Mills & Reece Trust Corporation Limited v Brian Vincent Martin & Ors.

The High Court held that it was bound by the Court of Appeal’s clear observations in Halsey v Milton Keynes General NHS Trust that the court could not compel truly unwilling parties to mediate. Subsequent developments concerning compulsory ADR, including Early Neutral Evaluation and the Civil Justice Council’s review, did not justify departing from that position at first instance.

A stay to encourage mediation or an order for another form of mandatory ADR was also refused. The court must consider the circumstances and likely utility of ADR. A long-running, intractable dispute, strongly opposed participation, the absence of credible alternative proposals and the risk of further entrenching positions justified proceeding without a stay.

The claimant trustee sought the court’s blessing for proposed dealings with development land held in two trusts. Four defendants supported the proposed course. The fourth and fifth defendants applied for, among other relief, a stay to facilitate mediation, an order compelling mediation or another form of ADR, and an extension of time to respond to the Part 8 claim.

The court also considered whether the applications should be heard in private because the evidence and negotiations concerned commercially sensitive trust property. The central procedural issue was whether the court had power to compel unwilling parties to mediate and, if not, whether another form of ADR or a stay should be ordered.

1. The hearing was held in private. Open justice is the general rule, but privacy was strictly necessary because the evidence, exhibits and submissions contained commercially sensitive information concerning trust property, negotiations and possible agreements. Access to the documents was restricted to the parties.

2. The court held that it was bound by the Court of Appeal’s observations in Halsey v Milton Keynes General NHS Trust. Although the issue of mandatory mediation had not been necessary to the result in that case, the Court of Appeal had expressed a clear view that compelling truly unwilling parties to mediate would obstruct access to the court. The judge therefore concluded that she had no power to order mediation.

3. The later authorities did not alter that conclusion. Lomax v Lomax concerned Early Neutral Evaluation and was distinguishable because ENE did not obstruct access to the court. McParland & Partners Ltd v Whitehead did not decide the issue because the parties had agreed to mediation. The Civil Justice Council’s 2021 review supported the legality of compulsory ADR in principle but did not recommend mandatory mediation at that time. The Chancery Guide proceeded on the basis that unwilling parties could not be compelled to mediate.

4. The court refused permission to appeal at that stage. It was not satisfied that an appeal had a real prospect of success or that there was another compelling reason for an appeal, while preserving the parties’ opportunity to seek permission after hand-down.

5. The court also refused to order another form of mandatory ADR or a stay merely to encourage ADR. The dispute had continued for about 27 years, the beneficiaries had entrenched and conflicting positions, the trustees had identified proposed arrangements, and the fourth and fifth defendants had supplied no detailed practical alternative. ADR at that stage was likely to cause delay and further entrench the parties’ positions, particularly without the involvement of the relevant landowners.

6. An extended period for responding to the claim was refused. The fourth and fifth defendants were required to respond by 4pm on 5 May 2023. Costs were reserved for later submissions.

First-instance decision. The judgment records that Deputy Master Henderson transferred the proceedings to Leeds by order dated 19 April 2022, reserving costs.