deed of release

A recent case has seen an employee being successfully sued by her employer despite having entered into a Deed of Release – Wichmann v Dormway Pty Ltd [2019] QCA 31

Raelene Wichmann misappropriated $2,809.42 of her employer’s funds. Her employer terminated Ms Wichmann’s employment and they both entered into a Deed of Mutual Release containing the terms of Ms Wichmann’s departure, including Ms Wichmann’s reimbursement of the $2,809.42. Soon after executing the Deed, the employer discovered that Ms Wichmann had actually misappropriated $321,593.85. The employer successfully sued Ms Wichmann.

Ms Wichmann attempted to appeal the decision arguing that the Deed of Mutual release should be interpreted to extend to all of her misappropriation. The court dismissed the appeal criticising the recitals of the Deed of Mutual Release as they were in general terms and so they did not identify the precise dispute that was the subject of the compromise contained in the Deed.

The court also made mention of Ms Wichmann’s acknowledgment that the employer did not know that she had taken a total of $321,593.85. Accordingly, the court stated that to allow Ms Wichmann to rely on the Deed of Mutual Release would be unconscientious and equity would have prevented Ms Wichmann raising the Deed as a defence. Furthermore, as Ms Wichmann was an employee of and admitted to owing the company a duty of good faith, it was suggested that she was under a duty to disclose the truth about her improper diversion of money and her failure to do could constitute common law fraud as it effectively induced the employer to execute the deed.

Key takeaways for employers:

It is essential that you receive legal advice when entering into a Deed of Release.

An experienced lawyer will ensure that the Deed and recitals are properly drafted to ensure that the agreed terms of settlement cover the matter at hand and any possible future claims. It is important to be aware that even if the terms of the release state that no further causes of action can arise between the parties, this may not always be the case.

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Contact our experienced Employment Lawyers at, fill out the form below or call (02) 9964 0499 to advise and guide you through the uncertain complexities associated with any employment dispute concerning employees.

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