Sanza Lockwood v HWG Cuthill, Mg Quinn, MJ Verbeeten and MJ Will Trustee for Wilhelm Trust T/A Kings Meadows Capital Chemist

[2014] FWC 2950

[2014] FWC 2950

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.365—General protections

Sanza Lockwood
v
HWG Cuthill, MG Quinn, MJ Verbeeten and MJ Will Trustee for Wilhelm Trust T/A Kings Meadows Capital Chemist
(C2013/6442)

COMMISSIONER GREGORY MELBOURNE, 17 JUNE 2014

Application to set aside a Notice of Discontinuance.

Introduction

[1] Ms Sanza Lockwood lodged an application with the Commission on 17 October 2013 under s.365 of the Fair Work Act 2009. The Respondent is her former employer HWG Cuthill, MG Quinn, MJ Verbeeten and MJ Will Trustee for Wilhelm Trust T/A Kings Meadows Capital Chemist (Kings Meadows Chemist).

[2] The application was listed for conference, as required by s.368, in Launceston on 21 November 2013. Ms Lockwood was represented then by her legal representative, Mr Darrell Grey, who was granted leave to appear under s.596(2)(b). The conference concluded on the basis that a settlement had been agreed to, in principle, and the matter was resolved, subject to the terms of a deed of release being drafted, agreed upon and signed by both parties.

[3] On 25 November, four days after the conference, the Commission was copied in on correspondence from Mr Grey to Kings Meadows Chemist attaching the proposed terms of settlement and indicating, “My client will execute that document this Wednesday.” 1 On 4 December 2014 the Commission received a Notice of Discontinuance, signed by Mr Grey on behalf of his client, dated 2 December 2013 and indicating the Applicant “wholly discontinues this matter as part of a settlement agreement.”2

[4] However, on 3 January the Commission received a Form F1 application from Ms Lockwood indicating she sought to have:

“1. F50 Notice of Discontinuance set aside

2. Matter relisted

3. Order for a conciliation conference

4. Date for the conciliation considered after 20 February 2014.” 3

[5] The grounds in support were indicated to be:

“1. Notice of form F50 has been filled (sic) but the matter has not been settled

2. The matter is unresolved

3. Require a later date for the conciliation conference in order to allow time for a separate legal matter to be heard before the Workers Rehabilitation and Compensation Tribunal Reference No: W/2013/1086 Order (S.61)” 4

[6] That application was listed for hearing on 11 March 2014, but subsequently relisted at the request of Ms Lockwood to 10 April 2014. The parties were directed to file and serve written submissions in advance of the hearing.

The issue to be decided

[7] Does the Commission have power to set aside the Notice of Discontinuance filed on 4 December 2014?

[8] If so, is it appropriate in all the circumstances for the Commission to set aside the Notice of Discontinuance?

The Evidence and Submissions

[9] Ms Lockwood filed a statement in support of her application dated 30 January 2014. She states she has “another legal matter” currently before the Workers’ Rehabilitation and Compensation Tribunal. 5 She also said:

“My instructions to my legal representative at the time was to have a clause (‘The respondent excluding any claims for personal injury that the applicant has to which the Workers Compensation and Rehabilitation Act 1988 (Tas)’)

Paragraph 3(c) added to the Terms of Settlement following any relevant documentation from my employment to be filed and/or used for (‘my Workers Compensation hearing’).” 6

[10] Ms Lockwood also stated, “My legal representative at the time & unknown to me filed the F50 - Notice of Discontinuance without the clause added to the terms of settlement”, 7 and she only discovered this when she was again in contact with the Commission. She also stated, “I have not signed the Terms of Settlement and have not received any payment from the respondent”,8 and “I have not been able to put (“my Workers Compensation hearing”) material for Section 42 to the Tribunal because of the current proposed Terms of Settlement.”9 The statement also attached various documents, including the Notice of Discontinuance signed by Mr Grey, and the proposed terms of settlement document.

[11] Kings Meadows Chemist also provided submissions in accordance with the directions issued. It submits an outcome was reached in the conference on 21 November, which was arrived at without pressure or coercion. It also submits the proposed settlement was set out in its “exact terms” by the Commission at the conference and not disputed by any party at the time. 10

[12] It also submits it received a settlement deed on 25 November from Mr Grey, which it signed and returned on 26 November, together with the documents and a cheque in payment of an amount agreed to as part of the settlement terms. It submits:

“We believe this fulfils all the terms of agreement reached at the conciliation hearing. We are therefore unsure why the applicant continues to state that the matter is unsettled.” 11

[13] It also notes the deed of settlement appears to contain the wording sought to be included by Ms Lockwood and it is “perplexed” as to why she feels unable to sign the document. 12 It submits it has since been advised the payment and additional documents it forwarded to Mr Grey with the signed deed of settlement are still being held by him on behalf of Ms Lockwood.

[14] It submits the issue to do with Mr Grey submitting the Notice of Discontinuance on behalf of his client, apparently without her knowledge, is a matter between him and Ms Lockwood and Kings Meadows Chemist “should not be prejudiced” by having the discontinuance set aside. 13

[15] The parties also made further submissions in a brief hearing on 10 April which essentially reiterated the matters set out in their written submissions.

Consideration

[16] A number of decisions of the Commission have been considered to be authority for the proposition that s.586 of the Act is a source of power that enables a Notice of Discontinuance filed by a party to be set aside. However, the exercise of this power was considered by a Full Bench of the Commission in a decision handed down in April last year in the matter of Chandra Gupta Narayan v MW Engineers Pty Ltd 14 (Narayan). The Full Bench specifically turned its attention to “...whether s.586 provides the Commission with the power to grant an application to set aside the Notice of Discontinuance Mr Narayan lodged on 31 July 2012...”15 It’s immediate response to this question was “no” and its reasons for coming to this conclusion are contained in the following paragraphs from the decision, which for the sake of completeness are set out in full, commencing at [6] (references omitted):

“[6] As to the first issue, s.586 provides a power to correct or amend an application, or to waive an irregularity in the form or manner in which an application is made. It is not a power to revoke or set aside an application. Once filed a notice of discontinuance is self executing and it brings the application to an end.

[7] It is not uncommon for the Commission to deal with applications to set aside or revoke a notice of discontinuance. But this is the first occasion on which a Full Bench has considered whether s.586 provides a source of power for the determination of such applications.

[8] The first instance decisions dealing with such applications often rely on decisions made under an earlier, and quite different, legislative framework. The decision in Kontogouris v Tradeflex Services Group Pty Ltd is a case in point. In that matter Senior Deputy President Watson said:

“[10] The Commission possesses general powers in s.111 of the Act, extended to apply to Part VIA of the Act by s.170JE. These powers include powers to:

“correct, amend or waive any error, defect or irregularity, whether in substance or form” [s.111(1)(q)]; and

“generally give all such directions, and do all such things, as are necessary or expedient for the speedy and just hearing and determination of the industrial dispute” [s.111(1)(t)].

[11] In my view, these general powers do provide power to grant leave to an applicant to withdraw a Notice of Discontinuance executed in error, in effect waiving the error and doing what is necessary for the just hearing and determination of a matter.

[12] I accept that the Notice of Discontinuance is intended to bring finality to an application under s.170CE of the Act and it would be unusual for the Commission to exercise its general powers to grant leave to an applicant to withdraw such a notice.” 

[9] Kontogouris has been applied in the context of the current legislative framework, on the basis that the power in s.586 is said to be similar to the power in s.111(1)(t) of the Workplace Relations Act 1996 (Cth). Such an approach is erroneous. The powers in s.586 and in the former s.111(1)(t) are quite different. There is no equivalent to s.111(1)(t) in the Act.

[10] We also note that the decision of Senior Deputy President Harrison in Aguilar v Qantas Airways Limited has been relied on in subsequent cases to support the general proposition that the Commission’s power to set aside a notice of discontinuance is ‘well settled’. But Aguilar does not support such a proposition. It is apparent from her Honour’s reasons that it was assumed that s.586 was a source of power to set aside a notice of discontinuance, but it was unnecessary to conclusively determine that question because the application failed on the merits. This is clear from paragraph [5]of her Honour’s decision:

“[5] For the purposes of this decision I have assumed in the Applicant's favour that s.586 is a source of power to set aside his notice of discontinuance. He has not, however, persuaded me to exercise my discretion to do so. The submissions of Qantas in this respect were compelling and I have generally adopted.”

[11] Whether or not a power to correct, amend or waive an irregularity in an application or document is a source of power permitting the withdrawal of a notice of discontinuance was considered, and rejected, by the Full Commission of the Industrial Commission of South Australia in Tomlinson v Leveda Inc. The Full Commission said:

“Dealing with the option whether the worker can withdraw his notice of discontinuance it should be said there is no provision of the Act or Rules which specifically deals with this issue. The procedural powers of the Commission are contained in ss 165-175 of the Act. Section 166(1)(a) empowers the Commission to allow the amendment of an application, notice, submission, report or other document associated with proceedings. Even giving that provision a liberal interpretation we do not think that the general understanding of amendment proceedings, which is really concerned with assisting in defining the actual controversy between the parties, could include the withdrawal of a formal step in the proceedings.

Section 166(1)(b) empowers the Commission to correct an error, defect or irregularity. Again we do not think that power is intended to apply in circumstances where a party has a change of mind about the continuation of the proceedings or has mistaken the consequences of discontinuance. Rather the subsection is directed towards ameliorating the effect of a variance or failure to comply with a procedure specifically stated in the Act or Rules so that the Commission can proceed to deal with the real dispute between the parties without the limitations of procedural defects.”

[12] There are differences between s.166 of the Industrial and Employee Relations Act 1994 (SA) and s.586 of the Act, but despite these differences Tomlinson supports the conclusion we have reached as to the scope of the power in s.586.

[13] We would also reject the suggestion that the reference to ‘equity, good conscience and the merits of the matter’, in s.578(b) of the Act, provides a source of power to permit the withdrawal of a notice of discontinuance. Section 578(b) is not a source of power, rather it is a matter which must be taken into account in the exercise of the Commission’s discretion in performing functions or exercising powers found elsewhere in the Act. As the Full SA Commission observed in Tomlinson:

“The remaining consideration is whether the general principle that the Commission, in exercising its jurisdiction, is governed in matters of procedure and substance by equity, good conscience and the substantial merits of the case without regard to technicalities, legal forms or the practice of courts (s 154) permits the Commission to consider the application regardless of the constraints of its powers.

The Commission's obligation to apply equity and good conscience is confined by its jurisdiction and powers. It cannot use the principles of equity and good conscience to extend its statutory powers: Walkley v Dairyvale Co-operative Ltd (Preliminary Issues) (1972) 39 SAIR 327 at 358. To do so would be to undermine the authority and standing of the Commission and to lower the confidence of the community in its adjudication. Public policy requires that the parties are entitled to conduct their litigation confident that the Commission will act within its charter.”

[14] For the reasons given we have concluded that s.586 does not empower the Commission to determine an application to set aside a notice of discontinuance. For completeness we note that the Commission may have power to deal with such an application if the notice of discontinuance was filed by mistake or under duress. In such circumstances, the general law may operate to render the notice a nullity. But that is not this case.” 16

[17] The following conclusions appear to follow from the decision of the Full Bench in Narayan:

1. Once finalised a Notice of Discontinuance is self-executing and brings the proceedings to an end.

2. Neither s.586 or s.578(b) of the Act empower the Commission to determine an application to set aside a Notice of Discontinuance.

3. However, the Commission may have a general law power to treat a Notice of Discontinuance as having no effect where the notice was filed by mistake or under duress.

[18] I now turn to consider the circumstances in the present matter in the context of the findings of the Full Bench in Narayan. There is no suggestion of duress in the present matter. Therefore the only basis on which the present application might succeed is if it can be established the Notice of Discontinuance was filed by mistake. Neither party made submissions on this point. However, it is understood the law on mistake is typically concerned with whether genuine agreement exists in regard to the making of a contract or agreement between two parties. It is also noted that the courts are generally reluctant to grant relief to a party on grounds of mistake, but will do so in certain cases to provide relief to a mistaken party. 17

[19] Three broad instances of mistake can be identified. Firstly, a common mistake where each party makes the same mistake, for example, entering into a contract for the sale of goods when those goods, unbeknown to either party, no longer exist. Secondly, instances of mutual mistake where the parties are mistaken about each other’s intentions and at cross purposes. For example, one party believes it is purchasing block A, while the other party believes it is selling block B. If it can be established, based on an objective test, that there is a lack of agreement as a result of this mistake then the contract can be set aside. The third category is unilateral mistake when the one party is mistaken and the other party knows or ought to be aware of that mistake.  18

[20] In the matter of Mr Graeme Frew v Makin Residential 19 Commissioner Jones considered an application to set aside a Notice of Discontinuance filed on behalf of the Applicant by his representative. That decision was handed down prior to the Full Bench decision in Narayan. However, Commissioner Jones indicated in the decision that evidence of mistake, among other matters, “are clearly relevant considerations” in coming to a decision in the matter before her.20 However, she found the Applicant had, after appropriate consultation with his legal representative, “Instructed his representative to file a Notice of Discontinuance on his behalf”.21 She concluded:

“In the circumstances, I have decided to refuse to set aside the Notice of Discontinuance. An Order dismissing the application will be issued today.” 22

[21] The circumstances are clearly different in the present matter. The basis of a settlement of Ms Lockwood’s original s.365 application was reached at the conclusion of the conference in November last year. However, finalisation of the settlement was contingent on the terms of a Deed of Release being agreed to and signed by both parties. Ms Lockwood submits that following the conclusion of the conference she was not prepared to sign the draft of the deed of release prepared by her legal representative, and sought changes to deal with her concerns.

[22] However, in the meantime her representative forwarded an unsigned copy of the deed to Kings Meadows Chemist which was signed and returned forthwith. On 4 December he also filed a Notice of Discontinuance with the Commission indicating the matter had been wholly discontinued. Ms Lockwood only discovered this when she subsequently contacted the Commission.

[23] I am satisfied in all the circumstances Ms Lockwood’s representative should not have filed the Notice of Discontinuance when he did, and acted without his client’s specific instructions in doing so. He appears to have acted on the assumption Ms Lockwood would accept the proposed terms of settlement and would sign the deed of settlement. This assumption is understandable, up to a point, given Kings Meadows Chemist had already signed the deed and forwarded the agreed documents and a cheque to him in accordance with their “part of the bargain.” However, I am also satisfied it was a mistake on his part to forward the Notice of Discontinuance to the Commission prior to his client agreeing to the terms of the deed.

[24] I am also satisfied this is not a case of Ms Lockwood agreeing to a settlement outcome, but then having “second thoughts” and seeking to extricate herself from that arrangement, as was the case in the matter before Commissioner Jones. Ms Lockwood has been concerned throughout that the proposed resolution of this matter should not impact on a workers’ compensation claim she is also pursuing. It is not necessarily clear as to why she actually believes she is unable to agree to the proposed terms of the deed in that context. However, I am satisfied the execution of an agreed deed of release was an important part of concluding the settlement from her standpoint, and her representative was mistaken in filing the Notice before this occurred.

[25] I also acknowledge the submissions of Kings Meadows Chemist that they should not be disadvantaged by an issue that has arisen between Ms Lockwood and her legal representative. I understand their concerns and have a significant degree of sympathy for their position. They have acted throughout in good faith and have not wavered from their position of support for the proposed terms of settlement. They have already complied with what it intended to require of them, including signing the proposed deed of release.

[26] It is also acknowledged that it is undoubtedly an unusual step for the Commission to set aside a Notice of Discontinuance. This has been emphasised in a number of previous decisions of the Tribunal, including the decision of SDP Watson in Kontogouris v Tradeflex Services Group Pty Ltd 23. However, the SDP indicated in that decision he was prepared to take this step in circumstances where the Applicant executed a Notice of Discontinuance in error, in circumstances where he did not intend to discontinue the application at the time.

[27] Similarly, in the present matter I am satisfied Ms Lockwood did not intend to discontinue her application at the time her legal representative purportedly filed the Notice of Discontinuance on her behalf. The execution of a signed deed by both parties on agreed terms was an integral part of concluding the settlement. Without the deed being signed by both parties the Notice should not have been filed. The circumstances can be described as involving a situation of mutual mistake where Ms Lockwood and her legal representative were mistaken as to each other’s intentions at the time. I am also satisfied there is no evidence before the Commission indicating Ms Lockwood contributed to that mistake being made. She may also suffer some detriment in the future by being denied the opportunity of continuing to have the option of pursuing her s.365 application if the Notice is not set aside.

[28] I am accordingly satisfied the Notice of Discontinuance was filed by mistake and in all the circumstances it is appropriate for the Commission to act and determine it be treated as having no effect. An order to that effect will be issued in conjunction with this decision.

[29] However, having come to this decision I also believe the parties require certainty about this matter, given that the conference convened under s.368 of the Act was held in November last year, more than six months ago.

[30] I accordingly propose to allow a further period of seven days from the date of this decision for the parties to consider whether the matter is capable of being resolved on an agreed basis. I am prepared to assist in this process, if requested to do so. However, if any party indicates within this seven day period that all reasonable attempts to resolve the dispute (other than by arbitration) have been or are likely to be unsuccessful I will, after confirming with the other party, proceed to issue a certificate to that effect, as I am required to do under s.368(3)(a) of the Act. In addition, in the event neither party is in contact with the Commission during this time I will also proceed to issue a certificate at the end of that seven day period on the basis of being satisfied, given the passage of time since the application was first lodged, that all reasonable attempts to resolve the dispute (other than by arbitration) have been or are likely to be unsuccessful.

COMMISSIONER

Appearances:

Both parties appeared on their own behalf.

Hearing details:

2014.

Launceston:

10 April

 1   Email correspondence from Darrell Grey to Melissa Verbeeten dated 25 November 2013

 2   Notice of Discontinuance filed by Darrell Grey by email on 4 December 2013

 3 F1 application signed by the Applicant on 3 January 2014 at page 2

 4   Ibid at page 3

 5   Statement of Sanza Lee Lockwood, dated 30 January 2014 at para 1

 6   Ibid at para 3

 7   Ibid at para 4

 8   Ibid at para 6

 9   Ibid at para 8

 10   Submissions of the Respondent dated 25 March 2014 at para 3

 11   Ibid at para 4

 12   Ibid at para 5

 13   Ibid at para 9

 14   [2013] FWCFB 2530

 15   Ibid at [5]

 16   Ibid at [6] - [14]

 17   Daniel Khoury and Yvonne Yamouni, Understanding Contract Law (Lexis Nexus Butterworths, 8th ed, 2010) 291

 18   Ibid 291-314.

 19   [2012] FWA 5608

 20   Ibid at [16]

 21   Ibid at [17]

 22   Ibid at [19]

 23   PR902620, 23 March 2001 per Watson SDP

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