Abood v Macpark Pty Ltd[2022] QCAT 393

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   This dispute arises out of the performance of building work by Macpark Pty Ltd. 
2. [2]
   Macpark Pty Ltd built a new home for Ms Abood. The building work was completed in 2011. In 2020, Ms Abood commenced these proceedings, claiming that the building work was defective. Specifically, Ms Abood said that steel supporting posts were corroding, not having been constructed in an appropriate manner. For present purposes it is not necessary to go into any further detail as to the precise nature of the alleged defective work. 
3. [3]
   On 23 July 2020 a compulsory conference was conducted. At that conference, the parties entered into an agreement to resolve the dispute. Abood says that Macpark Pty Ltd failed to comply with the terms of the agreement. 
4. [4]
   The Tribunal has made the following direction:

The Tribunal will determine the following stated issues (the stated issues):

1. (a)
   Does the agreement entered into by the parties dated 23 July 2020 constitute an accord and satisfaction of Christine Abood’s claim against Macpark Pty Ltd?
2. (b)
   If the answer to (a) is ‘yes’ should Christine Abood’s claim be dismissed? 

5. [5]
   The Tribunal must determine whether the agreement operated to compromise the Abood’s claim such that she is not entitled to continue the proceeding. 
6. [6]
   The agreement required both parties to undertake certain work. Abood was required to undertake preliminary drainage works. Once that work had been completed Macpark Pty Ltd was required to, inter alia, undertake work to address the corroded steel posts. The agreement did not specify a timeframe for the completion of the steps to be undertaken by the parties.
7. [7]
   The agreement provided:

   9. (the applicant) accepts this agreement in full and final satisfaction of all her claims made in BDL 071-20.
   10. Within 14 days of both parties executing this agreement, (the applicant) will withdraw her application in BDL 071-20.
8. [8]
   Abood did not file a notice of withdrawal as required by clause 10 of the agreement. 
9. [9]
   The position vis-à-vis the parties may be stated thus: Abood says that the work required to be undertaken by Macpark Pty Ltd was not performed; Macpark Pty Ltd says that it has fulfilled its obligations under the agreement. Abood says that she is entitled to continue the proceeding. Macpark Pty Ltd says that the proceeding is at an end. 
10. [10]
    The Tribunal must determine whether the agreement between the parties is an:

    1. (a)
       Accord and satisfaction;
    2. (b)
       Accord executory; or
    3. (c)
       Accord and conditional satisfaction.
11. [11]
    The Victorian Court of Appeal in Osborn & Bernotti t/as G04 Productions v McDermott t/as RA McDermott & Co & Karmine Pty Ltd ^[1] explained the difference between these three different types of agreement:

Thus, there are three possibilities, not two. First, there is the mere accord executory, which, on the authorities, does not constitute a contract and which is altogether unenforceable, giving rise to no new rights and obligations pending performance and under which, when there is performance (but only when there is performance), the plaintiff’s existing cause of action is discharged. Secondly, at the other end of the scale is the accord and satisfaction, under which there is an immediate and enforceable agreement once the compromise is agreed upon, the parties agreeing that the plaintiff takes in satisfaction of his existing claim against the defendant the new promise by the defendant in substitution for any existing obligation. Somewhere between the two, there is the accord and conditional satisfaction, which exists where the compromise amounts to an existing and enforceable agreement between the parties for performance according to its tenor but which does not operate to discharge any existing cause of action unless and until there has been performance. 

Where there is a mere accord executory, no suit can be maintained upon the compromise unless and until there has been performance, and then suit is ordinarily unnecessary. Upon default in performance, the plaintiff’s existing cause of action continues unaffected. With accord and satisfaction, either party may sue upon the compromise, but only on the compromise and for nothing else: the original cause of action has gone. Where there is accord and conditional satisfaction, the plaintiff is bound to await performance and accept it if tendered, but if there be no performance, then the plaintiff may proceed according to general principles called into play when any agreement is repudiated; the plaintiff may either treat the agreement (the accord) as at an end and proceed on his original cause of action; or he may, at his option, sue on the compromise agreement, in place of the original cause of action. Thus, the consequences should there be default in performance varies according to the case and... it would be surely in the best interests of the parties if their legal advisers saw to it, when settling litigation, that the intended consequence upon default was clearly expressed and not left to implication.

12. [12]
    In Osborn Phillips JA stated:

Where there is an accord and satisfaction, the agreement for compromise may be enforced, and indeed only that agreement may be enforced, because ex hypothesi the previous cause of action has gone; it has been ‘satisfied’ by the making of the new agreement constituted by abandonment of the earlier cause of action in return for the promise of other benefit.

13. [13]
    The questions for determination are these:

    1. (a)
       Was the promise given by Macpark Pty Ltd to undertake further building work given in consideration of the abandonment by Ms Abood of her claim accepted by Ms Abood as in substitution or satisfaction of the liability of Macpark Pty Ltd to her?
    2. (b)
       Did Ms Abood accept the performance of the further building work by Macpark Pty Ltd (as opposed to the promise to undertake the work) in satisfaction of her claim? 
    3. (c)
       Did Ms Abood agree to accept the promise of the performance of the further building work by Macpark Pty Ltd in satisfaction of her claim however the agreement did not operate to discharge Ms Abood’s claim unless and until Macpark Pty Ltd performed its obligations under the agreement. 
14. [14]
    If the agreement between the parties falls into category (a) then the agreement operates to discharge Macpark Pty Ltd’s liability to Abood and the proceeding by Abood is at an end. If Abood wishes to enforce the agreement then she must do so in a separate proceeding. 
15. [15]
    If the agreement between the parties falls into category (b) then there was no discharge of the liability unless and until Macpark Pty Ltd performed the promised work.
16. [16]
    If the agreement between the parties falls into category (c) then Abood was required to await performance by Macpark Pty Ltd of the agreed works however if those works were not performed then Abood was at liberty to continue the proceeding against Macpark Pty Ltd.
17. [17]
    The true meaning of the agreement is a question of construction. The agreement must be construed as a whole, with regard to its full context and purpose, and not in a piecemeal way or by reference to individual terms, or individual phrases within individual terms.^[2]
18. [18]
    For the reasons that follow, I find that the agreement is an accord and conditional satisfaction.  

19. [19]
    The agreement required Macpark Pty Ltd to undertake a number of discrete items of building work. The agreement was not confined to the filing by Abood of a notice of withdrawal.  

20. [20]
    It seems reasonably apparent that the agreement required the building works to be undertaken by Macpark Pty Ltd in a timely fashion. I accept that the works would not be completed within 14 days of the agreement being executed, which was the time by which Abood was required to file a notice of withdrawal. The agreement however otherwise contemplated that the parties would act promptly. By clause 2(b) of the agreement, Macpark Pty Ltd was required to consult with Abood’s expert and undertake initial building work within 14 days of Abood undertaking the preliminary drainage work. Thereafter Macpark Pty Ltd was required to inspect the building works annually for three years and provide a report to Abood regarding whether the rectification works had satisfactorily addressed the corrosion of the steel posts. 

21. [21]
    It seems to me unlikely that Abood would have accepted the promise by Macpark Pty Ltd to undertake the further building works in return for the discharge of her claim immediately, rather than agreeing to the discharge of the claim once the actions were taken.^[3]
22. [22]
    The following passage from Zivkovic v Parke^[4] is of particular relevance in the present case:

… construing the settlement agreement as an accord and satisfaction would not accord with a common sense approach to a settlement agreement of this kind. There is no apparent reason for the respondent to have given up his existing rights for a series of promises, with the attendant risk of non‑compliance, such that he was left only with an agreement which he would have to take legal action to enforce. That would place the respondent in a precarious legal position, particularly when, as we have explained above, three of the promises given might not be enforceable by specific performance. It does not accord with common sense for the respondent to have agreed to be put in that position. Thus, considered objectively, that could not have been the intention of the parties.

23. [23]
    I accept that the agreement required Macpark Pty Ltd to undertake annual maintenance checks and perform further remedial works if corrosion persisted. However, I do not consider that this factor alone weighs against the construction of the agreement which I prefer. The substantive part of the works to be performed under the agreement was, as I have noted, required to be undertaken by Macpark Pty Ltd in a timely way after the agreement was signed by the parties. The maintenance works may be viewed as secondary to the initial substantive works. 

24. [24]
    Clause 9 of the agreement provides that Abood accepts the agreement in full and final satisfaction of her claims in the proceeding. On a proper construction this provision does not, in my view, operate to immediately bind the parties to extinguish Abood’s claim regardless of the performance by Macpark Pty Ltd of its obligations under the agreement. This construction is supported by clause 10 of the agreement requiring the filing by Abood of a notice of withdrawal within 14 days of the execution of the agreement by the parties.  
25. [25]
    Where an application filed in the tribunal is withdrawn an applicant may not make a further application relating to the same facts or circumstances without the leave of the tribunal.^[5] In circumstances where an applicant asserts that the terms of an agreement constituting an accord and conditional satisfaction have not been complied with it is not difficult to conceive of such leave being granted. This is to be contrasted with the effect of a consent order for the dismissal of the proceeding. Had the agreement provided for the making of such an order, that would have clearly suggested the compromise had immediate effect in extinguishing Abood’s claim. Proceedings in the Tribunal may be brought to an early end by withdrawal, a default decision or an order under s 47 or s 48 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). A proceeding may be dismissed by the Tribunal pursuant to s 47 in circumstances where the Tribunal considers the proceeding to be, inter alia, lacking in substance. Where there has been a compromise of a claim having immediate effect in ending the rights and liabilities of the parties in the proceeding, such a claim would be liable to be dismissed pursuant to s 47. That the agreement in the present case did not provide for the dismissal of the proceeding supports the construction of the agreement which I prefer. 

26. [26]
    Another consideration tells in favour of the agreement being not being construed as immediately ending the rights of the parties in the present proceeding. Subsequent to the compulsory conference and the execution of the agreement, and notwithstanding the failure by Abood to withdraw the application as required by clause 10 of the agreement, the parties have conducted themselves consistently with the proceeding remaining on foot. If Macpark Pty Ltd considered the claim, the subject of the proceeding, to have been discharged by operation of the agreement, it is difficult to apprehend why Macpark Pty Ltd did not take steps to bring the proceeding to an end. While in itself this factor is not determinative, it does in my view support the conclusion that the discharge of Abood’s claim was conditional upon the performance by Macpark Pty Ltd of its obligations under the agreement. 
27. [27]
    Where there is an accord and conditional satisfaction, in default by the respondent of the obligations under the agreement, the applicant has the option of either suing on the agreement or treating the agreement as at an end and proceeding with the original cause of action. The fact that Abood was required to withdraw her application did not prevent Abood from commencing further proceedings against Macpark Pty Ltd for the original claim in the event that Abood asserted Macpark Pty Ltd had failed to comply with its obligations under the agreement. As was observed in Blue Moon Grill P/L v Yorkey's Knob Boating Club Inc: ^[6]

More importantly, however, while the evident desirability of bringing certainty to the parties' commercial relationship may be accepted, it does not follow that one should therefore conclude the parties intended immediately to discharge the existing proceedings by entering into the terms of settlement. The parties would be exposed to the uncertainties involved in the termination of the terms of settlement and the renewal of the pending litigation only as the result of the breach of the terms of settlement by one party and the exercise by the innocent party of a choice to continue with the current proceedings rather than to enforce the terms of settlement. The certainty provided by the terms of settlement would be jeopardised only by a breach of those terms, and then only if the party not in breach were to choose to pursue its rights in the pending proceedings. The party in breach could hardly be heard to complain about such a result brought about by its own breach of contract.

28. [28]
    I make the final observation that the conclusion I have reached is generally consistent with the approach taken by the tribunal in Lightfoot & Anor v Temple.^[7] There, the tribunal concluded that a settlement agreement was an accord and conditional satisfaction. The tribunal considered, inter alia, whether it had jurisdiction to determine the issues in dispute relating to whether the terms of settlement had been breached and, if so, by which party and the consequences of such breach. The tribunal stated:

… where the underlying claim being advanced by the applicants is in relation to the performance of domestic building work, the Tribunal has jurisdiction to deal with that claim and any defence to that claim based on a compromise including claims by each party as to repudiation of the Terms of Settlement by the other.

In my opinion the mere presence of an alleged compromise in the matrix of facts and issues before the Tribunal does not automatically strip it of jurisdiction to deal with the matter. It would be different if the applicants’ remedies arise entirely from the compromise. In that case there would be no jurisdiction on the part of this Tribunal to deal with the claim. That is because the applicants’ claim would not be for the Tribunal to decide a building dispute, but rather to decide a claim for breach of a compromise agreement.^[8]

29. [29]
    Here, Ms Abood’s remedies do not arise entirely from the settlement agreement. In circumstances where the agreement was an accord and conditional satisfaction, Ms Abood is entitled to pursue her original claim if it is determined that Macpark Pty Ltd did not fulfil its obligations under the agreement. Whether and to what extent Macpark Pty Ltd fulfilled its obligations is part of the overall factual matrix to be determined in the proceeding. 

Conclusion

30. [30]
    It follows from the foregoing that the answer to the state issues is:

    1. (a)
       No;
    2. (b)
       Not necessary to answer.
31. [31]
    As I have observed, there is clearly a dispute between the parties as to whether Macpark Pty Ltd has discharged its obligations under the agreement. It is not possible in determining the present application to make any factual findings in this regard. Ultimately it will be a matter for the parties to adduce evidence addressing the factual issues relevant to the adequacy of the further works undertaken by Macpark Pty Ltd and, if Abood is entitled to pursue her original claim, the factual issues relevant to that claim.  
32. [32]
    I will make directions for the filing of any further statements of evidence by the parties.