Shockthorap v Electricity Network Corporation Trading as Western Power
[2018] FCCA 1706
•29 June 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SHOCKTHORAP v ELECTRICITY NETWORK CORPORATION TRADING AS WESTERN POWER & ANOR | [2018] FCCA 1706 |
| Catchwords: PRACTICE AND PROCEDURE – Application for Summary Dismissal – factors for consideration – whether reasonable prospects of success – summary dismissal application allowed |
| Legislation: Fair Work Act 2009 (Cth), s.570(2) |
| Cases cited: Australian Securities & Investments Commission v. Cassimatis [2013] FCA 641; (2013) 220 FCR 256; (2013) 302 ALR 671; (2013) 94 ACSR 623 |
| Applicant: | LAURA SHOCKTHORAP |
| First Respondent: | ELECTRICITY NETWORK CORPORATION TA WESTERN POWER ACN 18 540 492 861 |
| Second Respondent: | ACN 060 472 666 PTY LTD |
| File Number: | PEG 287 of 2017 |
| Judgment of: | Judge Kendall |
| Hearing date: | 31 May 2018 |
| Date of Last Submission: | 31 May 2018 |
| Delivered at: | Perth |
| Delivered on: | 29 June 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr McIntyre SC |
| Solicitors for the Applicant: | Saharan Family & Criminal Lawyers |
| Counsel for the Respondent: | Mr Humphreys |
| Solicitors for the Respondents: | Minter Ellison |
ORDERS
Pursuant to s.17A of the Federal Circuit Court of Australia Act 1999 (Cth) and r.13.10 of the Federal Circuit Court Rules 2001 (Cth) (the “Rules”) the Originating Application filed 2 June 2017 by Ms Laura Shockthorap against Western Power be dismissed.
The parties are to confer with a view to reaching agreement on a minute of proposed consent orders regarding the quantum of costs in the matter (“Costs”), and if agreement is reached the minute of proposed consent orders are to be sent to the Associate to Judge Kendall by either party by 6 July 2018.
If an agreement cannot be reached regarding the Costs in accordance with order 2:
(a)Ms Shockthorap file and serve by 20 July 2018 an outline of submissions of no more than 5 pages addressing whether her Originating Application was commenced “without reasonable cause” pursuant to s.570(2) of the Fair Work Act 2009 (Cth); and
(b)by 3 August 2018 Western Power file and serve an outline of submissions of no more than 5 pages:
(i)in reply to Ms Shockthorap’s outline of submissions referred to in order 2 above;
(ii)addressing the basis on which Western Power has arrived at the quantum of costs it is seeking; and
(iii)stating Western Power’s position on the Court exercising the discretion to make an order for costs under r.21.02 of the Rules.
The issue of costs be determined on the papers unless otherwise ordered by the Court.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 287 of 2017
| LAURA SHOCKTHORAP |
Applicant
And
| ELECTRICITY NETWORK CORPORATION TA WESTERN POWER ACN 18 540 492 861 |
First Respondent
| ACN 060 472 666 PTY LTD |
Second Respondent
REASONS FOR JUDGMENT
Introduction
On 2 June 2017, Laura Shockthorap filed a general protections application PEG287/2017 in the Federal Circuit Court against Electricity Network Corporation T/A Western Power (“Western Power”) (the “substantive application”).
By way of application filed on 22 September 2017, Western Power seeks to have the substantive application summarily dismissed pursuant to section 17A(2) of the Federal Circuit Court of Australia Act 1999 (Cth) (the “FCCA Act”) and Rule 13.10 of the Federal Circuit Court Rules 2001 (Cth) (the “FCC Rules”) on the basis that Ms Shockthorap’s substantive application has “no reasonable prospects of success” (the “summary dismissal application”).
Western Power submits that a concluded settlement was reached between it and Ms Shockthorap in earlier proceedings brought by Ms Shockthorap in the Fair Work Commission.
Ms Schockthorap’s substantive application is based on the premise that no concluded settlement was reached.
Synopsis
The Court finds that a concluded settlement agreement was reached between Ms Shockthorap and Western Power.
In the circumstances the Court finds that Ms Shockthorap’s substantive application has no reasonable prospects of success.
Ms Shockthorap’s substantive application is, accordingly, summarily dismissed.
Relevant Background
On 19 February 2014, Ms Shockthorap lodged a non-dismissal general protections claim against Western Power in the Fair Work Commission (the “FWC”).
There was a mediated conferral between the parties in the FWC on 17 March 2014.
As outlined in an affidavit filed by Ms Briony Pole on behalf of the first respondent in relation to the summary dismissal application (dated 22 September 2017), at paragraphs 16 to 23, the mediation concluded with what solicitors for Western Power say was an offer to settle. Specifically:
16.At the conclusion of the conference, the First Respondent made a without prejudice settlement offer for the Applicant to consider. This offer was made on a ‘no admission of liability’ basis. The First Respondent offered to pay the Applicant a settlement sum of $5,000 (gross) and provide her with a letter of regret, in full and final settlement of the Applicant’s claim and any other claims arising from her relationship with the First Respondent.
17.Ms Reid advised that if the First Respondent’s offer was accepted, the terms of the agreement would be captured in a deed which would include the usual terms regarding confidentiality and non-disparagement.
18.Ms Reid advised (that) the First Respondent was willing to leave its offer open for acceptance until 10am the following day.
19.Commissioner Cloghan asked the Applicant to advise his associate if she accepted the First Respondent’s offer, following which Allion Legal would draw up a deed. Commissioner Cloghan stated that the purpose of the deed was not to renegotiate the settlement, but rather to reflect the common understanding of the parties as to the terms of the settlement.
20.I took a handwritten filenote during the conciliation conference. This filenote includes notes taken during confidential private conference between the First Respondent and Commissioner Cloghan, and also includes legal advice given to the First Respondent by myself and Ms Reid during breaks in the conference.
Annexed hereto and marked “BP-4” is a copy of my filenote, with confidential and legally privileged sections redacted.
21.On 18 March 2014, the Applicant emailed me and advised she accepted the First Respondent’s settlement offer. The Applicant copied Ms Reid and Commissioner Cloghan’s associate into her email.
Annexed hereto and marked “BP5” is a copy of the Applicant’s email dated 18 March 2014.
22.Later, on 18 March 2014, I emailed the Applicant and confirmed I would prepare a deed of settlement and release in relation to the settlement agreement reached between the parties, which I would send to the Applicant shortly.
23.On 20 March 2014, I sent the Applicant via email a deed of settlement and release. I asked the Applicant to sign and return a copy of the deed to me electronically or via post.
Annexed hereto and marked “BP-6” is a copy of my email dated 20 March 2014 and the attached deed.
Before this Court, Western Power’s solicitors stressed that their offer to settle was accepted by Ms Shockthorap. They highlight that on 18 March 2014 Ms Shockthorap sent an email to the solicitors for Western Power which stated: “I have decided to accept Western Power’s offer”.
Ms Shockthorap says, in effect, that she never intended for her email to constitute an acceptance of Western Power’s offer to settle.
Ms Shockthorap’s version of events is detailed in an affidavit filed by her in relation to the summary application proceedings (dated 19 February 2018) at paragraphs 5 to 10:
5. I did not consider the offer to be fair.
6.Commissioner Cloughan told me that if I did not accept the offer, I would have to initiate proceedings in Federal Court within 14 days of the conference to continue my claim.
7.I was very confused about what to do, so I asked for some time to think about it. Ms Pole said I had until 10am the following day to accept the offer or it would be ‘off the table’.
8.I was disappointed with the process followed at the Fair Work Commission conference. After the conference I went straight home and went to sleep as I was not feeling well physically and emotionally.
9.I did not seek any legal advice because I relied upon advice given by Commissioner Cloughan in the conference.
10.In relation to paragraph 21 of Ms Pole’s Affidavit I say that I sent an email 34 minutes before I understood the offer from the First Respondent would expire saying “I have decided to accept Western Power’s offer’’ in circumstances where I was proceeding on the basis that it had been misrepresented to me that I only had 14 days within which to take the alternative course of making an application to the Court. In those circumstances I judged that I would not have time, within 14 days, to accumulate the financial capacity to hire a lawyer to represent me in Court proceedings which I would be required to commence within that time. I formed the view, following my experience in the conciliation process that I would need legal representation to adequately present my case if it proceeded to Court. In calculating my financial incapacity to hire a lawyer within the 14 day time frame I believed was required to complied with, I took into account that I had just lost my job and I had a child to look after.
On 20 March 2014, Western Power sent Ms Shockthorap what they say was a deed of release for her to sign.
Events subsequent to the deed being sent to Ms Shockthorap were summarised by Ms Shockthorap in her written submissions at paragraphs 8 to 29 as follows:
8.By letter dated 26 March 2014 of the Solicitor for the First Respondent to the Solicitor for the Applicant it was asserted that an agreement was reached between the parties on 18 March 2014 which was a binding enforceable agreement.
9.On 27 March 2014 the Applicant informed the First Respondent’s Solicitor by letter that she would not be signing the ‘settlement agreement’.
10.On 8 April 2014 The Applicant wrote to the First Respondent’s Solicitor saying she was awaiting a more appropriate settlement offer.
11.The First Respondent’s Solicitor responded by letter dated 10 April 2014, saying “our client remains of the position that there is a binding agreement between the parties in relation to the settlement of the matter”, but added “If you have any alternative proposal you wish to articulate please do so, including your calculation and justification for any alternative.”
12.The Applicant responded by letter dated 22 April 2014 claiming $26,218.73 as the amount due, being the difference between payment as a contractor and permanent employment together with additional compensation for four breaches of the Fair Work Act 2009 and followed up that letter on 15 May 2014.
13.On 16 May 2014 the Solicitor indicated a response would be provided by 20 May 2014.
14.On 20 May 2014 the First Respondent’s Solicitor wrote offering to ‘uphold the initial settlement offer of $5,000” and ‘pay an additional settlement sum of $2,500 in settlement of the further anticipated legal proceedings’.
15.The Applicant responded by letter dated 11 June 2014 saying she was seeking ‘in order to settle this matter’ a letter of regret, $28,374.10 as compensation for the difference in salary between a contractor and employee and $55,446.12 for breach of the Fair Work Act 2009.
16.The First Respondent’s Solicitor responded by email on 16 June 2014 that their client’s ‘position remains that your claim in this matter has been settled’.
17.About 15 April 2015 communications commenced between the Applicant and Nicole El’Atrache of the First Respondent. On 16 April 2015 the Applicant informed Ms El’Atrache by email that she was seeking $26,218.73 in lost pay and twelve weeks pay for each of six breaches of the Fair Work Act 2009.
18.Ms El’Atrache confirmed in an email dated 17 April 2015 that her understanding was that the Applicant was ‘claiming roughly $81,664.73, comprising $26,218.73 for past lost earning and $55,446 of the alleged breaches’ and offered “On a purely commercial basis… the sum of $25,000 in settlement of the threatened Federal Circuit Court proceedings … open for acceptance until close of business next Tuesday 21 April”.
19.The Applicant counter-offered, by email dated 19 April 2015, to settle for $53,322.36.
20.The First Respondent’s offer was increased to $40,000 gross “in settlement of any and all claims… against Western Power”, by email dated 20 April 2015, and was expressed to be open until 21 April 2015.
21.The Applicant requested, by email of 21 April 2015, that the time be extended until 8am 22 April 2015 and that was agreed to.
22.The Applicant responded by email dated 22 April 2015:
In principle I do agree to the settlement offer of $40,000, however the settlement must not include the withdrawal of my Freedom of Information request as a condition.
…I ask that the deed includes agreement between the parties that the settlement amount is not in lieu of a claim for lost wages…
Provided that the remaining terms of the deed are agreeable to me and it is prepared and executed within a reasonable time frame, I look forward to withdrawing the complaint…
23.The First Respondent responded by email of 22 April 2015:
…our offer of $40,000 was intended to be in settlement of all claims, including your current freedom of information request…
…we can characterise the settlement sum in the deed as an ‘ex gratia payment’ in settlement of a claim, and not payment for lost wages. Please let me know….by no later than 5 pm today if you agree to this…
24.By an exchange of emails, it was agreed that the deadline for response be extended to 23 April 2015.
25.By email dated 23 April 2015 the Applicant set out why she regarded the Fair Work claim as separate for her Freedom of Information Request and pointed out that withdrawal of the Freedom of Information request was not raised until 22 April 2015.
26.The First Respondent replied by email dated 23 April 2015 that:
…our offer of $40,000 was intended to be in full and final settlement of any and all claims against Western Power. Our understanding has always been that this includes your claim for documents under the freedom of information act…
…Western Power can pay you a settlement sum of $40,000 …in final settlement of all claims …including your freedom of information claim … as part of the deed of settlement .. Western Power will arrange for you to come in and view the documents you have requested as part of the freedom of information claim. Then, if for person reasons you identify that you would like copies of any documents you view, Western Power will consider your request and your reasons for making the request, and at its discretion provide you with copies of those documents.
27.The Applicant, by email dated 23 April 2015, responded that the Freedom of Information request was not part of the settlement offer as it was not part of the claim against Western Power.
28.The First Respondent reiterated its offer of settlement (open until 28 April 2015) as follows:
• Western Power will pay you $40,000 (ex gratia)
• You will withdraw your freedom of information request and release Western Power from any other claims you may have;
• You will sign a deed which includes terms around confidentiality and not adverse comments;
• As part of the settlement, once you have signed the deed, you will be given an opportunity to attend Western Power’s office and view copies of any documents which you have asked for as part of your freedom of information request. You may then aske Western Power for copies of the documents you view and give reasons why you require that document. Western Power will then consider your request and reasons and provide you with a copy of the documents on a confidential basis for your personal records if it considers it appropriate.
29.By email dated 28 April 2015 the Applicant declined the offer.
On 5 June 2017, Ms Shockthorap filed a general protections application in this Court against Western Power.
Western Power now seeks to have Ms Shockthorap’s substantive application summarily dismissed.
Law Relevant to Summary Dismissal Applications
The statutory provisions relevant to an application for summary dismissal are outlined in s.17A of the FCC Act and r.13.10 of the FCC Rules.
Section 17A was added to the FCC Act Court on 1 December 2005. It is designed to strengthen the power of the Court to deal with unmeritorious proceedings by broadening the grounds on which the Court can dispose of them summarily.
The Court’s power to summarily dismiss an application is discretionary. The party making the summary dismissal application bears the onus of persuading the Court to make such an order: Australian Securities & Investments Commission v. Cassimatis [2013] FCA 641 at [46] per Reeve J.
As outlined by Cameron J in Martin v Repeller Nominees Pty Limited [2016] FCCA 3478 (“Martin”), the operation of section 17A and the analogous provision in the FCC Act has been discussed in detail in Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 (“Spencer”). In Spencer, the plurality held that no paraphrase of the expression “no reasonable prospect” can be adopted as sufficient explanation of its operation, let alone as a definition of its content, saying:
... full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success (per Hayne, Crennan, Kiefel and Bell JJ at 141 [60]).
In a separate decision in Spencer, French CJ and Gummow J identified circumstances in which a finding that a case lacked reasonable prospects of success would not reasonably be available. Their Honours said:
Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.
Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact (at 132 [25]-[26]).
Their Honours were referencing Lord Hope’s speech in Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 wherein His Lordship said:
In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence (at 261 [95]).
As summarised by Lucev J in McCulloch v Transport Workers Union of Australia Western Australian Branch [2018] FCCA 676 at [20] in assessing whether a case has “no reasonable prospect of success” under these provisions, the following principles apply:
a)the power to dismiss an action summarily should not be exercised lightly, or as was put in Takemoto at [12] per Flick J, “the power must necessarily be approached with caution”;
b)evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects. In a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court will be more reluctant to dismiss a proceeding on the face of a pleading;
c)summary dismissal applications should not involve the Court in lengthy and elaborate hearings for the purposes of determining whether or not a proceeding has no reasonable prospect of success;
d)if there is an issue of fact or law to be decided, and the rights of the parties depend upon it, it is appropriate that the matter goes to hearing;
e)in determining if there are real issues of fact in issue so as to preclude summary judgment the Court must draw all reasonable inferences in favour of the non-moving party;
f)a summary dismissal proceeding ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt. On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a hearing;
g)the mere presence of a trifling, implausible, tenuous or tangentially relevant factual controversy is not a bar to the exercise of the summary dismissal power; and
h)what is required is a prediction of the outcome of a hearing on the merits but not an actual adjudication of those merits such that the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to hearing, it may succeed.[1]
[1] Citing: George v Fletcher (Trustee) [2010] FCAFC 53 at [75] per Ryan and Logan JJ; White Industries Aust Ltd & Anor v Federal Commissioner of Taxation & Anor [2007] FCA 511; (2007) 160 FCR 298; (2007) 66 ATR 306; (2007) 240 ALR 792; (2007) 95 ALD 30 at [50]-[54] per Lindgren J; Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd & Ors [2008] FCAFC 60; (2008) 167 FCR 372; (2008) 46 ALR 465; (2008) 103 ALD 505; [2008] ATPR 42-231 at [45] per Rares J; Lawrenson Light Metal Die Casting Pty Ltd (in liq) v Cosmick Pty Ltd [2006] FCA 753 at [15] per Heerey J; Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 at [6] per Gilmour J.
Issues Before the Court
It was argued by counsel for Western Power in oral submissions that a settlement offer was made by Western Power in March 2014 and Ms Shockthorap’s subsequent acceptance (via email) of that offer constitutes a binding settlement agreement. As such, Ms Shockthorap’s substantive application should be dismissed because (as outlined in paragraphs 24 and 26 in Western Power’s written submissions dated 3 April 2018):
24.The Applicant’s cause of action in the FWC Claim was extinguished by the 2014 Agreement, which was an accord and satisfaction of the FWC Claim. As the cause of action in the FCC Proceedings replicates that in the FWC Claim, the Applicant’s cause of action in these proceedings was therefore also extinguished and replaced by a new cause of action based on the 2014 Agreement.
26.It is settled law that continued pursuit by the Applicant in the FCC Proceedings of a cause of action against the First Respondent which has been extinguished must be considered to be without reasonable prospects of success
Senior Counsel for Ms Shockthorap, in turn, summarised the core issues to be determined by this Court as follows:
2. This case is to be determined upon the basis of a factual issue in dispute, as to whether there was a concluded settlement agreement between the parties on 18 March 2014, which is to be determined by evidence, in circumstances where there is-
(a)a difference of view between the parties as to whether the evidence supports a conclusion as to whether or not the parties arrived at a position where they intended to enter into a binding contract by reason of the words in a one- sentence email directed to a third party, expressing a state of mind, and how those words are to be interpreted in the context of affidavit evidence of the Applicant as to her state of mind; and
(b)a disputed issue between the parties as to whether or not evidence of events subsequent to 18 March is admissible to establish the legal consequences of what occurred on 18 March 2014 and, if admissible, what the effect is of that evidence.
3. While the factual matters in issue are of narrow compass the resolution of them is not without complexity. The Court is not able to and ought not attempt to resolve the factual issues by summary dismissal of the proceedings.
From the above it is clear that the core issue before this Court is whether there was a binding settlement agreement between Ms Shockthorap and Western Power. If, on the evidence currently before the Court, it is clear that a settlement agreement exits in law, then the Court can summarily dismiss Ms Shockthorap’s substantive application.
Evidence
The evidence before this Court included:
·Written Submissions from Western Power dated 3 April 2018 numbering 45 paragraphs.
·Written Submissions from Ms Shockthorap (undated) numbering 59 paragraphs.
·An affidavit from Ms Briony Pole dated 22 September 2017 with lengthy attachments comprising:
− Attachment "BP-1", being a copy of the Applicant’s Form F8 − General protections application
− Attachment "BP-2", being a copy of the First Respondent’s Form F8A − Employer response to general protections application
− Attachment "BP-3" being a copy of the Notice of Listing
− Attachment "BP-4" being a redacted copy of the filenote taken during the Fair Work Commission conference on 17 March 2014.
− Attachment "BP-5" being a copy of the Applicant’s email dated 18 March 2014.
− Attachment "BP-6" being a copy of an email dated 20 March 2014 and attached deed.
− Attachment "BP-7" being a copy of an email and redacted letter dated 26 March 2014.
·An affidavit from Ms Shockthorap dated 19 February 2018 with annexures numbering 70 pages.
·A Bundle of Authorities prepared by Western Power, referencing 13 legal authorities, as follows:
Ms Shockthorap was represented by Mr McIntyre SC. Western Power was represented by Mr Humphreys.
Analysis
The Court notes that neither the applicant’s nor the first respondent’s submissions raise any new principle of law. Nor do they seek to develop any new law.
The Court notes the written submissions from Western Power in relation to what constitutes a binding agreement, as follows:
9. The Applicant’s Acceptance Email created a binding agreement between the parties, on the terms discussed at the FWC conciliation conference.
10.Where parties who have negotiated to 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: Masters v Cameron (1954) 91 CLR 353 (Masters) at [360] per Dixon CJ, McTiernan and Kitto JJ.
11. The three classes in Masters can be summarised as follows:
(a)Class 1 – the parties have reached finality in the terms of their bargain and intend to be immediately bound to the performance of those terms, which will be restated in a form which will be fuller or more precise;
(b)Class 2 – the parties have completely agreed upon all of the terms of their bargain and intend no departure from or addition to it, but nevertheless have made performance of one or more of the terms conditional upon execution of a formal document; or
(c)Class 3 – the parties’ intention is not to make a concluded bargain, unless and until they execute a final document.
12. In each of the first two classes there is a binding contract:
(a)in the first class, it is 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
(b)in the second class, it is a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution.
13.The agreement reached between the parties was on the following terms:
(a)the First Respondent’s offer was to pay the Applicant a sum of $5,000 and provide a statement of regret, being in full and final settlement of the FWC claim and any other claims relating to her engagement by the First Respondent;
(b)the Applicant was advised that if the offer was accepted, the terms of the agreement would be captured in a deed of settlement and release;
(c)Commissioner Cloghan stated to the Applicant that the purpose of the deed was not to renegotiate the settlement, but rather to reflect the common understanding of the parties as to the settlement terms;
(d)by the Acceptance Email, the Applicant provided her unconditional acceptance of the offer; and
(e)after the Applicant advised she accepted the First Respondent’s settlement offer, she was provided, and asked to sign, a deed of settlement and release in relation to the agreement reached between the parties (Deed).
14.The 2014 Agreement was a binding and operative agreement in its own right, which was intended to be reduced to writing. As such, it formed an agreement that fell within one of the first two categories in Masters, and not the third. It was therefore a binding contract.
15.In her affidavit filed on 19 February 2018 (Shockthorap Affidavit) in relation to the entering of a binding agreement between the parties, the Applicant contends she ‘understood that nothing was set in stone until I knew what the terms of the agreement actually were.’ It is settled law that the subjective beliefs of the Applicant must be disregarded by the Court, in favour of an objective view of the language used by the parties and the surrounding circumstances: Woodside Energy Ltd v Electricity Generation Corporation [2014] HCA 7 at [35].
16.The legal obligations of the parties to the contract do not depend upon their subjective beliefs but upon the view of the reasonable bystander informed as to the surrounding context and circumstances, which in practice means the view of the court based on the evidence before it: Johnston v Brightstars Holding Company Pty Ltd [2014] NSWCA 150 at [120] per Basten JA (Johnston).
17.On the plain meaning of the words in the Acceptance Email, there were no qualifications or conditions attached to the Applicant’s acceptance of the First Respondent’s offer. Viewed objectively, this can only lead to the conclusion that the Applicant intended to be immediately bound pursuant to either of Masters classes one or two as described in paragraph 12 above.
Ms Shockthorap’s written submissions, in turn, provide as follows:
Binding Contract/Formal Agreement
32. There is a significant difference between –
(a)the ‘objective approach’ to construing the terms of a contract which is indisputably in existence; and
(b)arriving at a factual determination as to whether or not the parties intended to arrive at the final terms of a bargain.
33.In this case, as Basten J said in Johnston v Brightstars Holding Company Pty Ltd – as succinctly stated by Spigelman CJ in County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [7]:
“The issue is not one of interpretation, because there are no words to interpret. The issue is one of fact: what did the parties agree?”
34.A contract only exists when the parties “have (or think they have) come to one mind”. As was pointed out in Masters v Cameron:
11…..Lord Blackburn said: “parties often do enter into a negotiation meaning that, when they have (or think they have) come to one mind, the result shall be put into formal shape, and then (if on seeing the result in that shape they find they are agreed) signed and made binding; but that each party is to reserve to himself the right to retire from the contract, if, on looking at the formal contract, he finds that though it may represent what he said, it does not represent what he meant to say. Whenever, on the true construction of the evidence, this appears to be the intention, I think that the parties ought not to be held bound till they have executed the formal agreement" (1878) 3 App Cas, at p 1152. So, as Parker J. said in Von Hatzfeldt-Wildenburg v. Alexander (1912) 1 Ch 284, at p 289 in such a case there is no enforceable contract, either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. (at p362)
12.The question depends upon the intention disclosed by the language the parties have employed, and no special form of words is essential to be used in order that there shall be no contract binding upon the parties before the execution of their agreement in its ultimate shape: Farmer v. Honan [1919] HCA 13; (1919) 26 CLR 183.
13…..When it is not expressly stated to be subject to a formal contract it becomes a question of construction, whether the parties intended that the terms agreed on should merely be put into form, or whether they should be subject to a new agreement the terms of which are not expressed in detail” (1877) 7 Ch D, at p 32. (at p363)
35.The Respondent’s unilateral view as to whether they believed a contract was in existence is not sufficient to conclude that the contract was in existence. The evidence as to what was intended by the Applicant is not capable of being ascertained solely by the email of 18 March 2014, which is, at best equivocal, as to the question of whether, by communicating as she did to the Commissioner, the Applicant intended to arrive at the final terms of the agreement. The Applicant deposes to her state of mind at the time as follows:
“I understood that nothing was set in stone until I knew what the terms of the agreement actually were.”
The intention of the parties is to be determined from the objective evidence. The best objective evidence here is seen in the words used by Ms Shockthorap; i.e. “I have decided to accept Western Power’s offer”. Objectively, these words are equivalent to “I accept the offer”.
Ms Shockthorap’s submissions state that the email of 28 March 2014 was sent to a third party. The email was sent to the first respondent’s solicitor. The first respondent’s solicitor is not a third party in any relevant sense. The email sent to the first respondent’s solicitors constitutes acceptance of the first respondent’s offer. If the applicant is to succeed she cannot do so on the basis that the offer was not accepted.
The agreement reached between the parties is within Class 1 of Masters v Cameron (1954) 91 CLR353.
The suggested difference between a) the objective approach to construing the terms of an agreement which is indisputably in existence and b) arriving at a factual determination as to whether or not the parties intended to arrive at the final terms of a bargain (as submitted by the applicant) is illusory. The test is always “what was the parties’ intention?” That intention is to be determined objectively. It is not sufficient for a party to argue that, subjectively, it did not intend to enter into a contract. The test is: “objectively, what do the words used establish”? In this case the words, objectively, establish that there was a concluded agreement.
The Court also notes the written submission from Western Power in relation to the meaning of and effect of what Ms Shockthorap alleges was a mistake on her part:
UNILATERAL MISTAKE
28.The Applicant’s evidence is that she ‘relied upon’ incorrect guidance from Commissioner Cloghan that she would only have 14 days to commence proceedings in the Federal Circuit Court if the FWC Claim did not settle.
29.In the event the Applicant’s assertions in this respect seek to form the basis of an argument that the Applicant made a ‘mistake of law’, the First Respondent relies on the accepted legal position, summarised as follows:
(a)A unilateral mistake of law will generally not void a contract: McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at [408] per Dixon and Fullager JJ, summarising the position at common law in Solle v Butcher [1950] 1 KB 671;
(b)A unilateral mistake provides no basis for relief under the doctrine of mistake, except where:
(i) a party to a contract induces or encourages the other party to hold a mistaken belief, the contract may be rescinded; and
(ii) where a party to a contract knows of the other party’s mistake and deliberately set out to ensure the other party does not become aware of the mistake, the contract may be rescinded: Taylor v Johnson (1983) 151 CLR 422 at [432].
30.The First Respondent submits that the facts in this matter do not support either of the above exceptions, because:
(a)the guidance which the Applicant claims she received from the Commissioner occurred in a private conference, to which the First Respondent was not a party therefore it could not have known or become aware of the alleged mistake; and
(b)the First Respondent did not induce or encourage the Applicant to hold any alleged mistaken belief.
31.The First Respondent submits that the Court must make a finding that any misinformation the Applicant may have received from the Commissioner does not void the 2014 Agreement.
The applicant’s evidence in her affidavit of 19 February 2018 (page 8) is that the first respondent was not present when the alleged advice concerning 14 days was given to the applicant by the Commissioner. There is no evidence to suggest that the first respondent was aware of the commissioner’s alleged guidance. There is, in these circumstances, no basis for a finding of unilateral mistake.
The Court also notes counsel for Western Power’s written submissions that:
2015 DISCUSSIONS
32.The Applicant appears to rely on evidence of communications between her and the First Respondent in 2015 (2015 Discussions) to assert that there was no binding agreement reached on 18 March 2014.
33.It is settled law that it is not legitimate to use as an aid in the construction of a contract anything which the parties said or did after it was made: Agricultural and Rural Finance Pty Limited v Gardiner [2008] HCA 57 at [35].
34.In any event, the terms of the 2014 Agreement (as described in paragraph 13 above) and the Applicant’s acceptance of it (by virtue of the Acceptance Email), were both explicit and do not require interpretation by reference to the parties’ subsequent conduct.
35.There were no circumstances prior to the Applicant sending the Acceptance Email from which a conclusion can be drawn that the parties were in negotiation only, and subsequent negotiations will not alter a contract already made: Lennon v Scarlett & Co [1921] CLR 422 at [506] (Lennon).
36.While conduct occurring after the time at which it is alleged that a contract was entered into can be used to decide whether the contract was in truth entered into, it is submitted the facts in this case do not support such a proposition on the part of the Applicant.
37.The 2014 Agreement was a binding contract, which contained all the terms agreed on at the time and was written with the intent of binding the parties. It was a complete agreement which cannot be affected by subsequent negotiations not resulting in a new contract: Lennon at [509].
38.Further, a reasonable person informed of the surrounding circumstances at the time 2014 Agreement was made would, viewed objectively, consider it to be a binding, complete agreement: Johnston at [120] per Basten JA.
39.The subsequent conduct of the First Respondent in the months following the date on which 2014 Agreement was made is indicative of an agreement having been reached between the parties.
40.In contrast, the 2015 Discussions took place some 13 months after the 2014 Agreement was reached between the parties. In this respect, the First Respondent submits the 2015 Discussions should be given limited weight as evidence of what was objectively agreed to by the parties at the time the 2014 Agreement was made.
41.On the Applicant’s own evidence, the 2015 Discussions took place in the context of a different factual background, arising from the fact the Applicant had pursued a new course of action against the First Respondent in the form of a request for information pursuant to the Freedom of Information Act 1992 (WA). The circumstances surrounding the 2015 Discussions and the subject matter of those discussions were different to the discussions at the time of the 2014 Agreement, which evidenced an intention to make a concluded agreement: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at [550] and [551] per Gleeson CJ, Hope and Mahoney JJA.
42.In this respect, the 2015 Discussions should be viewed by the Court as distinct from the 2014 Agreement. The 2015 Discussions therefore cannot be relied upon by the Applicant as evidence the parties did not intend to be bound by the terms of the 2014 Agreement, as they have limited probative value in determining the proper intention of the discussions about the 2014 Agreement: Sagatious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 at [103] (Sagatious) per Giles JA, citing McLelland J in Film Bars Pty Ltd v Pacific Film Laboratories (1979) 1 BPR 9251 at 9255-6.
43.In the alternative, the 2015 Discussions were discussions between the parties in respect to a potential variation to the 2014 Agreement. On the Applicant’s own evidence, the parties did not reach agreement on the terms of any such variation, meaning it is insufficient to displace or void the terms of the 2014 Agreement. As the 2014 Agreement was a binding contract, subsequent discussions which did not result in a new contract do not affect it: Sagatious at [113] per Giles JA citing Lennon at [409].
Ms Shockthorap, in turn, argued in written submissions:
Subsequent communications
37.Reference may be made to the correspondence between the parties subsequent to the alleged acceptance for the purpose of showing that ‘it was not in the contemplation of either party that they were to be bound until all the essential preliminaries had been agreed to, nor until a formal contract had been drawn up embodying all the matters incidental to a transaction of such a nature’.
38.In Brambles Holdings Ltd v Bathurst City Council Heydon JA said that “post- contractual conduct is admissible on the question of whether a contract is formed”.
39.In Barrier Wharfs Ltd v W Scott Fell & Co Ltd Griffiths CJ had considered that subsequent correspondence between the parties showing that they continued in negotiation “negatives the idea of an existing concluded contract”. In Howard Smith and Co Ltd v Varawa his Honour had said that “the question being whether the parties had in fact concluded an agreement on 1st December, any statements or conduct on their part after that date inconsistent with the existence of a concluded contract are relevant for this purpose”.
40.In Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd McLelland J suggested at 9255-6 that the probative value of subsequent communications lay in the light they shed on “the proper interpretation of the earlier communications alleged to constitute the contract”, such as by showing continued negotiations whereby the alleged contractual dealings could not properly be interpreted as mutual assents to be bound.
41.As Jessel MR said in Winn v Bull, “where you have a proposal or agreement made in writing expressed to be subject to a formal contract being prepared, it means what it says; it is subject to and is dependent upon a formal contract being prepared. When it is not expressly stated to be subject to a formal contract it becomes a question of construction, whether the parties intended that the terms agreed on should merely be put into form, or whether they should be subject to a new agreement the terms of which are not expressed in detail."
42.The conduct and correspondence of the Applicant subsequent to 18 March 2014 make it clear that it was not in her contemplation that she was bound by a concluded agreement from 18 March 2014. She continued to negotiate the terms of an agreement until 28 April 2015. The First Respondent, while not being of the same view as the Applicant, continued to participate in those negotiations.
The terms of the agreement reached on 18 March 2014 between Ms Shockthorap and Western Power establish that there was a concluded agreement. Subsequent events may be relevant where the facts are ambiguous as to whether a concluded agreement was reached, but that is not the case here. Ms Shockthorap has not established that the 2015 negotiations are inconsistent with a concluded agreement. As Western Power notes, in argument, since the subsequent negotiations did not result in a concluded agreement subsequent discussions do not affect the existence of an existing agreement. The Court accepts Western Power’s submissions on this point.
Ms Shockthorap and Western Power reached a concluded agreement on 18 March 2014. Any cause of action Ms Shockthorap had prior to 18 March 2014 merged in the agreement. Ms Shockthorap cannot now bring proceedings which seek a finding that no agreement was reached. Accordingly, Ms Shockthorap has no reasonable prospects of success in relation to her substantive application in this Court. Her proceedings in relation to her substantive application filed 2 June 2017 should be summarily dismissed.
Conclusion
For the reasons outlined above, the Court concludes that:
a)The terms of an agreement reached on 18 March 2014 establish that there was a concluded settlement agreement between Ms Shockthorap and Western Power;
b)In the circumstances, Ms Shockthorap’s substantive application has no reasonable prospects of success; and
c)Western Power’s application in a case to summarily dismiss Ms Shockthorap’s application must be allowed.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Kendall
Date: 29 June 2018
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