The Mid North Coast Local Health District has applied for Ms Lovell's complaint of disability discrimination under the Anti-Discrimination Act 1977 (NSW) to be dismissed. The basis for the application is that the parties have signed terms of settlement and Ms Lovell has executed a deed of release which reflects those terms. Ms Lovell says that the Health District has rescinded or repudiated the terms of settlement and the deed and she should be able to continue with her complaint.
The Health District accepts that it has not complied with the terms of settlement or the deed in some respects but submits that the breaches do not allow Ms Lovell to terminate the agreement. The money was paid a few weeks late and the statement of service, while initially incorrect, has now been amended. The Health District denies breaching confidentiality. The Tribunal has jurisdiction to determine whether the complaint should go ahead in circumstances where one party contends that the proceedings have been compromised or settled: Sebastian v Rail Infrastructure Corporation [2005] NSWADT 281 at [37] - [50].
I have decided that Ms Lovell is bound by the terms of settlement and that the complaint should be dismissed.
[2]
Background
On 18 January 2016 a delegate of the President of the Anti-Discrimination Board referred a complaint by Ms Lovell against the Health District to the Tribunal. The complaint alleged that the Health District had discriminated against Ms Lovell on the ground of disability in relation to her employment. Following a case conference, the matter was referred for mediation and the parties signed an Agreement to Mediate. The mediation was conducted by a person on the Tribunal's list of mediators: Civil and Administrative Tribunal Regulation, Sch 1, cl 5. At the conclusion of the mediation, the parties signed a document entitled "Confidential Terms of Settlement".
The terms of settlement state that:
The parties agree that, in full and final settlement of the matter before NCAT:
1. The applicant will provide a letter of resignation addressed to David Rogers, District Manager Drug and Alcohol Services, from her employment in the role of Alcohol and other Drugs Counsellor effective 15 April 2016, and the respondent waives any obligation of the applicant to give notice of termination.
2. The respondent will provide the applicant with a statement of service by 29 April 2016 which will detail period of service; duties and position; that the applicant's service was satisfactory.
3. The respondent will pay the applicant the sum of $10,000 as general damages to the applicant's nominated bank account on or before 29 April 2016, subject to receipt of an executed deed of release from the applicant.
4. The respondent to give consideration to its implementation of NSW Health's policies for Management of Non-Work Related Injuries and Injury Management Return to Work (2013-006) to provide timely notification to employees of concerns about their health.
5. The parties will enter into a deed of release reflecting the above terms and providing for:
(a) mutual releases in relation to all claims relating to the applicant's employment at its cessation, as far as permitted by law;
(b) mutual confidentiality;
(c) an acknowledgement by the applicant that she is not aware of any condition or injury arising from work which could be the subject of a workers compensation claim.
On 18 April 2016, in accordance with the terms of settlement, the Health District sent a copy of a draft deed of release to Ms Lovell. On 27 April 2016, Ms Lovell emailed Mr Rogers, District Manager of Drug and Alcohol Services, an amended version of the draft deed duly signed by her. There is no version of the deed signed on behalf of the Health District in evidence. Regardless, the parties' obligations under the terms of settlement are identical with those under the deed. The terms of settlement provide for "full and final settlement of the matter" while clause 3(a) of the deed provides the Health District with a release from all the applicant's claims relating to her employment.
On 10 May 2016 Ms Lovell telephoned Mr Rogers advising him that she was at a Tribunal directions hearing and that she had not been paid the $10,000. The Health District says that it was not advised of the directions hearing. The following day, 11 May 2016, the Health District says it sent a cheque for $10,000 to another C Lovell in error. The error was not discovered until 13 May 2016. The Health District corrected the error and paid $10,000 into Ms Lovell's bank account on 17 May 2016. The Health District does not dispute that it:
1. paid the settlement amount on 17 May 2016, rather than on 29 April 2016 as provided for in the terms of settlement;
2. issued Ms Lovell with a statement of service on 10 May 2016, rather than on 29 April 2016;
3. included in the statement of service an incorrect commencement date; and
4. advised staff that Ms Lovell had resigned.
[3]
Summary
Ms Lovell initially relied on the following matters for terminating the terms of settlement:
1. the Respondent paid the money nearly 3 weeks late;
2. the Respondent issued her with a statement of service nearly two weeks late;
3. the statement of service contained an error;
4. the Respondent breached confidentiality provisions by disclosing to its employees that Ms Lovell had resigned.
Later, Ms Lovell broadened the matters on which she relied by challenging the Tribunal's referral of the matter to mediation and the duress she says she was subjected to by the Respondent. The Health District was not on notice of this evidence and has not been given an opportunity to respond to it. For that reason we have not taken it into account. Nevertheless, I have taken this opportunity to explain to Ms Lovell why she would not have succeeded on either of those grounds even if the Health District had been given an opportunity to respond.
[4]
Referral to mediation
Ms Lovell contends that the Tribunal should not have referred the matter to mediation because the referral was inconsistent with the Tribunal's Procedural Direction 8 which provides that:
5.2 The Tribunal will not refer a matter to mediation unless the circumstances are appropriate. The circumstances may not be appropriate where:
…
(b) there is a history of sexual harassment, violence or extreme animosity between the parties, including a restraining order such as an Apprehended Violence Order between two or more parties. In those cases one or more parties may feel intimidated by being in the same room as another party. In these cases a mediation may be held if the parties are separated throughout the mediation.
Ms Lovell refers to parts of her original complaint to the Anti-Discrimination Board where she alleges harassment. She asserts that there was an "imbalance of power", indeed a "misuse of power" by the Respondent and that, for those reasons, the matter was not appropriate for mediation.
"The Tribunal may, where it considers it appropriate, use (or require parties to proceedings to use) any one or more resolution processes." Civil and Administrative Tribunal Act 2013 (NSW), s 37(1) (NCAT Act). A resolution process includes mediation. Mediation is provided for in Schedule 1 to the Civil and Administrative Tribunal Regulation 2013.
The procedural direction on mediation reflects the fact that s 37 of the NCAT Act gives the Tribunal a discretionary power to refer or not to refer a matter for mediation. The procedural direction merely lists considerations that may be relevant when deciding whether or not to refer the matter. Even if the Tribunal is bound to take those considerations into account, the discretion has not miscarried in this case for two reasons.
First, there was no evidence of the matters mentioned in the procedural direction namely a history of sexual harassment, violence or extreme animosity between the parties. While Ms Lovell alleged harassment, she did not draw our attention to any allegations of sexual harassment or violence. Second, the referral was by consent. The Tribunal did not require the parties to attend mediation. Both Ms Lovell and a representative of the Health District signed a mediation agreement agreeing to participate, to adhere to confidentiality requirements and to make a genuine effort to come to an agreement.
[5]
Duress or undue influence
The second matter Ms Lovell belatedly raised, and on which I merely make some observations, is duress or undue influence. A party to a contract may rescind it if it is procured by duress or undue influence: Seddon, Bigwood & Ellinghaus, Cheshire and Fifoot Law of Contract, LexisNexis Butterworths (10th Australian ed 2012) at 757. Ms Lovell refers to her previous evidence about the imbalance of power and the Health District's alleged misuse of power in support of this submission. Ms Lovell does not assert that the Health District coerced her into signing the terms of settlement or even that it attempted to unfairly persuade her to do so. As there is no factual basis to support a claim of duress or undue influence, the contract would not be voidable on either of those grounds.
Basis for claim that contract has been rescinded or terminated
[6]
Repudiation
Ms Lovell set out several ways in which the Health District had not complied with the terms of settlement, but I did not understand her submission to be that the Health District had repudiated the contract. Even if Ms Lovell did intend to rely on repudiation, the Health District did not demonstrate any unwillingness or inability to perform the contract. When Ms Lovell drew the fact of non-compliance to their attention, the money was paid a week later and the error on the statement of service was rectified.
[7]
Breach of term to pay $10,000 by 29 April 2016
Even if the Health District did not repudiate the contract, Ms Lovell was entitled to terminate the contract if it had either breached an essential term or breached an intermediate term causing loss of the substantial benefit of the contract: Seddon, Bigwood & Ellinghaus, Cheshire and Fifoot Law of Contract, LexisNexis Butterworths (10th Australian ed 2012) at 1049.
The first breach was that the Health District did not pay the settlement amount on 29 April 2016 as stipulated in the contract, but rather on 17 May 2016, 18 days late. While the contract did specify a precise time for payment, it does not follow that payment on time was an essential term: Kyrwood & Ors v Drinkwater & Ors [2000] NSWCA 126 (25 August 2000) at [135].
In considering whether the term is essential, its objective importance must be assessed: Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 at 641-2; DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] 138 CLR 423 at 431. Courts are "not too ready to construe a term as a condition …": Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 at 556-7.
In Fraser v Elgen Tavern Pty Ltd [1982] VR 398, the Supreme Court of Victoria was interpreting a provision where time was expressed to be the essence of the agreement. The Court held that as the monies had not been paid by the due date, the plaintiff was no longer bound by the settlement. The triviality of the breach was immaterial. This case is different. Time was not "of the essence" because time was not stipulated in either the terms of settlement or the deed to be "of the essence"; the release contained in the deed was not subject to timely payment or any other condition and Ms Lovell accepted late payment.
The parties did not stipulate that time was an essential term nor can essentiality be inferred from the terms of the contract or the circumstances.
Payment by 29 April 2016 was not a breach of an intermediate term, which would cause loss of the substantial benefit of the contract: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115. Ms Lovell received the money within a few weeks of the agreed date. She suffered no loss from the late payment other than not having the benefit of the $10,000 for 18 days.
[8]
Failure to provide statement of service by 29 April 2016
The second breach was failure to provide a statement of service by 29 April 2016. The Health District did not provide the statement until 10 May 2016. For the same reasons as those I have given in relation to the late payment of the money, payment by 29 April 2016 was not an essential term or an intermediate term breach of which would cause loss of the substantial benefit of the contract.
[9]
Failure to provide an accurate statement of service
The third breach was that the statement of service incorrectly records Ms Lovell's date of joining the Health District as 14 April 2003. Ms Lovell says she joined in March 2001. That assertion is supported by a letter to her from the Health District dated 19 February 2001 agreeing that she will commence duties on 19 March 2001. The Health District submits that this is a trivial breach and has been rectified by issuing a revised statement of service. An error in the statement of service which has subsequently been rectified is neither the breach of an essential term nor the breach of an intermediate term causing loss of the substantial benefit of the contract.
[10]
Breach of confidentiality
Finally Ms Lovell alleges that despite the fact the terms of settlement were headed "confidential" and the deed contained a confidentiality provision, the Health District breached those terms by informing her former colleagues of her resignation.
The Deed of Release contained the following confidentiality provision:
Each party agrees to keep confidential and not disclose the terms of this Deed to any person, other than:
(i) for the purpose of seeking professional accounting or legal advice;
(ii) in respect of the Employer, to an insurer in relation to the application of any policy of insurance;
(iii) to a court, tribunal or commission in proceedings relying on or to enforce this Deed; or
(iv) to the extent necessary, if required by law.
The alleged breach of confidentiality was the disclosure by officers of the Health District to its employees on or about 5 May 2016 that Ms Lovell had resigned. The Health District admits that its employees were told that Ms Lovell had resigned but says that information was not a term of the Deed. Recital C to the Deed was that:
Following mediation, the Employee tendered her resignation from the Employment effective 15 April 2016, subject to the terms of settlement set out in this Deed being executed.
It was a term of the Deed that the Employer "accepts the resignation tendered by the Employee referred in the Recital C and waives any obligation of the Employee to give notice of termination, with the effect that the Employment ceased effective 15 April 2016".
Ms Lovell says that she was contacted by other employees who knew that she had resigned before any of the other terms of the agreement, including payment of the $10,000, had been made. The Health District did not deny that it had told other employees that Ms Lovell had resigned. Nevertheless, the Health District submitted that the fact of Ms Lovell's resignation was not a matter covered by the confidentiality provision in the deed, nor did it breach the terms of settlement.
Ms Lovell's resignation is referred to as an event which has occurred in Recital C. It was a term of the deed that the Health District would accept Ms Lovell's resignation. There was no term of the agreement that Ms Lovell resign. Consequently communicating the resignation was not a breach of the confidentiality provision because the confidentiality provision only applied to the terms of the deed.
It was a term of the agreement that the Health District accept Ms Lovell's resignation. The communication to employees of Ms Lovell's resignation could be interpreted as disclosure of the term that the Health District has accepted the resignation. Characterised in that way, the Health District has breached confidentiality by disclosing that fact.
But the question remains as to whether breach of the confidentiality provision entitled Ms Lovell to terminate the contract. Confidentiality was no doubt an important consideration for the parties, especially Ms Lovell. But it was not objectively so important, especially in relation to disclosure of a fact that would become obvious to everyone in time. Nor did disclosure cause Ms Lovell to lose the substantial benefit of the contract. (See also, Sebastian v Rail Infrastructure Corporation [2005] NSWADT 281 at [90].)
I am satisfied that no further action should be taken in respect of the complaint because the parties have entered into an agreement to settle the complaint: Anti-Discrimination Act, s 102; 92(1)(b); Sebastian v Rail Infrastructure Corporation [2005] NSWADT 281 at [54] and [55].
[11]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 08 November 2016