//
[2019] FWC 2034
General information, not legal advice.
Fair Work Commission
2019-03-29
Original judgment source is linked above.
Section 789FC - Application for an order to stop bullying
Application for an FWC order to stop bullying - co-owner of family business - matrimonial dispute between business owners - jurisdiction - whether a risk of future bullying at work - whether agreement to discontinue - whether binding settlement agreement - direction that matter not be relisted until final Court order
[1] On 31 August 2018 Charmaine Hoad (Mrs Hoad or the Applicant) made an application[1] (AB2018/537) to the Fair Work Commission (Commission) under section 789FC of the Fair Work Act 2009 (the FW Act) seeking an order to stop bullying. The application identified two respondents: her employer Hoad Water Cartage Pty Ltd (Hoad Water Cartage or the employer) and a person named Mr (William) Mark Hoad (Mr Hoad) who is also her husband.
[2] The application was filed and dealt with by the Commission in the shadow of a matrimonial dispute between Mr and Mrs Hoad (the parties) which remains before the Federal Circuit Court of Australia (the Court).
[3] At a directions hearing on 25 January 2019 Mrs Hoad advised that she wished to proceed with her application. Mr Hoad made an oral application seeking dismissal of the application on jurisdictional and procedural grounds. I issued directions listing the matter for hearing on those threshold issues and required Mr Hoad to file an application in writing.
[4] On 8 February 2019 Mr Hoad filed an application[2] seeking dismissal of the application on three grounds: (1) that the parties had entered a binding settlement agreement such that there was no ongoing risk of alleged bullying; (2) the parties agreed to discontinue this proceeding in light of the binding settlement agreement; and (3) that action taken was reasonable management action (the strike-out application).
[5] I conducted a hearing of Mrs Hoad's application on 15 February 2019. Consistent with my directions, the hearing concerned only the first two grounds on which Mr Hoad sought dismissal of the application: being jurisdictional and procedural issues. I did not conduct a hearing of the claim of alleged bullying or whether the alleged conduct was reasonable management action taken in a reasonable manner (merits).
[6] In advance of the hearing Mr Hoad and Mrs Hoad each filed written materials on the strike-out application. Mr Hoad and Mrs Hoad appeared by telephone. Each was self-represented. Each gave evidence. I reserved my decision.
[7] Whilst there is significant contention between Mr and Mrs Hoad on the claim of alleged bullying (merits), I did not take evidence on the merits. On factual matters relevant to the jurisdictional and procedural issues, there were relatively few disputes. Despite evident tensions, each gave evidence carefully. On the jurisdictional and procedural matters the evidence of both Mr Hoad and Mrs Hoad is broadly reliable.
[8] In the few instances where I need to make contested findings of fact I do so based on the demeanour of witnesses, the tone and manner of giving evidence, the consistency (or otherwise) between oral evidence and witness statements and Commission records, the existence (or otherwise) of corroborating evidence, and the inherent plausibility of versions of events.
[9] An issue arises concerning the position of the employer.
[10] Mrs Hoad's bullying application cited two respondents: Hoad Water Cartage Pty Ltd as the employer (identifying Mr Hoad as the contact person) and Mr Hoad as the person named. Mr Hoad filed his response to the bullying application in the name of the employer Hoad Water Cartage Pty Ltd. He also made the strike-out application in the name of the employer.
[11] On 25 January 2019 I directed that:
"[16] The FAIR WORK COMMISSION DIRECTS that if Mark Hoad or Charmaine Hoad purport to file materials on behalf of the employer Hoad Water Cartage Pty Ltd trading as Hoad Water Cartage or Andy's Water Transport (the employer) they be directed to indicate the basis on which that person purports to have the authority to speak on the application on behalf of the employer."
[12] Having regard to the evidence and submissions, in the unusual circumstances of this matter, I conclude that neither Mr Hoad nor Mrs Hoad is in a position to claim authority to speak on behalf of the employer. The two sole directors present opposing positions on the application; one is the Applicant, one a Respondent (the person named). The employer's position is a stalemate between its two directors and unable to be expressed with one voice.
[13] I do not however disregard the application made by the employer or material filed by Mr Hoad in its name. The strike-out application was made by Mr Hoad in the belief that he had authority to speak on behalf of the employer. He did so having been named by Mrs Hoad as the contact person of the employer for the purpose of responding to her application. Mr Hoad's written application of 8 February 2019 is consistent with his oral application of 25 January. To the extent necessary, I give leave for the strike-out application to be dealt with by the Commission as an application by Mr Hoad as distinct from Hoad Water Cartage. Mrs Hoad understood the strike-out application to have been made by Mr Hoad and it was duly served on her. There is no prejudice in proceeding on the basis that Mr Hoad is the applicant to the strike-out application.
[14] I also receive the material filed by Hoad Water Cartage in its 'employer response' and the evidence and submissions of Mr Hoad on that same basis. Irrespective of whether he speaks on behalf of the employer, those materials are relevant to his capacity as a director of Hoad Water Cartage, as Managing Director and Operations Manager, and as the person named.
[15] On 25 January 2019 I stated as follows:[3]
"I am satisfied that a jurisdictional question may arise in determining the application, being whether "there is a risk that the worker will continue to be bullied at work" within the meaning of section 789FF pf the Fair Work Act 2009 should there be in existence a Heads of Agreement that is a valid and enforceable agreement between the parties and should that Agreement (if valid and enforceable) provide for the applicant worker to no longer work in the business of the employer. I am prepared to consider that matter (and whether there was and if so under what terms an agreement to discontinue) as a threshold issue should Mr Hoad make a formal application to this effect."
[16] Mr Hoad's application seeks dismissal of the application under the Commission's general powers to dismiss applications in section 587 of the FW Act. He relies on the general power in section 587 and refers specifically to section 587(1)(c) which provides power to dismiss an application if it "has no reasonable prospects of success".
[17] Mr Hoad also relies on specific anti-bullying provisions in the FW Act which enable orders to be made only "if there is a risk that the worker will continue to be bullied at work" (section 789FF(1)(b)(ii)) and which provide that conduct is not bullying if it is "reasonable management action carried out in a reasonable manner" (section 789FD(2)).
[18] I proceed to deal with Mr Hoad's strike-out application having regard to the provisions of section 587 of the FW Act. I do not do so under the specific anti-bullying provisions relied on by Mr Hoad. Both section 789FD(2) and section 789FF(1)(b)(ii) empower the Commission to make determinations or orders only once a merits hearing has been conducted. I have not conducted such a hearing.
[20] Hoad Water Cartage is a private family company established by Mr Hoad in 1988 and jointly owned by husband and wife William Mark Hoad and Charmaine Joy Hoad. Hoad Water Cartage is in the business of carting water in and around South Australia. The business is conducted from a matrimonial property at Carey Gully in the Adelaide Hills. On that property is a homestead and portable offices, trucks, related business equipment and personal assets.
[21] In 2015 Hoad Water Cartage purchased Andy's Water Transport. Thereafter Hoad Water Cartage operated its business under dual trading names: Hoad Water Cartage and Andy's Water Transport. It is a successful business employing approximately 30 persons. A separate small manufacturing business Optiblue Pty Ltd (Optiblue) is also operated by Mr and Mrs Hoad but owned by Mr Hoad.
[22] Mr and Mrs Hoad are the sole directors of Hoad Water Cartage. Mrs Hoad is also company secretary. Each works in the business: Mr Hoad as Managing Director and Operations Manager and Mrs Hoad as Director of Finance.
[23] In about November 2017 serious matrimonial conflict arose between Mr and Mrs Hoad. Mr Hoad moved off the property but works on the property. Mrs Hoad continues to live and work on the property. For approximately the past year they have communicated by email only (with a few exceptions) or via their solicitors.[4]
[24] Although both Mr Hoad and Mrs Hoad consider it in their mutual interests to maintain the business as a going concern until the matrimonial conflict is resolved (through the distribution of business and personal assets) and not allow their personal issues to detract from business value, the conflict has created severe tension and strain in the work environment.
[25] The matrimonial dispute became litigious in early 2018. Mr Hoad applied for an order from the Federal Circuit Court of Australia that Mrs Hoad be removed as a director of Hoad Water Cartage. Mrs Hoad cross claimed.
[26] On 21 May 2018 a Consent Order was made by the Court under the Family Law Act 1975 (Cth). This Court Order was an interim order pending resolution of a property dispute between Mr Hoad and Mrs Hoad over business and personal assets consequent on the dissolution of their marriage.
[27] The Court Order provided as follows:[5]
A. That paragraphs 2, 3, 5.1, 5.3.1, 5.4 and 8 of the orders sought by the Wife in her Application in a Case filed on 26 April 2018 are addressed by paragraphs 1 and 2 of the Order made by consent on 2 May 2018 and the undertaking of each of them noted therein and will continue.
B. That paragraph 6 of the interim orders sought by the Husband in his Amended Initiating Application filed on 17 May 2018 has been addressed in paragraph 3 of the said Order made by Consent on 2 May 2018 and will continue.
C. That it was noted for the purposes of the transcript of the hearing on 2 May 2018 that the Husband will not do any act or sign any document to cause the removal of the Wife as an employee and Director of Hoad Water Cartage Pty Ltd.
D. That the parties have sought and await receipt of joint valuations of their real and personal property and their businesses from Herron Todd White, Henley Valuers and Mr Philip Camens respectively.
1. That the Orders made by Consent on 2 May 2018 do continue until further order.
2. That in respect of the parties' businesses "Andy's Water Transport", "Hoad Water Cartage" and "Opti-Blue":
2.1. In accordance with the businesses' Operations Chart the Husband do continue in his roles as Managing Director and Operations Manager and oversee all areas as per the organisational chart and coordinate drivers, deliveries and dispatch, undertake servicing and maintenance of all equipment and vehicles, negotiations with suppliers and clients, maintenance of assets and stock control and in respect of Opti-Blue, stock manufacture through delegation to and management of the Logistics/Sales Manager Person A; and
2.2. In accordance with the businesses' Operations Chart, the Wife do continue in her role as Director of Finance and oversee and undertake business development, management of customer accounts, payroll, database management, human resources, administration, technical support and development through delegation to and management of the Finance Administrative Manager Person B and the outsourcing of accounting to Person C and marketing to Person D.
2.3. That the parties be restrained, and an injunction is hereby granted restraining each of them from removing and/or destroying any business records from the operations office of the business or from removing or changing any locks fitted to the business premises.
2.4. That the Wife be restrained, and an injunction is granted restraining the Wife from:
2.4.1. providing any instruction or direction on any matter relating to the duties or terns of employment of Person A in his capacity as the sales and logistics manager and occupational health and safety representative of the businesses;
2.4.2. communicating with the drivers of the businesses as to any operational matters or giving of any directions whatsoever to the drivers employed by the businesses as to operational matters;
2.5. That the Husband be restrained, and an injunction is granted restraining the Husband from providing any instruction or direction on any matter relating to the duties or terms of employment of Person B in her capacity as the finance and administrative manager of the business save as to those matters which the Husband presently instructs/directs in accordance with the Operations Chart.
2.6. That the Wife do continue to collect all incoming mail of the businesses on a daily basis and, after inspection of same, provide such mail to the Husband and/or any appropriate employee by close of business on the date of collection.
2.7. that the parties do all such things as may be necessary to arrange for after-hours calls to be diverted to a virtual receptionist with Office Earth and all after hours emergency calls to be diverted to the Husband or a suitable employee at the direction of the Husband AND for that purpose, the Wife forthwith return to the Husband the mobile telephones of the businesses as are utilised for the purpose of business sales and enquiries.
3. That the parties be hereby restrained, and an injunction be granted restraining each of them from transferring, mortgaging, assigning, disposing of or diminishing the value of the parties joint or individual interests in the real or personal property of each of them.
4. That the parties are hereby restrained and an injunction is granted restraining each of them from denigrating the other to or in the presence of employees, suppliers, contractors to the business.
5. That the Wife's Application in a Case filed on 26 April 2018 and the Husband's Amended Application for interim orders contained in his Amended Initiating Application filed 17 May 2018 be dismissed with no orders as to costs.
6. That within 28 days of their receipt of all valuations sought, the parties do all things necessary to arrange and attend a private mediation.
7. That the parties make mutual and informal discovery at least 14 days prior to any settlement conference/mediation.
8. That the Wife do file and serve the Response to Initiating Application, Affidavit and Financial Statement within 28 days of the date of this Order.
9. That further consideration of this matter be adjourned to 18 September 2018 at 9.30am for telephone mention before Judge Young at the Federal Circuit Court of Australia, Darwin with the parties requested to attend in person at the Federal Circuit Court of Australia, Adelaide for the telephone call."
[28] The Court Order referenced the Operations Chart for the business of Andy's Water Transport and Hoad Water Cartage. The Operations Chart relevantly provides as follows:[6]
[29] Property settlement proceedings before the Court are set down for trial in approximately August 2019, unless otherwise resolved.
[30] Subject to any variation of the Court Order, Mr Hoad and Mrs Hoad continue to work in the business on the terms of the Court Order. Each has different views as to whether the other is complying with the terms of the Court Order.
[31] Mrs Hoad's anti-bullying application was made on 31 August 2018, three months after the Court Order. Her evidence was that she made the application because she considered herself and other employees to be the subject of bullying conduct by Mr Hoad.
[32] On 20 September 2018 Mr Hoad filed a response to the application in the name of the employer.[7] He contended that bullying conduct had not occurred, that his conduct was reasonable management action and that the matter was "complicated as it is a husband/wife dispute arising from the breakdown of marriage".[8]
[33] I issued directions on the application on 27 September 2018, 1 November 2018, 15 November 2018, 28 November 2018, 3 December 2018 and 25 January 2019.
[34] I conducted conciliation on the application on 5 October 2018 and 31 October 2018.
[35] Conciliation (but not arbitration) was conducted concurrently with an anti-bullying application filed by an employee of Hoad Water Cartage (Paula Taylor) on 10 September 2018. That matter has been determined.[9]
[36] In my directions of 1 November 2018 I stated as follows:[10]
"Whilst neither application resolved at the conciliation conferences I conducted on 5 and 31 October 2018, the Commission is willing to offer one further opportunity for conciliation on both applications in advance of a hearing. In view of the fact that both applications have been referred to me for hearing and determination, and in view of the fact that any further conciliation may be assisted by a Commission member adopting a more interventionist approach (for example, by expressing particular views on the merits of either or both applications and remedies sought, which I have elected not to do during conciliation thus far) I do not consider it appropriate that I conduct such conciliation lest it be seen to prejudice the hearing and determination of the applications. In those circumstances, the Commission will make available the assistance of Commissioner Platt to conduct a further conciliation conference on both applications at 10.00am (ACDT) Friday 23 November 2018. The applicants and the respondents are requested to advise the Commission at the telephone hearing on 14 November 2018 their view on that course."
[37] My recommendation for interventionist conciliation by Commissioner Platt was agreed by the Applicant and by Mr Hoad at a report back hearing on 14 November 2018.
[38] On 15 November 2018 I issued directions that the matter be further conciliated before Commissioner Platt on 23 November 2018. I also issued a direction that "should there be no prior resolution, each application be listed for hearing and determination on 12, 13 and 14 December 2018".[11]
[39] Commissioner Platt conducted member assisted conciliation on 23 November 2018, 27 November 2018, 3 December 2018 and 10 December 2018.
[40] The conciliation conducted by Commissioner Platt on 27 November 2018 was attended by the parties and, at the Commissioner's suggestion, by their respective legal practitioners to the matrimonial dispute and its related court proceeding.
[41] I issued further directions on 28 November 2018 in which I stated:[12]
"Following the conference of 27 November 2018, Commissioner Platt has advised that in respect of the application by Charmaine Hoad AB2018/537 an in-principle agreement has been reached between the applicant Charmaine Hoad and the person named Mark Hoad with a heads of agreement to be prepared and exchanged by their respective solicitors by week's end, and that such agreement will involve (amongst other things) the applicant Charmaine Hoad discontinuing these proceedings.
Commissioner Platt has further advised that in respect of the application by Paula Taylor AB2018/558, a member assisted conciliation by telephone is to be held at 2.00pm (ACDT) on 3 December 2018.
[42] Following further conciliation by Commissioner Platt, on 3 December I issued further directions as follows:
"Following the conference of 3 December 2018, Commissioner Platt has advised:
3.1 in respect of the application by Charmaine Hoad AB2018/537 that whilst an in-principle agreement has indeed been reached between the applicant Charmaine Hoad and the person named Mark Hoad with a heads of agreement to be prepared and exchanged by their respective solicitors (and that such agreement will involve amongst other things the applicant Charmaine Hoad discontinuing these proceedings), more time is required to prepare and finalise the heads of agreement by close of business 5 December 2018 with the potential for a further report back to Commissioner Platt on 10 December 2018; and
3.2 in respect of the application by Paula Taylor AB2018/558 further consideration is to be given to the matter with a further report back to Commissioner Platt on 19 December 2018.
In light of the above my directions of 15 November 2018 in respect of Charmaine Hoad's application AB2018/537 and in respect of Paula Taylor's application AB2018/558 are set aside to enable these further steps to take place and the hearing dates of 12, 13 and 14 December 2018 are vacated." (emphasis added)
"Received, thank you. The Commissioner congratulates the parties on reaching settlement.
Ms Hoad, can you please complete the Form F50 Notice of Discontinuance, alternatively, you can advise the Commission by email in the following terms:
"I, Charmaine Hoad, wholly discontinue this matter (AB2018/537 - Application by Charmaine Hoad) as part of a settlement agreement."
[45] By email at 11.30am on 7 December 2018 Commissioner Platt further corresponded with the parties and their solicitors as follows:[16]
Ms Hoad, I refer to the below and note that I attempted to contact you by telephone earlier this morning.
Can you please provide the Form F50 Notice of Discontinuance as soon as possible.
[46] By email from Mrs Hoad (personally) to Commissioner Platt at 7.19pm on 9 December 2018 (not copied to Mr Hoad or his solicitor) the Commission was informed as follows:[17]
Due to issues arising from this situation with Mr Hoad with the heads of agreement,
I disappointed with Mr Hoad with his ongoing problems with abiding with agreements.
Due to him not abiding by the heads of agreement with in the first 24hrs has indicated that this agreement will not be valid due to his decisions to agree to any agreement between both parties.
This has left me to abandon the agreement at hand and leave me with no means of legal representative.
As to being left with escalating debit in which I cannot pay , will cause me to lose my credit rating for the future to ever be able to apply for loans has put me in a financial situation.
This has put me in a position to retract the heads of agreement, as to the financial and protection for my future outcome.
[47] On 10 December 2018 Commissioner Platt responded to the parties (and their solicitors) as follows:[18]
"Received, thank you. Parties, please see below correspondence received from Ms Hoad.
On the last occasion that the Commissioner met with the parties, an in principle agreement as to the division of your personal and business property was agreed. On this basis, Ms Hoad's agreement to discontinue the anti-bullying application (AG2018/537).
On 5 December 2018, I was supplied with an executed "Heads of Agreement" which, with the assistance of Counsel, documented the in-principle agreement reached. A review of the Heads of Agreement confirms a division of business property and clients such that the parties to the anti-bullying application will not be required to work together.
Ms Hoad has now advised that she wishes to withdraw from the Heads of Agreement and has not provided a Notice of Discontinuance in relation to the anti-bullying application.
It appears to the Commissioner that the parties have reached a binding settlement which included the discontinuance of the anti-bullying application. If either party wishes to dispute this point can they please advise Chambers in writing as to the reasons why the matter should be relisted and what action they would seek from the Commission in these circumstances.
[48] Not having heard from either party in the interim, Commissioner Platt again emailed the parties (and their solicitors) on 14 December 2018:[19]
At the Conciliation Conference on 27 November 2018 the Applicant advised the Commissioner that upon the Heads of Agreement being executed the application (AB2018/537) would be withdrawn. That condition having been met, the Commissioner is of the opinion that the matter should now be closed.
Unless the Commissioner receives written correspondence objecting to this course by 4:00pm on Monday 17 December 2018, the matter will closed.
[49] On 14 December 2018 Commissioner Platt received the following email from solicitors for Mrs Hoad:[20]
We refer to your below email correspondence of even date to which we have been copy circulated.
Further to the above, please note that our attendance at the recent Conciliation Conference was in circumstances where we understood that the same would address matters relevant to the adjustment of the parties' matrimonial property pursuant to Section 79 of the Family Law Act. Our client has not, to date, instructed us to act in respect of the Fair Work Application presently before the Commission. In such circumstances, we have forwarded your below correspondence to our client and have requested that she provide her response to the same directly.
[50] By email at 10.42am on 17 December 2018 Mrs Hoad (personally) informed the Commission (not copied to Mr Hoad or his solicitor) as follows:[21]
"Dear [Associate to Commissioner Platt[22]],
As to my decision to seek for my application to continue, due to the failure by Mr Hoad not abiding to the signed agreement requirements of the signed Heads of Agreement within the first 24hrs.
The situation has led to the discontinue of the heads of agreement between both parties.
For further information, please contact my lawyers Dimitra Tolis [details supplied]
[51] By email at 11.25am on 17 December 2018 Commissioner Platt advised the parties (and their solicitors) as follows:[23]
Given the below, this file will now be returned to Deputy President Anderson's Chambers.
Please direct all future correspondence in this matter to the Deputy President's Associate (Chambers.Anderson.DP@fwc.gov.au).
[52] On 17 December 2018 Commissioner Platt returned the Commission file to me in light of the disputed status of the matter.
[53] On 20 December 2018 Mrs Hoad emailed my chambers requesting that the Commission "send me the documents that I need to supply your department to support my bullying claim".[24]
[54] On 3 January 2019 I issued a Notice of Listing for a directions conference.
[55] I conducted a directions hearing on 25 January 2019, at which the parties were self-represented. Mrs Hoad indicated her intention to proceed. Mr Hoad made an oral strike-out application. I then issued directions that same day for the filing of a strike-out application in proper form and for the hearing of that matter on 15 February 2019.
[56] In my directions of 25 January 2019 I stated:[25]
"At the directions hearing on 25 January 2019 Mrs Hoad advised that she wished to proceed with her application. She claimed that a Heads of Agreement was entered into without prejudice, that she remained a principal of and was still working in the business of Hoad Water Cartage Pty Ltd, and advised that further proceedings in the Family Court of Australia were scheduled for 20 February 2019.
Mr Hoad advised the directions hearing that he considered the Heads of Agreement to be binding, that it provided for the parties to 'go their own way' and that Mrs Hoad would not be continuing to work in the business under the Heads of Agreement. He claimed that the bullying application by Mrs Hoad should not proceed. He foreshadowed making an application to that effect. Mr Hoad also asserted that Mrs Hoad had agreed to discontinue the Commission proceedings on signing the Heads of Agreement."
[57] Mr Hoad seeks dismissal of the application on jurisdictional and procedural grounds.
[58] Mr Hoad contends that a binding settlement agreement was reached between he and Mrs Hoad following conciliation by Commissioner Platt, and that the agreement contemplated the discontinuance of Mrs Hoad's application.
[59] Mr Hoad further contends that there is no jurisdiction to make anti-bullying orders because the binding settlement agreement provides for a parting of the ways in the sense that Mr and Mrs Hoad are to have no further business dealings with each other and Mrs Hoad is thereby not at future risk of being bullied at work by the person named.
[60] Central to the consideration of both contentions is whether a binding settlement agreement was reached between Mr and Mrs Hoad and if so, on what terms, its consequence and its implementation.
[61] Whether one or other of the parties holds a subjective belief that they had reached a binding settlement is not a sufficient basis on which to make a finding of fact. The question of whether there was a binding settlement and if so on what terms and for what purpose is to be determined objectively.[26] Moreover, whilst the surrounding circumstances, including the understanding of the Commission communicated in emails of 28 November, 3 December, 10 December and 14 December 2018 and related directions are relevant, all facts must be assessed objectively.
[62] On the basis of the evidence before me I am well satisfied that an in-principle agreement for the settlement of the property dispute (including disposition of the business and personal assets of Mr and Mrs Hoad) was reached between Mr Hoad and Mrs Hoad at the conciliation conducted by Commissioner Platt on 27 November 2018.
[63] There is no dispute that this in-principle agreement of 27 November 2018 was made by Mr and Mrs Hoad in the presence of and with access to the advice of their respective legal practitioners.
[64] There is no dispute that the in-principle agreement of 27 November 2018 was to be reflected in a written Heads of Agreement which was to be settled between their solicitors and signed by the parties.
[65] There is no dispute that in the week following 27 November 2018 document drafts of the Heads of Agreement were exchanged between solicitors and that both Mr Hoad and Mrs Hoad had access to their independent legal advisers prior to signing an agreed Heads of Agreement.
[66] The agreed document was titled "Heads of Agreement" and marked "Without Prejudice". It was tendered as evidence in proceedings before me.[27]
[67] There is no dispute that on 4 December 2018 Mrs Hoad signed the Heads of Agreement in her own hand.
[68] There is no dispute that on 5 December 2018 Mr Hoad signed the Heads of Agreement in his own hand.
[69] There is no dispute that the terms of the Heads of Agreement provided (inter alia) for the disposition of business assets whereby:
[70] Nor is there dispute that upon the disposition of business assets in the manner provided for in the Heads of Agreement that Mr Hoad and Mrs Hoad would not be engaged in the same business enterprise, and that Mrs Hoad would neither be an employee of Hoad Water Cartage nor working for or have a beneficial interest in any business operated by Mr Hoad, and vice versa.
Was the Heads of Agreement a binding settlement agreement?
[71] Whether an agreement is a binding settlement agreement has been the subject of previous consideration by the Commission. Each case turns on its own facts. A widely cited reference point for the applicable principles is the judgement of the High Court in Masters v Cameron.[28] In that matter the High Court described three classes of cases where parties reach agreement of a contractual nature and agree that the matter shall be finally dealt with by a formal contract. The Court said:[29]
"Where parties who have been in negotiation 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 cases. It may be one in which the parties have 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. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.
In each of the first two cases there is a binding contract: in the first case 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 in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common."
[72] The Heads of Agreement signed by Mrs Hoad on 4 December 2018 and by Mr Hoad on 5 December 2018 respectively is clear in what it purports to represent. Clauses 1 and 2 of the Heads of Agreement provide as follows:
"1. This Heads of Agreement ("Agreement") is intended to record the in-principle agreement reached by the parties, William Mark Hoad ("the Husband") and Charmaine Joy Hoad ("the Wife"), for the basis of a full and final settlement of Federal Circuit Court Action No. ADC 1438 of 2018 with respect to property settlement.
2. The parties acknowledge that further negotiations will be required to formalise this
Agreement by way of Consent Orders, that Counsel will be required to settle such documents and the parties' accountant will be required to provide advice in respect of
[73] The agreement was made in the presence of solicitors and in the context of a deliberate and exacting endeavour by the Commission to seek a conciliated outcome of not just the anti-bullying application but the broader matrimonial dispute. The mediation was not perfunctory. All relevant persons were in attendance. Its purpose as expressly stated was undoubtedly for the parties present to arrive at an agreement and resolve the dispute if they possibly could. The agreement is detailed, unsurprisingly so given the issues it needed to resolve. The signing of the agreement by the parties was not made in the heat of the moment nor in the forum of the Commission. It was made a week later once written drafts were settled between solicitors and parties were able to take independent advice. The parties sought from Commissioner Platt more time to finalise the text and that further time was granted before being provided to the Commission on 5 December 2018.
[74] Mrs Hoad's evidence was specific on this point: she took independent advice from her lawyers in the week prior to signing the agreement and did so after the Heads of Agreement in its final form had been explained to her by her lawyers.[30]
[75] The surrounding circumstances, including Commissioner Platt's emails to the parties of 28 November 2018 and 3 December 2018 indicate a belief, not rebutted by the parties prior to signing the Heads of Agreement, that they had reached an in-principle agreement and were conscientiously giving effect to it in writing. My directions of 3 December vacating hearing dates were predicated on that same basis.
[76] The communication on 5 December 2018 by Mr Hoad's solicitors forwarding to the Commission a copy of the signed Heads of Agreement was copied to Mrs Hoad's solicitors. Neither Mrs Hoad nor her solicitors demurred at that time. It was not until four days later, 9 December 2018, that Mrs Hoad made contact with the Commission advising that she had decided to "abandon" and "retract" from the heads of agreement. It is noteworthy that Mrs Hoad's email of 9 December 2018 does not dispute that a heads of agreement was in existence. Rather she was 'retracting' from it (in her words) due to alleged non-performance by Mr Hoad.
[77] The only conditionality associated with the Heads of Agreement is that it would require re-drafting to be formalised as Consent Orders to be put to the Court, would require counsel to settle the Consent Orders and the parties would consult their accountant.
[78] In circumstances where the Heads of Agreement self-evidently varied the interim agreement in the Court Order of 21 May 2018 and dealt with the disposition of assets it is not unsurprising that these conditions were attached to the Heads of Agreement. Clause 17 of the Heads of Agreement provided implementation steps "pending the sealing of Consent Orders". None of these conditions detract from a conclusion that the Heads of Agreement was a binding settlement agreement.
[79] Mrs Hoad relies on the fact that the Heads of Agreement is marked "without prejudice". The obvious question to be asked is "without prejudice" to what? It is clear from the evidence and surrounding circumstances that the Heads of Agreement was not "without prejudice" in the sense of the Agreement providing a cooling off period. No mention expressly or by inference to that effect is open on the evidence before me. Nor was it "without prejudice" to enable legal advice to be sought, given that the in-principle agreement and the Heads of Agreement was signed in the context of legal advice being available to both parties. Perhaps the phrase "without prejudice" simply remained on the document in error from an earlier draft. It is more likely that the agreement was intended to operate without prejudice to the rights to "negotiate" the terms of the Consent Orders within the meaning of clause 2 of the Heads of Agreement. The weight of evidence before me[31] is that the reference to "without prejudice" was a reference to the rights of the parties to submit to the Court agreed orders on terms to be settled by counsel; those terms not necessarily being the precise language of the Heads of Agreement document. I do not need to make a firm finding on that question. Whatever the expression was intended to mean, it did not act to render the Agreement other than a binding settlement agreement.
[80] Mrs Hoad submits that the evidence leads to a conclusion that the parties never intended themselves to be bound by the in-principle agreement until orders were sealed in the Federal Court. On that basis she submits that the contract falls into the third category in Masters v Cameron and is not a binding settlement agreement.
[81] I do not agree.
[82] This submission is an ex post facto reconstruction of the facts. It is apparent from the evidence that Mrs Hoad at the relevant time was not in reality disputing that she entered into an agreement on 4 December 2018. Her case was that she believed Mr Hoad had acted in breach of the agreement on 6 December 2018 (the day after the written agreement was made in the sense of both parties having signed it). I find that Mrs Hoad reached an agreement on 27 November 2018, agreed to its formal written terms on 4 December 2018 but shortly thereafter (on 6 December 2018) decided to walk away from the agreement on the basis that she believed the other party had, within its first 24 hours of operation failed to comply with it. She then notified the Commission on 9 December. This conclusion is irresistible from Mrs Hoad's own evidence.
[83] In emails sent by Mrs Hoad to Mr Hoad on 6 December 2018 she said:[32]
"Heads of agreement is off as you have already gone against it"
I no longer wish to proceed with the Heads of Agreement. Your conduct and role as a company director to even comply to an agreement is disputably questionable..."
[84] Mrs Hoad's email to Commissioner Platt of 9 December 2018 expressly said that her action was "due to him not abiding by the heads of agreement with in the first 24hrs".
[85] If there was no agreement in the first place, it would not have been logical for Mrs Hoad to claim that Mr Hoad had breached a non-existent or non-binding agreement.
[86] Mrs Hoad's evidence in these proceedings in answer to questions from myself relied on an assertion that the agreement had been "voided", not never having been made or binding:[33]
"DEPUTY PRESIDENT: So on what basis do you now believe that you can, and have the right to pursue your Fair Work Commission matter given that the heads of agreement was signed?
MRS HOAD: Well, I see it as, that now that that is voided, that I should have my case heard now.
MRS HOAD: And I've been given the opportunity for that.
MRS HOAD: Because I still have opportunity to come back and I have been given that, and I appreciate that, but I'll be still working with Mr Hoad until the trial in August."
[87] It is noteworthy that the very first proposition advanced by Mrs Hoad in her written submission to these proceedings is that "the Respondent and I reached an in-principle agreement in relation to our family law property settlement matter at a conciliation conference before Commissioner Platt."[34] Mrs Hoad confirmed this in her evidence before me.
[88] A unilateral declaration by a party to an agreement that the other party has acted in breach and that the agreement is (in their view) thereby 'voided' is no basis on which to objectively conclude that a binding settlement agreement was not created, is no longer valid or no longer exists. I conclude that an agreement (described as an in-principle agreement) existed between Mr Hoad and Mrs Hoad on 27 November 2018 and that it was a binding settlement agreement.
[89] I further find that a formal written agreement giving effect to the in-principle agreement of 27 November 2018 was made between Mr Hoad and Mrs Hoad on 5 December 2018 and that also was a binding settlement agreement.
[90] I conclude that both the in-principle agreement of 27 November 2018 and the written Heads of Agreement of 5 December 2018 were agreements in category 1 of contracts described in Masters v Cameron. At the time they were made they were binding, and intended to be binding.
[91] Mrs Hoad claims that Mr Hoad voided the agreement by acting in breach in the first 24 hours of its implementation. She claims that Mr Hoad did not make payments or release funds he was required to release. Mrs Hoad also claims that she was not provided assurances that vehicles she would take ownership of under the Agreement would be handed over fully maintained and roadworthy.[35] Mr Hoad disputes these claims. He claims that he made payments due and that Mrs Hoad simply "changed her mind"[36] in seeking to withdraw from the agreement.
[92] The evidence before me provides some support for Mr Hoad's position but I do not need to determine those questions in any final sense. Whether a party to a binding settlement agreement has failed to implement obligations under the agreement is a civil matter with a cause of action for breach of contract. It is not a matter that disturbs the finding that a binding settlement agreement was entered into.
[93] I therefore conclude that Mr and Mrs Hoad entered into a binding settlement agreement.
Was there an agreement to discontinue the Commission proceedings?
[94] An unusual feature of this matter is that the binding settlement agreement was a settlement of a property dispute and the distribution of matrimonial assets including the business of Hoad Water Cartage.
[95] The Heads of Agreement does not expressly refer to the anti-bullying application brought by Mrs Hoad. Clause 21 of the Agreement provides that "the parties shall forthwith withdraw any interim applications presently before the Court (save and except as to the substantive application)." This is not an express term agreeing to withdraw these Commission proceedings.
[96] The question then arises is whether there is evidence before me of such an agreement.
[97] In answer to questions from myself Mrs Hoad said as follows:[37]
"DEPUTY PRESIDENT: ... can I ask you whether there was anything specific said to you at the time, or prior, at the time of you signing this heads of agreement or prior to signing, in the week proceeding, about what this heads of agreement would mean for your Fair Work Commission bullying application and the future of it?
MRS HOAD: Yes, yes your Honour, no I was told that this would be, the case would be removed from the Fair Work Commission and be all finished. Mark and I would have to negotiate the heads of agreement if that didn't work and we'd have to start from A1 again, that's how I look at it.
MRS HOAD: I was told at Fair Work that this case would be removed.
DEPUTY PRESIDENT: When you say at Fair Work, who at Fair Work? What do you mean? Who at Fair Work?
MRS HOAD: When we sat, when we sat in there with the lawyers and Mr Platt, what would happen was, this would be removed, that's how I was told. That, with finalising the heads of agreement or getting a heads of agreement signed, that would remove it from Fair Work.
DEPUTY PRESIDENT: So you, you were told that by signing a heads of agreement, you were resolving the Fair Work Commission matter?
MRS HOAD: The Fair Work Commission? Yes, that's correct, as, yes."
[98] The evidence of Mr Hoad was that on reaching an agreement on the property dispute, Mrs Hoad would discontinue the bullying application.[38]
[99] This evidence of both Mr and Mrs Hoad is consistent with the intimation made by Commissioner Platt in his email to the parties of 14 December 2018 and in my directions to the parties on 28 November 2018 and 3 December 2018 that the Commission's understanding was that "such agreement will involve (amongst other things) the applicant Charmaine Hoad discontinuing these proceedings". Neither Mr nor Mrs Hoad nor their solicitors demurred from that proposition when it was communicated to them.
[100] I am satisfied that notwithstanding nothing express on the face of the Heads of Agreement, that the parties did in fact agree on 27 November 2018 that the binding settlement agreement on the matrimonial matters (including distribution of the business assets) would result in Mrs Hoad discontinuing these bullying proceedings.
[101] However, it is not clear from the evidence whether that agreement was specific as to the timing of the discontinuance: whether it was agreed to be filed immediately (that is, upon the signing of the Heads of Agreement) or upon the interim arrangements in clause 17 commencing or upon the sealing of Consent Orders by the Court. The weight of the evidence is that the parties did not specifically turn their attention to that question. I do not need to make a finding on this point; it is sufficient to dispose of this matter by finding that an agreement was made for the discontinuance of this application by at least no later than the sealing of Consent Orders by the Court giving effect to the Heads of Agreement.
Is there a future risk of Mrs Hoad being bullied at work?
[102] Mrs Hoad continues to work in the business because the status of the Heads of Agreement is in dispute and Consent Orders have not yet been sealed with the Court.
[103] On the evidence before me, the matrimonial dispute remains listed for hearing in the Court in August 2019 if not resolved earlier.
[104] I note that the Heads of Agreement also provided that during the implementation stage of the settlement agreement (that is, from the commencement of the Heads of Agreement until the sealing of Consent Orders by the Court) the parties also agreed:[39]
"the wife will continue to receive her normal salary notwithstanding that she will not be required to attend to her normal employment duties."
[105] Consequently, a binding agreement exists whereby Mrs Hoad is not required to attend the workplace but will continue to receive her salary until business assets are distributed in accordance with the Agreement.
[106] In these circumstances whilst there is a risk that Mrs Hoad may be bullied at work in the short term given that she could attend at work (in the sense of logging on to the Hoad Water Cartage IT system, transacting business and walking in the vicinity of the worksites on the Carey Gully property where she lives), there is a self-correcting mechanism available to her. She can refrain from doing any work, and would continue to draw a salary.
[107] Mrs Hoad could also instruct her solicitors to move promptly to negotiate and settle the Consent Orders on the terms of the Heads of Agreement and have those orders sealed by the Court. Taking that course would (if the Court agrees) result in her no longer dealing with Mr Hoad in any business context. I have already found that, once implemented, the Heads of Agreement provides that Mr and Mrs Hoad go their own way.
[108] In their evidence and submissions before me each indicated that this is what they are seeking as the substantive outcome to their dispute.
[109] I therefore conclude that whilst there is a possibility that Mrs Hoad could in an immediate sense be bullied at work, there are practical mechanisms available to her to lawfully avoid that possibility in both the short, medium and longer term including acting to give effect to the terms of the Heads of Agreement and exercising her rights thereunder.
[110] Mrs Hoad also has the right, not available to other persons employed by Hoad Water Cartage, to apply to the Court to seek variation to the interim orders of 21 May 2018 so as to regulate her interaction with Mr Hoad and vice versa.
Is it appropriate to dismiss the application under section 587?
[111] It is well established that a power to dismiss an application under section 587 is a discretionary power. It must be exercised in a judicial manner, having regard to the circumstances as a whole including the statutory objectives and context.[40]
[112] The power to dismiss under section 587 is not restricted to the three circumstances set out in section 587(1) (a), (b) or (c). As the Commission said in Howey v Mars Australia Pty Ltd:[41]
"In my opinion, the opening words of s 587(1) provide the Tribunal with a broad discretion to dismiss an application in a range of circumstances, not necessarily restricted to the examples in the non exhaustive list in subparagraphs (a), (b) and (c). Other circumstances readily spring to mind; for example, where there is a failure by an applicant to prosecute their claim with due diligence or where an applicant seeks to withdraw a notice of discontinuance filed in FWA."
[113] It is also well established that in cases where a binding settlement agreement has been reached between the parties, especially one requiring the discontinuance of proceedings, that the power in section 587 can be used to dismiss applications. As noted by the Commission in Potter v Darwin City Council:[42]
"It is not appropriate that an application which has been settled now be heard and determined as if that settlement had not been reached. Such an approach would not be consistent with the statutory charter of Fair Work Australia in relation to this jurisdiction."
[114] The requirement that there be an ongoing risk to health and safety is a jurisdictional precondition to making bullying orders[43]. However, the "success" of an application (within the meaning of section 587(1)(c) of the FW Act) can be measured in a number of ways. For example, there may be a finding of bullying behaviour irrespective of whether orders are made and this may, objectively speaking, be a "successful" claim. I do not conclude that Mrs Hoad's application has "no reasonable prospects of success" on that basis.
[115] The Commission should, for good reason, proceed cautiously to dismiss an application (especially a remedial application such as a bullying application) in the absence of a merits hearing. However, in the unusual circumstances of this case the objective facts provide strong grounds on which the Commission should act to dismiss Mrs Hoad's application without a merits hearing. I particularly take into consideration:
[116] My finding that a binding settlement agreement was made which included an agreement that these proceedings would be discontinued is a sufficient basis to conclude that Mrs Hoad's application should be dismissed in the exercise of both the general discretionary power in section 587 of the FW Act and by reference to the specific provisions of section 587(1)(c).
[117] It is true that the settlement of this matter has been agreed through the indirect route of a settlement of matrimonial property and business assets. However, the effect of that settlement on these proceedings is direct. There is no utility in proceeding with Mrs Hoad's bullying application given that the settlement agreement will have the effect of Mrs Hoad ceasing to work in the business of Hoad Water Cartage.
[118] Further, hearing an application which has been the subject of an agreement to discontinue would not be consistent with the objects of the FW Act. In the absence of a hearing, there are no reasonable prospects of an application being successful. In the circumstances of this matter, I do not consider that this conclusion is disturbed by the lack of clarity over when a notice of discontinuance was to be filed. Whether it was agreed to be filed immediately (that is, upon the signing of the Heads of Agreement) or upon the interim arrangements in clause 17 taking effect or upon the sealing of Consent Orders by the Court, there was an agreement nonetheless not to proceed with this application because the parties had agreed to go their own way.
[119] However, I have one reservation in dismissing the application on the basis of the general power in section 587 or the specific circumstance provided for in section 587(1)(c). The settlement agreement is conditional on its implementation. This requires the sealing of Consent Orders by the Court. If for some reason the Court does not seal orders based upon the Heads of Agreement, the Court may determine the matrimonial dispute by making alternate orders, either via different consent orders or by conducting a trial (which is scheduled).
[120] Should for some reason the Court not give effect to the settlement agreement or not otherwise dispose of the matrimonial dispute in a manner that separates Mrs Hoad from working alongside Mr Hoad, the basis on which Mrs Hoad agreed to discontinue the application may have materially altered.
[121] For this reason, and this reason alone, I will adjourn the application by Mrs Hoad until such time as final orders of the Court are sealed (whether by consent or otherwise) unless these proceedings have been otherwise discontinued. I will not list this matter for hearing in the interim unless material circumstances change, or by consent. Should this matter still be before the Commission at the time of the final Court Orders, I will require Mrs Hoad to notify the Commission of the Orders and will provide leave for Mr Hoad to make a fresh strike-out application if Mrs Hoad is to no longer work for Hoad Water Cartage. Mrs Hoad will have general liberty to apply should her application still be before the Commission but only if the basis on which she agreed to discontinue has materially altered.
[122] For the sake of completeness I deal with one final matter. After I reserved my decision on 15 February 2019 Mrs Hoad (on 13 March) made a request by email that her case be "re-opened" to permit further evidence of bullying conduct. She attached various emails to that request. Those emails have apparent relevance to the merits of her claim. Although the request was brought to my attention, I have not had regard to it in making this Decision. The hearing of 15 February 2019 was not a merits hearing. There is no basis (even were it appropriate to receive new evidence) to re-open the proceedings of 15 February 2019. Those proceedings concerned themselves (as does this Decision) with jurisdictional and procedural issues only.
[123] The Commission will direct that:
the anti-bullying application not be listed for further hearing except as provided for in this Direction;
leave be granted to the Applicant and to William Mark Hoad to apply on short but reasonable notice should it be considered necessary to vary or supplement this Direction or seek re-listing or dismissal of the anti-bullying application in light of changed circumstances, significant practical necessity, or agreement between the parties;
unless the anti-bullying application has been discontinued, the Applicant is to notify the Commission of the terms of the final Order of the Court within seven days of the Order being made;
should the final Order of the Court give effect in substance to the Heads of Agreement or otherwise have the effect that the Applicant is no longer to be employed by Hoad Water Cartage and should the anti-bullying application not be discontinued by such date, leave is granted to William Mark Hoad to make application within fourteen days of the final Order of the Court seeking dismissal of the anti-bullying application;
leave is granted to the Applicant to discontinue the anti-bullying application at any time from the date of this Direction.
[124] A Direction to this effect is issued in conjunction with the publication of this Decision.
[2] F1 Application by Hoad Water Cartage Pty Ltd in name of William Mark Hoad dated 8 February 2019
[3] Directions 25 January 2019 at [11]
[4] Audio transcript 15 February 2019 11.32am (Mr Hoad)
[5] R4; Names of persons other than Mr Hoad and Mrs Hoad have been anonymised in this Decision
[9] AB2018/558; A decision in that matter was delivered on 21 March 2019 [2019] FWC 1794
[10] Directions 1 November 2018 at [3] paragraph 6
[11] Directions 15 November 2018 at [5]
[12] Directions 28 November 2018 at [3], [4] and [5]
[22] Name has been anonymised in this Decision
[25] Directions 25 January 2019 at [9] and [10]
[26] Damcevski v Emilios Demetriou & Ors [2018] NSWSC 988 at [78]
[28] [1954] HCA 72; (1954) 91 CLR 353. The Courts have subsequently recognised a fourth category of agreements summarised in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628
[30] Audio transcript 15 February 2019 12.26pm
[31] Mrs Hoad audio transcript 15 February 2019 12.27pm; A1 paragraph 5(b)
[32] Email 6 December 2018 2.30pm and 3.29pm
[33] Audio transcript 15 February 2019 12.53pm
[35] Audio transcript 15 February 2019 12.20pm ; A1 paragraph 5(g)
[36] Audio transcript 15 February 2019 11.07am
[37] Audio transcript 15 February 2019 12.49pm
[38] Audio transcript 15 February 2019 11.12am
[40] Grabovsky v United Protestant Association NSW Ltd [2019] FWCFB 1964 at [12]; Mihajlovic v Lifeline Macarthur [2014] FWCFB 1070 at [39]
[41] [2012] FWA 6259 at [74] per Sams DP
[42] [2010] FWA 6129 at [62] per Hampton C
[43] Re Kathleen McInnes [2014] FWCFB 1440 at [20]
Printed by authority of the Commonwealth Government Printer
(1954) 91 CLR 353
(1986) 40 NSWLR 622