Yan (Rocky) Kong v Citic Pacific Mining Management Pty Limited T/A Citic Pacific Mining
[2016] FWC 4290
•4 JULY 2016
| [2016] FWC 4290 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Yan (Rocky) Kong
v
Citic Pacific Mining Management Pty Limited T/A Citic Pacific Mining
(U2015/16933)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN | ADELAIDE, 4 JULY 2016 |
Application for relief from unfair dismissal – s.399A – settlement agreement – binding agreement – effect of deed of settlement.
[1] On 21 December 2015 Mr Kong lodged an unfair dismissal application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) with respect to the termination of his employment with Citic Pacific Mining Management Pty Ltd (Citic). This decision deals with an application made by Citic to dismiss Mr Kong’s unfair dismissal application pursuant to either s.399A or s.587 of the FW Act.
[2] The application to dismiss was the subject of a hearing in Perth on 21 June 2016. At that hearing, Mr Kong represented himself. Mr Lilburne of counsel represented Citic pursuant to a grant of permission made under s.596(2)(a) of the FW Act. As that grant of permission was opposed by Mr Kong, I have set out the basis upon which I determined it to be appropriate. As a matter of convenience, I have combined this with a summary of the background to the hearing on 20 June 2016. I note that, at Mr Kong’s request, an interpreter has been provided by the Fair Work Commission in each of the proceedings in which he has participated. That interpreter service has been utilised by Mr Kong as and when he requested it.
[3] Mr Kong’s application was referred to me on 6 April 2016. It was the subject of a telephone directions conference on 15 April 2016. Mr Kong did not participate in that conference but was represented by Mr Jacobsen, of counsel. Citic was represented by Mr Lilburne. As my directions of 15 April 2016 recorded, both parties indicated that grants of permission would be sought and confirmed that neither party opposed those requests. In those circumstances, I confirmed that the parties should proceed on the basis that this permission would be granted. I note at this point that the 15 April 2016 directions confirmed that the application would be listed for a hearing in Perth on 20 and 21 June 2016. This hearing was to specifically consider the Citic objection to the application, made on the basis that the termination of Mr Kong’s employment was a case of genuine redundancy. The long delay in the listing of the matter was due to advice provided to me that Mr Kong was travelling in China and difficult to contact.
[4] Over a number of weeks during May 2016, Mr Kong forwarded correspondence to my office. Despite requests to the contrary, Mr Kong did not generally copy those emails to Citic. One of these emails advised that Mr Kong was no longer proposing to be represented. A number of the emails from Mr Kong advised that he was considering a settlement offer. Amended directions were issued on 19 May 2016. In these directions I stated:
“[3] In the event that Mr Kong seeks to represent himself in the hearing on 20 and 21 June 2016, I reserve his rights to adopt a different position with respect to whether representation should be granted to Citic Pacific Mining Management Pty Ltd T/A Citic Pacific Mining (Citic). Accordingly, Citic is on notice that it should attend this hearing on 20 and 21 June 2016 prepared to argue its position relative to representation pursuant to s.596(2) of the Fair Work Act 2009. A copy of this section is attached.
[4] I also understand that the parties are continuing settlement negotiations and confirm that my office should be advised as a matter of urgency, if this application is resolved.”
[5] As a consequence of the continuing emails from Mr Kong, the application was again listed for a telephone directions conference on 27 May 2016. Mr Kong participated in this conference by telephone from China. Mr Lilbourn represented Citic. The parties indicated that they disagreed over whether the application had or had not been resolved. Notwithstanding this, both parties indicated that the application could still be settled. Citic foreshadowed that, if the matter was not settled, a motion to dismiss the application pursuant to ss.399A and 587 of the FW Act would be lodged. Whilst Mr Kong’s application remained listed for consideration of the genuine redundancy issue on 20 June 2016, the date for the provision of materials for this hearing was extended to accommodate the parties through further directions issued on 31 May 2016. I note that, at the request of the parties, the directions conference on 27 May 2016 was prolonged so that both parties could access the services of the interpreter provided by the FWC. As I did not participate in this aspect of the conference, I have not further remarked on it.
[6] Later on that same day, the Citic motion to dismiss the application was lodged. On 1 June 2016, further directions were issued, listing the s.399A and 587 motions for hearing on 21 June 2016.
[7] A lawyer or paid agent can only appear in the FWC with the permission of the Commission. Section 596(2) specifies the circumstances which the FWC is required to be satisfied about in order to grant that permission. This section states:
“596 Representation by lawyers and paid agents
…
(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:
(a) it would enable the matter to be dealt 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.
Note: Circumstances in which the FWC might grant permission for a person to be represented by a lawyer or paid agent include the following:
(a) where a person is from a non English speaking background or has difficulty reading or writing;
(b) where a small business is a party to a matter and has no specialist human resources staff while the other party is represented by an officer or employee of an industrial association or another person with experience in workplace relations advocacy.”
[8] The background circumstances which I have outlined led me to the following conclusions with respect to s.596(2). Firstly, it is clear that Mr Kong’s changed decision so as not to be represented has affected his position with respect to a grant of permission for Citic. Secondly, Mr Lilburne has been actively involved in the matter from shortly after the application was made, and his continuing involvement in some form is clearly integral to the consideration of the Citic motions to dismiss the application. I have concluded that it would be a denial of natural justice for the FWC not to hear from Mr Lilburne who has provided a witness statement and supporting material. In the event that permission is not granted for representation of Citic by a lawyer, Citic would be in the unenviable and difficult position of having to argue its motion to dismiss Mr Kong’s application on the basis of the actions of its lawyer. I was satisfied that this means that a grant of permission was appropriate in accordance with s.596(2)(a) in that the motion to dismiss the application involves some complexity associated with the disputed facts and representation of Citic by a lawyer would enable these issues, which are closely related to the evidence of Mr Lilburne, to be addressed more efficiently.
[9] Additionally, I am satisfied that a grant of permission is appropriate pursuant to s.596(2)(b), because Mr Lilburn has been representing Citic in the proceedings which led to the disputed settlement agreement. Until Mr Kong changed his representation arrangements, there was no dispute over Mr Lilburn’s involvement. Even more particularly, the Citic position is heavily dependent on the evidence of its lawyer, Mr Lilburne, such that I consider Citic is unable to represent itself effectively if it is required to effectively use “in-house” personnel to effectively test the evidence of its external lawyer.
[10] The Citic motion to dismiss Mr Kong’s application is made on the basis that Citic asserts that, on 11 May 2016, a binding agreement was reached between Mr Lilburne and Mr Jacobson, then representing Mr Kong. Under this agreement Mr Kong was to receive five weeks salary in full and final settlement of all matters pertaining to Mr Kong’s employment with Citic. Citic assert that these terms were subsequently recorded in a draft Deed of Release that it was intent on complying with. Further, that Mr Kong has not provided a valid basis for his apparent refusal to comply with this settlement.
[11] Mr Kong’s position has a number of facets to it. Firstly, he asserts that there was no binding agreement reached on 11 or 12 May 2016 and that, consistent with the approach generally described as the Masters v Cameron principle, 1 the discussions on 11 or 12 May 2016 were not conclusive and were subject to agreement on an appropriate deed of release. Mr Kong’s evidence was that:
“26. At all relevant times, the discussion between Mr Jonathan Jacobson (Archon Legal) and myself was only focusing on the payment not extend to other terms as per the list on email dated 3 May 2016.” 2
[12] Mr Kong asserts that deed was not satisfactorily negotiated. Furthermore, Mr Kong asserts that a settlement offer was put by Mr Lilburne on 3 May 2016 but was left open only until close of business 9 May 2016. Mr Jacobson responded to that offer on 4 May 2016 with a counter claim. That counter claim was rejected. On 10 May 2016 Mr Jacobson sent Mr Lilburne an email in the following terms:
- “My client has instructed me to accept your client’s offer made on Tuesday, 3 May 2016:
- payment of five weeks gross salary with tax to be deducted;
- the settlement would cover the Company, its associated entities and their officers, employees and agents; and
- that the offer is subject to a deed of release in mutual terms to include confidentiality and non-disparagement to be executed by the parties.
Please can you send me a draft Deed of Release, which I will forward to my client assuming that no amendments are necessary. Once the payment has been made, my client will discontinue the proceedings in the FWC.” 3
“I note your advice that your client accepts my client’s offer made on Tuesday 3 may 2016.
As you are aware that offer lapsed when you made a counter-offer on 4 May 2016.
However as set out in my email below dated 5 May 2016, I will encourage my client to finalise the matter on the basis.
I will come back to you as soon as practicable but it may not be until tomorrow.
I trust that is acceptable to your client.” 4
[14] The draft Deed of Release was then forwarded to Mr Jacobson’s office on 13 May 2016. Mr Kong advised that he did not agree to those terms. In this regard he relies on offer and acceptance principles applicable under common law.
[15] I have also noted that Mr Kong asserts that whilst Mr Lilburne’s correspondence was generally forwarded on a “without prejudice “basis, Mr Lilburne had subsequently consented to waive that caveat and he accordingly asserted that Mr Lilburne’s correspondence and negotiating position did not make any mutual concessions so as to involve any compromise position.
[16] Additionally, Mr Kong explained that the position he adopted with respect to the draft Deed of Release was inconsistent with the settlement proposed in that it sought to exclude Mr Kong from making any further claims against Citic.
[17] Mr Kong’s evidence covered a range of matters not directly related to the asserted settlement of his application. Mr Kong’s version of the negotiations was in the following terms:
“23. On 3 May 2016, Mr Rob Lilburne (Ashurst Australia) emailed Mr Jonathan Jacobson (Archon Legal) to reject 14 weeks offer and made a counter offer of 5 weeks. Attached and marked “I” is a copy of the email.
I refer to our telephone discussion yesterday and your client’s without prejudice offer to accept the value of 14 weeks’ salary …
That offer is rejected.
In a final effort to try to resolve this matter without the need for litigation our client makes the following without prejudice offer of settlement:
- payment of five weeks gross salary with tax to be deducted;
- the settlement would cover the Company, its associated entities and their officers, employees and agents; and
- that the offer is subject to a deed of release in mutual terms to include confidentiality and non-disparagement to be executed by the parties.
… the settlement amount is reduced as a result of the additional legal expenses it has been forced to incur since the previous offers were made.
This offer remains open for acceptance until close of business on Monday 9 May 2016 at which time it lapses… no further offers of settlement after this will be possible.
(emphasis added)
…
26. At all relevant times, the discussion between Mr Jonathan Jacobson (Archon Legal) and myself was only focusing on the payment not extend to other terms as per the list on email dated 3 May 2016.
27. On 10 May 2016, Mr Jonathan Jacobson (Archon Legal) sent email to Mr Rob Lilburne (Ashurst Australia). Attached and marked “L” is a copy of the email.
My client has instructed me to accept your client’s offer made on Tuesday, 3 May 2016:
● payment of five weeks gross salary with tax to be deducted;
● the settlement would cover the Company, its associated entities and their officers, employees and agents; and
● that the offer is subject to a deed of release in mutual terms to include confidentiality and non-disparagement to be executed by the parties.
(Emphasis added)
28. On 10 May 2016, Mr Lilburne (Ashurst Australia) sent email to Mr Jonathan Jacobson (Archon Legal) to advise below. Attached and marked “M” is a copy of the email.
I note your advice that your client accepts my client’s offer made on Tuesday 3 May 2016.
As you are aware that offer lapsed when you made a counter-offer on 4 May 2016.
However as set out in my email below dated 5 May 2016 I will encourage my client to finalise the matter on this basis.
…
29. On 11 May 2016, there was no correspondence or phone conversation, confirmed by Mr Jonathan Jacobson (Archon Legal).
30. On 12 May 2016, Mr Rob Lilburne (Ashurst Australia) telephone Mr Jonathan Jacobson (Archon Legal) to advise that CPM would make 5 weeks payment and that he would send through a deed. Attached and marked “N” is a copy of the file note.
31. On 13 May 2016, Ms Ashleigh Littlewood (Ashurst Australia) emailed Draft Deed of Release (Draft) to Mr Jonathan Jacobson (Archon Legal). Attached and marked “O” is a copy of the email.
Please find attached the Draft Deed of Release in the terms proposed by our client.
(Emphasis added)
32. On 17 May 2016, I was forward this Draft via email by Mr Jonathan Jacobson (Archon Legal). Attached and marked “P” is a copy of the Draft Deed.
33. From 17 May 2016 to 25 May 2016, I had discussion with Mr Jonathan Jacobson (Archon Legal) about the Draft. As previously advised to him that I only discuss about settlement for unfair dismissal at FWC, thus anything else are not relevant. I also told him I did not have more funds to pay. So he agreed I can discuss the Draft directly with Mr Rob Lilburne (Ashurst Australia).
34. On 25 May 2016, Mr Jonathan Jacobson (Archon Legal) filed From F54 Notice of Representative Ceasing to Act.” 5 (sic)
[18] Mr Kong then provided his understanding of the discussions he had with Mr Lilburne about the Deed of Release. He advised that he was confused about the time limits given to him for him to agree with the Deed and that he could not get valid advice in this respect.
[19] As Mr Kong agreed that, on or around 10 May 2016 he instructed Mr Jacobson to pursue a settlement providing for five weeks pay, I asked Mr Kong if he was still prepared to settle the matter on that same basis. Mr Kong advised that he was not prepared to settle the matter on that basis. Later in this hearing he advised that his position had changed from 10 May 2016. He advised that this change was due to the following factors:
● he had subsequently received an account from his lawyers for the time they had spent on the matter,
● he had subsequently reached a conclusion that, because he had become a father earlier in 2016, he now considered that he may be entitled to some additional parental payments, and
● he did not consider that the proposed payment adequately reflected full compensation for the relinquishment of any claims (other than workers compensation and superannuation) which he could make against Citic.
[20] Mr Lilbourn’s evidence in this matter went to the discussions and email correspondence he had with Mr Jacobson, representing Mr Kong. Mr Lilburne detailed these communications. Of critical importance is his evidence in the following terms:
“6. …
(b) In response to my email of 3 May 2016, Mr Jacobson, on behalf of Mr Kong, made a counter offer in which he sought payment of 8 weeks salary. A copy of the relevant email of 4 May 2016 is annexed hereto marked “RL-2”.
(c) After obtaining the Respondent’s instructions, I emailed Mr Jacobson on 5 May 2016 informing him that Mr Kong’s counter offer had been rejected. A copy of my email of 5 May 2016 is annexed marked “RL-3”.
(d) On 10 May 2016, Mr Jacobson emailed me purporting to accept the settlement proposal that the Respondent had made as communicated in my email of 3 May 2016. A copy of Mr Jacobson’s email dated 10 May 2016 is annexed marked “RL-4”.
(e) That same day, I emailed Mr Jacobson advising him that, on account of Mr Kong’s counter offer, the Respondent’s offer of 3 May was no longer open for acceptance. I, however, undertook to obtain instructions regarding whether the Respondent was nevertheless still prepared to settle on the basis of its original settlement proposal. A copy of my email dated 20 May 2016 is annexed marked “RL-5”.
(f) I, once again, obtained instructions from the Respondent and, on 11 May 2016, consistent with those instructions, I telephone Mr Jacobson. In a short discussion, I advised Mr Jacobson that the Respondent would prepare the Deed of Release in the agreed terms.
(g) Mr Jacobson, on behalf of Mr Kong, then confirmed that the dispute was resolved and I recall that we had a brief discussion regarding the preparation of an appropriate Deed of Release recording the substance of the terms of the Respondent’s original settlement proposal dated 3 May 2016.
(h) In all of the discussions with Mr Jacobson regarding possible settlement – including a number of discussions before my email of 3 May 2016 – the various proposals from both the Applicant and the Respondent were premised upon a settlement of all matters relating to the Applicant’s employment and termination of that employment. It was expressly discussed at the conciliation conference that this would exclude any disputes about superannuation or workers’ compensation.
(i) A draft Deed of Release was then prepared and a copy of that Deed of Release was provided to Mr Jacobson under the cover of an email dated 13 May 2016. A copy of the email and the draft Deed of Release is annexed marked “RL-6”.” 6
[21] Mr Lilburne advised that when he had not heard from Mr Jacobson, his office followed the matter up and was advised, on 17 May 2016, that Mr Jacobson expected to hear back from Mr Kong on the following day. On 25 May 2016 Mr Jacobson advised Mr Lilburne that he was no longer representing Mr Kong.
[22] Mr Lilburne’s evidence went to the discussions he then had with Mr Kong. He advised that Mr Kong sought a number of amendments, including amendments which would enable him to pursue other actions against Citic. Mr Lilburne advised that:
“6. …
(o) When it first became apparent that the Applicant did not want to go through with the parties’ agreement, I also telephone Mr Jacobson to try and understand what was going on. I did so on 26 May 2016. In that call I explained to Mr Jacobson that the Applicant was trying to change aspects of the agreement and I asked Mr Jacobson whether he knew the reason why the Applicant was doing so as I considered that settlement had been agreed. Mr Jacobson told me and that, as far as he was concerned, a settlement had been reached.” 7 (sic)
Findings
[23] There is some dispute about a discussion which occurred between Mr Lilburne and Mr Jacobson on either 11 or 12 May 2016. Mr Lilburne’s evidence is that this occurred on 11 May 2016. 8
[24] I have also noted Mr Lilburne’s evidence that Mr Jacobson confirmed this agreement on 26 May 2016. 9
[25] Mr Kong’s position is rather more remote in that he relies on an email from his former lawyer, Mr Jacobson, in following terms:
“Rocky
This is the last email from you that I will be responding to. You have an outstanding account for April that you have not paid and you have recently received our account for May. I have written to you and terminated your retainer with our firm. Please do not email me for any more information.
I attach my file note of 12 May 2016. That file note shows that on 12 May 2016 Rob Lilburn called me and advised that Citic would pay 5 weeks compensation and that he would end through a deed.
I attach an email from Ashurst dated 13 May 2016, which contained the deed of settlement. I was very busy on Friday 13 May and Monday 16 May, so I only had a chance to review the deed and write to you with my views about the deed on 17 May 2016.”
Regards
Jonathan Jacobson / Senior Associate” 10
[26] I note that Mr Kong elected not to provide the file note referenced in that email to him from Mr Jacobson but instead, preferred to adhere to his assertions about the settlement proposal. I have concluded that Mr Kong has elected not to provide that file note to me on the basis that it does not support the position he is now promulgating.
[27] In this respect, there is no evidence before me from Mr Jacobson. It is very clear 11 that Mr Kong had not, at least until very recently, paid Mr Jacobson’s account and that Mr Jacobson has responded to Mr Kong’s questions to him on the basis of his professional principles which I understand would not extend voluntary participation in proceedings of this nature.
[28] On the material before me, I have preferred Mr Lilburne’s version of the events which led to the provision, on 13 May 2016, of the Deed, with the exception that I accept that the discussion between Mr Lilburne and Mr Jacobson may have occurred on either 11 or 12 May 2016. I do not consider that difference in dates to be significant.
[29] Citic initially relies on s.399A of the FW Act, which states:
“399A Dismissing applications
(1) The FWC may, subject to subsection (2), dismiss an application for an order under Division 4 if the FWC is satisfied that the applicant has unreasonably:
(a) failed to attend a conference conducted by the FWC, or a hearing held by the FWC, in relation to the application; or
(b) failed to comply with a direction or order of the FWC relating to the application; or
(c) failed to discontinue the application after a settlement agreement has been concluded.
Note 1: For another power of the FWC to dismiss applications for orders under Division 4, see section 587.
Note 2: The FWC may make an order for costs if the applicant’s failure causes the other party to the matter to incur costs (see section 400A).
(2) The FWC may exercise its power under subsection (1) on application by the employer.
(3) This section does not limit when the FWC may dismiss an application.”
[30] In its application Citic seeks a determination that Mr Kong concluded a settlement agreement but then failed to discontinue his application. Notwithstanding that Citic seeks that Mr Kong’s application be dismissed on this basis, Citic has confirmed that it undertakes to comply with the terms of the agreement which it asserts was reached in May 2016.
[31] The initial issue goes to whether there was a concluded settlement agreement. In that event, the discretion exists for me to conclude that Mr Kong acted unreasonably in failing to discontinue his application.
[32] I have concluded that there was a concluded settlement agreement and that this settlement agreement provided for five weeks pay, less tax, on the basis that Mr Kong had no further claims against Citic, its associated entities and their officers, employees and agents. The settlement protected Mr Kong’s superannuation and workers compensation rights. The settlement included confidentiality and non-disparagement. The settlement terms were to be reflected in a Deed of Release to be provided by Citic. I have summarised the reasons for my conclusion in the following terms.
[33] I have found Mr Lilbourn’s evidence to be substantially more reliable than that of Mr Kong and, to the extent of any inconsistency, have preferred that evidence.
[34] I have accepted Mr Lilburne’s evidence that all of his settlement discussions with Mr Jacobson were predicated on a settlement of all matters relating to Mr Kong’s employment 12 other than workers compensation and superannuation issues. Not only does that approach reflect the normal arrangement for the conclusion of applications of this nature, but it is consistent with the emails between Mr Jacobson and Mr Lilburne. Mr Lilburne’s email of 3 May 2016 refers to a settlement that would cover the “Company, its associated entities and their officers, employees and agents”.13 That phraseology is consistent with a final settlement arrangement. Further, Mr Jacobson’s response on the following day appears to accept all but the monetary component of this proposal. Mr Jacobson confirmed this in his email to Mr Lilbourn on 10 May 2016.14
[35] The subtle differences in the phraseology adopted in the various correspondence between Mr Lilburne and Mr Jacobson relative to settlement offers does not change the nature of the final settlement. Mr Kong’s assertion that any final settlement agreement was contingent on resolution of other unresolved issues such as whether the settlement precluded him from taking any other action against Citic, apart from actions relating to workers compensation or superannuation matters is inconsistent with the negotiations. Correspondence throughout the protracted settlement negotiations has been consistent in this regard. There is nothing provided to me about Mr Kong’s position which indicates that a different form of more limited settlement was being contemplated or pursued. Mr Kong has asserted that the minor differences in phraseology in the correspondence between Mr Lilburne and Mr Jacobson over settlement arrangements over the course of a number of months enabled him to form a view that the five-week settlement offer accepted on 10 May 2016 was not in full and final settlement of any other claims he might wish to make. That submission lacks credibility. Had it been the case that there was any form of substantive departure from the full and final settlement nature of the settlement discussions, I consider that would have been included in Mr Jacobson’s correspondence to Mr Lilburne of 4 and 10 May 2016. Instead, Mr Jacobson’s statement that “the settlement would cover the Company, its associated entities and their officers, employees and agents;”, indicates clearly that the proposal put by Mr Kong was a full and final settlement.
[36] As I have indicated, Mr Kong did not provide to me a copy of Mr Jacobson’s file note of 12 May 2016. I have concluded from this that the file note does not support the position now contended by Mr Kong.
[37] Mr Kong’s assertion that any agreement was always subject to the successful negotiation of a “Deed of Settlement” similarly lacks credibility. It is clear from Mr Lilburne’s 10 May 2016 email that the deed was simply to confirm the agreed settlement.
[38] Mr Kong’s answers to my questions about the reason why his position had changed from 10 May 2016 to the present time, are indicative of a clear and consistent understanding about the agreement reached on 11 or 12 May 2016. Mr Kong’s advice to me indicated that he simply changed his mind some time after 10 May 2016.
SENIOR DEPUTY PRESIDENT O’CALLAGHAN:
… you’ve explained to me that part of the reason why you refused that proposition that I put to you this morning related to the fact that you now have an account from Mr Jacobson. What other reason explained your response this morning?
MR KONG:
And the other thing was that before the dismissal I told the company I will have a baby, but they dismissed me, so it affect my other legal rights like paid parental leave or something. 15
[39] Further, Mr Kong stated:
MR KONG:
I instructed settlement of the matter for five weeks, yes, yes.
SENIOR DEPUTY PRESIDENT O’CALLAGHAN:
Do you say you put in any constraints or caveats or conditions on that settlement?
MR KONG:
Can I have the interpreter interpret please ….
INTERPRETER ….
MR KONG:
We did not talk to many things, we only discuss about the five weeks payment and also it based on the offer subject to …. something to discuss. 16
[40] In this last respect I have concluded that Mr Kong’s failure to articulate specific additional negotiating issues also confirms that there was a clear settlement agreement.
[41] I have considered the nature of the agreement reached on 11 or 12 May 2016 in the context of numerous other authorities. Firstly, and notwithstanding Mr Kong’s submissions, I am satisfied that the agreement reached on 11 or 12 May 2016 between Mr Jacobson, representing Mr Kong and Mr Lilburne, representing Citic was an agreement which was a binding contract consistent with Masters v Cameron. 17 It required Mr Lilburne to gain Citic’s prior approval to reconfirm and it followed a clear undertaking on behalf of Mr Kong. The settlement deed could only be intended to formally document the agreement that had been reached. The reservation relating to amendments which is contained in Mr Jacobson’s email of 10 May 201618 must be read consistent with the earlier correspondence as meaning that this deed was not a further negotiating point.
[42] Mr Kong’s circumstances are consistent with those addressed in other decisions such as Gorman v Australia Post. 19 A Full Bench in Curtis v Darwin City Council20 considered the Masters v Cameron distinctions before stating:
“[63] Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have any, any binding effect of their own. The expressions ‘subject to contract’, ‘subject to the preparation of a formal contract’ and others of similar import prima facie create an overriding condition so that what has been agreed upon must be regarded as the intended basis for a future contract and not as constituting a contract of itself.
[64] At first instance the Commissioner was satisfied that there was a binding agreement between the parties. The Commissioner deals with this issue at paragraphs [68]-[70] and [74] of his decision, in these terms:
“[68] The question of whether there was or was not a binding settlement agreement is a question of fact. That the draft Deed was never signed by the Applicant does not mean the Applicant cannot be bound by an agreement if made. The High Court in Masters v Cameron made this clear in determining where parties reach agreement on terms of a contractual nature and agree the negotiations will be dealt with by a formal contract, that the first two categories of agreement described in Masters v Cameron will be binding despite the absence of a signed Deed.
[69] It is my view that the subsequent draft settlement agreement prepared by Mr Roffey went further than the terms of the settlement reached on 30 January in that it included terms beyond those the Applicant had instructed Ms Early to offer to the Respondent. In that regard I specifically refer as an example to the breadth of the mutual release clause in the draft deed prepared by Mr Joffey. 53
[70] On the basis of the views expected by the Full Bench in A.Zoiti-Licastro v Australian Tax Office where an agreement is reached and subsequently a draft Deed prepared which may go beyond the terms of the agreement reached, it does not mean the agreement reached is not binding. In such circumstances the party objecting to the inclusion of such terms in the draft should indicate their rejection of those terms that were not part of the agreement actually made. ...
[73] It is my view the nature of the agreement was of a kind falling within the first category of agreement described in Masters v Cameron, 54 in that the parties had ‘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’.”
[65] In dismissing the Appellant’s argument, the Commissioner relied on the Full Bench decision in A Zoiti-Licastro v Australian Tax Office. 55 The relevant facts in that case are set out at paragraphs 4-6 of its decision:
“[4] The evidence concerning the settlement discussions is set out in the Senior Deputy President’s decision. It is not necessary to repeat it all. It is clear that following discussions on 3 March 2005 between Mr Dowling on behalf of the appellant and Mr Niall on behalf of the ATO agreement was reached on the following terms:
(i) the ATO would pay the appellant $17,000 ($12,000 on the presentation of invoices for legal costs and $5,000 as an eligible termination payment);
(ii) a statement of service would be provided to the appellant;
(iii) payment would occur within 14 days of signing terms of settlement;
(iv) the appellant would adjourn the proceedings pending receipt of payment.
[5] Despite this level of agreement, the appellant contended that there was no completed agreement. She relied on two related issues. The first was that when a formal agreement was drawn up by the ATO’s solicitor for signature it contained provisions by which each party released the other from further liability in relation to the termination of employment. Mr Dowling maintained that a mutual release provision had not been discussed, let alone agreed upon, in the settlement discussions on 3 March 2005. Mr Niall testified that although it was unlikely, it was possible that no express reference had been made to mutual releases in the discussions. Nevertheless he regarded mutual releases as standard in settlements of the kind being discussed.
[6] The second matter relied upon by the appellant was that any agreement which had been made was conditional on written terms being agreed. Although there was no evidence of this condition being discussed, it appears that it was accepted by both sides that there would be a signed agreement in due course.”
[66] The Senior Deputy President at first instance in Zoiti-Licastro had found that the appellant had agreed to release the ATO from any liability arising from her employment by the ATO, save for personal injuries. He pointed out that the ATO’s solicitors had sent the appellant’s solicitors a facsimile letter on 4 March 2005 confirming the terms of settlement. The terms set out included the following: “5. Mutual releases by both parties in the usual terms.”
[67] The Senior Deputy President also referred to a settlement agreement sent to the appellant’s solicitors by the ATO’s solicitors a few days after the settlement discussions on 7 March 2005. That agreement contained mutual release provisions. In particular it contained a clause by which the appellant released the ATO from any liability arising out of the appellant’s employment with the ATO, other than claims by the appellant under the Safety, Rehabilitation and Compensation Act 1988 and/or the relevant superannuation legislation. The Senior Deputy President regarded it as significant that no objection had been raised to the facsimile letter of 4 March or the settlement agreement forwarded on 7 March until the indication on 31 March 2005 that the appellant did not want to go ahead with the settlement. Furthermore, counsel for the Appellant gave evidence that he had told his client that if she settled the proceedings she would be surrendering all of her rights, save any injury rights. This apparently took place before the conclusion of the discussions on 3 March 2005.
[68] The Full Bench dismissed the appeal in respect of this issue, stating:
“We are satisfied that there was no relevant error in the Senior Deputy President’s reasoning on the release issue. It would be most unlikely, as the Senior Deputy President himself pointed out, that the ATO would pay money in settlement without receiving a release of some kind. Furthermore the release contained in the settlement agreement drafted by the ATO’s solicitors was in substance a release of the kind which Mr Dowling had advised the appellant she would have to accept in order to settle the case. It is not necessary that we comment further on the Senior Deputy President’s decision, because, regardless of the breadth of the release, nothing arising in connection with the question of the release casts doubt on the conclusion that there was a completed agreement.”
[69] The second issue relied upon by the appellant in Zoiti-Licastro was that the agreement reached between Counsel was “subject to written terms”. It was submitted that the agreement could not be said to be completed until a document had been signed by both parties. The Full Bench also rejected this challenge to the Senior Deputy President’s decision also, in these terms:
“It is clear that the settlement agreement drafted by the ATO’s solicitors contained mutual releases and those had not been specifically agreed in the discussions on 3 March. There were other terms included as well, such as a request for confidentiality. But the appellant’s focus on the settlement document seems to us to miss the point. The real question is what was agreed on 3 March between counsel. It is clear enough that a completed agreement was reached and that it was not conditional in any sense on an agreement being signed. Terms relating to mutual releases and confidentiality could hardly be said to be unusual. Even so, if they were objected to the proper course would be for the appellant to simply indicate that they were not part of the agreement. No such indication was given, at least not until after 31 March 2005.”
[70] In the present matter the Appellant submitted that the decision in Zoiti-Licastro was distinguishable and that the circumstances in this matter fall into the third category in Masters v Cameron.
[71] Contrary to the Appellant’s submission the ratio of the decision in Zoiti-Licastro is relevant to the present matter. In that matter, a draft deed was prepared which went beyond the terms of the parties’ agreement. The Full Bench held that such a circumstance did not mean that the agreement reached was not binding. The same issue arises in this case and we are not persuaded that we should depart from the decision in Zoiti-Licastro.
[72] Nor are we persuaded that the Commissioner erred in his characterisation of the agreement between the parties. The settlement agreement was not expressed to be ‘subject to contract’ or an expression of similar import such as to create an overriding condition to the affect that what was agreed was the intended basis of a future contract, rather than constituting a contract of itself.
[73] The agreement in this case fell within either the first or second category in Masters v Cameron, in either case there was a binding contract.”
[43] Having considered all of the circumstances of this matter, I am satisfied that, for the purposes of s.399A(1)(c), a binding settlement agreement was reached on either 11 or 12 May 2016. I have then considered whether Mr Kong’s decision not to regard his application as settled, and to seek to pursue the matter, represents an unreasonable act.
[44] In this regard Mr Kong effectively relies on the three issues I have already noted, as the basis for his decision to pursue the matter and not regard it as settled. Firstly, he concedes that a circumstance which has changed since 11 or 12 May 2016 goes to his receipt of the account from his lawyer. Such an event must have been obviously foreseeable. To the extent that it explains Mr Kong’s current refusal to agree to a five week settlement on terms, consistent with those set out in Mr Jacobson’s email to Mr Lilburne of 10 May 2016 21 but drafted by the Commission and utilising a standard approach to terms of settlement, the receipt of that account cannot represent a reasonable basis for Mr Kong’s failure to discontinue his application.
[45] Secondly, Mr Kong now considers that he may have an entitlement to some form of parental leave payment associated with his employment, following the birth of a child some time before May 2016. To the extent that he relies upon this claim to support his position that he was entitled to reject the agreement reached on 11 or 12 May 2016, his failure to discontinue the application was unreasonable. Simply put, if Mr Kong wanted to pursue his claim for some form of payment in recognition of his parental status, that should have been put in the settlement proposal of 10 May 2016. 22 It was not so included and Mr Kong has not demonstrated to me that this correspondence was inconsistent with the instructions he had provided to Mr Jacobson.
[46] Finally, Mr Kong asserts that he understood that whilst he was proposing a settlement amount of five weeks, other matters could be addressed through the negotiation of the settlement deed. I have already referred to the substantial correspondence between Mr Jacobson and Mr Lilburne which confirms the nature of the settlement being negotiated. The position Mr Kong now seeks to put would require that the five week settlement offer be increased. Because that was such a fundamental component of the settlement arrangement, I have concluded that Mr Kong has simply sought to use the finalisation of that deed as a mechanism to achieve a higher payment. In this respect Mr Kong has adopted an opportunistic approach which I consider to be unreasonable given the clear settlement arrangement reached on 11 or 12 May 2016.
Conclusion
[47] I am satisfied that Mr Kong acted unreasonably in failing to discontinue his application after a settlement agreement had been concluded. Accordingly, I consider it appropriate to dismiss that application pursuant to s.399A(2). An Order (PR582214), consistent with this decision will be issued. In issuing this decision, I note the clear undertaking provided by Citic to the effect that it will honour the agreement reached on 11 or 12 May 2016.
[48] Given this conclusion, it is not necessary that I consider the Citic application in so far as it is made pursuant to s.587. Notwithstanding this, even if I had not reached this conclusion with respect to s.399A, I would have reached the same conclusion pursuant to s.587(1)(b) or (c) on the basis that Mr Kong reached an agreed position with Citic on 11 or 12 May 2016 and hence his continued pursuit of the application must be described as vexatious and having no reasonable prospect of success.
Appearances:
Y (Rocky) Kong on his own behalf.
R Lilburne counsel for the Respondent.
Hearing details:
2016.
Perth:
June 21.
1 see Masters v Cameron [1954] 91 CLR 353
2 Exhibit A2, para 26
3 Exhibit C2, Attachment RL4
4 Exhibit C2, Attachment RL5
5 Exhibit A2, paras 23, 26, 27, 28 – 34
6 Exhibit C2, paras 6(b) – 6(i)
7 Exhibit C2, para 6(o)
8 Exhibit C2, para 6(f)
9 Exhibit C2, para 6(o)
10 Exhibit A3
11 Exhibit A3
12 Exhibit R2, para 6(h)
13 Exhibit R2, Attachment RL1
14 Exhibit R2, Attachment RL4
15 Transcript – Audio Recording – 21 June 2016, 12:43:42 pm
16 Transcript – Audio Recording – 21 June 2016, 12:51:26 pm
17 [1954] 91 CLR 353
18 Exhibit A2, Attachment L
19 see [2010] FWA 7423 ; [2010] FWAFB 9413 ; [2011] FCA 975
20 [2012] FWAFB 8021
21 Exhibit A2, Attachment L
22 Exhibit A2, Attachment L
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