Patrick Cooper v Preston Rowe Paterson Sydney Pty Limited T/A Preston Rowe Paterson

[2018] FWC 3958

[2018] FWC 3958

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394, s.399A—Unfair dismissal

Patrick Cooper
v
Preston Rowe Paterson Sydney Pty Limited T/A Preston Rowe Paterson
(U2018/2730)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 3 JULY 2018

Application for an unfair dismissal remedy – respondent’s application to dismiss originating application – Fair Work Act 2009 (Cth) s.399A, s.587 – whether the applicant and the respondent had reached a binding settlement – evidence demonstrates settlement reached – respondent’s application granted – originating application dismissed.

[1] Patrick Cooper (the applicant) applied on 16 March 2018 for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the FW Act) in relation to the termination of his employment by Preston Rowe Paterson Sydney Pty Ltd trading as Preston Rowe Paterson (the respondent) on 12 March 2018.

[2] The respondent has applied to dismiss Mr Cooper’s application under either:

•  s.399A(1)(c) of the FW Act because the applicant has failed to discontinue the application after a settlement has been concluded; or

•  s.587(1)(c) of the FW Act on the basis that Mr Cooper’s application has no reasonable prospects of success because there is a binding agreement between the parties which has resolved the application.

[3] A hearing was conducted on 12 June 2018 to deal with the respondent’s application. The applicant represented himself and the respondent was represented by D Mahendra of counsel. The applicant gave evidence on his own behalf and Nicholas Noonan (a solicitor) gave evidence for the respondent.

The facts

[4] I should state at the outset that I found Mr Noonan’s evidence to be more credible than that of the applicant. In particular I found Mr Noonan’s evidence to be more consistent with the contemporaneous (or near contemporaneous) written records. I also found some of the applicant’s evidence inherently implausible given the chain of events that occurred. Accordingly I have generally preferred Mr Noonan’s evidence over that of the applicant.

[5] I am satisfied of the following facts.

[6] Mr Noonan acted for the respondent in relation to Mr Cooper’s unfair dismissal application from the time the application was filed until 16 May 2018.

[7] On 19 April 2018 Mr Noonan received instructions from the respondent’s Mr Rowe to attempt to conduct a ‘without prejudice’ settlement discussion with the applicant to resolve all disputes with the applicant. These included the unfair dismissal application and another proceeding in the District Court which the applicant had flagged (though had not filed).

[8] On 19 April 2018 Mr Noonan emailed the applicant and invited him (and his representative, if he had one) to attend a ‘without prejudice’ meeting with him to explore the possibility that the dispute the applicant had with the respondent could be resolved ‘before the parties go down the road of formal proceedings.’ 1 The meeting was scheduled for 24 April 2018.

[9] In preparation for the meeting, Mr Noonan had prepared draft settlement terms which he had arranged for Mr Rowe to sign on behalf of the respondent prior to the meeting. These had been prepared by Mr Noonan in the event that he found himself in a position where the applicant was prepared to sign the settlement terms at the meeting. They were in fairly standard terms, and included a mutual release from all claims and liabilities, conversion of the termination of employment to a resignation, and the payment of an ex gratia payment (with the actual amount left blank).

[10] At the meeting on 24 April 2018 Mr Noonan indicated to the applicant that he was instructed to ‘put on the table’ the reclassification of the termination as a resignation, a statement of service and a release in the applicant’s favour. He then asked the applicant whether he wanted to put an offer to the respondent to resolve the unfair dismissal claim and the District Court claim. The applicant said words to the following effect:

‘$50,000. Plus the resignation. And a confidentiality deed…’ 2

[11] Mr Noonan and the applicant then agreed there should be mutual non-disparagement and full and final release on both sides from all proceedings. Mr Noonan then hand wrote notes to this effect on the back of the draft terms of settlement he had brought with him. These notes referred to $50,000, resignation, a deed of confidentiality, non-disparagement and releases on both sides. 3

[12] Mr Noonan then said words to the following effect:

‘So just to confirm, your offer is $50,000 gross payment, reclassification of the termination as a resignation, a deed including confidentiality and mutual non-disparagement terms as well as mutual releases of all claims. The $50,000.00 is gross so it would be taxed as an employment termination payment, an ETP, at 32%’ 4

[13] The applicant then asked whether the termination could be treated as a redundancy. Mr Noonan said it could not because the respondent would be replacing his position, so it would have to be taxed as an ETP. The applicant then responded ‘OK’. 5

[14] Mr Noonan then said he would obtain instructions to see if the matter could be resolved. The applicant said:

‘That is the only offer I will accept…If we can’t do the deal on those terms, I am going to lodge this District Court claim too.’ 6

[15] At this point the applicant stood up to leave and Mr Noonan then said he would get some instructions on the applicant’s offer and would come back to him as soon as possible. The applicant then thanked Mr Noonan and left.

[16] After Mr Noonan returned to the office he obtained instructions from Mr Rowe over the phone to accept the applicant’s offer. Mr Rowe followed this up with an email to Mr Noonan which, inter alia, referred to ‘Patricks offer of $50,000 gross.’ 7

[17] Mr Noonan then emailed the applicant. This included the following:

‘I am instructed to accept the offer of settlement made by you this morning.

I will send you a Deed of Release shortly documenting the terms discussed:

•  Payment to you of $50,000 gross, taxed as an employment termination payment (to be made within 7 days of execution of Deed);

•  Termination reclassified as a resignation;

•  Statement of Service;

•  Mutual releases from any and all claims relating to the employment and termination (including the unfair dismissal claim and any other claims, including the potential District Court claim we discussed);

•  Mutual non-disparagement obligations.’

[18] The applicant replied ‘OK’. 8

[19] Mr Noonan then prepared a Deed of Release which incorporated these agreed terms of settlement, sent it to the applicant, and asked him to sign and return it to him.

[20] On 26 April the applicant sent an email to Mr Noonan. This email included the following:

‘I have managed to read over the Deed and seek some advice and whilst the overall terms and conditions seem straight forward the settlement amount as it is currently structured to be paid wont really work for me.

Once the applicable tax and super (which is hasn’t been specifically referenced in the Deed) are deducted I will have little left over.

After discussing it with my wife and my solicitor the net payment won’t make it worthwhile for me as I have also (as you are aware) incurred solicitor and barrister fees for the preparation of the statement of claim.

Unless we can organize the payment in another way either paid as straight damages, or compensation then it is not really going to be worthwhile me settling the claim.

I am not saying I am not agreeing to settle the disputes I just don’t see why the settlement should be paid as employment income when my employment contract had already been terminated 6 weeks ago….

Should the PRP want to withdraw the acceptance I am happy to proceed with the proposed hearing and lodge the statement of claim.

Having time to think about it leads me to believe I could have been too hasty with my decision without seeking advice about the settlement consideration.’ 9

[21] The only reasonable interpretation of these events is that the applicant agreed to settle his claims if the respondent agreed to the terms discussed at the meeting with Mr Noonan on 24 April 2018. The respondent did agree to those terms and sent the applicant a deed reflecting that agreement. On reflection, and after discussing the matter with his wife and solicitor, the applicant changed his mind and decided that the agreed terms of settlement were no longer acceptable.

Consideration

[22] A recent Full Bench summarised the principles relevant to the issue of when a binding settlement has been reached as follows:

‘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. 

● 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. 

● 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. 

● Acceptance will be effective if it sets out expressly what would be implied by law in the absence of express agreement. 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.

● 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”. Such a request for information does not revoke the offer and may constitute acceptance of the offer.’ 10

[23] The circumstances of this case are relatively straightforward. The applicant put forward the terms he was willing to accept to settle his claims at his meeting with Mr Noonan. These terms were then unequivocally accepted by the respondent. The deed sent by Mr Noonan to the applicant merely served formally to document those agreed terms. The applicant thought it provided him with an opportunity to renegotiate the terms of the agreement. In this he was mistaken.

[24] In Australia Postal Corporation v Gorman 11 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. His Honour stated:

‘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.’12 

[25] I am satisfied in the present case that there is a binding agreement between the parties. The application therefore has no reasonable prospects of success and should be dismissed.

Conclusion

[26] The application is dismissed under s. 587(1)(c) of the FW Act on the grounds that it has no reasonable prospects of success.

SENIOR DEPUTY PRESIDENT

Appearances:

P Cooper, the applicant, in person.

D Mahendra, counsel, with S Wood, solicitor, for Preston Rowe Paterson Pty Limited T/A Preston Rowe Paterson.

Hearing details:

Sydney.

2018.

June 12.

Printed by authority of the Commonwealth Government Printer

<PR608714>

 1   Exhibit 1, Attachment A

 2   Exhibit 1 [30]

 3   Exhibit 1, Attachment D

 4   Exhibit 1 [36]

 5   Exhibit 1, [39]

 6   Exhibit 1, [41], [43]

 7   Exhibit 1, Attachment E

 8   Exhibit 1, Attachment F

 9   Exhibit 1, Attachment G

 10   Subeg Singh v Sydney Trains[2017] FWCFB 4562 at [48] (references deleted)

 11   Australia Postal Corporation v Gorman [2011] FCA 975

12 At [33]