31/05/2013

Although you may not be entirely happy with compromising your legal dispute, you should do so without throwing away any future rights you may have. A recent case provides an important lesson.

The West Australian case of Matthews v Hargreaves deals with what happens when the terms of settlement of a legal dispute go too far.

The facts were as follows.

•    Matthews was CEO of a council in WA and Hargreaves was a Councillor of that council.
•    Hargreaves circulated material about Matthews’ medical condition and admitted doing so.
•    Matthews took action against the Council for Unfair Dismissal.
•    A deed of settlement was signed between Matthews and the Council.  
•    In separate proceedings Matthews complained to the court that Hargreaves had discriminated against him on the basis of a disability, namely that he had Hepatitis C.
•    The court found that Hargreaves had discriminated against Matthews.
•    However, Hargreaves was protected against any further action or penalty by the deed of settlement.
•    The court held that as Hargreaves was a member of the Council he was a person to whom the deed applied.

So, what was wrong with the deed? On the face of it and from the Council’s viewpoint – nothing. It contained many standard provisions.

It provided:

•    a release by each party of the other “forever” from all Claims which the other party had in connection with Matthews’ employment or his departure from that employment, including his application for unfair dismissal;
•    a broad definition of the term “Claim” which included any complaint, action, application, arbitration debt, liability or right;
•    that the deed itself would be a bar to any “Claim” to be commenced by Matthews in the future in connection with his employment.

In signing the deed, Matthews may not have remembered or realised that he might want to take action against Hargreaves in the future and that he needed to have the deed drafted and executed in a form which protected those rights. Unfortunately for Matthews, the widely-drawn deed effectively ended his rights.

The lesson when settling disputes is, where appropriate, to ensure that you resolve only the actual dispute while still protecting your rights not related to the dispute in question, including the right to take action in the future on other issues.
 
If you need help with a business, superannuation or estate dispute, please contact Townsends Business & Corporate Lawyers on (02) 8296 6222.