[2020] VCAT 1307
General information, not legal advice.
Victorian Civil and Administrative Tribunal
2020-11-24
Original judgment source is linked above.
(a) the motivation for the application, as became apparent during the hearing, was that after executing the Deed in which the applicants gave the respondents a release, the applicants decided that they required a release in return. The applicants had brought claims against the respondents in the proceedings, and there had been no counterclaim[1]. Even though there had been no counterclaim, the Deed contains a "statement" by the respondents that "any and all debts owed by the (applicants) at the date of (the) deed are extinguished". In those circumstances it is difficult to perceive a need by the applicants for a release;
(b) in correspondence between the applicants and the respondents' legal practitioner after the compulsory conference, the applicants had asked for the Deed to be amended or replaced to give them a release, and that request had been refused. As a deed can be varied by agreement, but one side of this Deed had refused an amendment, the effect of the applicants' application was to seek an Order from the Tribunal varying the Deed. In the absence of extraordinary vitiating circumstances such as fraud, which were not present in these proceedings, no such Order would be made;
(c) to the extent that the application could be confined initially to be an application simply for reinstatement of the proceedings, the applicants' release of the respondents in the Deed would of course be relied on the respondents as a defence in the reinstated proceedings.
"The Releasors also complain about various interactions between the Releasees and the Releasors including St Gregory The Great Primary School, its employees and agents in documents and evidence filed in the proceedings" (emphasis added).
"(T)he Releasors release and discharge the Releasees from all damages, costs, causes of actions, and legal proceedings whatsoever arising out of or in any way connected with the claims and the disputes underlying the claims, which the Releasors now have or have had the right to bring
against the Releasees or which the Releasors would have had the right to bring against the Releasees but for the execution of this Deed. This Deed extends to all employees, representatives, agents and associated entities and associated persons of the Releasees".
(a) The Deed is unfair because the applicants release the respondents but there is no cross release in return. Without a cross release the applicants could be sued by unknown parties. VCAT did not prevent a deed being prepared which did not contain a cross release.
(b) The applicants' understanding of the Deed was that there would be a cross release.
(c) The applicants did not have legal representation. The respondents' legal practitioners drafted the Deed. Before the final version of the Deed was executed, there had been negotiations over the terms of the Deed and, for example, some text from one of the agreed communiqués which had been suggested by Mr Caspersz were deleted by the respondents.
(d) The applicants were rushed, signed the Deed under duress, and did not have the opportunity to obtain legal advice.
(e) Section 114 of the Victorian Civil and Administrative Tribunal Act 1998 contains a time limit of 14 days.
(f) Mr Caspersz' emailed the respondents' legal practitioners at 9:36am on 25 September 2020 to show how the release clause was inappropriate. The clause implicitly contains a cross release.
(g) Mr Caspersz asserts that the respondents executed their counterpart of the Deed after he had asserted that the applicants wanted a cross release. The respondents have never denied that they executed the Deed after Mr Caspersz had sent his email of 25 September 2020 and accordingly Mr Caspersz asserts that the respondents did execute the Deed after that email.
(h) The applicants did not receive the executed Deed back from the respondents until a week after its date.
(i) It is unfair of the respondents to refuse to amend the Deed, or to not grant a release to the applicants, because on 2 October 2020 the respondents' legal practitioners emailed the applicants saying that the respondents had no intention of suing the applicants. However because the practitioners only wrote on behalf of their clients, and the words "employees, representatives, agents and associated entities and associated persons" cover persons who are not the practitioners' clients, that assurance is hollow.
(b) Because the compulsory conference was held on-line, due to Covid-19 restrictions, the parties could not literally sit together and sign the Deed. Therefore at 5:37pm and 5:43pm on 23 September 2020 the respondents' legal practitioners and Mr Caspersz exchanged emails which confirmed their respective acceptance of the terms of the Deed[2], and thereafter the Deed was executed.
(c) The Deed is valid and enforceable, and only after the Deed was executed did Mr Caspersz begin asserting that the applicants sought to receive a release.
(d) If the VCAT proceedings were reinstated, the respondents would plead the Deed as a complete bar to the applicants' claim.
(e) The respondents deny that the Deed is unfair, or that the applicants did not have an opportunity to obtain legal advice. The parties had attended a one-day long mediation in February 2020, as well as attending the one-day long compulsory conference in September 2020, and in May 2020 the respondents' legal practitioners had sent the applicants a draft Deed of Settlement during negotiations. Clause 1 of that draft was in the same form as in the executed Deed, and so the applicants had the clause before them for around four months before executing the Deed. They had ample time to obtain legal advice on it.
(f) The respondents did not impose any pressure on the applicants to sign the Deed. It was simply a matter of the parties exchanging offers until finally the settlement agreement recorded in the Deed was reached.
(g) The respondents have offered to sign a document which would be to the effect that they give a full release to the applicants. However, the respondents could not purport to give a release which would bind other persons, such as teachers at the School. The legal practitioners could sign a document binding their clients, on the clients' instructions, but could not sign such a document binding person who were not their clients.
(h) It was important to the respondents that the applicants release teachers at the School, as well as the respondents, and it is legitimate to provide for such a release in a Deed.
(i) Objectively, Mr Caspersz has simply changed his mind. It is submitted that VCAT would not impose on the respondents new clauses of a Deed, because essentially Tribunals and Courts enforce agreements rather than imposing new ones. There is a public interest in litigation reaching finality and it would be inappropriate for VCAT to reinstate the two proceedings.
(j) If, though, VCAT was to reinstate the proceedings it ought be conditional on the applicants returning to the respondents the settlement sum that has been paid to them.
(a) The applicants have not established that the Deed is "unfair". Parties have freedom of contract, and they are able to choose to settle proceedings on terms. In a case in which applicants sue respondents for damages or other relief, and there is a settlement, it stands to reason that the respondents would require a release. Where the respondents have not asserted claims against the applicants, there could be no presumption that the applicants would be entitled to require a release. In any event, the Deed records the agreement which the parties freely entered into.
(b) It is a big question as to whether the Tribunal has an obligation to ensure that terms of a settlement are "fair", and that is further complicated by the fact that fairness can be in the eye of the beholder. In the Family Law Act 1975, a court exercising jurisdiction under that Act can make a consent order dividing property between parties, if the court is satisfied that the order is just and equitable. There is no expressly equivalent provision in the Victorian Civil and Administrative Tribunal Act 1998. Whilst such an order in a family court would contain the property division provisions, the Order made in this VCAT proceeding on 23 September 2020 did not contain the terms of the settlement: it only struck out the proceeding. This VCAT proceeding is not one in which the question of whether the Tribunal has an obligation to only allow cases to settle on "fair" terms should be determined, as objectively the provisions of the parties' Deed are commonplace.
(c) The applicants have not established any objective basis to support their alleged understanding that the Deed did or would contain a release in their favour. The document is in relatively plain text. It does contain the statement by the respondents that "any and all debts owed by the Releasors to the Releasees as at the date of signing this deed are extinguished", which would obviously cover outstanding school fees, levies and the like (if there were any). The applicants have the benefit of that statement. The presence of the statement is inconsistent with the applicants' allegation of understanding that the Deed would contain a release of them expressed differently.
(d) The applicants cannot benefit in this application from their decision not to retain legal practitioners. Mr Caspercz filed quite lengthy and detailed documents in the proceedings in the period before the compulsory conference and demonstrated an understanding of the position which the applicants were asserting. VCAT's procedures are designed to allow citizens to represent themselves in proceedings if they choose to do so. The Deed is not expressed in obscure legalese. It is clear from the documents filed by Mr Caspercz in this application that the words in the Deed were the subject of negotiation before the final version was agreed. Mr Caspercz conceded, for example, that the respondents had required the word "lies" to be deleted and that he agreed to that. There is no merit in this submission of the applicants.
(e) There is no objective basis for me to conclude that the applicants signed the Deed under duress.
(f) I do not accept that the applicants did not have the opportunity to obtain legal advice. The applicants' issued their two proceedings around one year before settling them in the compulsory conference. The parties participated in a one-day long mediation in February 2020.
(g) The applicants' reference to section 114 of the Victorian Civil and Administrative Tribunal Act 1998 is misplaced. That section concerns formal offers of settlement, the rejection of which may have an impact on the offeror's ability to seek costs. That it provides that a formal offer must be open for a certain length of time has no application to communications during a compulsory conference.
(h) Mr Caspercz' submission that the release clause in the Deed "implicitly" contains a cross release is plainly incorrect. It only provides for a release by the applicants of the respondents and their associates.
(i) Mr Caspercz' email to the respondents' legal practitioners at 9:36am on 25 September 2020 does not assist the applicants because it was plainly sent after all parties had accepted the terms of the Deed on 23 September 2020.
(j) The date on which the applicants may have received the executed Deed is irrelevant, given the exchange of emails at 5:37pm and 5:43pm on 23 September 2020 and the applicants' receipt of the benefits under the Deed.
(k) The applicants' criticism of the email of 2 October 2020 from the respondents' legal practitioners is irrelevant as the applicants have rejected that email.
(l) If the VCAT proceedings were reinstated, the respondents have a complete defence because of the Deed. Accordingly, the proceedings should not be reinstated.
[1] In the hearing before me, Mr Caspercz also acknowledged that the applicants had never received a demand from any person within the respondents' camp.
[2] Paragraph 1 of the Order made 23 September 2020 refers to "the Deed of Settlement agreed by email by the parties on 23 September 2020". The emails were:
(a) an email from the respondents' legal practitioners to Mr Caspercz dated 5:37pm on 23 September 2020 saying, "Attached is the final deed of settlement. I Jason Newman, on behalf of the Respondents agree to the terms of the attached Deed of Settlement as though I had signed it. This email shall be taken to be evidence of my signing of the deed on my client's behalf"; and
(b) an email from Mr Caspercz to the respondents' legal practitioners dated 5:43pm on 23 September 2020 saying, "Confirmation of attached final deed of settlement prepared by Gilchrist Connell. I, Adrian Caspercz on the behalf of the Applicant's agree to the terms of attached Deed of Settlement as though I had signed it. This email shall be taken to be evidence of my signing of the deed".
Caspersz
St Gregory the Great Primary School