If you have some idea about corporate law, then you may be familiar with a deed of release. It is a legal document that has an agreement between both parties to settle disputes. The release terms have the power to prevent either concerned party to pursue the other party to enter any other further claims since it has been the dispute’s subject. The problem is that there are often clauses that can disrupt the agreement.
For instance, there can be a clause that says both parties release and discharge others from all causes of actions and demands which parties currently have or at any point in the future. If you accept this clause, then you may be led to thinking it can prohibit you and the other party from pursuing further legal action, especially once the deed is legally binding. However, that is not how the Queensland Court of Appeal handled the case between Domway Pty Ltd and Ms Wichmann. For your guidance, feel free to use this article to gain relevant insights for your deed of release.
What Happened With the Wichman v Domway Case?
Ms Wichmann was the former office manager of Domway Pty Ltd, and she illegally transferred money owed to the corporation into her bank account, which was a total of 2,809.42 dollars. Because of this, they fired her.
Through corporate law, they were to settle the dispute through a deed of release. The terms stated that the money should be returned, the company will still entrust her redundancy pay, and any claim against her would be released. However, the main conflict began when it was found out that she also embezzled 320,000 dollars. At this point, the deed of release was already signed.
Domway Pty Ltd went on with proceedings against Ms Wichmann in the Supreme Court of Queensland, appealing that she return the 320,000 dollars. Because of this, she defended the proceedings from the deed of release, and it was seen as an effective defence. To resolve this, His Honour Justice Atkinson heard the application of Domway on September 4, 2018, for the summary judgement against Ms Wichmann.
During the court proceedings, the summary judgement is only accepted through circumstances when there are no real prospects of success for a party’s case. It was the same for the case against Ms Wichmann, so it was in favour of Domway. In the end, all the misappropriated funds were returned to the company, and Wichmann’s appeal was not approved.
In response to the case, the Court cited some information regarding the decision. They pointed out that the law has been settled since 1751 that releases only happen for contemplation within parties. When considering the terms of the release, what was only regarded were the known disputes between Domway Pty Ltd and Ms Wichmann. The Court also cited that it would be unconscientious for a party to honour the deed of release when a particular party only was aware of further liability, while the other didn’t.
The Takeaway
As you can see from the Wichmann v Domway Case, negotiations for deed of release, the terms and conditions must be well-established, and you must make certain that your rights are not withheld. If you need comprehensive legal protection, you should look for a corporate legal professional who is well-versed and up-to-date on various clauses to sustain your legal protection.
GLG Legal can help you with your deed of release and other corporate law matters in Queensland. We also specialise in property, financial, and intellectual property cases, ensuring you have the best legal advice and protection. Contact us today to ensure you do what you can to settle disputes properly.