Mallegowda v Hawkesbury City Council

Procedural Background and the Evidence

1. The Notices of Motion were listed for directions on 27 June 2024, at the same time as the substantive proceeding had been listed for report back. On 26 June 2024 the Applicant sent an email to the Registry in which he stated that he had received medical advice that for the following four weeks he was not to engage in any kind of work or court attendance or anything which could aggravate his current (poor) mental state, and which attached a medical certificate which ostensibly supported this advice. He also advised that his wife would act as his support person. Neither the applicant, nor his wife, appeared at the directions hearing the following day.
2. In light of the Applicant's email, and after hearing from the Respondent, who did not oppose my proposed course of action, I decided to set a timetable for hearing of the Respondent's Notices of Motion which only required the Applicant do work in respect of the motions after the four-week period referred to by the Applicant and his doctor. At the request of the Respondent, I included a direction that the Applicant file and serve any expert evidence upon which he proposed to rely. The directions I made on 27 June 2024 were as follows: "1. Hawkesbury City Council is to file and serve an outline of submissions in support of its notice of motion, of no more than 5 pages, by 12 July 2024. 2. Mr Mallegowda is to file and serve, in response to the Respondent's notice of motion, all written statements to be relied on, an outline of submissions and any other relevant documentation, including any expert reports, to be relied on by 25 July 2024. 3. Hawkesbury City Council is to file and serve any evidence and submissions in reply by 31 July 2024. 4. The notice of motion filed by Hawkesbury City Council is listed for hearing on 2 August 2024 at 10.00am for half a day. 5. The parties have liberty to relist the matter on short notice. 6. Mr Mallegowda's application for leave to issue a Summons to Produce is stood over to the hearing of the motion on 2 August 2024."
3. The practice of this Commission is to forward a copy of any orders made by the Commission to the parties. I have confirmed this occurred by email in this case. I also arranged for a copy of the orders to be sent to the Applicant's wife.
4. The Respondent filed its Outline of Submissions on 10 July 2024 (RS).
5. On 25 July 2024 the Applicant filed an Outline of Submission (AS) but did not file any other document. Three aspects of the AS require comment at this point. The first is that the AS was filed on 25 July 2024, being the deadline I had directed on 27 June 2024, and was signed by the Applicant with a notation that the document had been "settled by" the Applicant. From that fact I infer that the Applicant, or at least his wife, was aware of the directions made on 27 June 2024. The Applicant confirmed during submissions that his wife had received a copy of the directions. [1]
6. The second point of note is that the AS makes clear that the Applicant, or at least his wife on his behalf, made a deliberate decision not to put on any evidence. As I will discuss in more detail below, the Applicant objected to the Respondent adducing in evidence 'without prejudice' settlement communications, on the basis that s 131(1) of the Evidence Act 1995 (NSW) prohibited such evidence being adduced. Consequently, the Applicant submitted at AS [4]: "The Applicant is not preparing any affidavit or statement or attachments because the Applicant does not have to do the same mistakes as Respondents (sic) by tendering all the without prejudice communication."
7. During oral submissions, the Applicant also stated: "The court did not order me to say that without prejudice documents can be submitted to the court [and so] on that basis I did not put [on] any evidence." [2]
8. The third point of note is that in the final paragraph of the AS the Applicant requested that the Commission "decide this application in the absence of parties (sic) or via tele link because Applicant's (sic) mental health is not in good shape to attend the Commission." The Respondent opposed the matter being heard on the papers in its Submissions in Reply filed on 30 July 2024 (RSR).
9. Had the Respondent not opposed the Applicant's request I would have readily acceded to it. However, in the face of the Respondent's opposition and in the absence of any medical evidence to support the Applicant's claim that he was unable to attend the Commission for the hearing on Friday 2 August 2024, on Wednesday 31 July 2024, I arranged for the Registrar to write to the parties to advise that I had declined the Applicant's application and that the motion would be heard in person on 2 August 2024 at 10.00am.
10. The Applicant attended in person on 2 August 2024 and, as I will explain below, made no compliant regarding the hearing proceeding on 2 August 2024 until the closing stages of his oral submissions.
11. In respect of each Notice of Motion the Respondent read an affidavit affirmed by Thomas Duffy, Senior Industrial Officer employed by Local Government NSW (LGNSW) on 24 June 2024, which had been filed with the Notice of Motions on 25 June 2024. The Respondent is a member of LGNSW, a registered organisation of employers. While a separate affidavit was read in respect of each matter, the affidavits were identical in their terms and in the balance of this decision I refer to the affidavits in the singular.
12. Mr Duffy was not the primary person at LGNSW with whom the Applicant had corresponded regarding settlement of the proceedings and the Applicant appropriately objected to a number of paragraphs of Mr Duffy's affidavit on the ground of hearsay, with the result that counsel for the Respondent opted not to read a number of paragraphs.
13. The Applicant also objected to the tender of three emails which were annexed to Mr Duffy's affidavit on the basis that they offended s 131(1) of the Evidence Act. While the Commission is not bound by the rules of evidence (s 163(1)(b) of the IR Act), it is obliged act justly when informing itself on any matter. The rules of evidence, as provided for in the Evidence Act and at common law, have been developed to ensure as best as possible, fairness to all parties and the Commission may properly have regard to a rule of evidence when considering whether to admit certain evidence: Secretary of the Ministry of Health v New South Wales Nurses and Midwives' Association [2022] NSWSC 1178; 320 IR 249 at [462] - [465] (Walton J).
14. The Applicant made the quite cogent and well-articulated objection that: "… these three emails are confidential and without prejudice and before settlement of the Court judgment, these documents should not be provided to the judge or commissioner on the basis that it [may] influence the commissioner in deciding the matter." [3]
15. However, I overruled the Applicant's objection on the basis that the communications fell within the bounds of s 131(2)(f). Section 131(1) and 131(2(f) provide: (1) Evidence is not to be adduced of - (a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute, or (b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute. (2) Subsection (1) does not apply if - … (f) the proceeding in which it is sought to adduce the evidence is a proceeding to enforce an agreement between the persons in dispute to settle the dispute, or a proceeding in which the making of such an agreement is in issue, or …
16. The Applicant submitted that no concluded agreement had been reached and therefore s 131(2)(f) did not apply, however the Applicant's submission overlooked the second part of the sub-section which permits evidence of settlement negotiations to be adduced in a proceeding in which the making of a settlement agreement is in issue. Whether the parties had reached a binding settlement agreement is the very issue the Commission, by reason of the Respondent's Notices of Motion, is required to determine. The documents alleged by the Respondent to evince that agreement must be adduced into evidence in order for the Commission to resolve that issue. In short, the communications made between the Applicant and the representatives of the Respondent, and the documents prepared, in connection with the attempt by the parties to settle the dispute are caught by the exemption provided in s 131(2)(f): Jones v Jones [2024] NSWSC 210 at [10] (Elkaim AJ).
17. Ultimately, the only parts of Mr Duffy's affidavit that were read and admitted as evidence (as opposed to being treated as a submission) were: 1. the three emails referred to above and which I detail below; 2. a copy of the draft Deed of Release which the Respondent forwarded to the Applicant on 19 June 2024 at 11:40am; 3. evidence that Mr Duffy was instructed that as at the date the Applicant's employment was terminated by the Respondent, the Applicant was not owed payment for any leave entitlements; and 4. evidence that Mr Duffy was instructed that, should the Commission determine that a conclusive settlement was reached, the Respondent will pay $17,000 less applicable taxation to the Applicant pursuant to the terms of settlement.
18. Initially the Applicant indicated that he wished to cross examine Mr Duffy, although he ultimately stated that he did not need to cross examine Mr Duffy. [4]
19. The Respondent also tendered the transcript of the direction hearing held on 19 June 2024. [5]
20. While the Applicant had not filed and served any evidence and did not tender any evidence when given the opportunity during the hearing [6] , at the commencement of his submissions he sought to tender a without prejudice letter from LGNSW dated 8 March 2024 in which LGNSW on behalf of the Respondent made an offer to settle the proceedings. The offer included what was described as a "Gross payment of Seventeen Thousand, Two Hundred and Sixty-One Dollars and Sixteen Cents ($17,261.16) … representing 7 weeks' gross ordinary pay". The letter also stated: "The above payment will be taxed according to Australian taxation law." The Applicant submitted, in response to the Respondent's objection to the tender, that the letter was relevant to show that he had previously rejected an offer for more than the amount which the Respondent contended he had ultimately accepted, to make good his submission that: "if a person has rejected an offer with a gross sum of 17,000 plus why would he accept an offer for 17,000 three months later?"
21. While the timing of the tender of the letter was unorthodox, and the letter itself arguably of limited relevance to events two and half months later, I admitted the letter into evidence. [7]
22. The material admitted into evidence established the following facts.
23. On 8 March 2024 LGNSW made a written offer to the Applicant to settle the two proceedings for $17,261.16 which was to be taxed according to Australian law, and on the basis of other stated conditions. Although there was no direct evidence that the Applicant rejected this offer, that fact is readily inferred from subsequent events.
24. On 18 June 2024 at 11:57am the Applicant sent an email to Mateo Lopez of LGNSW in the following terms: "Subject: Amended Without Prejudice Offer Hi Mateo As requested I'm now amending the settlement offer from 12 to 10 weeks. with tax. The weekly gross wages (attached) was $2,465.90, so far 10 weeks it takes to $24,659. I would really appreciate if you could accept the revised offer. Regards, Shashi Regards Shashi" (Emphasis and errors in original)
25. On 18 June 2024 at 12:33pm Mateo Lopez replied to the Applicant's earlier email in the following terms: "Without Prejudice Dear Mr Mallegowda I refer to your without prejudice counter-offer below. I am instructed to reject the offer. Without admission of liability, Council proposes to resolve both your current unfair dismissal claim and victimisation claim on the following terms and subject to a Deed of Release: • Payment to you of $17,000 (gross payment, less applicable taxation) in full and final settlement of the claims. • Mutual release form all present and future claims arising in any way out of, or in relation to, your employment with HCC (excluding workers compensation claims) • Mutual obligations with respect to confidentiality • Mutual obligations with respect to non-disparagement • A clause which precludes you from applying for a position with Hawkesbury City Council again I am instructed to advise you that this Council's final offer to resolve the matter on a commercial basis. This offer will remain open until 5:00pm Friday 21 June 2024, at which time it will be withdrawn. Yours sincerely, Mateo Lopez Industrial Officer Local Government NSW" (Emphasis and errors in original)
26. On 18 June 2024 at 12:52:47 pm the Applicant replied to Mr Lopez's email (which was included in the email chain) in the following terms: "Hi Mateo, I accept your counter offer of $17,000 in accordance with the terms and conditions. I don't think we need the directions on summons to produce tomorrow. You can write an email registry saying that both parties agreed to vacate the directions. Now the only issue before the Commission is whether to grant leave for summons, let this happen parallely while you send the draft deed to finalise. Can you advise the timeframe to draft the deed? Regards, Shashi" (Emphasis and errors in original)
27. On 19 June 2024 at 10:02am the parties appeared before me by telephone for a directions hearing. Mr Lopez appeared on behalf on the Respondent. The Applicant was unrepresented. The following exchange occurred immediately after I inquired what steps needed to be timetabled: LOPEZ: Commissioner, as of yesterday afternoon the parties have reached an in-principle agreement actually to resolve each of the matters, notwithstanding that there's a summons on foot. Subject to Mr Mallegowda's views, I understand that we're in the process of preparing a deed of release which we hope to send through to Mr Mallegowda later today but at this stage we don't think that there's a need for directions to be set in terms of each of the substantive matters. COMMISSIONER: That is most encouraging news. Mr Mallegowda, I take it that's the current position. You're in the process of trying to resolve the matter on a final basis? APPLICANT: Correct, Commissioner. I totally agree what Mr Lopez has told and the parties have agreed to settle and we are in the process of executing the deed. Once the deed and everything is finished, I will file a notice of discontinuance for both the proceedings and that's the end of it.
28. On 19 June 2024 at 11:40am Mr Lopez emailed the Applicant a Deed of Release. The terms of the Deed reflected the terms set out in Mr Lopez's email of 18 June 2024, including that the payment of the "gross sum" of $17,000 "shall be taxed in accordance with Australian taxation laws". Only two substantive clauses in the Deed, as opposed to 'boilerplate' type clauses, were not otherwise referred in Mr Lopez's email. The first required the Applicant to file a Notice of Discontinuance in each proceeding upon receipt of the settlement sum; and the second stipulated that the parties were to be responsible for their own legal costs. The Applicant raised no complaint before me with respect to those clauses, which I observe are very common in settlement agreements made to resolve proceedings before the Commission.
29. As is evident from the applications brought by the Respondent, the Applicant refused to sign the Deed. It is apparent from the Applicant's submissions that he objected to signing the Deed because it stated that the settlement sum was to be taxed. He maintains that he accepted Council's offer "without tax".

Applicable Legal Principles

1. The Commission is required to determine whether the parties, by their email exchange on 18 June 2024 had reached a concluded bargain. That involves ascertaining, objectively, whether the parties intended to form a legally binding agreement by their communications.
2. The initial focus of the inquiry will be the terms of the communications said to constitute the agreement, however regard may be had to the parties' communications and other conduct before and after the formation of an allegedly binding agreement in order to determine, objectively, whether they intended to form such an agreement: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 547 - 548, (Gleeson CJ, with whom Hope and Mahoney JJA agreed); Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd (1995) 7 BPR 14,551 at [14,562] (Kirby P); Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313 at [15] (Bathurst CJ).
3. In Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 at 360, Dixon CJ, McTiernan and Kitto JJ identified three categories of case which may exist where parties, which have been in negotiation, reach agreement upon terms of a contractual nature and agree that the matter of their negotiation will be dealt with by a formal contract, as follows: "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. … the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own … The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document, … or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed.
4. A fourth category of case was identified by McLelland J in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628 where: "the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms."
5. Relevantly in respect of this case, the plurality in Master v Cameron at 362 - 363 also confirmed earlier English authority to the effect that the expression "subject to contract" or expressions of similar import "prima facie create an overriding condition, so that what has been agreed upon must be regarded as the intended basis for a future contract and not as constituting a contract." Nevertheless, the plurality confirmed, by its approach to its determination in that case, that consideration of all of the circumstances is required to determine whether the context provides a reason "for holding that the case is outside the application of these authorities."
6. These principles have been applied by the Commission when determining motions similar to those now under consideration: see Falconer v Fire and Rescue NSW [2020] NSWIRComm 1053; Liszt v Health Secretary in respect of Sydney Local Health District [2020] NSWIRComm 1030; 295 IR 285; Liszt v Health Secretary in respect of Sydney Local Health District (No 2) [2020] NSWIRComm 1078. Of particular assistance is Commissioner Webster's decision in Falconer as the facts are not dissimilar to the present.
7. In that matter representatives of the parties had a telephone conversation during which "it was agreed that the matter would resolve". The Union representative for the claimant then send an email to the representative of the Employer in the following terms: "Dear John Unfair Dismissal of Ben Falconer Thank you for talking with me today about this matter. I confirm that we have reached the following agreement in principle to settle the Unfair Dismissal of Benjamin Falconer: - $10,000 gross along with other terms - Termination changed to Resignation and this reflected in the In-Orders. Just to confirm if his termination has been published, a retraction and the publication of this resignation. - A statement of service (including a transcript of his training). This agreement is also subject to a satisfactory deed of release. Regards, Anastasia"
8. Thereafter further negotiations took place regarding the provisions of the deed of release, in particular in relation to the non-disparagement clause and to ensure that workers compensation claims were excluded from the release. The claimant ultimately refused to sign the deed.
9. Commissioner Webster stated at [21]: "The question before the Commission is whether a binding agreement was made between the parties on 24 January 2020 and, if so, whether there is any reason why the Commission should not give effect to it. The question turns ultimately upon the Commission's determination of the parties' objectively ascertained common intention."
10. Commissioner Webster found (at 24] that a binding agreement had been reached which fell into category two as recognised in Masters v Cameron. Commissioner Webster considered (at [26]) that the statement that the in-principle agreement was "also subject to a satisfactory deed of release" was "not a sufficient basis to find that the parties did not intend to be bound to the agreement they had struck. The conclusion that the parties did intent (sic) to be bound by the agreement is supported by the language used in the email that, "I confirm we have reached the following agreement in principle"."
11. Commissioner Webster ordered a permanent stay of the proceeding.
12. A similar outcome occurred in Listz. Commissioner Sloan found at first instance (Liszt v Health Secretary in respect of Sydney Local Health District [2020] NSWIRComm 1030; 295 IR 285) that a binding settlement had been reached, but that no steps to implement the settlement would be taken until such time as the Respondent received a signed copy of the deed. He considered that the agreement fell within the second category identified in Masters v Cameron and that the appropriate order was for the proceedings to be permanently stayed. Leave to appeal from his decision was refused: Liszt v Health Secretary in respect of Sydney Local Health District (No 2) [2020] NSWIRComm 1078.

The Parties' Submissions

1. The Respondent submitted that a binding agreement had been reached when the Applicant sent his email to Mr Lopez on 18 June 2024 at 12:52pm. The Respondent submitted that agreement fell into category one of Masters v Cameron or in the alternative, category two or four. The Respondent relied on the fact that the Applicant had made an earlier offer on 18 June 2024 which referred to the monetary component of the offer as "with tax" and that the Respondent had rejected that offer; that the Respondent's counter offer clearly identified the monetary component as a "gross payment, less applicable taxation" and otherwise contained "non-monetary clauses which were expressed in a complete form"; and that the Applicant unequivocally replied stating "I accept your counter offer of $17,000 in accordance with the terms and conditions."
2. The Respondent submitted that the words "subject to a Deed of Release" indicated an intention that the agreed terms would be reflected formally in a deed or that the entering into such a deed was a condition of the performance of the contractual terms. The Deed of Release which was subsequently sent to the Applicant contained identical terms to those which were agreed at 12:52pm on 18 June 2024 and that the additional terms were "mechanical clauses which in no way altered the substance of the agreement and sought only to formalise the agreed terms."
3. At the directions hearing the following day the Applicant confirmed to the Commission that the "parties have agreed to settle" and were in the process of executing a deed.
4. I asked counsel for the Respondent what I was to make of Mr Lopez informing the Commission at the directions hearing that the parties had reach "an in principle agreement". Counsel responded: "With respect I don't see that that matters terribly much. An in principle agreement is still an agreement. There was still a concluded agreement, Mr Lopez even saying "in principle" that doesn't mean that there were other moving parts, there is an agreement, the terms are set and in any event, that's agreed to by Mr Mallegowda later…"
5. Lastly the Respondent submitted, by reference to observations made by Schmidt J in Dr Payne v The University of Sydney & Anor [2000] NSWIRComm 102 at [94] that it was in the public interest that parties be held to the bargains they make in settlement of proceedings which they have brought, thereby bringing litigation to an end.
6. The Respondent, through its counsel, undertook to the Commission to pay the Applicant the sum of $17,000 less applicable taxation, within 28 days of the Commission making an order dismissing or permanently staying the proceedings, but reserved the right, in the event an application for leave to appeal is lodged, to apply to pay the sum into a trust account or into court, pending the resolution of the appeal application.
7. The Applicant submitted that no binding agreement had been reached because he had not signed the Deed of Release (AS [8]). He submitted in writing and orally that he did not unconditionally accept the Respondent's counter offer as the words "in accordance with the terms and conditions" in the first sentence of his email of 18 June 2024 sent at 12:52pm meant "subject to the terms and conditions" that would be contained in the Deed of Release, meaning that no concluded agreement could be reached until the Deed was finalised and signed. The Applicant made the following oral submission: "If you don't mind I just want to give an example. I recently bought a house and I said I made an offer, they accepted, I said subject to pest and building inspections. I accepted the offer but there is a condition attached to it. This is exactly like a similar situation where I'm saying 17,000. I'm not saying less tax. I am not saying less - is a gross payment. I'm just saying using the words 17,000 only without referring with or without tax and I was mindful that there going to be a deed of release coming on the way so I said in terms and condition because I want to read the deed carefully and then if I have any objections then I can make objections to it so that's why I said terms and condition acceptance." [8]
8. This submission reflected the Applicant's written submission at AS [19] - [20]: "It is very vital to note that Applicant accepted $17,000 offer with "terms and conditions" referred in the email earlier as it was primitive stage without draft Deed. … The very first terms and condition that Applicant would have applied to the Deed was to pay ex-gratia compensation amount of $17,000 without tax." (Emphasis and errors in original)
9. The Applicant also submitted that he would not have agreed to $17,000 with tax to be deducted, given he had rejected the Respondent's offer made in March 2024 to pay him a greater sum ($17,261.16), but with tax to be deducted.
10. Lastly, the Applicant submitted that if the Commission were not to order that the Respondent pay $17,000 without tax (an order that the Commission has not been formally asked to make), it will result in a "great injustice" to the Applicant (AS [28]), although he also stated at AS [29] that he "is happy to accept settlement amount of $17,000 with tax if that is what the Commission decides." The Applicant submitted, albeit without evidence, that he has not been employed since he was suspended without pay in December 2023 and that the settlement sum will: "help to manage my family and towards my mental health (sic)".

Consideration

1. The Applicant is not a lawyer and as he explained, he comes from a non-English speaking background. He cannot be expected to understand the intricacies of contract law. Nevertheless, he, like everyone else, is subject to the law.
2. The example the Applicant provided of buying a house and making an offer that was "subject to pest and building inspection", which offer was accepted by the vendor, is in fact an example of the second category of Masters v Cameron. Leaving aside regulatory requirements regarding contracts for the sale of real estate, the Applicant had concluded a contract which was to be binding, but he would not be obliged to perform his end of the bargain if major structural defects and or major pest infestations were identified. If no such issues were identified, the vendor could hold the Applicant to the price agreed and would be entitled to enforce the contract.
3. An objective interpretation of the words used by the Applicant in his email sent at 12:52pm on 18 June 2024, is that he intended to accept the offer made in the Respondent's email sent at 12:33pm on the terms and conditions set out in that email, without any variation to those expressed terms. This is indicated by: 1. the use of the phrase "accept your counter offer"; 2. the failure to express any caveat, qualification or clarification in relation to the settlement sum of $17,000, in circumstances where the Respondent's email had expressly stated that the sum would be a "gross payment, less applicable taxation" and where it is clear that one of the major impediments to settlement had been the tax treatment of the settlement sum; 3. the use of the phrase "in accordance with the terms and conditions", where to be 'in accordance with' means to be in conformity or agreement; and the use of the definite article "the" indicates reference to the terms and conditions that had been expressed in the Respondent's email, rather than to more indefinite terms and conditions to be expressed in a subsequent deed; and 4. the Applicant's suggestion in his email that steps be taken to stop further progress of the proceedings.
4. To the extent there is any doubt as to the objective meaning of the Applicant's email, noting that I consider it to be unambiguous, regard may be had to the offer made by the Respondent in March 2024 and the events that subsequently occurred. Consideration of those matters does not undermine a conclusion that a binding contract had been formed on 18 June 2024 at 12:52pm. The fact that the Applicant rejected, in March 2024, a higher settlement sum from which tax would be deducted does not mean that the Applicant would not accept a lesser sum more than three months later. The Applicant could have a change of heart for all sorts of cogent reasons.
5. At the directions hearing on 19 June 2024 the Applicant used language which unequivocally conveyed that a concluded settlement agreement had been reached. I do not consider that the Mr Lopez's description of the agreement as being "in principle" detracts from a finding that a binding agreement had in fact been concluded.
6. The Applicant refused to sign the Deed of Release due to it stating that the settlement sum was to be taxed in accordance with Australian taxation laws. No other complaint regarding the terms of the Deed was made by the Applicant in either the AS or during his oral submissions.
7. It would seem, by the submissions made by the Applicant, particularly those I have set out at [54] and [55] above, that the Applicant may have subjectively considered that, by deliberately not making any mention of the tax treatment of the settlement sum in his email and by referring to "terms and conditions" he would be able to continue to negotiate with the Respondent regarding the deduction of tax from the settlement sum when the draft Deed was presented to him, despite otherwise representing to the Respondent that he accepted its counter offer. That this may have been his approach is supported by the following exchange he had with me during his oral submissions: COMMISSIONER: So, can I suggest to you that the word[s] in accordance with the terms and conditions when some terms are set out in the email below reflect an acceptance of those terms. You don't use the word subject to. You don't say subject to, you say in accordance with. APPLICANT: I come from a non-English speaking background and that's the best English I can use at the time as a casual email. It's a email as you can see the first email returned by Mr Lopez at 12.33pm. My response to that is in - just in 20 minutes. So, it's a quick reply back within 20 minutes to say, yes accepting 17,000 but I have terms and condition how I want to accept that. What is that? Terms and condition? The terms and condition is I don't want with tax. I want without tax was the terms and number one terms and condition. COMMISSIONER: But, Mr Mallegowda, that's not what the email says though. You say‑‑ APPLICANT: Because‑‑ COMMISSIONER: --though. You say, I accept the counter offer of 17,000 and in the email below it's got in the brackets straight after 17,000, it makes clear that that's a gross payment less applicable tax, so‑‑ APPLICANT: According to him. According to him. COMMISSIONER: Well, yeah, that's what the offer was and you say I accept your offer of 17,000. You don't say, but without tax. APPLICANT: No. COMMISSIONER: So, you don't make it clear in the email to Mr Lopez‑‑ APPLICANT: Because terms and‑‑ COMMISSIONER: --that that's the problem. APPLICANT: Yeah, terms and condition is because the draft deed was settlement was not prepared. The draft deed of settlement was not done at the time and I don't know - I've given that liberty to the respondent to prepare the draft deed of release. Unless I've seen the draft deed of release I can't subject to any terms and condition without looking at the draft deed of release which came the following day. The next - the next day.
8. Whenever a court or tribunal is asked to determine whether a binding contract was made due to the parties being in dispute over that fact, one of the parties to the putative agreement will be asserting a lack of the requisite intention. The court or tribunal is however, only concerned with establishing whether the established facts and circumstances, assessed objectively, establish the elements of a binding contract. For the reasons I have already explained, there are no facts or circumstances, viewed objectively, to support the Applicant's contention that he did not intend to form a concluded agreement on the terms as set out in the Respondent's email sent at 12:33pm on 18 June 202 when he sent his email at 12:52pm.
9. Importantly the Applicant did not assert that the agreement, if made, was vitiated by mistake or that he was incapable, be reason of language or mental illness, of entering into a contract. I accept that the Applicant's English is not perfect, however it is far from rudimentary. His oral and written submissions in respect of the operation of s131 of the Evidence Act were quite sophisticated, albeit wrong, and generally I consider that the Applicant's use and understanding of the English language is quite proficient. The Applicant did submit that his mental illness impaired his ability to defend the Respondent's notices of motion, however he did not submit that he was unaware of what he was doing when he sent his email to the Respondent on 18 June 2024 at 12:52pm. On the contrary, his submissions relied on the Commission accepting that he consciously and deliberately accepted the offer only on "terms and conditions" which were to be subsequently agreed.
10. Pursuant to s 73(1)(a) of the CP Act I determine that the email sent by Mr Lopez on behalf of the Respondent on 18 June 2024 at 12:33pm and the Applicant's reply to that email sent on 18 June 2024 at 12:52pm constituted a binding agreement on the terms set out in Mr Lopez's email and that performance of the agreement was subject to the signing of a Deed of Release. As such, the agreement falls in the second category of Masters v Cameron. Alternatively, as the draft Deed includes a clause that the Deed is to embody the entire agreement between the parties and is to supersede all prior agreements and undertakings, and otherwise makes plain that the Deed is be regarded, once executed, as the sole operative document, the agreement reached on 18 June 2024 would fall into the fourth category of case identified by McLelland J in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd.
11. I do not regard the Respondent's undertaking to pay the Applicant the settlement sum in the absence of a signed copy of the Deed of Release to detract from my view that performance of the agreement is subject to the parties signing the Deed. It is a matter for the Respondent whether it wishes to waive this requirement before it performs its end of the bargain. It is obviously a fair approach to take, in circumstances where the Respondent seeks orders that will prevent the Applicant further prosecuting his claims.
12. For completeness, I note that I may have come to a different view as to the effect of the words "subject to a Deed of Release" if Mr Lopez's email had not otherwise stipulated exactly what releases were to be given. However, Mr Lopez's email plainly states that mutual releases were to be given "from all present and future claims arising in any way out of, or in relation to, [the Applicant's] employment with [the Respondent] (excluding workers compensation claims)" and the draft Deed presented to the Applicant entirely reflects this proposed term.
13. In circumstances where I have found that performance of the concluded agreement is subject to the execution of a Deed of Release reflecting the agreed terms, I consider that the most appropriate relief to be granted pursuant to s 73(1)(b) of the CP Act and consistent with the power given to the Commission pursuant to s 67 of the CP Act, is a permanent stay, rather than dismissal of the proceedings, which was not in the contemplation of the settlement reached. In circumstances where a binding settlement has been reached, the performance of which is in the control of the Applicant, it would be an abuse of process for the Applicant to be permitted to continue to prosecute his claims. In determining to grant a permanent stay, as was done in both Falconer and Liszt, I have had regard to the principles governing permanent stays of proceedings, in particular by reason of an abuse of process, as explained in Stokes v Toyne [2023] NSWCA 59 at [10] (Ward P); [137]; [149]; [176] (Simpson AJA).
14. I also consider this it is in the public interest and in the interests of justice that such an order be made. In the absence of evidence, including evidence as to the difference the deduction of tax will make to the payment to be made to the Applicant pursuant to the settlement reached, I do not accept that finding that a binding settlement was reached on the terms identified, will impose a 'great injustice' on the Applicant.

A Final Matter

1. During his oral submissions the Applicant sought to rely upon an email he apparently sent to the Respondent on 19 June 2024 at 3:39pm, after he had received the draft Deed of Release. A hearsay account of that email had been set out in Mr Duffy's affidavit, however following the Applicant's objections to other hearsay paragraphs of Mr Duffy's affidavit, counsel for the Respondent opted not to read the paragraph, with the result that there was no evidence before the Commission of the email.
2. The Applicant expressed considerable frustration at not being able to refer to the email and claimed that he did not understand that he could or should have put the email into evidence. He then sought that the proceedings be adjourned to enable him to put on evidence as he was "not mentally fit to run his case." [9] I refused the adjournment application on the basis that he had been given an opportunity to put on evidence, including expert evidence, and there was no medical evidence before me justify the granting of an adjournment.
3. The Applicant concluded his oral submissions with a complaint as to the injustice of him not being able to rely on his email of 19 June 2024; that he was mentally unwell and unable to properly represent himself and he had been forced to attend the hearing in person when I refused his application for the matter to be heard on the papers or that he be allowed to appear by telephone.
4. I do not consider that any of these matters affect the outcome I have determined.
5. Mr Duffy's hearsay account of the Applicant's email of 19 June 2024 was as follows: "On 19 June at 3:30PM, Mr Mallegowda emails Mr Lopez, myself and officers of the Council, stating that he accepted Council's offer on 18 June at 3:20PM "without tax". Mr Mallegowda alleged that the deed of release sent by Mr Lopez on 19 June at 11:40AM, which characterised the momentary quantum as subject to taxation, was inconsistent with the nature of the agreement." [10]
6. The Applicant's account of the content of his email of 19 June 2024 as set out in the AS at [18] and during his oral submissions, is consistent with Mr Duffy's account.
7. Even if the content of the 19 June 2024 email were in evidence, it would not change the fact that objectively a concluded agreement had been reached the previous day. While it is possible that the parties could have, by mutual agreement, substituted that agreement with a different one, there is no evidence, admissible or otherwise, that Council made a further offer at 3:20pm on 18 June 2024 which the Applicant purported to accept at 3:30pm on 19 June 2024. Indeed the Respondent denied the existence of such an offer, albeit in the RSR (at [4]) rather than in evidence. More likely, there was no such email and the intention of the Applicant's email of 19 June 2024, sent after receipt of the draft Deed that morning, was to say that he had, (subjectively), accepted the Respondent's offer made the previous day on the basis that no tax would be deducted.
8. I reject any assertion that the Applicant was forced to attend the hearing. No order was made requiring the Applicant to attend. It is the case of course that the Applicant may have felt he needed to attend in circumstances where the Respondent's representatives were to attend in person, however he was not forced to do so. Had I acceded to the Applicant's request and either allowed him to appear by telephone or I determined the matter on the papers, the result would have been the same, given the principled application of the law to the evidence before the Commission.

A Further Final Matter

1. On the morning this decision was due to be delivered, and after I had reached my decision, the Applicant filed a Notice of Motion, supported by an affidavit sworn by him on 9 August 2024, seeking the following orders: 1. That the Applicant is under legal incapacity, so requests Industrial Relations Commission to appoint tutor under clause 7.18(1)(a) of UCPR. 2. Clause 7.17 of UCPR - Non-appearance of person under legal incapacity (1) Subject to subrule (2), the plaintiff in proceedings against a defendant who is a person under legal incapacity may take no further step in the proceedings following service of the originating process until a tutor has entered an appearance on behalf of the defendant. 3. When the proceedings continue in the presence of a tutor, then Applicant seeks for order for Respondent to pay the settlement amount as agreed $17,000 (net amount, without tax) within 14 days. (Errors in original)
2. As I had already determined to permanently stay both proceedings by the time the Applicant's Notice of Motion was filed and all that remained was the formality of delivering the decision, it is unnecessary for the Applicant's Notice of Motion to be considered. Should the stay of the proceedings be lifted or otherwise set aside in the future, or if an application for leave to appeal from this decision is made, it may be appropriate at that time for the Applicant's Notice of Motion to be heard and determined.

Orders

1. I order that proceedings 2024/96185 and 2024/112612 be permanently stayed. Janet McDonald Commissioner

Endnotes

1. Tcpt, 2 August 2024, p 29 (38) - (40).
2. Tcpt, 2 August 2024, p 27(3) - (5).
3. Tcpt, 2 August 2024, p 2 (32) - (35).
4. Tcpt, 2 August 2024, p 13 (6) - (12).
5. Ex R2.
6. Tcpt, 2 August 2024, p 12 (24) - (27).
7. Exhibit A1.
8. Tcpt, 2 August 2024, p 22 (42) - p 23 (1).
9. Tcpt, 2 August 2024, p 25 (29) - (30).
10. Ex R1 [21]. 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: 09 August 2024