after Chris was finished. Steven agreed to complete the painting and quoted $15,000 for the entire job. Sarah was excited as she was going to be under budget by $5,000 and she knew that she could make a few hundred thousand dollars in profit when she sold the property. She paid Steven a $5,000 deposit on 10 February 2022 to secure his services for March 2022.

Steven had promised Sarah that he would have the painting completed within 2 weeks of Chris finishing his work. By April 2022 Chris had failed to complete any of the work that he had agreed to do and now he was behind schedule. Sarah had been trying to push him to finish the job, but it appeared that he was always making excuses. Steven also contacted Sarah a few times and said that if he could not start work on her property by the end of April he may not be able to commit to her job anymore.

He will also not be able to pay her back the $5,000 as he had already refused several other jobs for that period. Sarah has now become very nervous about everything. Her bank’s interest rates have gone up a few times and now Sarah is unsure that she can sell the property at the price she thought. It even looks like she may make a loss. Sarah is now thinking about taking legal action against Chris for his failure to complete the work on time. She is also mad at David and wants to take action against him as it was his idea to get into this business and he was the one that recommended Chris to her.

She also found out that David had not made $900,000 profit in 2021 and in fact made only $100,000. She feels that David should pay her compensation for his ‘dodgy’ advice. After weeks of complaints and exchanges of emails, David proposes that they all attempt an amicable discussion and possible agreement through mediation. Steven, Sarah, Chris and David all agree to join the mediation.

Party 1: Sarah ] Sarah believes that Chris will now not be able to finish the job in a timely manner and she wants him to refund the $20,000 she paid. She also wants David to pay her compensation for his wrong advice and referring Chris to her. Sarah also wants Steven to return her $5,000 deposit. Sarah thinks that with the interest rates becoming so high no one will buy her property.

Party 2: David ] David does not believe that he owes Sarah anything. He simply explained to her his business idea and when he guaranteed that she would make a profit it was just something that he said in passing. He did not realise that Sarah would take his comments about making a $900,000

profit seriously. If he was making that kind of money he would not be working at all. David wants to be involved in the mediation because he has a close relationship with Chris and Steven and believes he can help in the process.

Party 3: Chris ] Chris says that he was going to finish the job but he had to have emergency surgery on his back. He was not able to work for a few weeks and now the cost of building material has gone up. Chris can no longer finish the job at the quoted price and wants more money. He thinks Sarah is being greedy.

Party 4: Steven ) Steven does not want to refund the $5,000 because he believes he has lost almost $20,000 because Sarah. He had refused a job for a big company because he thought he would be working on Sarah’s property at that time. Steven thinks the $5,000 is somewhat of compensation for his loss.

Mediator  When you are role playing the mediator, you are required to initiate and undertake the mediation. Your role is to manage the process of discussion between the parties in a way that is conducive to producing resolution of disputes. You are to undertake the “Mediator’s Opening Statement” and then conduct the process

Please observe the following procedure for the role play :

  • Mediator’s Opening Statement
  • Parties’ Statements
  • Common Ground & Agenda Setting
  • Exploration
  • Option Generation
  • Closing the session