Matthieu Mootoosamy v Banson Wong
[2021] FWC 6406
•23 NOVEMBER 2021
| [2021] FWC 6406 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Matthieu Mootoosamy
v
Banson Wong
(U2021/2195)
COMMISSIONER BISSETT | MELBOURNE, 23 NOVEMBER 2021 |
Application for an unfair dismissal remedy
[1] Mr Matthieu Mootoosamy (Applicant) has made an application seeking relief from unfair dismissal in relation to the termination of his employment by Banson Wong (Respondent). The Applicant’s employment was terminated on 4 March 2021. He made his application to the Commission pursuant to s.394 of the Fair Work Act 2009 (FW Act) on 16 March 2021.
[2] The application was subject to conciliation before a staff conciliator on 1 April 2021 where it apparently settled. The Commission file was subsequently closed.
[3] On 19 October 2021 the Applicant contacted the Commission and sought that the application be listed for mention before the Commission. It was listed before me on 27 October 2021. At the mention it became apparent that the Applicant maintained a binding settlement agreement had been reached but the Respondent had not complied with the terms of that agreement. Following the mention the Respondent advised that it repudiated the agreement reached between the parties. The Applicant subsequently advised that it did not accept the repudiation. The Applicant ultimately sought that the matter be referred to arbitration, without concession as to repudiation. In doing so the Applicant was aware that the first matter to determine would be if a binding settlement agreement had been reached.
[4] I issued directions in which I required the Applicant and Respondent to file as to whether a binding settlement agreement had been reached. Both parties complied with that direction, with the Applicant filing more fulsome submissions than those of the Respondent. Following further correspondence the parties agreed that the Commission could determine the matter on the basis of the material filed.
SUBMISSIONS
Matters not in dispute
[5] The following matters, covered in the Applicant submissions, are not disputed by the Respondent.
[6] At the conclusion of the staff conciliation on 1 April 2021 the parties agreed to terms to settle the claim of the Applicant. It was agreed that the Commission staff conciliator would draft those terms and send them to the parties. The key terms of that agreement were that the Respondent would:
• pay the Applicant an amount of $4,458.16 (subject to taxation)
• rescind the dismissal and record a resignation with effect from 4 March 2021
• provide the Applicant with a statement of service outlining the Applicant’s position, duties and period of employment
[7] The agreement also recorded mutual releases, mutual confidentially and mutual non-disparagement terms.
[8] The agreement was sent to the parties on 1 April 2021 with a covering letter. The letter included a 3-day cooling off period as follows:
As discussed, a three day cooling off period now applies. I will hold the file for three business days to allow you (the parties) time to consider the agreement reached at conciliation. Unless I hear from either of you in writing by the close of business Thursday 8 April 2021 the matter is resolved in the terms attached and I will close the file accordingly. (emphasis per original)
[9] The three day cooling off period apparently coincided with Easter – hence the requirement for advice to the conciliator by 8 April 2021.
[10] Neither the Applicant nor Respondent invoked the three day cooling off period. For this reason the Applicant says the agreement became ‘unconditional and absolute’ on 8 April 2021.
[11] The Applicant subsequently signed the agreement which was sent to the Respondent on 11 April 2021. The Respondent failed to execute the deed and has not complied with the terms, including the payment of the settlement amount.
Applicant’s submissions
[12] The Applicant submits that a binding settlement agreement was reached between the parties. He says that the agreement reached is of the first type described in Masters v Cameron 1 in that the terms of the contract were agreed in conciliation with both parties agreeing to be bound. These terms were then formalised in writing by the conciliator. The Applicant submits that the existence of the cooling-off period does not alter the characterisation of the agreement reached. In any event neither party invoked that cooling-off period.
[13] The Applicant submits that a binding agreement exists even though the deed of settlement was not executed. 2
[14] The Applicant seeks a determination that a binding settlement agreement was reached. In the event that no such determination is made the Applicant requests that his application be referred to arbitration by the Commission.
Respondent’s submissions
[15] The Respondent lodged a submission which reads in full as follows:
The Terms of Settlement from the conciliation at the Commission on 1 April 2021 are not a binding:
1. the Commission is not a party to the Terms of Settlement; the 3 day cooling off period only relates to whether the Commission closes or holds its file open.
2. The Applicant on 1 April 2021 sent a copy of the Terms of Settlement for me to execute by signing in the presence of a witness; the Terms of Settlement was not executed.
3. The Applicant by not proceeding with a VCAT application for the enforcement of the Terms of Settlement on 14 October 2021 has by its own conduct conceded that a binding agreement does not exist.’ 3
LEGAL PRINCIPLES
[16] The legal principles in relation to the offer and acceptance of a settlement proposal (such as that between the parties in this matter) were set out by the Full Bench of the Commission in Singh v Sydney Trains. 4 In that matter the Full Bench was considering, on appeal, if the member at first instance had applied the correct legal principals in determining whether a binding settlement agreement had been reached. The Full Bench, with whom I respectfully agree, identified the following principals as relevant to the determination of whether a binding settlement agreement was reached (as is relevant to this matter):
[46] Chief Justice Bathurst of the New South Wales Supreme Court explained the relevant principles concerning intention to create legal relations in the following way in Pavlovic v Universal Music Australia Pty Limited: 5
“It is well established that the question of whether the parties intended to bind themselves to a contract is to be determined objectively, having regard to the intention disclosed by the language the parties have employed: Masters v Cameron [1954] HCA 72; 91 CLR 353 at 362. In cases such as the present, which do not depend on the construction of a single document, what is involved is the objective determination of the question from the communications between the parties in their context and the parties’ dealings over the time leading up to the making of the alleged contract. This involves consideration of the subject matter of the communications: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 550. As was said by Mahoney JA and McHugh JA in Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309, that includes consideration of what the parties said or wrote (at 334, 337).”
[47] …
[48] An offer and acceptance must precisely correspond. The following principles are relevant to this requirement:
• An acceptance corresponds to an offer if it is an unequivocal acceptance of the terms offered. 6
• An acceptance is not an unequivocal acceptance of the terms offered if it deviates from the offer, even if that deviation is not material or important. However, as a qualification to this principle, if a new term is included in a purported acceptance of an offer and the new term is solely for the benefit of the offeror, then this can constitute a valid acceptance. 7
• An acceptance will be effective if it does not depart from the terms of the offer, but simply repeats in the offeree’s own words the effect of the offer. 8
• Acceptance will be effective if it sets out expressly what would be implied by law in the absence of express agreement. 9 For example, an offer may contemplate that, were it to be accepted, a document would be prepared to record its terms. In proposing that a deed be prepared as part of an acceptance of such an offer, the offeree would be stating that which would be implied by law arising from the terms of the offer, namely, that it would be documented in some formal manner.10
• Similarly, if a purported acceptance of an offer merely includes the “machinery of working out what was meant by the offer, it is on the same plight as a request for information”. 11 Such a request for information does not revoke the offer and may constitute acceptance of the offer.
[49] Ultimately the question is whether a “reasonable recipient of the acceptance would have regarded it as corresponding to the offer or whether they would have taken the acceptance to be qualifying the original offer such that it would amount to a counter-offer or, at any rate, not an unconditional acceptance of what was originally offered.” 12 Put another way, the language used by the offeree in their acceptance of the offer must be such as would convey to a reasonable person in the position of the offeror a clear and definite decision by the offeree to be bound by the terms of the offer, leaving nothing further to be negotiated.13
[50] …
[51] Conduct of the parties after the making of the supposed agreement is relevant. Such conduct may be considered in order to determine whether the prior dealings between the parties gave rise to a binding contract. 14
[52] …
[53] If parties who have been in negotiations reach agreement on terms of a contractual nature and also agree that those terms will be dealt with by subsequent formal documentation, there are several categories into which such negotiations fall. 15 First, the parties reach finality, intend to be immediately bound, and propose restatement of the terms of settlement in a fuller or more precise form but not different in effect. Secondly, the parties have completely agreed all terms but performance of one or more terms is conditional on execution of a formal document. Thirdly, the parties did not intend to make a concluded bargain at all, unless and until they execute a formal contract. Fourthly, the parties intended to be bound immediately and exclusively by agreed terms while expecting to make a further contract in substitution containing, by concept, additional terms.16
[54] When parties do reach an agreement of the first or fourth category referred to in Masters v Cameron and Baulkham Hills, they will be bound by the terms of their bargain, notwithstanding a later disagreement between the parties about the terms to be included in a deed or written agreement between them. 17
CONSIDERATION
[17] In the case before me, beyond the toing and froing that might have occurred before the Conciliator, there can be no dispute that what arose from the conciliation attended by the Applicant and Respondent was an agreement. The agreement was ultimately put in writing by the Conciliator. There is no dispute that what was put in writing properly reflected the agreement reached in negotiations between the Applicant and Respondent.
[18] The Respondent had 3 working days (which, because of Easter, was 7 calendar days) in which it could have withdrawn from the agreement because the Respondent changed its mind or because it did not think it reflected the agreement reached or for any other reason. The Respondent would not be required to explain or defend any withdrawal during the cooling off period – that is why it is there, it allows for what has been described as ‘buyer’s remorse’ with no questions asked. Had the Respondent utilised the 3-day cooling off period the question of whether a binding agreement was reached would not arise.
[19] The conduct of Mr Wong of the Respondent, in not utilising the 3 day cooling off period, suggests that he accepted an agreement had been reached which was binding on the Respondent and Applicant.
[20] On receipt of the covering letter and agreement drawn up by the conciliator the Respondent at no stage protested the content of the letter or written terms of the agreement. The failure of the Respondent to do so suggests that the Respondent was aware of and accepted that it had reached agreement with the Applicant.
[21] On 1 November 2021, in response to a question from me during the mention held on 27 October 2021 and the Commission re-sending to the Respondent the correspondence sent by the Conciliator on 1 April 2021, the Respondent sent the following email to the Commission:
To Whom It May Concern,
I acknowledge receipt of documents issued to me on 1 April 2021 by the Fair Work Commision. (sic)
I advise that though I did not reject the agreement within the three day cooling off period I wish to do so now.
Regards
Banson Wong
(address withheld)
[22] The language of the Respondent in this email further supports a conclusion that the Respondent did not reject the agreement reached between the parties at the time the agreement was made nor when it was provided in writing. It is abundantly apparent from the words used that the Respondent accepted that he did reach agreement with the Applicant – there can be no other reason for the need to now ‘reject’ that agreement.
[23] That the Commission was not a party to the agreement reached between the Applicant and Respondent has no bearing on any determination as to whether a binding settlement agreement was reached. Ultimately this is not a matter of whether the Commission took administrative action to close the file or not – it is whether the Commission should hear the application in circumstances where the Applicant says – and the facts support – that a binding settlement agreement was reached between the parties.
[24] Despite the submission of the Respondent, there is nothing that the Respondent has put to suggest that the agreement was subject to the Respondent signing the agreement reached.
[25] That the Respondent did not sign the agreement does not mean there is not a binding contract between the parties. In Zoiti-Licastro v Australian Taxation Office 18 the Full Bench of the Australian Industrial Relations Commission was dealing with the question of whether a binding settlement agreement had been reached. In that matter it was ‘submitted that the agreement could not be said to be completed until a document was signed by both parties.’19 The Full Bench said of this:
[12] …the appellant’s focus on the settlement document seems to us to miss the point. The real question is what was agreed on 3 March between counsel. It is clear enough that a completed agreement was reached and that it was not conditional in any sense on an agreement being signed…
[26] The Full Bench also observed, in relation to the matter at first instance:
The Senior Deputy President regarded it as significant that no objection had been raised to the facsimile letter of 4 March or the settlement agreement forwarded on 7 March until the indication on 31 March 2005 that the appellant did not want to go ahead with the settlement. 20
[27] In the matter before me agreement was reached on 1 April 2021 and the Respondent has not, until its email to the Commission of 1 November 2021, indicated it repudiated the agreement reached.
[28] The types of agreements that may be reached after negotiation occur are set out in Singh (above). The first three are detailed by the High Court in Masters v Cameron with the fourth in Baulkam Hills. These are:
1. First, the parties reach finality, intend to be immediately bound, and propose restatement of the terms of settlement in a fuller or more precise form but not different in effect
2. Secondly, the parties have completely agreed all terms but performance of one or more terms is conditional on execution of a formal document
3. Thirdly, the parties did not intend to make a concluded bargain at all, unless and until they execute a formal contract
4. Fourthly, the parties intended to be bound immediately and exclusively by agreed terms while expecting to make a further contract in substitution containing, by concept, additional terms.
[29] The Respondent does not argue that the third of fourth circumstance existed (such that it might be concluded no agreement was reached) or even that the second circumstance existed. Rather, by his conduct the Respondent concedes that the agreement reached in conciliation on 1 April 2021 fell into the first category.
[30] This application before the Commission is unusual. Whilst the Applicant has sought that the matter be referred for hearing it concedes that a binding settlement agreement was reached between the parties. It wishes to have the Respondent comply with the agreement reached. In making an application that the unfair dismissal application be heard the Applicant has made clear that it does not accept the repudiation of the agreement by the Respondent.
[31] I am satisfied, on the basis of the material filed, that a binding settlement agreement has been reached between the parties and it is the of the first type described in Masters v Cameron.
[32] In Australian Postal Corporation v Gorman 21 Besanko J in the Federal Court considered the effect of parties reaching an ‘accord and satisfaction’. His Honour continued:
An accord and satisfaction extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement. A valid accord and satisfaction is not a discretionary factor relevant to the subsequent litigation of the original claim; it is an answer to the claim. 22
[33] To the extent it might be argued that the agreement reached between the parties is an accord and conditional satisfaction (in that the release given by the Applicant is conditional on the Respondent complying with its commitments under the agreement), I note that it was observed in Osborn v McDermott 23 that:
With accord and satisfaction, either party may sue on the compromise and for nothing else: the original cause of action has gone. Where there is accord and conditional satisfaction, the plaintiff is bound to await performance and accept it if tendered, but if there be no performance, the plaintiff may proceed according to general principles called into play when any agreement is repudiated: the plaintiff may either treat the agreement (the accord) as at an end and proceed on his original cause of action; or he may, at his option, sue on the compromise agreement, in place of the original cause of action. 24
[34] I am not of the view that the release given by the Applicant in the agreement has any bearing on the matter before me. In any event I note that neither party has addressed me on this.
CONCLUSION
[35] For the reasons given above I am satisfied that the Applicant and Respondent reached a binding settlement agreement at the conclusion of the conciliation on 1 April 2021. I am further satisfied that the parties intended to be immediately bound by that agreement, subject only to either exercising their rights during the 3 (business) day cooling off period. Neither did so such that the agreement continued in force.
[36] The type of agreement reached between the parties is the first type described in Masters v Cameron. It was intended that the agreement be put in writing and be signed but this was not an essential term of that agreement.
[37] That the agreement was not signed by the Respondent does not alter the fact that an agreement was reached.
[38] In the normal course of dealing with such matters the Commission would consider whether the application should be dismissed pursuant to s.587 of the FW Act on the grounds that an agreement has been reached. That would be considered as part of an application or on the Commission’s own initiative. In this case no application has been made that the application for unfair dismissal be dismissed and no submissions on such have been made. For this reason I make no decision on that question. I would observe however that, for the reasons in Osborn v McDermott above, it is not open to the Applicant to jump between jurisdictions. Having determined to pursue the Respondent on the agreement it cannot, at some point in the future, decide to accept the repudiation and proceed with the unfair dismissal action in the Commission.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR736010>
1 [1954] CLR 353 at p.360
2 Zoiti-Licastro v Australian Taxation Office [2006] AIRC 45 at [9]
3 Respondent’s submission filed 17 November 2021.
4 [2017] FWCFB 4562
5 [2015] NSWCA 313 (Pavlovic) at [15]
6 Redowood Pty Ltd v Mongoose Pty Ltd [2005] NSWCA 32 (Redowood) at [84]
7 Boreland v Docker [2007] NSWCA (Boreland) at [76]-[78]
8 Boreland at [76]; Cavallari v Premier Refrigeration Co Pty Ltd (1952) 85 CLR 20 at 26-27
9 Brookfield Australia Investments Limited v Lucas Stuart Pty Limited [2012] NSWSC 1130 (Brookfield) at [34]
10 Brookfield at [30]-[31]
11 Brookfield at [35], applying Howe v Connell [1997] NSWSC 432 and Stevenson v McLean (1880) 5 QBD 346
12 Redowood at [76], applying Carter v Hyde (1923) 33 CLR 115
13 Redowood at [84]
14 Saliba at [53]-[54], applying B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147 at 9149 per Glass JA
15 Masters v Cameron
16 Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 (Baulkham Hills)
17 Zoiti-Licastro v Australian Taxation Office (2006) 154 IR 1 at [10]-[12]; Howe v Connell [1997] NSWSC 432
18 PR967544 (Guidice J, O’Callaghan SDP and Gay C, 25 January 2006)
19 Ibid at [11]
20 Ibid at [9]
21 [2011] FCA 975
22 Ibid at [31]
23 [1998] 3 VR 1
24 Ibid at pp. 10-11
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