Victorian Civil and Administrative Tribunal|2010-05-04

The Applicant's claim to VCAT was not prepared by a lawyer, nor was his application to the Small Business Commissioner, so neither document was particularly precise. However, the Terms of Settlement were more precise. After examining the documents and considering the circumstances, I was satisfied that the application to VCAT covered the same issues and circumstances as those which were covered by the Terms of Settlement. The following list of similarities leads overwhelmingly to this conclusion:

The respondent named originally on the applicant's VCAT application is "Toll Group (ACN 084 157 666)" and on the applicant's application to the SBC the respondent is named in exactly the same way and, as described in the Terms of Settlement, the application to the SBC forms part of the dispute covered by the Terms (see 15(a) of the Terms);

Paragraph 15(b) of the Terms of Settlement refers to "wrongful termination" and paragraph 16 (b) which sets out the settlement gives the date of the termination as 23 July 2007, while the letter of 10 November 2008 attached to the VCAT application refers also to the applicant's allegation he was dismissed on 23 July 2007;

Paragraph 15(e) of the Terms of Settlement refers to "bullying and harassment" and the history of dispute on the VCAT application form says "threatened, bullied, harassed";

Paragraph 15 (d) of the Terms of Settlement refers to "failure to negotiate a contract" and the history of dispute on the VCAT application says "no chance to negotiate further payment";

Paragraph 15 (f) of the Terms of Settlement refers to "increased hours" and the VCAT application history of dispute says "threatened, bullied harassed to work before starting time for nothing."

Further, there was no evidence, no submission and no suggestion that the VCAT application form and the Terms of Settlement dealt with different times or circumstances from each other. Therefore, I was satisfied that all the substantive issues and circumstances mentioned in the VCAT application had been covered by the Terms of Settlement.

Whether the Terms of Settlement prohibit further litigation

Cause 5 of the Terms of Settlement was as follows:

"This Settlement Agreement shall be absolute, final and binding on all the parties and shall be relied upon as a binding contract in any future proceedings in any court of tribunal by the parties and both parties agree to RELEASE each other from any further proceedings in this dispute upon fulfilment of the terms of this agreement, excluding any action under the Accident Compensation Act 1985".

These words are quite clear, so that unless there is some reason why the applicant is not bound by the contract made between the parties at the mediation, he is prevented by those terms from bringing any further action.

Whether the applicant should be bound by the Terms of Settlement

The applicant contended for several different reasons that he should not be bound by the Terms of Settlement which prevented him bringing any further action. I will consider each of the issues raised by the applicant to support this argument.

At the hearing, the applicant said that his claim was brought under the Owner Drivers and Forestry Contractors Act 2005, as well as the Fair Trading Act 1999. VCAT has jurisdiction under both Acts, but the jurisdiction under the Owner Drivers Act is enlivened only after a certificate is provided by the SBC. Section 40 of that Act relevantly provides:

'(1) A dispute may be the subject of proceedings before the Tribunal only if the Small Business Commissioner has certified in writing that alternative dispute resolution under this Part has failed, or is unlikely, to resolve it.'

No certificate has been provided by the SBC. On the contrary, the alternative dispute resolution referred to in section 40(1) took place and as recorded in the Terms of Settlement, the dispute was resolved.

Accordingly, the Owner Drivers and Forestry Contractors Act 2005 does not give VCAT jurisdiction in the dispute if the Terms of Settlement are binding. Therefore, the applicant's reference to that Act as authority for his claim can not be accepted.

Mr Guida said that he should not be bound by the Terms of Settlement for the following reasons which for convenience I have numbered i. to vii.

The amount of money paid to him under the settlement was not a fair outcome;

The TWU did not represent him well, should have advocated for him more vigorously and pressured him to sign the Terms of Settlement;

He misunderstood them and thought they were an agreement involving his company but not his personal rights to recover;

The contract was changed after he signed it to refer to Toll Ipec instead of "toll group" and to him personally as well as the company Mandance Pty Ltd;

Alternatively, he was not aware that the parties included himself personally and Toll Ipec and he assumed that he as an independent contractor still had issues to resolve;

The Terms were signed in a stressful situation;

He was under economic duress when the terms were signed and he was told that the Workcover claim would deal with all the other issues - that claim is still proceeding.

As to the first argument, that the Terms were not fair, a person is generally bound by a contract which he has entered freely. In commercial relations, the contention that a bargain freely entered is not fair will not usually free a person from the bargain.

It is true that the Fair Trading Act 1999 in section 109 allows for the tribunal to consider what is 'fair' when making orders to determine a dispute. However, those powers are not enlivened unless the dispute is within VCAT's jurisdiction. If the applicant is bound by the Terms of Settlement, VCAT has no jurisdiction to re-open the dispute. Here, the Terms of settlement must be interpreted in accordance with the ordinary law of contract, which does not allow for a contract to cease to be binding simply because one of the parties thinks better of the bargain he made and decides it is not fair.

It is true that the Fair Trading Act 1999 in section 8A prohibits unconscionable conduct in business transactions and that Act allows a person to claim damages for such conduct and seek orders about the unconscionable contract. However, assuming that the applicant would be able to support his contention that the settlement was not fair, that would not necessarily be an infringement of the prohibition on unconscionable conduct.

"Unconscionable" in the Fair Trading Act 1999 is a word which is sometimes misunderstood. In Hall v Kennards Storage Management Pty Ltd (Civil Claims) [2009] VCAT 1531, my colleague Senior Member Vassie examined recent cases concerning the interpretation of sections 8 and 8A. The Senior Member noted that the courts have taken a cautious and restrained approach to the equivalent provisions in the Commonwealth Trade Practices Act 1974 and reached a conclusion (at paragraph 146) with which I respectfully agree - that "unconscionable" is a stronger word than "wrong" or "unfair": "it connotes conduct of a kind that attracts moral obloquy or an adverse moral judgement".

In the present case, despite the Applicant's strong conviction that the outcome of the settlement negotiations was not fair, he did not indicate that he would produce evidence of any such conduct. He mentioned that he felt stressed during the mediation, but there was no indication that the Respondent contributed to that stress except by being a party to the dispute. Consequently, the chance that he could succeed in overturning the Terms of Settlement on the ground of unconscionable conduct was remote in my view.

As to the second argument, that the TWU did not represent the applicant well and pressured him to sign the Terms of Settlement, if that were true it might be that the applicant could bring an action against the TWU in respect of its behaviour, but it does not in itself change the fact that the applicant is bound by the Terms to which he agreed. If the applicant has any action against the TWU, VCAT, as I have said, has no power to deal with it.

The third and fifth contentions were really the same - that the Applicant misunderstood the terms of settlement and thought they were an agreement involving Mandance Pty Ltd and Toll Group, but not his personal rights to recover against Toll Ipec Pty Ltd. At the hearing, Mr Guida gave no indication that his belief that there were two different contracts would be supported by any evidence other than his own conviction that there were two different contracts for services.

Further, the documents I saw and have already discussed indicated that there was only one set of circumstances involving the parties - that is the circumstances covered by the Terms of Settlement, so that even if there were two separate contracts for services the Applicant would still be bound by the Terms, which referred to all the circumstances between the parties. Accordingly, these contentions could not succeed.

Concerning the fourth contention, that the Terms of Settlement were altered after the applicant signed the document, to indicate that they were an agreement between Terry Guida and Toll Ipec as well as between Mandance Pty Ltd and Toll Group, the applicant gave oral evidence and was cross-examined before me.

He first gave evidence that the names of the parties were altered after he signed the Terms, from "Mandance Pty Ltd" and "Toll Group" to "Mandance Pty Ltd and Terry Guida (driver)" and "Toll Ipec (hirer)". When cross-examined, he agreed that he had not noticed what the names of the parties were when he signed the terms, that the names probably were already altered when he signed and that the name "Toll Ipec" on the front of the Terms was consistent with the party indicated on the signature page, which bore his signature.

The applicant did not have the assistance of his own counsel at the hearing. However, taking all the circumstances into account, I considered it most unlikely that he would or could maintain at a full hearing that the names of the parties were changed after he signed.

As to the sixth contention, that the applicant should not be bound by the Terms because he signed them in stressful circumstances, it is true that a contract entered under duress is not binding in some circumstances. However, the applicant gave no indication that he would give evidence that he was forced to enter the terms of settlement by actual or threatened violence to him or his family or property or to his commercial or financial interests (apart from the fact that he was in need of funds). Nor did he point to any special disability or disadvantage. Something along these lines would be required for a challenge based on duress to succeed. Therefore it was unable to succeed in my view.

The seventh contention, that he should not be bound by the Terms of Settlement because he was under economic duress when he signed them, was misconceived. Contracts such as the Terms of Settlement may be voidable when economic duress has been applied to a party to persuade him to enter the contract. Here, the applicant gave no indication that he would give evidence of any economic duress applied to persuade him to sign the Terms of Settlement. Rather his evidence was that he was suffering from financial hardship at the time he signed the Terms. While this hardship may have been the result of the termination of his income from the Respondent, there was no indication that the Respondent had applied any further duress to persuade the Applicant to agree to the Terms.

In summary, I found that the Applicant's claim in this tribunal concerns the same facts and circumstances which were the subject of the Terms of Settlement and that those Terms specifically prohibit this claim from being brought. Further, the Applicant did not raise any issue or allege any fact which might if supported by appropriate evidence excuse him from complying with that prohibition. It would therefore be an abuse of process for this claim to proceed against the first respondent and it must be dismissed under section 75.

Accordingly, the claim is dismissed pursuant to section 75 of the VCAT Act 1998.

Fair Trading Act 1999ss 3,107, 159-

Compensation Act 1985

Drivers and Forestry Contractors Act 2005

Guida v Toll Ipec Pty Ltd & Anor (Civil Claims) [2010] VCAT 539 (4 May 2010)

The second respondent contended that its representation of the applicant did not occur in trade or commerce. It referred to the leading case on the meaning of "trade and commerce" - Concrete Constructions (NSW) Pty Ltd v Nelson ([1990] HCA 17; 1990) 169 CLR 594, in particular to the following passage at page 603:

Further, the second respondent referred the tribunal to a decision of the Federal Magistrates court Everett & Anor v Australian Services Union [2007] FMCA 1665 (12 October 2007) in which this principle was applied to the representation of trade union members by the trade union. The Magistrate held, in the following passage with which I respectfully agree, that the representation by a trade union of its members is not a trading or commercial activity:

Guida v Toll Ipec Pty Ltd & Anor

At a glance

Court

Decision date

Source

Judgment (41 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (3)

Guida v Toll Ipec Pty Ltd & Anor (Civil Claims) [2010] VCAT 539 (4 May 2010)