Mr Christopher Baum v K & J Baker Cartage Pty Ltd T/A K & J Baker Cartage Pty Ltd

[2020] FWC 5185

[2020] FWC 5185

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Christopher Baum
v
K & J Baker Cartage Pty Ltd T/A K & J Baker Cartage Pty Ltd
(U2020/8965)

COMMISSIONER CIRKOVIC MELBOURNE, 29 SEPTEMBER 2020

Application for unfair dismissal remedy – application to dismiss – whether binding settlement reached at Fair Work Commission conciliation – binding settlement reached – application dismissed.

[1] On 30 June 2020, Mr Christopher Baum made an application to the Fair Work Commission (Commission) for an unfair dismissal remedy under section 394 of the Fair Work Act 2009 (Act) against K & J Baker Cartage Pty Ltd (Respondent).

[2] On 27 August 2020, the Respondent made an application to dismiss these proceedings pursuant to section 587 of the Act on the basis that a binding settlement had been reached (Dismissal Application). This decision deals with the Dismissal Application.

Permission to be represented

[3] The Respondent sought permission to be represented by a lawyer pursuant to section 596 of the Act. The Applicant opposes permission being granted. I invited both parties to make submissions on this matter.

[4] Section 596(2) of the Act provides that the Commission may grant permission for a person to be represented by a lawyer or paid agent in a matter before the Commission only if:

(a) it would enable the matter to be deal with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

[5] The decision to grant permission is not merely a procedural step but one which requires consideration in accordance with s.596 of the FW Act. 1 The decision to grant permission is a two-step process. First, it must be determined if one of the requirements in s.596(2) of the FW Act have been met. Secondly, if the requirement has been met, it is a discretionary decision as to whether permission is granted.2

[6] On the question of representation, the Respondent submits:

•  the involvement of a lawyer acting for the Respondent will ensure that the matter is dealt with more efficiently;

•  the matter is complex as there is “multiple reasons” why the Respondent submits the dismissal was valid and evidence from “more than six witnesses” is likely required. This complexity makes it necessary to allow the Respondent to be represented; and

•  the Respondent is a small business with no designated human resources department and both Matthew and Kevin Baker are inexperienced in writing, oral advocacy, preparing documents and contribute to the business through physical labour. As a result, it would be unfair to not allow the Respondent to be represented as it is not able to represent itself effectively.

[7] On the question of representation, the Applicant submits:

•  the matter is not complex but a simple factual contest;

•  the Respondent has withdrawn its jurisdictional objections removing a level of complexity;

•  the matter would be more efficient if “those involved in the dismissal” were the only ones at the hearing;

•  that he, much like the Respondent, is inexperienced in writing and oral advocacy and therefore granting permission would be unfair;

•  the Respondent has an office manager who can assist with this case; and

•  Kevin and Matthew Baker are decision makers for the business, hold licences for a variety of plant equipment and oversee tender sand the carrying out of contracts. Matthew Baker is a signatory to the Respondent’s enterprise agreement and was involved in a meeting to inform employees about changes to the law in this area and Kevin Baker has a knowledge of Mining Law, Environment and Cultural Heritage Law and providing reports.

[8] Having considered those matters, I determined at the hearing that allowing the Respondent to be represented by a lawyer would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter as per section 596(2)(a) of the Act.

Procedural History

[9] It is of assistance, at this juncture, to set out briefly the procedural history of this matter before the Commission as it relates to a purported settlement between the parties.

[10] On 23 July 2020, a telephone conciliation conference was held before a Commission conciliator. The conference was attended by the Applicant, Mr Patrick Smith (the Respondent’s lawyer) and Mr Kevin Baker and Mr Matthew Baker of the Respondent.

[11] Correspondence from the Commission conciliator to the parties shortly after the conclusion of the conciliation conference included the following:

“I confirm that you reached a settlement agreement and I attach terms of settlement. I confirm that the parties have agreed to waive the cooling off period that applied to this agreement.” (emphasis added)

[12] I note that the Commission’s records indicate that the terms of settlement were attached to this email.

[13] On 24 July 2020 at 6:42am, the Applicant sent an email to the Commission conciliator stating:

“I don’t think I fully understood or heard correctly about the terms in our telephone discussion yesterday but now having the time to read through them I feel that to be gagged by a company that has disparaged me, I can not agree to these terms (sic). I would rather forgo any compensation and keep my voice. If this means I’ve lost my chance at defending myself at commission then so be it.”

[14] On 24 July 2020 at 9:11am, the Commission conciliator responded to the Applicant’s email stating:

“This is unfortunate. I believe I explained that mutual non-disparagement meant that “neither side bags the other”.

If you do not wish to proceed with the settlement and its usual terms, you forego the compensation and the statement of service with the verbal referee you nominated.

If you do not wish to proceed to a hearing and defend the jurisdictional objections the respondent has raised, you need to withdraw the application.

Please file  the Notice of Discontinuance ( Form 50).

Please confirm that this is what you will do as soon as possible. I shall need to inform the respondent’s representative.”

[15] On 24 July 2020 at 10:27am, the Applicant sent an email to Commission conciliator stating:

“I feel that they are already bagging me and the claims about me don’t add up. The original reason for my dismissal seemed to get lost in the discussion by them diverting to he said she said accusations. I would like to continue to commission to make my case even if they bank on the claim that my employment was not on a regular and systematic basis.”

[16] On 24 July 2020 at 11:18am, the Commission conciliator sent an email to the Applicant stating:

“In that case, I shall need your preferences for hearing the jurisdictional objection:

Place of Hearing

Number of witnesses

Estimated length of hearing

Whether you will seek leave to have legal representation.

I shall refer the matter for hearing on Monday, 27 July (please note that I do not work on a Friday).”

[17] On 24 July 2020 at 11:56am, the Applicant sent an email to the Commission conciliator stating:

“Sorry for disrupting your day off. I’m not exactly sure of all the legal jargon but l will be representing myself and will rely on any stat declarations that I can muster. As for the location, I would think that home telephone hearing would do given Bakers COVID -19 contact. If the hearing sticks to the facts it shouldn’t take any more than two hours.”

[18] On 24 July 2020 at 12:06pm, the Commission conciliator emailed Mr Smith stating:

“Unfortunately  the applicant emailed me early today to inform me that he is re-neging. He said initially that he did not understand what I outlined  as “mutual non-disparagement”.

I have had another email to confirm that  he wishes to proceed with a hearing.

So I will need your preferences for hearing the jurisdictional objection:

Place of hearing

Number of witnesses

Estimated length of hearing

Whether the respondent will seek leave for legal representation.”

[19] On 28 July 2020, the matter was allocated to my chambers for determination. That day, my chambers issued a notice of listing for an initial Case Management Conference to take place on 4 August 2020.

[20] On 3 August 2020, Mr Smith sent a letter to the Applicant restating the agreed terms of settlement and proposing alternative terms of settlement.

[21] On 4 August 2020, a Case Management Conference was heard before me in this matter. At this listing, directions were agreed between the parties to timetable for hearing on the merits of the application. Later that day, the agreed directions were issued to the parties.

[22] On 27 August 2020, the Respondent emailed my chambers attaching, amongst other things, the Dismissal Application.

[23] On 28 August 2020, I directed the Applicant to file material in response to the Dismissal Application and listed the matter for a hearing on 9 September 2020.

Submissions of the Respondent

[24] The Respondent advanced the following:

(1) the parties agreed, at the conciliation on 23 July 2020, to settle this matter on terms that were set out in a Deed of Release; 3

(2) the Deed of Release was sent to the parties by the Commission conciliator that day; 4

(3) the Deed of Release was not signed by either party; 5

(4) the binding settlement became “final and enforceable” on 23 July 2020; 6

(5) the binding settlement reached between the parties was the second type identified in Masters v Cameron, noting the consensus on terms and the performance of conditions within the settlement becoming enforceable upon signing; 7

(6) the terms of the release, the note made by the Commission conciliator and the evidence of both parties indicates that the “the consensus was final and capable of forming a binding contract in the circumstances” and the three day cooling off period was waived by the Applicant; 8

(7) there is “nothing to suggest that accord and satisfaction between the parties has not been reached”; 9

(8) the question of whether to recognise the settlement as the second type in Masters v Cameron is “complicated” by the events since 24 July 2020, in particular communications initiated by Mr Smith, but that are ultimately present “no barrier” to the finding that a binding settlement was entered into on 23 July 2020; 10

(9) it is an “established principle” that where actual communications between the parties contain a “clear and unambiguous statement” to the effect that the parties intended to be bound immediately, the court will give effect to this intention notwithstanding the existence of other factors which might otherwise indicate that the parties did not intend to be immediately bound. The current matter is such a case where the direct and objective evidence enables a complete conclusion that settlement was reached on 23 July 2020 and as such the Commission’s inquiry should cease at this point; 11

(10) the Applicant’s position that a settlement was reached that wasn’t immediately binding is contrary to the evidence of given by the Respondent’s witnesses and the objective circumstances of the negotiation; 12

(11) the Applicant’s waiving of the cooling off period “manifests an objective intention to be immediately bound”. Further, the circumstances in which the settlement was reached, being at a conciliation and the conciliators own record of a binding settlement, suggest a final binding settlement has been reached; 13

(12) the conduct of the Respondent’s representative in progressing the matter towards a hearing did not involve “advancing a position on a binding settlement” and his actions were merely complying with Commission directions to progress the matter; 14

(13) Mr Smith’s letter on 3 August 2020 was an attempt to “formalise” the binding settlement reached on 23 July 2020 as well as containing an offer to vary the already binding settlement that had been agreed between the parties; 15

(14) if weight is given to the post settlement conduct of the Respondent, it should be viewed in the context of Mr Smith’s admitted “misapprehension about the nature of the Agreement” and that “the respondent had understood as per the evidence they had no option but to proceed”; 16

(15) as a result of the settlement reached on 23 July 2020, the Applicant’s cause of action has been extinguished. 17

[25] Mr Kevin Baker, a co-director of the Respondent who attended the conciliation, stated in his witness statement “The matter settled on terms agreeable to me as an authorised representative of the Respondent. I was pleased to have the matter finalised and left the office as I understood the terms of settlement in the deed would be sent through for me to sign in the coming days…I do not recall signing anything but considered signing a formality as the matter had settled. I understood the matter was finalised at this conciliation in July 2020…”. 18

[26] Mr Matthew Baker, a co-director of the Respondent who attended the conciliation, stated in his witness statement that at the conciliation “We settled the matter after negotiating back forth (sic) with the help of the conciliator. The Deed of Settlement was sent through to our office later that day. The terms of settlement were as agreed at the conciliation.” 19

[27] Mr Patrick Smith, solicitor for the Respondent who attended the conciliation, gave evidence that:

•  agreement was reached at the conciliation on 23 July 2020; 20

•  when he received an email from the Commission conciliator advising him that the Applicant had “reneged” on the agreement he was “under the impression” that the “agreement was essentially reneged” and “trusted” that to be correct until he sought further advice from Counsel; 21

•  he responded to the conciliator’s email regarding details to proceed to arbitration because he “believed [he] was required to”; 22 and

•  he had communicated with the Applicant in writing and by telephone after the conciliation “In a hope to resolve the matter without having to proceed any further”. 23

Submissions of the Applicant

[28] The Applicant advanced the following:

(1) his application is not “frivolous, vexatious or has no reasonable prospects of success”; 24

(2) the parties were not intended to be bound until the execution of the deed and was, in essence, of the third type identified in Masters v Cameron; 25

(3) during the conciliation “allegations” were made against the Applicant which “greatly” upset him and “took away [his] focus from the conciliation meeting”; 26

(4) after “a sleepless night” the Applicant contacted the Commission conciliator and informed her he wished to proceed to a hearing as the Respondent had “disparagred” him and he would be “gagged”; 27

(5) the Respondent “requested” for the matter to be listed for final hearing with a timetable for the filling of material at the Case Management Conference; 28

(6) in the post – settlement communications with Mr Smith, there was never any mention of a binding settlement being reached; 29 and

(7) the Dismissal Application should be “rejected” due to communications the Applicant had with Mr Smith, on behalf of the Respondent, on 3 August and 14 August 2020 in which further discussions were had around resolving the matter. 30

Consideration

[29] The issue for me to determine is whether or not a binding settlement agreement has been reached by the parties in this matter.

[30] In Masters v Cameron, the High Court of Australia held that a binding agreement could come about in the following manner:

“Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution.” 31

[31] Counsel for the Respondent submits that, in circumstances where the direct evidence is “clear and unambiguous” that a binding settlement was reached, then it follows that post agreement conduct should not be considered. 32 The Respondent further submits that having regard to the evidence as to what occurred at the conciliation conference on 23 July 2020 it is “very clear that a binding agreement was reached”.33 The Respondent submits that if the post agreement conduct is considered it should be viewed in the context of Mr Smith’s admitted “misapprehension about the nature of the Agreement” and that “the respondent had understood” from the conciliator’s correspondence that “they had no option but to proceed”.34

[32] In support of its submissions, the Respondent cites a number of authorities, in particular the decision of Abigroup Contractors Pty Ltd v ABB Service Pty Ltd (formerly ABB Engineering Construction Pty Ltd) [2004] NSWCA 181 (Abigroup). At [63], the Full Court of Appeal states as follows:

“Evidence of subsequent communications between parties is admissible for the light it casts upon their dealings from which a contract is alleged to have arisen: for example, it may show that apparently concluded negotiations were in fact continued, or were not regarded by the parties as contractually binding until entry into a formal contract. Evidence of the parties' subsequent conduct is also admissible as an admission by conduct of the existence or non existence of a subsisting contract. The probative force of an admission may not be great. If the direct evidence is complete and enables a conclusion, an indirect admission may count for little. Similarly, if an admission is of a matter of law or legal consequences, as to which the admitting party has no expertise or is otherwise to be seen as uninformed or unreliable, the admission will not carry much weight” (citations removed) (emphasis added)

[33] In essence, the Applicant does not dispute that a settlement was reached on 23 July 2020 but contends that it was not immediately binding. The Applicant also advanced the argument that he “didn’t understand” the explanation of the non-disparagement term. I have taken into account the following exchange between myself and the Applicant during the hearing: 35

“You were told that non disparagement meant that neither side bags the other? That's correct.

And you know what that means I take it, that's fairly self-evident?---Yes.  She did explain - I don't think I fully understood as stated in my correspondence to her, but I won't - I won't argue with what she said.

What did you take to have been meant by neither side bags the other?---That given being in a small community and with some of the things that were said I would likely, my chances especially at my age getting employment around here would not be helped by any disparaging remarks.  So that was one of the reasons there.

So what is meant by neither side bags the other in your view?---Well, to me looking at it it's we're not allowed to talk about each other at all.  That'd be correct, wouldn't it?”

[34] Although the Applicant accepted that he waived the cooling off period, he contended that he was not told the “importance” of doing so. 36 Further, the Applicant states that he had a “change of heart” overnight. The Applicant also contends that the Respondent’s post-agreement conduct indicates that a binding settlement was not reached.

Findings

[35] There is no dispute between the parties that an agreement was reached on 23 July 2020 with the only point of contention being whether it was immediately binding. It is also not in contest that the terms were agreed by the parties and that the Applicant agreed to waive the cooling off period. Further, the Applicant accepts that he had a “change of heart” overnight after reading the written terms. The Applicant does not contend he was absent legal capacity to agree to the binding settlement.

[36] While the Applicant was self-represented it is apparent from the material in evidence that the conciliator adopted simple and accessible language when communicating legal concepts with the Applicant. Further, in my view the Applicant has displayed a significant degree of aptitude and skill in preparing his material for hearing and my observations of his advocacy skills at hearing is such that I am satisfied that he understood the terms of the agreement reached including the non-disparagement term and the waiving of the cooling off period.

[37] While I am sympathetic to the Applicant’s position that he had a “change of heart”, I am not satisfied that this alters the proper characterisation of the events on 23 July 2020. Despite the Applicant’s submission, an objective assessment of the evidence before me of what transpired on 23 July 2020 favours a finding that the Applicant entered into an agreement with the Respondent that was intended to be immediately binding. Further, the letter from the conciliator to the parties on 23 July 2020 together with the attached deed of release serve as a contemporaneous file note of the outcome of the conciliation, with the letter specifically noting that “you reached a settlement agreement…” and “I confirm that the parties have agreed to waive the cooling off period that applied to this agreement”. The Applicant’s concession at the hearing that this letter was reflective of what was “said at the time” 37 supports this conclusion. I also accept the Respondent’s submission that the Applicant’s waiving of the cooling off period manifests an objective intention to be immediately bound by the settlement agreement. I also have regard to the unchallenged evidence of each of the Respondent’s representatives that they believed the matter to be binding from 23 July 2020. Therefore, the material before me favours a conclusion that “accord and satisfaction”38 was reached between the parties.

[38] Contrary to the Respondent’s assertion, I believe it is appropriate in this case to consider the post-settlement conduct of the parties and I have done so in coming to my conclusion. It is not in dispute that, following the Commission conciliation, the Respondent agreed to timetable this proceeding towards a hearing on merits, sent a letter to the Applicant on 3 August 2020 and had a telephone call with the Applicant on 14 August 2020. I note that there is some contest between the parties as to what was said during 14 August 2020 telephone call. The Respondent submits that Mr Smith attempted to execute the terms of the 23 July 2020 binding settlement, the Applicant denies this and states that the telephone call is further evidence that a binding settlement was not reached.

[39] I have considered the correspondence of 3 August 2020, referred to at paragraph [20] above. The letter contains two parts, one dealing with terms as agreed on 23 July 2020 and the other dealing with alternative terms. With respect to the former, the letter contains the following heading: “Resolve the dispute as agreed on 23 July 2020” (underline added). As to the latter, Counsel for the Respondent contended that this was a proposed “variation” to the binding agreement reached on 23 July 2020 and as such is not inconsistent with a binding settlement being reached. Regardless of whether the latter part of the letter constituted a “variation” to the binding settlement, which for completeness I note has not been accepted, I am satisfied that the letter of 3 August 2020 is not inconsistent with a binding settlement having been reached at the conciliation conference on 23 July 2020.

[40] I accept Mr Smith’s evidence that he proceeded under a misapprehension following the conciliator’s email, referred to at paragraph [18] above. As such, I am not satisfied that the matters that occurred after 24 July 2020 are of sufficient significance to overcome the objective evidence that a binding settlement was reached on 23 July 2020. That said, I do not need to resolve the dispute between the parties as to the 14 August 2020 telephone discussion.

[41] Having regard to the material before me, I am satisfied that a binding settlement was reached on 23 July 2020 of the second type in Masters v Cameron.

Conclusion

[42] In Australia Postal Corporation v Gorman, 39 Besanko J held that the existence of a binding settlement or “accord and satisfaction” extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement.40

[43] His Honour stated:

“[33] There is nothing in the Act which suggests that an accord and satisfaction should not be recognised. At a general level the object of Chapter 3 Part 3-2 and the general statements of the manner in which FWA is to perform its functions and the matters to which it is to have regard are consistent with the recognition of an accord and satisfaction. Furthermore, the words of subsection 587(1) are wide enough to include the recognition of an accord and satisfaction. As I have said, a valid and effective accord and satisfaction extinguishes the pre-existing cause of action and continued pursuit of an application based on such cause of action is clearly capable of being considered to be frivolous or vexatious or without reasonable prospects of success.” 41

[44] As can be seen from Australia Postal Corporation v Gorman, if there is a binding agreement between the parties, the Commission has the power under s.587(1) of the Act to dismiss an application on the basis that it has no reasonable prospects of success.

[45] Section 587(1) of the Act provides as follows:

“587 Dismissing applications

(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(b) the application is frivolous or vexatious; or

(c) the application has no reasonable prospects of success.”

[46] As I have found that the parties reached agreement at the conciliation conference on 23 July 2020 and I am satisfied that the agreement was of the second type discussed in Masters v Cameron, I am persuaded that I should exercise my power under s.587(1)(c) of the Act to dismiss the application on the basis that it has no reasonable prospects of success. The settlement agreement that was made is a complete answer to the Applicant’s case that he was unfairly dismissed.

[47] Consequently, the Applicant’s application for unfair dismissal remedy is dismissed.

COMMISSIONER

Appearances:

Mr C. Baum for himself

Mr J. Ryan of Counsel for the Respondent

Hearing details:

10:00am 9 September 2020 (via Microsoft Teams)

Printed by authority of the Commonwealth Government Printer

<PR723129>

 1   Warrell v Fair Work Australia [2013] FCA 291.

 2   Ibid.

 3   Written Submissions of the Respondent dated 27 August 2020 (Respondent’s Submissions) at [5] – [6].

 4   Respondent’s Submissions at [5] – [6].

 5 Respondent’s Submissions at [10].

 6 Respondent’s Submissions at [12].

 7   Respondent’s Submissions at [17]; Submissions on Binding Contract dated 8 September 2020 (Respondent’s Further Submissions) at [11]; Transcript PN200.

 8 Respondent’s Further Submissions at [7].

 9 Respondent’s Submissions at [20].

 10   Respondent’s Further Submissions at [12] – [13].

 11   Respondent’s Further Submissions at [15] – [17]; Transcript PN205.

 12   Transcript PN196.

 13   Transcript PN197.

 14   Transcript PN217.

 15   Transcript PN230 - PN235.

 16   Transcript PN218, PN250.

 17 Respondent’s Submissions at [20].

 18   Witness Statement of Kevin Baker dated 27 August 2020 at [20], [22] – [23].

 19   Witness Statement of Matthew Baker dated 27 August 2020 at [17] - [19]

 20   Transcript PN104.

 21   Transcript PN121.

 22   Transcript PN109.

 23   Transcript PN113.

 24 Applicant’s Response to application to dismiss at [1].

 25   Applicant’s Response to application to dismiss.

 26   Applicant’s Response to application to dismiss.

 27   Applicant’s Response to application to dismiss.

 28 Applicant’s Response to application to dismiss at [2].

 29   Transcript PN307.

 30   Applicant’s Response to application to dismiss at [3] – [4].

 31   Masters v Cameron [1954] 91 CLR 353 at [360].

 32   Respondent’s Further Submissions at [15]; Transcript PN245.

 33   Transcript PN321.

 34   Transcript PN218.

 35   Transcript PN90 – PN93.

 36   Transcript PN78.

 37   Transcript PN75 – PN76.

 38 [2011] FCA 975 at [32].

 39 [2011] FCA 975.

 40 Ibid at [31].

 41 Ibid at [33].