The deeds of release the subject of the Bank's appeals
227 In its appeals against the orders made in the Arundell and the Briody proceedings, the Bank challenges the primary judge's conclusions that deeds of release executed by 13 employees were ineffective to bar the claims that were upheld. On this ground, the Bank seeks to have the primary judge's orders set aside, and seeks its costs of the proceedings below and of the appeal on an indemnity basis.
228 The occasions for the 13 deeds of release the subject of the Bank's appeals were the termination of the employees' employment. The deeds executed by Briody, Crone, Duong, Elliott, Mahajan, Marr, Purvis, Roberts, and Saba bore dates in May, June, and July 2018, were relevantly similar in their terms, and were premised on the termination of those employees' employment upon their positions becoming redundant. The deed executed by Starr was different, the occasion being the redundancy of his position in about July 2014. The deed executed by Smrk was dated 22 January 2016, and also referred to termination on account of redundancy. The deed executed by Ryan was dated 12 December 2016, and was premised on the termination of Ryan's employment but with no reference to redundancy. Otherwise, the Starr, Smrk, and Ryan deeds had some material similarities to the others. The deed executed by Gamble was dated 20 December 2016, and was premised on Gamble's resignation. The Gamble deed was in different terms requiring separate consideration.
229 In the Arundell proceeding, the primary judge at [65] of the liability reasons referred to the defences raised by the Bank in reliance on the deeds of release executed by Gamble, Roberts, and Smrk. By its defence and cross-claim, the Bank had pleaded the releases separately. The primary judge at [65] stated that the deeds were "substantially identical in operation of the release", before setting out what was described as a recital, which was referred to as "recital D(a)". In fact, the Gamble deed did not contain the recital. While the Smrk deed did contain the recital it was numbered as recital E(a), and the Roberts deed contained a substantially similar but not identical recital, which was numbered G(a). Outside the context of the cross-claim that Gamble was overpaid, no separate consideration of the terms of the Gamble deed appears in the reasons for judgment.
230 In the combined liability reasons in the Wardman and Briody proceedings, at [65] the primary judge referred to the Bank's defences based upon deeds of release entered into by Briody, Crone, Duong, Elliott, Mahajan, Marr, Purvis, Ryan, Saba, and Starr. The primary judge referred to the defences as being "based upon deeds that are substantially identical in operation of the release, except for the tenth and seventh applicant". The judge's reference in [65] to the tenth and seventh applicants, who were Kerr and Elliott, is inapt and appears to be the product of the judge copying and pasting [65] of his reasons of the Arundell proceeding without sufficient attention to its content. There is also some confusion in the primary judge's reasons at [65] and [67] caused by the fact that the quotation in [65] of recital F(a) is from one form of deed, whereas the quotation of the operative release in [67] reflects the language of the Starr deed, which referred to recital D. Nonetheless, recital D in the Starr deed was in substantially the same terms as recital F of most of the other deeds, and the judge's analysis is therefore not affected.
231 There are therefore three forms of deeds to be considered: (1) the deeds executed by those employees that were in substantially the same form as that executed by Briody; (2) the deeds executed by Starr, Smrk and Ryan; and (3) the deed executed by Gamble. I will first address the issues by reference to the terms of the deed executed by Briody.
232 The Bank wrote to Briody by letter dated 17 May 2018 advising that it proposed that, effective 31 May 2018, Briody's role would no longer be required, and stating that if the Bank decided to proceed with its proposal then Briody's position would be made redundant, and that unless a suitable alternative role was identified, his employment would come to an end by reason of redundancy. The letter invited Briody to discuss the changes before any final decision was made. The letter then addressed indicative payments in the event of redundancy -
Indicative redundancy calculation
In the event that your employment with Macquarie ends by reason of redundancy, Macquarie will make a redundancy payment to you in accordance with legislation. Any accrued but untaken annual and long service leave (if applicable) will also be paid to you.
In addition to these minimum statutory amounts, Macquarie may also offer to pay you additional payments and benefits, conditional upon you signing and returning a Deed of Release which we will provide to you.
Attached is an indicative outline of the payments offered. This indicative outline is based on the Proposal as set out above, including the proposed date of redundancy, and may be subject to change, at Macquarie's discretion.
233 Attached to the letter from the Bank to Briody was a document titled "Indicative Termination Payment". That document included net amounts attributable to salary, notice commissions, an ex gratia payment of $35,900.33, a notice/severance payment of $46,839.04, and sums on account of untaken annual leave and long service leave. The total indicative amount was $121,617.22. There was no sum attributable to arrears of leave loading, or loading on accrued annual leave. There were corresponding letters dated 17 May 2018 before this Court relating to Crone, Duong, Elliott, Mahajan, Marr, Purvis, Roberts, and Saba.
234 The recitals in the Briody deed were as follows, where I have highlighted in bold some critical elements -
RECITALS
A. The Employee has been employed by the Company or one of its Related Companies since 11 August 2008, most recently as an Investment Adviser ('Employment').
B. The Employment will come to an end on 28 May 2018 or an earlier date if agreed in writing with the Company ('Termination Date') by reason of redundancy ('Redundancy').
C. As a consequence of the Employment, the Employee is remunerated by a Basic Cost Responsibility ('BCR') of $70,000 per annum. BCR is the Company's remuneration packaging system and reflects the total cost of employment of the Employee to the Company.
D. Before signing this Deed, the Company has provided the Employee with an indicative calculation of the payments to be made to the Employee by reason of the Redundancy including notice and leave payments.
E. Before signing this Deed, the Employee has had a reasonable opportunity to seek legal advice about the terms and effect of this Deed.
F. Subject to receiving a properly executed and unannotated copy of this Deed from the Employee within 14 days of the Termination Date and in consideration for the release provided by the Employee pursuant to clause 1 of this Deed, the Company and/or another Beneficiary (as relevant) has agreed to:
(a) within 21 days of receipt of the executed Deed or the Termination Date (whichever is later), pay to the Employee the finalised amounts less applicable deductions and less any amounts that have been paid to the Employee in advance as part of the monthly pay cycle corresponding to the indicative amounts set out in the payment schedule provided to the Employee with this Deed (acknowledging that: (i) statutory and contractual amounts are due and payable by the Company irrespective of the Employee executing this Deed; and (ii) the indicative amounts in the payment schedule will be adjusted if the Termination Date is earlier than 31 May 2018);
(b) release the Employee from any non-compete or non-solicitation obligations contained in the employment agreement applicable to their Employment. To avoid any doubt, this does not extend to any contractual or common law obligation the Employee has regarding the Company's confidential information. which continue indefinitely;
(c) provide to the Employee a statement of service concerning the Employment and, upon request by the Employee. an Employment Separation Certificate;
(d) take reasonable steps to prevent comment, publicly or otherwise, by any of the Beneficiaries who are aware of the terms of this Deed, which is not in conformity with the statement of service referred to in (b) above;
(e) keep this Deed and the settlement recorded in it confidential and not disclose them to a third party except: as required by law; as required by the Australian Bankers' Association Inc. Banking Industry Conduct Background Check Protocol; to enforce this Deed; in accordance with corporate governance legislation; to obtain professional advice; to the Australian Taxation Office; for internal reporting purposes; or in the ordinary course of business; and
(f) provide to the Employee outplacement services with a provider selected by the Company.
235 The release clause was complementary to the matters that were recited. Again, I have highlighted in bold some critical elements -
1. Release
Upon execution of this Deed and receipt of the payments outlined above in Recital F, and to the extent permitted by law, the Employee releases the Beneficiaries from any and all present and future claims touching upon the matters recited including but not limited to the Employment, the terms of the Employment, the Redundancy (except for claims by the Employee for workers' compensation) and payments to be made to the Employee by reason of the Redundancy, including any action, application, arbitration, cause of action, complaint, cost, debt due, demand, determination, inquiry, judgment and verdict at law, in equity, arising under any statute or arising under any award, enterprise agreement or other instrument made or approved under any law.
236 The terms of the Smrk, Ryan, and Starr deeds differed slightly from those set out above. No letters or calculations were produced in relation to Smrk or Ryan. The Bank sent a letter to Starr dated 16 July 2014 advising him of the redundancy of his position, which referred to an attached "indicative redundancy calculation", although no attachment was produced to the Court -
Indicative Redundancy Calculation
In the event that your employment with Macquarie ends by reason of redundancy, attached is an indicative outline of the redundancy payment that will be paid to you following termination (using the proposed date of redundancy).
237 There were no references in the recitals to the Smrk, Starr, or Ryan deeds to any indicative calculations. I will set out the relevant terms of the Ryan deed, which are substantially similar to those of Smrk and Starr. The recitals to the Ryan deed were as follows (my emphasis in bold) -
RECITALS
A. The Employee has been employed by the Company or one of its Related Companies since 6 June 2011, most recently as an Investment Adviser ('Employment').
B. The Employment will come to an end on 6 January 2017 ('Termination Date') ('Termination').
C. As a consequence of the Employment, the Employee is remunerated by a Basic Cost Responsibility (BCR) of $65,000 per annum. BCR is the Company's remuneration packaging system and reflects the total cost of employment of the Employee to the Company.
D. Before signing this Deed, the Employee has had a reasonable opportunity to seek legal advice about the terms and effect of the Deed.
E. Subject to receiving a properly executed and unannotated copy of this Deed from the Employee within 14 days of the Termination Date the Company and/or another beneficiary (as relevant) has agreed to:
(a) within 21 days of receipt of the executed Deed or the Termination Date (whichever is later), pay to the Employee all accrued but untaken annual leave and long service leave entitlements plus one month of BCR, less applicable deductions and less any amounts that have been paid to the Employee in advance as part of the monthly pay cycle (acknowledging that statutory and contractual amounts are due and payable by the Company irrespective of the Employee executing this Deed);
(b) provide to the Employee a statement of service concerning the Employment, and, upon request by the Employee, an Employment Separation Certificate;
(c) take reasonable steps to prevent comment, publicly or otherwise, by any of the Beneficiaries who are aware of the terms of this Deed, which is not in conformity with the statement of service referred to in (b) above; and
(d) keep this Deed and the settlement recorded in it confidential and not disclose them to a third party except: as required by law; to enforce this Deed; in accordance with corporate governance legislation; to obtain professional advice; to the Australian Taxation Office; for internal reporting purposes; or in the ordinary course of business.
238 The release clause in the Ryan deed was in substantially the same terms as the Briody deed, and provided (my emphasis in bold) -
1. Release
Upon execution of this Deed and receipt of the payments outlined above in Recital E(a), and to the extent permitted by law, the Employee releases the Beneficiaries from any and all present and future claims touching upon the matters recited including but not limited to the Employment, the terms of the Employment and the Termination (except for claims by the Employee for workers' compensation), including any action, application, arbitration, cause of action, complaint, cost, debt due, demand, determination, inquiry, judgment and verdict at law, in equity, arising under any statute or arising under any award, enterprise agreement or other instrument made or approved under any law.
239 As I have mentioned, the Gamble deed was in different terms, and was not the subject of separate consideration by the primary judge in the combined reasons for judgment in the Wardman and Briody proceedings, or separately addressed by counsel for the Bank in their submissions. As with the Ryan deed, counsel for the Bank maintained a submission addressed to the Gamble deed that claimed that the primary judge had failed to have regard to a letter attaching a schedule indicating payments, when there was no such letter referred to in the deed, or which was before the Court. The recitals to the Gamble deed were as follows -
RECITALS
A. The Employee has been employed by the Company or one of its Related Companies since 13 December 1999, most recently as a Senior Investment Adviser {'Employment').
B. The Employment came to an end on 14 December 2016 ('Termination Date') by reason of the Employee's resignation ('Termination').
C. As a consequence of the Employment, the Employee was remunerated by a Basic Cost Responsibility ('BCR') of $65,000 per annum and a Commission Based Structure ('Commission') as set out in the Employee's employment documentation. BCR is the Company's remuneration packaging system and reflects the total cost of employment of the Employee to the Company.
D. The Employee and the Company, without admitting liability, have reached agreement on the terms set out in this Deed.
240 Clauses 2 and 3 of the Gamble deed contained, respectively, obligations to make payment, and a release by Gamble -
2. Obligations of the Company
Without admitting liability, and subject to receiving a properly executed and unannotated copy of this Deed from the Employee within 14 days of the Termination Date, the Company and/or another Beneficiary (as relevant) has agreed to:
(a) within the next available pay cycle following receipt of the executed Deed pay to the Employee the following gross amounts:
(i) $16,272.08, being an amount equivalent to 4 weeks' notice of termination;
(ii) $1,073.55 for accrued and untaken annual leave; and
(iii) $91,532.89 for accrued and untaken long service leave, where this payment is calculated based on the Employee's BCR plus the average weekly Commission paid over the 5 years preceding the Termination Date,
where each amount is less applicable taxes and acknowledging that statutory and contractual amounts are due and payable by the Company on termination of employment irrespective of the Employee executing this Deed;
(b) pay the Employee his BCR and any Commission earned up to the Termination Date in accordance with the terms and conditions of his employment and Macquarie's standard practice;
(c) within 21 days of receipt of the executed Deed or a valid tax invoice from the Employee's Solicitors (whichever is later) pay to the Employee's Solicitors the amount of $3,000 plus GST for legal services provided to the Employee;
(d) record the Employee's employment as a resignation and will provide to the Employee a statement of service concerning the Employment, and, upon request by the Employee, an Employment Separation Certificate; and
(e) take reasonable steps to prevent comment, publicly or otherwise, by the Beneficiaries who are aware of the terms of this Deed, which is not in conformity with the statement of service referred to in (d) above.
3. Releases
(a) The Employee agrees that the Employee has no further claim or entitlement against the Company arising out of the Circumstances.
(b) Upon execution of this Deed:
(i) the Employee releases the Beneficiaries from the Circumstances; and
(ii) the Company releases the Employee from the Circumstances except for Claims concerning or relating to apparent or actual fraud, dishonesty or criminal conduct on the part of or involving the Employee.
241 The terms "Circumstances" and "Claims" were defined by cl 1.1 of the Gamble deed as follows -
In this Deed (including the Recitals):
…
(b) 'Circumstances' means any and all present and future Claims touching upon the matters recited including but not limited to the Employment, the terms of the Employment and the Termination, except for Claims by the Employee against the Company for workers' compensation.
(c) 'Claims' includes any action, application, arbitration, cause of action, complaint, cost, debt due, demand, determination, inquiry, judgment and verdict:
(i) at law;
(ii) in equity;
(iii) arising under any statute; or
(iv) arising under any award, enterprise agreement or other instrument made or approved under any law.
242 The primary judge held in a global way that the releases should be construed so that they were conditional on the receipt of the payments referred to in the recitals, holding at [67] of the Arundell judgment, and at [68] of the Wardman judgment, that unless the Bank had made payments due under the Act and under the Award, there was no release.
243 On the appeal from the orders in the Briody proceeding, counsel for the Bank submitted that the primary judge had erred by applying "a construction of the deeds which had the effect of overriding the operative provisions of the deed[s]". Counsel submitted that the relevant employees executed the deeds following the cessation of their employment, and that by doing so, they were conferred benefits relating to their employment, including payments that exceeded their contractual entitlements. Counsel submitted that the primary judge had failed to have any regard to the letters that set out the indicative entitlements, and which were referred to in the recitals. Counsel submitted that the letters set out "the contractual and statutory payments which were payable to each [employee] along with additional amounts which would only be paid to the employees on them executing the deed". Counsel submitted that the Bank had been "denied the very (and only) benefit which it obtained through the execution of the deeds and making generous payments to the [employees]". In making these submissions, counsel for the Bank did not address the separate position of Ryan, where there was no evidence of any letter or indicative entitlements. On the Bank's appeal from the orders in the Arundell proceeding, counsel for the Bank made substantially the same submissions, claiming that each employee was provided with a letter attaching a schedule of indicative payments. While this was the case for Roberts, and may have been the case for Smrk, it was not the case for Gamble, whose deed of release made no reference to any such document. Likewise, the Smrk, Starr, and Ryan deeds make no reference in their recitals to any indicative calculation of payments.