Industrial Relations Commission of New South Wales in Court Session CITATION : Jayawardena v Rejendran Palany of Palany and Partners [2003] NSWIRComm 134 CHANDRA JAYAWARDENA Applicant PARTIES : REJENDRAN PALANY trading as PALANY & PARTNERS Respondent FILE NUMBER: IRC 6133 of 2002 CORAM: Schmidt J CATCHWORDS : Unfair contract - deed of release - notice of motion seeking dismissal or stay of proceedings - questions as to construction of deed, fairness of deed, whether this appropriate time to determine these questions - motion dismissed LEGISLATION CITED : Industrial Relations Act 1996 David Jones Limited v Cukeric (1997) 78 IR 430 Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 CASES CITED : Nagle (t/as WD and JL Nagle & Sons) v Tilburg (1993) 51 IR 8 Qantas Airways Limited v Gubbons (1992) 28 NSWLR 26 Sasse v National Dairies Limited [1999] NSWIRComm 458 HEARING DATES: 04/11/2003 DATE OF JUDGMENT: 04/29/2003 APPLICANT/RESPONDENT ON MOTION Mr Chandra Jayawardena (Applicant in person) LEGAL REPRESENTATIVES: RESPONDENT/APPLICANT ON MOTION Mr R Moore of counsel SOLICITORS: Palany & Partners JUDGMENT: - 6 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J DATE: 29 April 2003 MATTER NUMBER IRC 6133 OF 2003 CHANDRA JAYAWARDENA v RAJENDRAN PALANY OF PALANY AND PARTNERS Application under s106 of the Industrial Relations Act 1996 INTERLOCUTORY JUDGMENT 1 This judgment concerns a notice of motion filed by the respondent on 29 January 2003, seeking that the proceedings be dismissed or in the alternative, permanently stayed. The proceedings were commenced by summons for relief filed in November 2002, under s106 of the Industrial Relations Act 1996 ('the Act'). There, the applicant sought orders declaring void or varying a contract under which he had performed work for the respondent, as a solicitor and migration agent. 2 That contract had been brought to an end by the respondent in October 2001. The applicant then filed an unfair dismissal application under s84 of the Act. Those proceedings came before Commissioner Connor in conciliation and were settled, with the parties later executing a deed of settlement, upon which the respondent here sought to rely. The Deed contained certain releases, which the respondent argued operated as a bar to these proceedings. 3 Certain documents were received in evidence for the purpose of the hearing of the motion. They included the affidavit sworn by the applicant in October 2002, in support of the initiating summons and the Deed relied upon by the respondent. 4 The evidence showed that these proceedings had been initiated after proceedings had been commenced against the applicant, in the Local Court by the Commonwealth Bank. In those proceedings the Bank sought to recover an amount of over $12,000 owed by the applicant on a MasterCard account. That card had been acquired by the applicant while working for the respondent. It was the applicant's case that the expenses incurred on the card were business expenses of the respondent, which he refused to meet. The applicant has issued a third party notice against the respondent in the Local Court proceedings. The respondent also relied on the Deed to resist the applicant's claim before the Local Court. 5 The Deed contained various recitals, including 'The Applicant has also made additional claims upon the Respondent generally arising from the performance of work by him for and on behalf of the Respondent, including as to further monies allegedly owed.' 6 It was agreed that the applicant accepted that he had not been an employee of the respondent, but an independent contractor; that the $17,000 paid to him by the respondent represented 'all monies howsoever owed to him'; and that the further ex gratia payment of $5,500 was paid 'in order to extinguish all other claims as may be made by the Applicant as against the Respondent whether known or unknown as at the date of execution of this Deed'. The Deed further contained releases expressed in wide terms. 7 The case put for the respondent by Mr Moore of counsel, was that the critical issues were not in dispute, namely that the applicant had worked for the respondent; that the contract had been brought to an end; that proceedings under s84 of the Act had been brought and settled and that the parties had executed the Deed on which the respondent relied. It was accepted that the Deed could not oust the Court's jurisdiction and it was accepted that such a Deed itself might be reviewed under s106. (David Jones Limited v Cukeric (1997) 78 IR 430 at 455). 8 The test to be applied was submitted to be that discussed by the High Court in Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 and Sasse v National Dairies Limited [1999] NSWIRComm 458. 9 It was argued that the evidence showed that these litigants had agreed on terms of settlement in proceedings brought shortly after their relationship had been brought to an end and at a time when the issue here being sought to be litigated, the MasterCard debt, was alive, as between them. This put these facts into a different category to those considered in Cukeric and other cases referred to. It followed, that the public interest in parties being held to the bargains which they reached in settlement of litigation, must prevail and the orders sought granted. The fact that the applicant was himself a solicitor and acknowledged that he had had an opportunity to seek legal advice, but reinforced this conclusion. 10 As to the constraints imposed by the Full Court's approach in Nagle (t/as WD and JL Nagle & Sons) v Tilburg (1993) 51 IR 8 it was submitted that this was the appropriate time to consider whether the Deed provided a bar to the proceedings. Of relevance were the Local Court proceedings, listed for hearing in May, where the construction of the Deed also arose for consideration. A multiplicity of litigation ought, in these circumstances, to be avoided. At the least the proceedings should be stayed, pending the outcome of the Local Court proceedings. 11 The case advanced by Mr Jayawardena, with the assistance of written submissions prepared by Mr Britt of counsel, was that the Deed reflected a settlement of the unfair dismissal claim and not the MasterCard debt. Proceedings brought by the Commonwealth Bank were not in contemplation when the Deed was executed. Reference was made to various correspondence between the parties, it being submitted that the matters referred to in recital H of the Deed, concerned claims for a hernia operation, superannuation, holiday pay and unpaid notice and not the Mastercard debt. 12 It was argued that the cautious approach required when consideration was given by the Court to a motion seeking the dismissal of the application without hearing the applicant, precluded the orders sought being granted. The Court could not be satisfied that the evidence before it permitted the view that this was a clear case where all of the requisite material was before it, in order to permit a final conclusion to be reached. 13 The facts were not agreed; there had been no opportunity for the processes of discovery or summonses for production to be pursued and the evidence did not permit the Court to determine the parameters of the contract or arrangement in question. It followed that the appropriate stage for the determination of the issues between the parties had not been reached. 14 It was also submitted that it could not be concluded that the applicant's case was manifestly groundless and so obviously untenable that it could not possibly succeed, nor that to allow the case to proceed would involve useless expense. Consideration 15 The circumstances which bring the parties to the Court following upon this motion, are undoubtedly difficult. As Kirby P, as he then was, expressed it in Qantas Airways Limited v Gubbons (1992) 28 NSWLR 26 at 42, "it is not unjust or offensive to the community's conscience or its sense of equity that an adult person who accepts a compromise and takes money pursuant to it should ordinarily be kept to that bargain". Here, of course the applicant was not only an adult, but a qualified solicitor. 16 Nevertheless, the evidence showed that the circumstances here were such that I must be satisfied that this is not the appropriate stage at which the question raised by the respondent in his motion may be determined. 17 The Full Court in Cukeric made plain that circumstances will arise where a deed of release is successfully challenged under s106 of the Act. The applicant asserts that this is such a case. The respondent resists that claim. 18 On the evidence, I am satisfied that the applicant's case, while it may undoubtedly be difficult, has not been shown to be so hopeless or untenable, that the view can properly be reached that the applicant has no prospect of succeeding at a trial. 19 The matters lying between the parties raise questions as to the proper interpretation of the Deed, as well as the fairness of the parties' dealings with each other, pursuant to the contract in question. The parties' respective conduct is relevant to the latter question. 20 As the High Court put it in Grant, at p132, 'prima facie the release should be read as confined to the matters forming the subject of the disputes which the deed recites'. The parties are in dispute as to this issue and the proper construction of the Deed. 21 As the Full Court accepted in Cukeric, releases are also not immune to challenge under s106 and when so challenged, questions of the parties' conduct is relevant. Given the evidence as to these matters put for the applicant at the hearing of the motion, I am unable to conclude that the applicant's case as to these matters is untenable or hopeless. 22 In those circumstances, the proper course is to dismiss the motion. It was put in the alternative, that these proceedings should be stayed, pending the hearing of the Local Court proceedings in May. Given the issues which arise in this case and the time at which any conciliation or hearing might be scheduled before this Court, I cannot accept that the appropriate course is that suggested for the respondent. Order 23 For the reasons given, I order that the motion be dismissed. ------------------------ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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