Settlements made by the court dispute resolution centre are binding, the Appeals Court made clear on Wednesday.

Chief Justice Chan Sek Keong, in handing down a three-judge panel's judgement on the appeal involving primary school teacher Jonathan Lock and NTUC Income, who had challenged the order made by the mediation judge, said when such a settlement is reached, the process can be included in a court order for the purpose of enforcement.

He said that mediation in the Subordinate Courts is now part of the court process, introduced in 1994 to provide a court-supervised method of resolving disputes amicably and to save costs.

It is is held before a District Judge who, when he conducts a mediation, will not be exercising his judicial powers.

'A mediated settlement is binding on the parties,' said CJ Chan.

'When such a settlement is reached, the court dispute resolution process contemplates that the settlement may be embodied in a court order for the purpose of enforcement. In other words, the court dispute resolution process contemplates the District Judge exercising his judicial power to make an order of court to give effect to the terms of the settlement, whenever necessary.'

Mr Lock's legal tangle arose from an accident he was involved in in November 2004.

In March last year, the Primary Dispute Resolution Centre (PRDC) awarded him $188 and ordered the car owner Jessiline Goh to pay $1,200 in costs.

But Ms Goh took the case to the High Court and argued that the centre - now known as the e@dr Centre - was not a court.

The High Court agreed and ruled in favour of Ms Goh's insurer, NTUC Income. Mr Lock was ordered to pay Income $45,000 in costs. He also found himself saddled with legal bills of over $100,000 from his own former lawyer, Mr Andrew Hanam, who extracted a court order and took out a writ of seizure and sale (WSS) against Ms Goh to enforce payment of the $1,200.

This move set in motion a series of events that went all the way up to the Appeals Court on Tuesday.

In his judgement on Wednesday, CJ Chan said that Mr Hanam might have acted 'precipitately and unnecessarily' in extracting the court order and also in issuing the writ of seizure and sale (WSS) against Ms Goh. Even then, he said the series of actions did not affect the validity of the settlement court order.

Added the CJ: 'The response of the respondent's solicitor was also disproportionate, having regard to the small amount in dispute. There was no necessity to set aside WSS as after the respondent had paid up the settlement sum and taxed disbursements, the WSS had nothing to bite on and execution could not have been effected.'

'The District Judge's decision not to set aside the court order was correct in the circumstances.'

The CJ said when the appeal was heard by the High Court, the wrong arguments were made before the Judge.

'We nevertheless acknowledge that the High Court has erred in giving leave to appeal and in holding that a mediation judge has no power to direct the entry of a consent order or judgment or make other consequential orders once a settlement has been reached,' he ruled.