CITATION: Queensland Health AND Dr Inderjit Singh Virdi
(B/2009/79) - Decision
<http://www.qirc.qld.gov.au>
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
Industrial Relations Act 1999 - s. 331 - decisions generally
Queensland Health AND Dr Inderjit Singh Virdi
(B/2009/79)
DEPUTY PRESIDENT BLOOMFIELD
2 February 2010
DECISION
[1]
On 29 October 2009 Queensland Health, through its Solicitors, filed an application in which it requested the
Commission to act pursuant to s. 331(b)(ii) of the Industrial Relations Act 1999 (the Act) to dismiss an
application for reinstatement made by Dr Virdi on 1 October 2008 (TD/2008/158) or, in the alternative, refrain
from hearing the application on the basis that further proceedings by the Commission are not necessary or
desirable in the public interest.
[2]
In support of its application, Queensland Health relied upon the affidavit of Mr Daniel Charles Williams, a
partner of Minter Ellison Lawyers. In his affidavit Mr Williams swore:
"10. On 1 May 2009 I had a telephone conversation with [Mr Andrew Herbert of Counsel]. Mr Herbert stated
to me to the effect that Dr Virdi would settle the Reinstatement Proceedings on the [basis of terms proposed
by Minter Ellison in a letter dated 27 April 2009], with two qualifications:
(a) in relation to the obligation not to speak about each other in derogatory terms - it needed to be clear
that Dr Virdi would not be constrained in relation to any comment made to the CMC or other
authority;
(b) the effective date of the reinstatement (and the resignation) should not be the date of the original
termination, but rather the date of the Deed.
11. During that telephone discussion, I raised with Mr Herbert the possible impact on Dr Virdi's employment
entitlements if his effective date of reinstatement was the date of the Deed rather than the date of
termination. Mr Herbert stated to the effect that this issue could be dealt with by a specific release from Dr
Virdi in relation to any further employment benefits. I stated that I agreed.
12. During the conversation, Mr Herbert stated to me to the effect that he had Dr Virdi's instructions to make
an offer to Queensland Health to settle the matter on these qualified terms.
13. I discussed with Mr Herbert how the agreement should be recorded. I said I thought that Queensland
Health would not insist on the execution of a deed, and would be comfortable with an exchange of
correspondence. Mr Herbert said he thought a deed should be signed recording the terms. I agreed.
14. I stated to Mr Herbert that I would seek instructions in relation to the qualifications to the original
proposed terms, and, assuming they were acceptable to Queensland Health, I would send him and his
instructing solicitors a draft deed recording the terms of settlement.
15. …
16. Following my telephone conversation with Mr Herbert, I sent an email to Ms Bloch and Ms Bain [of
Queensland Health] advising them of the offer of settlement made by Mr Herbert. This note contains an
accurate summary of the key issues discussed with Mr Herbert. Exhibit DSW-06 is a true copy of the email
to Ms Bloch and Ms Bain dated 1 May 2009.
17. On 1 May 2009 I caused a draft Settlement Agreement to be prepared reflecting the terms of the offer of
settlement put forward by Mr Herbert on Dr Virdi's behalf. I caused an email to be sent to Ms Bloch and
Ms Bain seeking their instructions in relation to the terms of the offer of settlement. Exhibit DCW-07 is a
true copy of the email and attached draft Settlement Agreement sent to Ms Bloch and Ms Bain.
18. On 5 May 2009 and 6 May 2009, I received instructions from Ms Bain and Ms Bloch respectively to accept
the offer of settlement on behalf of Queensland Health and to send the settlement agreement to Dr Virdi's
representatives.
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19. At 6.42pm on 6 May 2009 I caused a settlement agreement to be sent to Mr Herbert by email. Exhibit
DCW-08 is a copy of the email and attached settlement agreement sent to Mr Herbert.
20. I regarded my email of 6 May 2009, with the attached proposed settlement deed, as an acceptance of the
counter proposal made by Mr Herbert in our telephone discussion on 1 May 2009.
21. By 21 May 2009 a response had not been received from Hall Payne to my email of 6 May 2009. In order to
obtain closure in the Reinstatement Proceedings, I caused a letter dated 21 May 2009 to be sent to Hall
Payne. Exhibit DCW-09 is a copy of that letter.
22. …
23. Although Dr Virdi has not signed the settlement agreement, it was and remains my belief that a settlement
in the matter has been reached by the parties.".
[3]
Queensland Health also relied upon an affidavit of Catherine Ann Lyndon, a Senior Associate with Minter
Ellison Lawyers, who swore as follows:
"4. At 1.02pm on 1 May 2009, I was copied in to an email from Mr Williams to Ms Bloch and Ms Bain
advising them that Mr Herbert had made a counteroffer of settlement. Exhibit CAL-01 is a true copy of this
email.
5.
I recall that either shortly before or shortly after I received this email I spoke to Mr Williams in his office.
At Mr Williams' direction, I amended the draft Settlement Agreement.
6.
On 6 May 2009, I was copied in to an email from Mr Williams to Mr Herbert attaching the draft Settlement
Agreement. Exhibit CAL-02 is a true copy of this email and attachment.
7.
On 7 May 2009, I caused an email to be sent to Ms Angela Pratt of Hall Payne Lawyers enclosing the draft
Settlement Agreement for their review. Exhibit CAL-03 is a true copy of that email and attachments.
8.
At approximately 2.35pm on 14 May 2009, I telephoned Ms Pratt seeking an update regarding the draft
Settlement Agreement. I spoke with Ms Pratt's assistant, Amanda, who stated to me words to the effect that
they had sent the draft Agreement to Dr Virdi but had not yet heard back. Amanda undertook to follow up
with Dr Virdi. Exhibit CAL-04 is a true copy of my file note of that telephone conversation.
9.
At approximately 8.55am on 15 May 2009, I received a telephone call from Ms Laura Fraser-Hardy of
Hall Payne Lawyers. Ms Fraser-Hardy stated to me to the effect that, as far as they, Hall Payne Lawyers,
were concerned, the matter had settled, subject to the '"deed" being signed'. I asked to the effect of whether
they had recommended any amendments to the document in respect of which I may need to get instructions.
She stated in response to the effect that she would need to wait to get instructions before she could discuss
that matter. I was concerned to obtain a full release for my client, and told Ms Fraser-Hardy that we were
hesitant to declare the matter finalised until we obtained a signed Settlement Agreement from Dr Virdi. Ms
Fraser-Hardy again stated to the effect that, as far as they (Hall Payne Lawyers) were concerned, they
considered the matter to be settled, and the "deed' just needed to be signed. Exhibit CAL-05 is a true copy
of my file note of that telephone conversation.
10. At approximately 8.40am on 21 May 2009, I telephoned Ms Fraser-Hardy to follow up the Settlement
Agreement as I was conscious that the Queensland Industrial Relations Commission had not yet been
advised of the settlement and that the hearing dates were still set down. Ms Fraser-Hardy was not
available and I left a message asking her to return my call. At approximately 8.48am on 21 May 2009, I
received a return telephone call from Ms Fraser-Hardy. Ms Fraser-Hardy stated to me to the effect that
Hall Payne Laywers had not received instructions regarding the written agreement from Dr Virdi yet.
Exhibit CAL-06 is a true copy of my file note of these telephone conversations.
11. On 21 may 2009, at the direction of Mr Williams, I prepared a letter to Hall Payne Lawyers. Exhibit CAL07 is a true copy of this letter.
12. On 28 May 2009, Minter Ellison received a facsimile from the Commission advising that the hearing dates
that had been allocated had been cancelled, I assumed at the request of Hall Payne Laywers. Exhibit CAL08 is a true copy of the Notice of Cancellation.".
[4]
Queensland Health's application was vehemently opposed by Dr Virdi. On his behalf it was argued that Mr
Herbert did not possess the necessary authority and instructions to settle Dr Virdi's reinstatement application and
had not done so. In the alternative, it was argued that if the Commission accepted there was an agreement
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reached between Mr Williams and Mr Herbert, the Commission would be satisfied it was an agreement reached
without the authority of Dr Virdi. Accordingly, if that was the finding, the Commission should exercise its
discretion to refuse Queensland Health's application to dismiss or refrain from hearing Dr Virdi's reinstatement
application on the basis it was not in the public interest for Dr Virdi to be denied his day in court because an
agreement to settle was reached outside his authority.
[5]
To support his arguments, Dr Virdi's representative, Mr K. Watson of Counsel, called Dr Virdi, Dr Donald
William Kane, State President of Salaried Doctors Queensland, Industrial Organisation of Employees (SDQ),
and, by attendance notice, Mr Herbert.
[6]
Each of these gentlemen had participated in a telephone conference, together with representatives of Dr Virdi's
then legal representatives, on 30 April 2009. Each of the three witnesses agreed that the telephone conference
was lengthy (the estimates ranged between 45 minutes and 1.5 hours) and quite difficult, in the sense that Mr
Herbert and Dr Virdi's then legal representatives were encouraging him to try to settle the matter and Dr Virdi
was resistant to many of their suggestions and raised a number of issues he would need to have addressed if he
was to settle the matter. In his affidavit, filed on 27 November 2009, Dr Virdi swore:
"38. I recall that at the conclusion of the conference, Mr Herbert asked me if it was alright for him to work
around the terms of settlement which were acceptable to me with the lawyers for Queensland Health and I
consented saying that I wanted to see the terms of settlement and then decide whether or not I would settle
on that basis. I wanted to see any final terms of settlement in writing.".
[7]
The outcome of the conference was generally confirmed by Dr Kane. In his affidavit he swore:
"30. From my involvement I know that Dr Virdi had at all times been reluctant to agree to the restrictions. At
no time did Dr Virdi give any instructions to Mr Herbert to make a firm offer to Minter Ellison. His
instructions only went to authorising further negotiations with a view to receiving a draft written
agreement that Dr Virdi could peruse and consider. …".
[8]
In the course of his examination-in-chief, Mr Herbert was asked questions about the contents of Mr Williams'
affidavit, as follows (Transcript day 3, pages 25-26):
"Mr Watson: Can you go to paragraph 12 and can you tell the Commission what you say about that
paragraph?-- It's about a quarter right, in rough terms.
Okay. Well, tell me the three-quarters that's wrong first?-- Well, I did have a conversation. I did state to him to
the effect that he had - I had Dr Virdi's instructions to seek to settle the matter with Queensland Health on the
basis of particular terms that were not contentious that were, I think, common ground between us. But on the
further basis that it - any settlement needed to include questions of confidentiality and issues concerning
restraints on which - on the basis of which Dr Virdi might be able to speak about those matters and issues
relating to a - the extent to which the parties would be released from further liability to each other. And that all
of those matters needed to be in a particular form before there was any possibility of the matter - the core matter
being able to be resolved. And by the core matter I mean the issue of the withdrawal of the termination and the
subsequent resignation by Dr Virdi.
What was your expectation then with respect to that matter? That is, how it was going to be resolved as a result
of this telephone conversation?-- That Mr Williams would prepare a draft of his - sorry - Queensland Health's
version of what they would propose by way of settling all of the issues, and there were a number of them as you
can see from the draft that he subsequently sent, it had a large number of paragraphs in it. His version of what
Queensland Health would accept in relation to those issues, or would propose in relation to those issues and
then I was going to work on that to see if I could put it into a form that Dr Virdi would accept, because he had
very particular requirements about those matters, that was my very firm instructions. And having got it into a
form that I thought Dr Virdi might accept, it was then I would have to get Dr Virdi's acceptance, which was by
no means certain, and then put it back and see if Queensland Health would accept something that Dr Virdi
would accept so it was - the matter was well under negotiation.
All right. Had it - sorry - during that conversation, did you put specific terms to Mr Williams which were
capable of being accepted?-- Absolutely not. Quite inconceivable. As you know, I've been in this business a
very long time and I have had a long conversation with Dr Virdi. Dr Virdi was very unhappy about his
treatment by Queensland Health, understandably so. He was very concerned about the whole issue of
settlement. He was particularly concerned about the - what are generally in settlements reasonably peripheral
issues, namely questions of restraint. I had absolutely no instructions that - to put an offer to Queensland Health
off my own bat which I would consider to be the settlement of the matter and that my word on those matters
would be enough to bind Dr Virdi to the settlement. That's completely inconsistent with the nature of the
conversation we had and in instructions I had.
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Sorry. Can I just interrupt. When you say that, are you referring to the telephone conference you had with Dr
Virdi-----?-- Yes.
-----on the 30th of April?-- When we had the telephone conference with Dr Virdi I had no instructions to simply
go to Queensland Health or make up my own mind about a suitable settlement at all. Dr Virdi was extremely
particular. He has a very much a mind of his own about these matters. He was extremely particular about what
he would and would not accept and to my mind probably hadn't even settled in his own mind exactly how much
he would accept and we had a long debate about what Queensland Health may or may not agree to in that
conversation. Armed with those instructions, or lack of instructions, I was exploring with Mr Williams what I
could or could not extract out of Queensland Health with a view to try and to mould it into something that Dr
Virdi might accept and that Queensland Health would also accept. But I was fair square in the middle of that
operation and there is simply no way that I did or could have conveyed to Mr Williams the impression that I had
plenipotentiary authority to settle there and then on behalf of Dr Virdi. That's just not the way the conversation
went.".
[9]
Under cross-examination by Mr Murdoch, Counsel for Queensland Health, Mr Herbert was asked a series of
questions about the extent of his instructions from Dr Virdi, as follows (Transcript day 3, pages 35-38):
"Mr Murdoch: Now he authorised you to have further negotiations with Queensland Health, didn't he?-- He did.
Yes. And did he give you instructions to the effect that Queensland Health were prepared to accept the
reinstatement and resignation, that that was something that he would agree to?-- No, only - as bald as that, no.
It was only - he was only prepared to accept that situation if he was able to get appropriate safeguards built
around that in relation to the things he wanted to continue to do because as he saw it, as I said before, he was
letting Queensland Health off the hook. He had an opportunity, as he saw it, to take Queensland Health into a
public forum and have them explain themselves as to what they had done to him. If he was relinquishing that
opportunity he didn't want there to be a cone of silence lowered over the whole situation so that he could never
tell anyone about it ever again or take any action if it turned out he'd been the victim of a criminal conspiracy or
something of that kind. So the answer is, he was only prepared - I was only able to persuade him to go further in
negotiations on that basis on the footing that all of those other matters were able to be attended to. They were a
package absolutely welded together.
And was it the case that he gave you instructions to the effect that if Queensland Health were prepared to accept
that package, being resignation and reinstatement and carve out, in respect of CMC, other statutory authorities
and to carve out, in respect of criminal liability that he'd settle on those terms?-- No. What he did tell me is to
go away and have some negotiations and see what you can come up with along those lines and he would have a
look at it and Mr Williams sent, as I understood it, a draft settlement deed and I think it was sent to Hall Payne.
I don't recall if it was actually sent directly to me but I got it anyway somewhere along the way and I spent well, I billed for - I spent a lot more - but I billed for an hour and a half of my time, I redrafted that deed very
extensively because it just didn't do anywhere near what I knew could even be reasonably saleable to Dr Virdi. I
couldn't even go back to him with that deed because of the terms of it and I spent at least an hour and a half of
my time scrawling all over that and track marking that draft.
…
And you've mentioned the letter of 27 April 2009. Was it the case that, at least, by the end of the conference that
you had with Dr Virdi on 30 April 2009 that he advised that he accepted the broad terms of settlement as
outlined in the letter of 27 April 2009?-- No, he - his view was that he instructed me to go forward to see whether
an appropriate settlement could be reached that included some of those elements plus some of the elements that
we had discussed in the conference that weren't even contemplated in that letter, that I needed to add into the
equation and I needed to have a form of words that he found acceptable in relation to those matters. He was by
no means sold on the project at that point.
And to that end did he instruct you, after receiving advice from you, to enter into further discussions with
Queensland Health?-- Yes.
-----regarding his concerns about the gagging effect of the offer that had been made?-- It wasn't - it wasn't just
that. He was - he was, of course, very concerned about the gagging effect but what he instructed me to do was to
negotiate - to see if I could negotiate some terms with Queensland Health around that whole issue that he could
live with. It wasn't simply a matter of saying, "Well, I'm only concerned about the gagging effect of that order.
Go and remove the gagging effect and you have my permission to settle on whatever terms you think fit." One
thing about Dr Virdi, if you've had any conversations with him, he has very firm views about these things and I
was not ever in a position to speak for Dr Virdi without his absolute approval on the wording that was to be
included in - and the precise terms that would be included in any settlement and there was no doubt in my mind
whatsoever and I - it is inconceivable that I would have had a conversation that suggested to anybody that I had
Dr Virdi's carte blanche approval to settle on terms X, because I never did.".
5
[10]
Later, under further cross-examination, Mr Herbert was asked as series of questions about his reaction to the
contents of Mr Williams' affidavit, as follows (Transcript day 3, page 42-44):
"Mr Murdoch: Now paragraph 14. Can I suggest to you that those words were said by Mr Williams?-- Oh, in
general terms he was certainly going to go away and get some instructions around the issues that I'd raised with
him and he was going to put together a draft deed. That - for that there was a conversation along those general
lines with the emphasis on the word draft. That's all it was ever going to be, as he says. There was going to be a
draft and I was then going to take it off and see if I could get some - get other people to agree to it. Well, have a
look at it first and see how far Queensland Health was prepared to go. I have a vague recollection and you have
to accept it was a very long time ago from my point of view and I've probably done 40 or 50 similar matters
since that time and I'm trying very hard not to allow all my recollections about settlement discussions to
influence what's happened here, but I have a recollection of suggesting that he do a draft and send it through to
me because I'd already told him and I think his report is somewhere, I'd had a very difficult discussion with Dr
Virdi and I was - I was going in to bat for a position with Dr Virdi which he was resisting, but I was going into
bat for it because I thought it was - I was doing him a favour by doing that and - but by no means there yet.
You didn't state to Mr Williams, did you, that Dr Virdi's settling the matter was conditional upon there being a
satisfactory deed?-- I don't recall using those precise words but there's absolutely no doubt in my mind I said
words to the effect - to a similar effect, that there was no way this could be settled without a deed and there's no
way, that he was to prepare a draft to get it to me and I would look at it. Now Mr Williams is a very experienced
practitioner, as I am. Those words used between experienced industrial practitioners in my invariable
experience over three decades has been that means we're not done yet. We won't be done until you - if you send
me a draft I'll look at it and we'll see. That means we're not - I did not convey to him to put the obverse of your
question. At no time did I say to Mr Williams I have the authority to settle without recourse to Dr Virdi, and I
mean, it's inconceivable that I could. I've never said that on behalf of a client ever that I can recall but for Dr
Virdi would be the last person on this planet I would have said a thing like that about, or even given the
impression that I had his authority, because I still had his resistance ringing in my ears.
Now you've seen paragraph 12 of Mr Williams's affidavit?-- I have.
Can I suggest to you that those were the words that you stated?-- Well, as I said earlier, there are about five
paragraphs that would need to be added to that, to that paragraph before you could - and it was not to the effect
that I had his instructions to make an offer capable of immediate settlement, to settle the matter on these
qualified terms. I did what I always do in these situations and said, 'I've got - I've got his instructions to put
some matters forward which in effect could settle the matter but there's all these other problems with what
you've proposed. All of these problems need to be addressed, we need to sort these things out, here's the
shopping list. You go away and prepare a draft around these terms. If you can get those instructions and get it
back to me and I'll see if I can sell it.' Now that was, in two or three short sentences, was the tone of the
conversation, and as I say, I mean, I'm not - I don't think I'm quite so stupid as to go and say I have the authority
to settle something when I'm dealing with a senior experienced practitioner like Mr Williams who's representing
a Government department when I didn't have that authority and I was going to get caught absolutely leg before
wicket, stumped and run out, if Mr Williams accepted that offer because Dr Virdi would have kicked me through
the goalposts if I'd - if I'd done a thing like that. And that's - and as I say it's never happened yet and it wasn't
going to happen this time.".
[11]
The contentions advanced on behalf of Queensland Health, to the effect that Dr Virdi's reinstatement application
had been settled, are relatively simple, as follows:
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In a telephone conversation on 1 May 2009 Mr Herbert stated to Mr Williams words to the effect that Dr
Virdi would settle the reinstatement proceedings on terms proposed in a letter written by Minter Ellison
Lawyers on 27 April 2009, with two qualifications:
(a) in relation to the obligation not to speak about each other in derogatory terms, it needed to be clear that
Dr Virdi would not be constrained in relation to any comment made to the CMC or other authority;
(b) the effective date of the reinstatement (and resignation) should not be the date of the original
termination, but rather the date of the deed.
Mr Herbert stated words to the effect that he had Dr Virdi's instructions to make the above offer.
Mr Herbert said that he thought a deed should be signed regarding the terms and Mr Williams agreed with
this proposal.
It was agreed that Mr Williams would obtain instructions from Queensland Health as to whether the matter
could be settled on the basis of the terms advanced by Mr Herbert.
These instructions were subsequently obtained and Mr Williams sent a "Settlement Deed" to Mr Herbert on
6 May 2009 and arranged for a Deed to be sent to Dr Virdi's then legal representatives on the following day.
The actions of Mr Herbert on 1 May 2009 constituted the making of an offer to settle the matter.
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[12]
The actions of Mr Williams in providing the "Settlement Deed" was an acceptance, on the part of
Queensland Health, of the offer made by Mr Herbert on 1 May 2009.
The agreement fell within the second limb of cases discussed by the High Court in Masters v Cameron1.
That is, the parties had completely agreed upon all of the terms of their bargain and intended 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.
The fact that a Deed was never signed did not mean that a settlement was not achieved. The Deed was
simply intended to record the terms of the agreement reached as a consequence of the offer made by Mr
Herbert on 1 May 2009 and its acceptance in the form of the provision of a Settlement Deed on 6 May 2009.
It was the intention of the parties who conducted the negotiations that the Deed was simply intended to
record the terms of the agreement and to effect the resignation of Dr Virdi.
The fact that the terms of settlement have not been performed, in that no Deed has been executed and Dr
Virdi has not resigned, does not prevent an Order being made by the Commission (Pauls Ltd v Mikhail2).
If it is necessary to make an Order to ensure that both parties get the benefit of the agreement, the
Commission can make an Order in the following terms:
(a) Queensland Health permit Dr Virdi to resign effective 6 May 2009 and amend its records accordingly.
(b) Upon performance of (a) Application No. TD/2008/158 be dismissed.
In his submissions opposing Queensland Health's application Mr Watson referred me to an extract from
"Contract Law in Australia", 5th Edition by Cater and Others, wherein it is stated:
"[3-19] Acceptance must correspond with offer. The offer and acceptance must precisely correspond; the
acceptor ('offeree') must have accepted all the terms of the offer. Any departure from the offer will result in the
purported acceptance being ineffective. Such a purported acceptance will normally, even though worded as an
acceptance, amount to a new offer (described as a 'counter-offer'). If a counter-offer is accepted by the original
offeror (now the offeree in respect of the counter-offer), a contract will be formed. Of course, if the counteroffer itself is not accepted, neither party is bound.".
[13]
Mr Watson then compared the terms of Minter Ellison's letter of 27 April 2009 with the draft Deed of
Settlement forwarded by Mr Williams to Mr Herbert on 6 May 2009 and highlighted a number of differences
between what was initially proposed and what was recorded in the draft Deed of Settlement. On the basis of
these differences, Mr Watson argued that even if Mr Herbert advanced an offer on 1 May 2009 which was
capable of acceptance (which was submitted not to be the case) Queensland Health had responded with a
counter-offer in the form of its draft Deed on 6 May 2009.
[14]
In support of his argument that Mr Herbert had not made an offer capable of acceptance Mr Watson also
referred to the fact that Mr Herbert had insisted on the terms of settlement being incorporated in a Deed of
Settlement and argued Mr Herbert's insistence on this point reflected his evidence that there was not going to be
any "deal" until an agreement was "signed, sealed and delivered by Dr Virdi".
[15]
Mr Watson also referred me to the decision of Martin J in Max Reflectance Investment Pty Ltd v Drazcat Pty Ltd
& Ors3 in which his Honour referred to a decision of Tamberlin J in the Federal Court of Australia, as follows:
"[16] Much consideration has been given to the principles to be applied in this type of case and many of them
have been conveniently collected in the decision of Tamberlin J in Francis v New South Wales Egg
Producers Co-Operative Pty Ltd4. His Honour said:
'In considering the recurrent problem as to whether communications between parties in contemplation
of eventually reaching a binding agreement have been crystallised into a concluded bargain, the
courts have enunciated a number of guidelines. For present purposes some of the relevant principles
are as follows:
1. The central question is whether it was the intention of the parties at the relevant date, time or point
of negotiations, to make a concluded bargain.
2. The use of words such as "subject to contract" or "subject to preparation of a formal contract" and
expressions of similar import prima facie give rise to an overriding condition that no binding contract
is concluded at that point, but rather what has been negotiated is an intended basis for a future
contract. See Masters v Cameron (1954) 91 CLR 353; Rossiter v Miller (1878) 3 App Cas 1124 at
1
Masters v Cameron (1954) 91 CLR 353 at 360
Pauls Ltd v Mikhail (2000) 163 QGIG 273
3
Max Reflectance Investment Pty Ltd v Drazcat Pty Ltd & Ors [2009] QCS 24
4
Francis v New South Wales Egg Producers Co-Operative Pty Ltd Unreported, Federal Court of Australia, NJ540 of
1992, 10 March 1995
2
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1152; Santa Fe Land Co Ltd v Forestal Land Timber and Railways Co Ltd (1910) 26 TLF 534
("subject to a formal contract to be approved by your solicitors and ourselves").
3. The answer to the question referred to above depends on the intention disclosed by the language
the parties have used and no special form of words is essential to be used in order to manifest an
intention that there will be no binding contract as between the parties before execution of the
agreement in its ultimate form. See Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2
NSWLR 309 as per Hope JA.
…
9. Subsequent conduct of the parties can be taken into account. Later correspondence, oral
communications, and action or inaction by the parties can be relevant in determining that it was not
the intention of the parties to be presently bound before all the essential preliminaries had been
agreed to, nor until a final contract had been drawn up, embodying all the matters incidental to a
transaction of such a nature. See Barrier Wharfs Ltd v W Scott Fell and Co Ltd (1908) 5 CLR 647 at
669; Howard Smith and Co Ltd v Varawa (1907) 5 CLR 68; ABC v XIVth Commonwelath Games
Ltd (1988) 18 NSWLR 540 at 547-348'.".
[16]
On this latter point, Mr Watson referred me to subsequent correspondence from Minter Ellison to Dr Virdi's then
lawyers dated 21 May 2009. In that letter (referred to by Ms Lyndon at paragraph 11 of her affidavit) Minter
Ellison wrote:
"We refer to your telephone conversation with Cathy Lyndon of this office this morning.
The draft Settlement Agreement was sent to you on 7 May 2009. Although we appreciate there are some
communication difficulties with your client being in India, we urgently need to secure closure in this matter.
If Dr Virdi will not sign the Deed, and the matter is to proceed, both parties need to prepare their material (for
trial) as a matter of urgency.
Please provide a copy of the signed Deed as soon as possible.".
[17]
Mr Watson suggested Queensland Health's lawyers would have not used those sorts of words if they really
believed they had an agreement. They would have been taking steps, as they were now, to have the matter
dismissed.
[18]
Finally, Mr Watson referred me to several cases concerning the actual, or implied, authority of Barristers to
settle cases and the relevance of those authorities to the present circumstances. However, for reasons which will
become apparent, it is not necessary to refer to these cases.
Conclusions
[19]
My review of the evidence, including the various items of correspondence appended to the affidavits of Mr
Williams and Ms Lyndon respectively, as well as the subsequent actions of Mr Herbert, Mr Williams and Ms
Lyndon, leads me to conclude that the proposals for settlement advanced by Mr Herbert on 1 May 2009 were
not capable of immediate acceptance. Rather, the proposals represented the basis upon which a settlement might
be explored, with ultimate agreement dependent upon whether a form of words could be agreed which was
suitable to all parties. This is because the first qualification (referred to at paragraph 10 of Mr Williams'
affidavit) was clearly one which was going to require some careful thought to achieve. In that respect, Mr
Herbert was always going to have to consider any draft words which Mr Williams might craft before he could
indicate his client's likely acceptance, or otherwise, of what was proposed.
[20]
There is no doubt that Mr Herbert clearly enunciated to Mr Williams on 1 May 2009 the nature of the matters
which Dr Virdi needed to have addressed if he was to withdraw his reinstatement application. However, it is
equally clear that Mr Herbert also conveyed the tenor of his (difficult) conversations with Dr Virdi just on 24
hours earlier and highlighted to Mr Williams that even if they jointly agreed a form of words Mr Herbert would
still have to "sell" the settlement to Dr Virdi.
[21]
As such, any ultimate settlement was always going to be dependent on not only the actual words agreed between
Mr Williams and Mr Herbert but also Dr Virdi's approval of those words.
[22]
In addition, the words and actions of Minter Ellison between 7 May 2009 and (at least) 21 May 2009 do not
support the contentions now advanced.
8
[23]
Firstly, Ms Lyndon's letter to Hall Payne Lawyers, dated 7 May 2009 refers to "the proposed Settlement
Agreement between Dr Virdi and Queensland Health for your review". If an agreement had truly been reached
the day prior to this letter it would not have been necessary to refer to as a "proposed" Settlement Agreement
and to forward it to Dr Virdi's solicitors for their "review".
[24]
Secondly, Ms Lyndon's affidavit (paragraph 8) records that she contacted Hall Payne Lawyers on 14 May 2009
seeking an update regarding the draft Settlement Agreement. Her file note of this date (Exhibit CAL-04)
records that she told Ms Pratt's assistant "we need to know either way, as quite a bit to do if it is not going to
settle … we really need to know either way by tomorrow COB.". None of this suggests an agreement had
already been reached.
[25]
Thirdly, Ms Lyndon's affidavit (paragraph 9) records that although Hall Payne Lawyers reported their belief the
matter had settled she nonetheless asked if they had recommended any amendments to the document in respect
of which she may need to get instructions. Further, her affidavit records she told the representative of Hall
Payne that "we" were hesitant to declare the matter finalised until we obtained a signed Settlement Agreement
from Dr Virdi. Such comments do not support any argument that a settlement had already been reached.
[26]
Fourthly, on 21 May 2009 Mr Williams instructed Ms Lyndon to write to Hall Payne Lawyers in relation to the
status of the matter. This letter (see above) is still clearly seeking Hall Payne Lawyers' advice about Dr Virdi's
intentions. Such inquiry, particularly in the form in which it was made, would not have been necessary had the
matter settled on 6 May 2009 as now alleged.
[27]
For the foregoing reasons I dismiss Application No. B/2009/79.
[28]
Although the issue of costs was not raised by Mr Watson on the final day of hearing I apprehend, on the basis of
him raising an application for costs during earlier discovery proceedings (a decision about which was reserved
pending the outcome of the ultimate case) that an application for costs will be forthcoming. If such an
application is to be made such intention should be communicated to Queensland Health, and the Commission, in
writing - including the amount of costs so sought. If, after consideration of such an approach and the quantum
involved, Queensland Health is resistant to an order for costs, or challenges the amount involved, I shall list the
matter for further hearing in relation to the disputed point, or points. In this respect Dr Virdi's solicitors are
asked to contact my Associate, should it become necessary, so that a hearing date may be programmed.
[29]
The Commission determines and orders accordingly.
A.L. Bloomfield, Deputy President.
Hearing Details:
2009 10 December 2009
Released: 2 February 2010
Appearances:
Mr C. Murdoch (Counsel) instructed by Mr D. Williams and Ms
C. Lyndon of Minter Ellison Lawyers for the Applicant.
Mr K. Watson (Counsel) instructed by Ms S. Moriarty of Susan
Moriarty and Associates for the Respondent.