Hoogendoorn v State of Queensland
[2021] QCAT 352
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Hoogendoorn v State of Queensland & ors [2021] QCAT 352
PARTIES: MICHAEL JOHN HOOGENDOORN (applicant)
v
STATE OF QUEENSLAND (First respondent)
SERCO AUSTRALIA PTY LTD
(Second respondent)LUKE MAKEJEV
(Third respondent)CAMERON STERLING
(Fourth respondent)APPLICATION NO/S:
ADL067-17; ADL038-18
MATTER TYPE:
Anti-discrimination matters
DELIVERED ON:
12 October 2021
HEARING DATE:
On the papers
HEARD AT:
Brisbane
DECISION OF:
Member Traves
ORDERS:
1. Declare that the Heads of Agreement dated 10 February 2021 between the applicant and the second, third and fourth respondents is illegal and void by reason of s 319M(3) of the Corrective Services Act 2006 (Qld).
2. Order that the Heads of Agreement dated 10 February 2020 between the applicant and the second, third and fourth respondents be set aside.
3. Direct that the matter be listed for a Directions Hearing on a date and time to be advised.
CATCHWORDS:
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – SETTLEMENT AGREEMENT CONTEMPLATING EXECUTION OF FORMAL DOCUMENT – where ‘heads of agreement’ entered into between applicant and second, third and fourth respondents at compulsory conference – whether concluded agreement – whether agreement should be set aside – where applicant alleges duress – whether agreement void for mistake or illegality – whether agreement void under the Corrective Services Act 2006 (Qld) – application of s 74 and s 83 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
Corrective Services Act 2006 (Qld), s 319J, s 319M, s 319N, Schedule 4
Queensland Civil and Administrative Act 2009 (Qld), s 28, s 74, s 83, s 84, s 87
State of Queensland v Aigner [2013] QCATA 151
REPRESENTATION:
Applicant:
Self-represented
First Respondent:
Mr S Mackie, counsel, instructed by Crown Law
Second, Third and Fourth Respondent:
Carter Newell
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
The matter before the Tribunal concerns whether the settlement agreement which was struck on 10 February 2020, following a conciliation conference chaired by Member Paratz, is void or should otherwise be set aside. The Heads of Agreement was executed at the conference by Mr Hoogendoorn and the second, third and fourth respondents.
The applicant, Mr Hoogendoorn, submits that the agreement should be set aside because he says he was coerced or unduly influenced into entering into the agreement. Alternatively, Mr Hoogendoorn submits that it should be set aside because the respondents breached the agreement by tendering to the applicant a comprehensive settlement deed following execution of the agreement on 10 February 2020 which was different in a material respect to the terms of the Heads of Agreement.
The Tribunal, during consideration of the matter, requested submissions on the issue (amongst others) of illegality.[1] The first respondent did not execute the Heads of Agreement but, in response to the directions, made brief submissions in relation to the matter.[2] The position of the second, third and fourth respondents is that the Heads of Agreement resolved the matter and there is no legal basis for setting that agreement aside. Further, it was submitted that, as the applicant had not alleged nor provided evidence that the settlement agreement might be set aside for mistake or illegality, there was no basis for the Tribunal to give any consideration to those issues.[3]
[1]Tribunal Directions dated 30 April 2021.
[2]First Respondent’s supplementary submissions regarding dismissal of applications filed on 14 June 2021.
[3]Submissions of the Second, Third and Fourth Respondents in response to directions issued on 30 April 2021 at [5].
Background
The parties attended a compulsory conference on 10 February 2020 at which they negotiated a resolution of the proceedings.[4] A document titled “Heads of Agreement” was signed at the conference on 10 February 2020 by Mr Hoogendoorn and the lawyer on behalf of the second, third and fourth respondents. I note that the Heads of Agreement names Serco Asia Pacific Pty Ltd ACN 55 061 889 763 (Serco Asia) as the second respondent and the agreement is signed on behalf of Serco Asia by the lawyers for the second, third and fourth respondents. There is no explanation before me as to why this occurred and no party has contended that the Heads of Agreement is not binding on the second, third or fourth respondents as a consequence.
[4]Applications ADL067-17 and ADL038-18.
The Heads of Agreement stated that:
1. The parties participated in a compulsory conference before Member Paratz on 10 February 2020 in the Queensland Civil and Administrative Tribunal in Ipswich.
2. The parties have agreed to settle all matters in issue between them on the basis that a comprehensive deed of release, discharge and indemnity will be delivered to the applicant for his execution by close of business on Thursday, 13 February 2020. Notwithstanding that, the parties agree that the essential terms of the settlement agreement are set out in these heads of agreement.
The terms of the Heads of Agreement included, relevantly, terms that an amount of money would be paid into the applicant’s nominated bank account in full and final settlement of all and any claims the applicant has or may believe he has against the respondents arising out of, referable to or as a consequence of the applicant’s incarceration in Queensland prisons; the settlement sum was to be paid within 28 days of the date of the applicant’s execution of the full deed of release, discharge and indemnity; there was no admission of liability; the terms of the settlement and all negotiations leading up to the settlement were to remain strictly confidential; and that the applicant acknowledges that he has been afforded the opportunity to consider his position with respect to the heads of agreement and to seek advice with respect to accepting these heads of agreement and he does so voluntarily and of his own accord.
I am satisfied that, putting aside the matters to which I shall turn shortly, there was an objective intention of the parties to be legally bound by the Heads of Agreement.[5]
[5]Masters v Cameron (1954) 91 CLR 353; Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310 at 317.
On 13 February 2020 a deed of release was forwarded to Mr Hoogendoorn for signature. Relevantly clause 3 of the Deed was headed “Characterisation of Settlement Sum” and, in effect, provided that the payment of the settlement sum was not to constitute an award of compensation as the term is defined in s 319J of the Corrective Services Act 2006 (Qld) (CSA) because the respondents deny that the applicant has sustained any loss or damage so as to justify the payment to him of any compensation. The letter stated that if Mr Hoogendoorn did not agree to clause 3 that the payment was likely to be deemed compensation for the purposes of s 319N of the CSA and be required to be paid into a victim trust fund and managed by the Public Trustee until any eligible claims were paid. The letter continued, “by recording that the payment is not compensation, and that you acknowledge that you have not suffered loss, the payment may be paid into an account nominated by you”.
On 16 February 2019 Mr Hoogendoorn wrote to the second, third and fourth respondents asking questions about the deed. He did not sign the deed.
On 5 March 2020 the applicant applied for a direction that another compulsory conference be scheduled to discuss three aspects of the settlement:
(a)to explain what government agencies he can make complaints to and what about;
(b)whether the State of Queensland waives all money owed by the applicant to them from all previous court matters (including costs); and
(c)whether the applicant needs a JP to witness his signature as the jail refuses to supply him with one.
The applicant also foreshadowed that he might seek amendments to the agreement and that if the matter was not resolved at the further compulsory conference, that he would seek the following directions to progress the matter for hearing: directions to permit the applicant to file further evidence, directions for an adjournment of the scheduled hearing; directions relating to applications for notices to attend and for notices to produce.
The applicant acknowledged in the application that he had entered an agreement on 10 February 2020 but that he wanted “clarafacation (sic) and possible amendment”.
The applicant also refers to events which occurred and things which were said in the compulsory conference. He alleges he was coerced into entering the Heads of Agreement.
The lawyers for the second, third and fourth respondents wrote to the Tribunal questioning the utility of a further conference, given they were unable to give the applicant legal advice.
On 23 March 2020 the respondents wrote to Mr Hoogendoorn enclosing a further updated release which, presumably, given the contents of the covering letter, reflected that the payment was compensation and had to be paid in accordance with the requirements of the CSA. Mr Hoogendoorn did not sign that deed either.
On 23 March 2020 Member Fitzpatrick directed another compulsory conference be conducted by teleconference on a date to be advised. The conference was scheduled for 18 May 2020.
On 18 May 2020, following the compulsory conference, directions by consent were issued by Member Hughes requiring the parties to file submissions as to why the Tribunal should not make orders necessary to give effect to the Heads of Agreement dated 10 February 2020 including the dismissal of applications ADL067-17 and ADL038-18 pursuant to s 84 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
On 14 December 2020 the Tribunal issued directions that the application to set aside the settlement agreement would be determined on the papers on the basis of the written submissions filed by the parties on 19 July 2020 (applicant); 3 August 2020 (first respondent); 3 August 2020 (second, third and fourth respondent) and 9 October 2020 (applicant in reply).
On 30 April 2021 the Tribunal issued further directions requiring the parties file submissions addressing the following issues:
(a)whether the settlement agreement of 10 February 2020 should be set aside for mistake;
(b)whether the settlement agreement of 10 February 2020 should be set aside for illegality;
(c)whether s 83 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) applies in circumstances after a settlement agreement has been entered into;
(d)whether in circumstances of mistake, common or otherwise, the parties are entitled to refer to matters which took place during the compulsory conference and whether the exceptions in s 83(2)(b) apply,
Applicant’s submissions
The applicant submits that the agreement should be set aside principally for two reasons:
(a)Clause 3 which dealt with how the settlement sum was to be paid was altered from having been paid to him to his nominated bank account to having to be paid to a victim trust fund administered by the Public Trustee.
(b)That he signed under duress because of the things that were said to him in the compulsory conference.
The applicant filed supplementary submissions in which he alleged he had been misled by the lawyer for the respondents in the compulsory conference.
First respondent’s submissions
As the first respondent was not a party to the Heads of Agreement it refuted the allegation that it breached its own agreement by varying it, otherwise in accordance with clause 16 which deals with variation. As it was not a party to the Heads of Agreement it made no further submissions regarding the matter.
Second, Third and Fourth respondents’ submissions
The second, third and fourth respondents rely on s 83 of the QCAT Act which provides that evidence of anything said or done at a mediation for a proceeding is not admissible at any stage of the proceeding. They submit that none of the exceptions in s 83(2) apply. Accordingly, they submit it is impermissible and inappropriate for them to respond to the applicant’s attempt to recount what occurred at the compulsory conference.
In the circumstances, they submit, there is no basis upon which the Tribunal ought not make orders for the dismissal of the applicant’s application pursuant to the Heads of Agreement executed by the applicant on 10 February 2020.
The respondents submit that the applicant’s alternative basis for setting aside the agreement, namely that the respondents were in breach due to altering clause 3, is the real reason for the applicant seeking to have it set aside. The respondent says that re-framing the agreement in terms of their statutory obligations to pay the settlement funds to the Public Trustee does not constitute duress. Further, there is no unconscionable conduct as the applicant has not identified any special disadvantage to which he was subject when he signed the Heads of Agreement nor contended that he did not know what he was doing.
In truth, they submit, when the applicant received the Deed on 13 February 2020 and then again on 22 March 2020, which was framed having regard to the obligations of the parties under the CSA, he changed his mind about the settlement. A change of mind does not justify setting aside of the Heads of Agreement for duress.
In relation to mistake or illegality, it is submitted that there is no evidence or allegation by the applicant that the settlement agreement of 10 February 2020 was infected by mistake or is otherwise liable to be set aside for illegality. Further, apart from the exceptions in s 83(2)(b) of the QCAT Act there is no basis for going behind a settlement agreement reached at a compulsory conference convened pursuant to that Act, unlike the position at common law.[6]
[6]cf Harvey v Phillips (1956) 95 CLR 235.
Consideration
Subject to ensuring procedural fairness, the Tribunal is not bound to the legal issues advanced by the parties.
Section 28(2) of the QCAT provides:
In all proceedings, the tribunal must act fairly and according to the substantial merits of the case.
Further s 28(3) provides:
(3) In conducting a proceeding, the tribunal—
(a) …
(b) is not bound by the rules of evidence, or any practices or procedures applying to courts of record, other than to the extent the tribunal adopts the rules, practices or procedures; and
(c) may inform itself in any way it considers appropriate; and
(d)…
(e) must ensure, so far as is practicable, that all relevant material is disclosed to the tribunal to enable it to decide the proceeding with all the relevant facts.
Further, the Tribunal, under s 84 may record the terms of a settlement reached at a compulsory conference in writing and make orders necessary to give effect to the settlement. Relevantly, s 87 provides that:
An order under this division giving effect to a settlement for a proceeding may be made only if the entity making the order is satisfied the tribunal could make a decision in the terms of the settlement or in terms consistent with the settlement.
In my view, where the tribunal has a statutory obligation to act fairly and in accordance with the substantial merits of the case, it is incumbent on the Tribunal to raise and ask for submissions about issues which are important to the resolution of the dispute according to law. This approach is in the interests of justice and does not prejudice the respondents who were given the opportunity to make submissions about those issues. Further, before the Tribunal can make orders giving effect to the settlement, it must be satisfied that it could have made a decision in the terms of the settlement. This applies regardless of the submissions made by the parties. Accordingly, I have considered below issues not raised directly by the applicant but which I considered to be relevant to the validity of the Heads of Agreement.
The following provisions of the QCAT Act are relevant to what transpires at a compulsory conference:
74 INADMISSIBILITY OF PARTICULAR EVIDENCE
(1) Evidence of anything said or done during a compulsory conference for a proceeding is not admissible at any stage in the proceeding.
(2) Subsection (1) does not apply to—
(a) evidence that all parties to the proceeding have agreed may be admitted into evidence; or
(b) evidence of an order made or direction given at a compulsory conference or the reasons for the order or direction; or
(c) evidence of anything said or done that is relevant to a proceeding—
(i) for an offence relating to the giving of false or misleading information; or
(ii) for contempt; or
(iii) relating to an order made under section 72 (1) (b).
83 INADMISSIBILITY OF PARTICULAR EVIDENCE
(1) Evidence of anything said or done during mediation for a proceeding is not admissible at any stage of the proceeding.
(2) Subsection (1) does not apply to—
(a) evidence that all parties to the proceeding have agreed may be admitted into evidence; or
(b) evidence of anything said or done that is relevant to a proceeding—
(i) for an offence relating to the giving of false or misleading information; or
(ii) for contempt.
Section 74 was considered by the Appeal Tribunal in State of Queensland v Aigner[7] where it was held:
[16] Section 74(1) provides for the inadmissibility of evidence of ‘anything said or done during a compulsory conference’. Section 74(2) sets out limited exceptions to the prohibition established in s 74(1). The exceptions concern evidence that all parties to the proceeding have agreed may be admitted; evidence of a direction given or order made at the conference (or the reasons for it); and evidence relevant to offences and contempt proceedings or orders made in the absence of a party under s 72(1). Similar provisions apply to mediations, save that the exceptions are more limited again in recognition by the Parliament that directions and orders cannot flow from a mediation.[8]
[17] Section 74(1) is an absolute prohibition, with few and specific exceptions. It is apparent from Chapter 2 Part 6 Division 2 of the QCAT Act about compulsory conferences that it is the intent of the legislature for parties to be encouraged and they are expected to have fulsome discussions in compulsory conferences. Section 69 sets out the various purposes of conferences, including identification and clarification of issues and promoting settlement of the dispute. It further confirms that if the proceeding is not settled, then a purpose is to make directions and orders about the conduct of the matter or as are appropriate to resolve the dispute. Conferences are generally held in private.[9]
[18] These provisions recognise the sacrosanct nature of the discussions which parties are expected to have at compulsory conferences and the confidentiality which they are entitled to expect in relation to those discussions.
[19] Unlike hearings and directions hearings, compulsory conferences are not recorded. Therefore, the Appeal Tribunal does not have the benefit of a transcript of the comments attributed to the learned Senior Member, in an instance such as this appeal presents.
[20] The prohibition and limited exceptions in s 74 are clear and should be strictly construed.
[7][2013] QCATA 151.
[8]QCAT Act, s 83.
[9]QCAT Act, s 70(2).
In my view, the exceptions in s 74(2) do not apply here.
Duress
The main basis relied on by Mr Hoogendoorn for setting the agreement aside is duress. Common law duress is said to signify a “procuring of contractual assent by an illegitimate threat and looks to the quality of the consent or assent of the threatened party.”[10] Duress will be said to exist when the victim’s intentional submission arises from the realisation that there is no other practical course open.[11]
[10]Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 474.
[11]Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298.
The evidence concerning duress is inadmissible by reason of s 74 of the QCAT Act. In any event, the circumstances relied upon by Mr Hoogendoorn did not, in my opinion, go so far as to demonstrate duress.
Illegality
Section 319M of the CSA provides as follows:
319M NO PROPERTY OR INTEREST UNDER AGREEMENTS
(1) This section applies if a protected defendant enters into an agreement with a person about the liability of the protected defendant to pay an amount of damages or compensation, however described, in relation to a civil wrong committed by the protected defendant against the person while the person was an offender.
(2) The agreement contains the following implied terms—
(a) the damages or compensation that must be paid by the protected defendant must be dealt with under this part;
(b) the person has no property or interest in the damages or compensation.
(3) An agreement between the protected defendant and the person to deal with the amount of damages or compensation other than as provided by this part is void.
(4) In this section—
"damages or compensation" includes any interest payable on the damages or compensation.
Section 319N provides:
319N RELEVANT MONEY HELD IN TRUST IN A VICTIM TRUST FUND
(1) Relevant money awarded in relation to a person—
(a) is held in trust by the protected defendant liable to pay the relevant money for the payment of the following—
(i) any awards on eligible victim claims against the person;
(ii) any amounts of eligible entity claims against the person; and
(b) may be paid out only as allowed under this part.
(2) Relevant money held by a protected defendant in trust under this part forms a fund (a "victim trust fund").
(3) This section is subject to any Act of the State or the Commonwealth requiring the protected defendant to pay the relevant money to someone else.
Under s 319J an “award of compensation”, in relation to a person, is defined to mean:
(a) an amount of compensation (including any interest on the amount), that has been finally decided, in relation to the person under the Anti-Discrimination Act, section 209 (1) (b) or (g) for a contravention of that Act committed by a protected defendant while the person was an offender; or
(b) an obligation to pay an amount of compensation in relation to the person under an agreement between the person and a protected defendant relating to a complaint under the Anti-Discrimination Act about an alleged contravention of that Act committed by the protected defendant against the person while the person was an offender.
I invited the respondents to make submissions on illegality. The second, third and fourth respondents declined to do so. The first respondent submitted that, assuming s 319M applied, the agreement was not void for ambiguity and complied with Part 12B of the CSA. The first respondent referred to clause 3 of the Heads of Agreement which provided that Serco would “pay to the applicant the sum of $25, 000”. It submitted that this should be read broadly and subject to the implied terms in s 319M(2) and therefore, that the phrase “payment (sic) to the applicant” was, in fact, an obligation to make a payment in accordance with Part 12B of the CSA, in particular, ss 319N to 319R. It followed, it was submitted, as those provisions set out a specific mechanism for payment, no issue of the agreement being void for ambiguity arises and that s 319M(3) was not engaged.
In order for s 319M to apply, the following conditions must be satisfied:
(a)The second, third or fourth respondents is a protected defendant (A);
(b)(A) entered into an agreement with a person (B) about the liability of (A) to pay an amount of damages or compensation (howsoever described) in relation to a civil wrong committed by (A) against (B); and
(c)The civil wrong was committed by (A) against (B) while (B) was an offender.
“Offender” is defined in Schedule 4 to mean:
"offender" means—
(a) a prisoner; or
(b) a person who is subject to a community based order.
“Prisoner” is defined to mean a person who is in the chief executive’s custody, including a person who is released on parole.[12] Mr Hoogendoorn was a prisoner at the time of the alleged contravention of the AD Act and is accordingly an ‘offender’ for the purposes of s 319M of the CSA.
[12]Schedule 4.
“Protected defendant” is defined in schedule 4 by reference to s 319A. Section 319A defines “protected defendant’ as follows:
In this part –
protected defendant means—
(a) the State, but only in relation to a matter arising out of the administration of this Act; or
(b) an engaged service provider; or
(c) a community service supervisor; or
(d) an entity employed or engaged under this Act whose functions include rehabilitating offenders; or
(e) an entity that is joined in a proceeding about a contravention of the Anti-Discrimination Act brought by an offender against an entity mentioned in paragraph (a), (b), (c), (d) or (f); or
(f) an individual employed or engaged by an entity mentioned in paragraph (a), (b), (c), (d) or (e).
An “engaged service provider” is defined in schedule 4 by reference to s 272(1). Section 272 provides that the chief executive may, in writing, authorise an entity (an "engaged service provider") to perform an office holder’s functions ("authorised functions").
Is the agreement void by reason of s 319M of the CSA?
In my view, the second, third and fourth defendants are all protected defendants. The second defendant, Serco Australia Pty Ltd, is an entity joined in these proceedings. The proceedings are about a contravention of the Anti-Discrimination Act and were brought by an offender against the State which is an entity mentioned in paragraph (a).[13] Serco is also an ‘engaged service provider’.[14] The third and fourth respondents are protected defendants being employed or engaged by Serco, within paragraph (f) of the definition of ‘protected defendant’.[15]
[13]CSA, s 319A(e).
[14]CSA, s 319A(b); Management and Operation Agreement for Southern Queensland Correctional Centre dated 28 July 2011.
[15]Statement of Luke Makejev dated 4 December 2019 at [2]; Statement of Dr Cameron Sterling dated 5 December 2019 at [2].
The Heads of Agreement was legally binding (subject to my conclusions below). There was no other agreement entered into between the parties, so it is the Heads of Agreement which falls for consideration.
The Heads of Agreement compromised the applicant’s claim against the respondents alleging the respondents were liable under the AD Act. Accordingly, the Heads of Agreement were “about the liability of the protected defendant”.
The agreement was for the respondents to pay a monetary sum to the applicant. This was, in my view, “damages or compensation”. In particular, the sum related to a complaint under the AD Act for an alleged contravention of the AD Act against the applicant while he was an offender.
The sum agreed is to be paid “in relation to a civil wrong” committed by the protected defendant against the applicant.
By s 319M(2) the agreement contained the implied terms that:
(a)the damages or compensation that must be paid by the protected defendant must be dealt with under Part 12B of the Act; and
(b)the person has no property or interest in the damages or compensation.
The question then becomes whether the Heads of Agreement “deal with the amount of damages or compensation other than as provided by [Part 12B]” of the CSA. If so, the agreement is void.[16]
[16]CSA, s 319M(3).
The second, third and fourth respondents submitted that the effect of clause 3 read with the implied terms in s 319M(2) is that the compensation was to be paid in accordance with Part 12B of the CSA. That submission, however, ignores clause 6(e) of the Heads of Agreement which provides that the compensation was to be paid, “to the applicant’s nominated bank account”.
The term that the money be paid to the applicant’s nominated bank account is contrary to s 319N(1). The term permits the applicant legal ownership of the settlement sum; not that legal ownership be vested in the protected defendant and be paid in accordance with s 319N(1). The effect of the term is contrary to the implied terms in s 319M, in that:
(a) the damages or compensation that must be paid by the protected defendant are not dealt with under Part 12B; and
(b) the applicant would, indeed have legal property in the compensation.
Accordingly, the agreement is void and I will make a declaration to that effect. The matter is to be listed for directions.
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