WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2015 WAIRC 00246 CORAM : Chief Commissioner A R Beech HEARD : Tuesday, 3 February 2015 DELIVERED : MONday, 23 MARCH 2015 FILE NO. : B 214 OF 2014 BETWEEN : Stephan Curr Applicant AND Coates Hire Operations Pty Ltd Respondent CatchWords : Industrial law (WA) – contractual benefits claim – employment pursuant to written employment agreement – provision for a housing allowance non-taxable - whether misrepresentation of taxability of the housing allowance - whether provision actionable - mistake on matter of law - whe ther provision of allowance non- taxable void for illegality - whether employee entitled to receive full amount of housing allowance - whether claim is an ind us trial matter Legislation : Industrial Relations Act 1979 (WA) s 7(1), s 23(1), s 26(1)(a), (c) , s   29(1)(b)(ii) Taxation Administration Act 1953 (Cth) Schedule 1 s 12 35, s 16 25 Property Law Act 1969 (WA) s 124 Result : Declarat ion issued and application adjourned Representation: Counsel: App licant : Mr  J Kitto of counsel Respondent : Mr  J R Brooksby of counsel and Mr  N Keats of counsel Solicitors: Applicant : Kitto and Kitto Respondent : W. G. M c Nall y Jones Staff Case(s) referred to in reasons: Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 Barker v Midstyle Nominees Pty Ltd [2014] WASCA 75 Belo Fisheries v Dennis Terence Froggett (1983) 63 WAIG 2394 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498 Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust [2004] NSWSC 214 Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR  29 Hockey v WIN Corporation Pty Ltd [2013] FCA 772 Matthews v Cool or Cosy Ltd & Anor [2004] WASCA 114; (2004) 84 WAIG 2152 Miller v Miller [2011] HCA 9; (2011) 242 CLR 446 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 Shacam Transport Pty Ltd v Damien Cole Pty Ltd [2013] WAIRC 00872; (2013) 93 WAIG 1628 Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 Reasons for Decisio n Mr  Curr’s employment agreement states: You will receive the following housing allowance, paid fortnightly: Housing Allowance (non taxable) $1600 per fortnight He claims he should receive $1 , 600 per fortnight from his employer without incurring a tax liability on that sum . Evidence Mr  Curr gave evidence that he lives in Queensland and had previously worked as a bus driver in Karratha in 2010 - 2011 before he commenced working as a bus driver with the respondent. He was aware that living in Karratha is very expensive. He was in Queensland when he received an email from the respondent (at that time Tru Blu Hire Australia Pty Ltd which subsequently became the respondent named in this matter) stating they were looking for a driver in Karratha . H e had a discussion with the respondent which led to the job being offered to him. He accepted employment with them and on 13  February 2012 , the day he started employment, signed a n employment agreement (exhibit A). He was employed by the respondent between 13 February 2012 and 3 1  March 2014 under the employment agreement. The employment agreement contains the following terms which are relevant to the issues raised in the hearing . 4 Remuneration You will be paid a flat rate of $28.00 per hour. The rate of pay referred to is paid in recognition of any and all entitlements that you may have pursuant to any Award or any other industrial instrument. This rate of pay is intended to fully compensate you for all hours worked including, but not limited to, any entitlement to any periodic rate of pay, penalty rates, overtime penalty payments and allowances. The Company reserves the right to offset the rate of pay that has been paid to you against all Award or any other industrial instrument entitlements of any nature. The net cash salary (gross salary less PAYG tax) will be paid in fortnightly instalments directly into your nominated bank account. Housing for Remote Location: In conjunction with your employment the company will provide you with accommodation as part of the remote location you are residing in. You will receive the following housing allowance, paid fortnightly: Housing Allowance (non taxable) $1600 per fortnight … 4.1.1. Superannuation Guarantee Contributions Superannuation Guarantee Contributions (SGC) shall be calculated at the statutory rate of 9% of your annual gross salary up to the Maximum Benefits Limit, which is indexed annually by the Australian Taxation Office, and adjusted at the commencement of each financial year. SGC will be paid into a superannuation fund of your choice. It is your responsibility to ensure that the chosen superannuation fund is a complying fund to which the Company can contribute funds under the superannuation guarantee legislation. … 12 Amendments and Variations The Company reserves the right to make alterations, amendments and additions to the terms and conditions set out in this Agreement from time to time in consultation with you. The terms and conditions set forth in this Agreement supersede all contrary oral understanding or impressions you may have obtained in conversations with the Company representatives prior to the signing hereof. You and the company agree that any Implied Term of Mutual Trust and Confidence is expressly excluded from this contract of employment. Mr  Curr’s evidence is that he had understood that he would be paid $1,600 clear, and he would not be paying any tax on that sum. He says he would not have accepted the position in Karratha otherwise , because it is too expensive to live there without having a housing allowance. His evidence is from the date he started work until a date in mid- 2013 he received the housing allowance of $1,600 without any deduction being made for tax. In mid- 2013, he was called to a meeting with some other employees and addressed by Mr  Durey, the new general manager , and handed a letter (exhibit B) . Mr  Durey said, in essence, that Mr  Curr had to pay back- tax es on the housing allowance and that the pay section in Perth had made a mistake. From the first pay period in the 2013 / 2014 financial year, he no longer received $1,600 ; h e received a lesser sum after tax had been deducted from the $1,600. In cross examination, Mr  Curr was asked about his tax returns. He has an accountant to do his tax returns but said that ‘ because of the situation I didn’t do any tax returns until I got those people to do that because I knew we were having problems with this whole affair. So I thought best to keep it until I straightened it out a bit ’ (ts 16). Tax was not deducted in the first financial year 20 11/ 20 12 which was consistent with his expectation arising from the employment agreement that the housing allowance was non taxable . Mr  Curr was asked the following: Mr  Brooksby: And I think your actual words were, “I did not think I would pay tax on the $1,600,” that was your understanding? That’s correct. And subsequent to that understanding being changed, have you taken the matter up with the taxation authorities     ? No.     as to whether it is taxable? No. Because of the situation with myself and the other, I think the majority of us haven’t done a tax return until this is resolved through this - these hearings and this Commission. So do you know whether it’s taxable? The housing allowance? Yes? Well, I would presume it would be taxable. Right. And have you paid tax on the housing allowance? I have been taxed     At source? I think from - I’m - from July 2013 up until I had left on 31 March 2014, my housing allowance was taxed. (ts 16/17) Mr  Curr does not know how much, if any , tax will be levied on the housing allowance he has received. He said that his understanding had been that he would be paid $1 , 600 clear: Mr  Brooksby: That that sum was non - taxable? --- T hat that was non - taxable by – by – not by me. Maybe by Tru Blu e , or Coates, or whoever it may be, but I wasn’t to pay tax on it. That was what my impression was and that’s what I was told . (ts 18) No other witnesses gave evidence . The letter received by Mr  Curr (exhibit B) is dated 23 July 2013 and is headed ‘Payment S ummary C orrection’ and states, relevantly: It has been brought to our attention that you r PAYG P ayment S ummary – I ndividual non business for Y ear E nding 2012 2013 has been printed incorrectly. Please see below the correct figures plus the breakdown. The letter also states ‘ T he Australian Tax Office has been notified of this amendment to your Payment S ummary. We apologise for any inconvenience this may have caused’. The letter is signed by the respondent’s payroll manager. Submissions on behalf of Mr  Curr Mr  Kitto submitted that the written agreement distinguished the housing allowance as ‘non - taxable’ from the taxable $28 per hour wage which is expressed as a ‘net cash salary (gross salary less PAYG tax)’. A contractual agreement between the parties is to be interpreted using the ordinary words of the contract unless there is an ambiguity. Nevertheless, the respondent has withheld PAYG tax from the housing allowance and thereby paid Mr  Curr less than the agreed amount. He has therefore been underpaid by the respondent. Mr  Curr is seeking payment of his contractual benefits from the respondent. He is not seeking a reimbursement from the Australian Tax ation Office. The monies paid to the Australian Taxation Office have been paid correctly, but these monies should have come from the respondent’s resources and the respondent was not entitled to reduce its agreed payment to Mr  Curr in order to pay the Australian Taxation Office . Mr  Curr acknowledges that the respondent says it was initially mistaken as to the tax liability attaching to the housing allowance when it entered into the contract and when it was partly performed. Nevertheless, when the mistake was discovered and the respondent made aware that it was lawfully obliged to remit the tax on the housing allowance, it unilaterally paid Mr  Curr less than the agreed sum by remitting some of the allowance to the Australian Taxation Office. However, the respondent’s contractual obligation to Mr  Curr to pay him the amount of $1,600 non taxable simply obliges the respondent to pay the Australian Tax Office sufficient monies to cover Mr  Curr’s tax liabilities so he receives $1,600 net of tax as promised by the respondent. Further, the payment of $1,600 per fortnight goes to the very heart of the employer employee relationship and is a fundamental express term of remuneration. It would be legally impossible to characterise it as a mere representation. On behalf of Mr  Curr, it is submitted the respondent cannot seek to avoid liability for its mistake by characterising it as a mere misstatement of the law. There is no statement of law at all, and even if there was , the representation would still expose the respondent to damages if it was made in trade or commerce. Mr  Curr is not seeking damages for negligent representation, rather he seeks payment of the stated consideration. The term ‘non taxable’ does not mean that tax is not payable by anyone. It merely states, unambiguously and simply , that the applicant gets the allowance without paying tax on it. The employment contract does not compel the respondent unlawfully to make a payment free of any tax deduction. Submissions on behalf of Coates Hire Operations Pty Ltd Mr  Brooksby, for the respondent, submitted that the claim, properly construed, is that Mr  Curr seeks reimbursement of the additional tax that he has paid and the claim therefore does not relate to an industrial matter. The taxation authorities will, when an appropriate tax return is submitted, adjust the inciden ce of taxation in accordance with the governing law. It is an allowance to the employee and must therefore be dealt with in his hands. Further, the respondent has complied with the terms of the contract. The respondent did not withhold any amount in relation to the taxation of the housing allowance. The statement in the contract is, and can be, no more than a representation as to the state of the law and is not actionable. There has been an innocent misrepresentation on a matter of law in respect of which Mr  Curr is not entitled to relief. The contract cannot bind the Australian Taxation Office and is void and unenforceable as a matter of public policy. The fact that there were subsequent taxation consequences to the payments made by the respondent does not alter the fact that the respondent has discharged its obligations under the contract. Furthermore, the provision of the contract that provides for the housing allowance to be non taxable must be void because it required the doing of something expressly prohibited by s 12 35 of Schedule 1 of the Taxation Administration Act 1953 (Cth). The section of the employment agreement which Mr  Curr is seeking to enforce would compel the respondent unlawfully to make a payment free of any tax deduction. The illegal part of the contract can be severed so that the non illegal parts of the contract are capable of performance. In the absence of that term therefore the contract is valid and enforceable. Mr  Brooksby also submitted cl 12 of the employment agreement gave the respondent the right to make alterations, amendments and additions to the terms and conditions set out in the agreement from time to time in consultation with Mr  Curr. It was submitted that as a result of the meeting in mid- 2013, the respondent varied the terms of the contract and accordingly there has not been a breach of it. Consideration of the issues Mr  Curr is entitled to refer to the Commission a claim that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of employment : Industrial Relations Act 1979 (WA) s 29(1)(b)(i i ) (the Act) . There is no dispute that he was at the time an employee and employed by the respondent. There is a dispute, however, over the following issues. Whether the claim is an industrial matter The Commission is only able to enquire into and deal with an industrial matter: s 23(1). The Act in s 7 (1) defines an industrial matter as meaning ‘ any matter affecting or relating or pertaining to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter affecting or relating or pertaining to — (a) the wages, salaries, allowances, or other remuneration of employees or the prices to be paid in respect of their employment ’ . The respondent’s submission is that properly characterised , the claim is seeking reimbursement of the additional tax that he has paid and it therefore does not relate to an industrial matter. The submission is that Mr  Curr’s dispute is with the taxation authorities, not with the respondent , and to that extent the dispute is a matter of tax law and not a matter of industrial law . I do not find this argument persuasive. H is claim that it is a benefit under his contract of employment that he would receive a housing allowance of $1 , 600 per f o rtnight from which he would not have to pay the tax is a claim affecting or relating or pertaining to the amount of an allowance to be paid in respect of Mr  Curr’s employment . The claim directly arises as a result of the words ‘ non taxable ’ which are used in the employment agreement to describe the housing allowance. Mr  Curr’s dispute is with the respondent because he claims it did not pay him a housing allowance of $1 , 600 per fortnight non-taxable because it caus ed Mr  Curr to have to pay tax on the housing allowance he received to July 2013 and it deduct ed tax from the housing allowance he rec eived after July 2013 . Mr  Curr submits that his employment agreement means he would receive $1 , 600 per fortnight from which he would not have to pay the tax . The relief claimed in the particulars of claim attached to the Notice of application is an order that the respondent pay Mr  Curr a sum in damages for the loss of the contractual benefit and the sum claimed is an amount which he says he has paid in tax which he should not have paid. I f his claim is successful, t he Commission, using the broad power given it under s 23(1) of the Act, read if necessary with s 26(2), may award compensation as the means of dealing with the industrial matter referred to it ( Matthews v Cool or Cosy Pty Ltd [2004] WASCA 114; (2004) 84 WAIG 2152 per Steytler J at [24]) . T he Commission may award compensation to Mr  Curr as the means of dealing with the claim referred . To do so , t he amount of the housing allowance he did not receive will need to be calculated. The remedy sought is no more than a valuation of the benefit he did not receive . The amount of additional tax that he has paid may provide one measure of the amount of the housing allowance he did not receive ; i n turn, t hat amount may be the appropriate amount of any compensation to be ordered to be paid to him by the respondent if it would do no more than compensate him for the benefit which he will not have been allowed . But it is whether Mr  Curr is entitled to the benefit which he claims which characterises the matter referred to the Commission , not the consequent ial relief sought if the claim is successful . The claim Mr  Curr has referred to the Commission is that he is entitled under his contract of employment to receive from his former employer a housing allowance of $1 , 600 per f o rtnight from which he would not have to pay the tax . The claim arises from the wording in his employment agreement. I find that it is an industrial matter. Whether Mr  Curr is entitled to the benefit which he claims Whether Mr  Curr is entitled to the benefit he claims turns upon the proper interpretation of the employment agreement. The ascertainment of the terms of a contract , whether oral or in writing , always turns on the words used by the parties , and the construction of the words used by the parties are to be judged objectively ( Shacam Transport Pty Ltd v Damien Cole Pty Ltd [2013] WAIRC 00872; (2013 ) 93 WAIG 1628 per Smith AP at [ 43 ] , referring to Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 where the Full Court of the High Court said at [40]: This Court, in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction ( Pacific Carriers Ltd v BNP Paribas at 461-462 [22]). The meaning of the terms of the employment agreement is to be determined by what a reasonable person would have understood them to mean . In relation to the words ‘non-taxable’, t he word ‘taxable’ means ‘ liable to be taxed ’ (Onions CT, Shorter Oxford English Dictionary (3 rd   ed revised 1973) 2250). As the word ‘non’ implies the opposite, t he words ‘non - taxable’ mean not liable to be taxed. Objectively, t he words mean that the housing allowance was not liable to be taxed. In my view th os e words have a plain meaning and regard is not to be had to the surrounding circumstances : Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 352 ; Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 at [9] . In relation to the purpose and object of the ir transaction , the housing allowance and its description as non taxable occur in an employment agreement . Its purpose is to prescribe the terms and conditions agreed between Mr Curr and the respondent by which Mr  Curr would render the services of a driver as an employee of the respondent and in return be remunerated in accordance with cl 4. The whole of the employment agreement has to be considered since the meaning of one part of it may be revealed by other parts and the words of every clause must if possible be construed so as to render them harmonious : Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 per Gibbs J at 109 . Both the rate of pay of $28 per hour and the housing allowance form part of the remuneration. Provision of t he rate of pay also contains information about the taxation of it by use of the words: ‘The net cash salary (gross salary less PAYG tax) will be paid in fortnightly instalments directly into your nominated bank account’. Objectively, t he remuneration in the contract is $28 per hour which will be taxed and a housing allowance of $1,600 per fortnight which would not be taxed because it was not liable to be taxed . To interpret the provision of t he housing allowance in this way is harmonious with the provision of the rate of pay. The only other remuneration mentioned within the employment agreement is superannuation in cl 4.1.1. Reference within that clause to the calculation of the superannuation guarantee contribution is that it is the said percentage of the ‘ annual gross salary ’ . W ithin the employment agreement, each reference to remuneration (hourly rate, housing allowance and superannuation) carries information relevant to taxation . It sets out what payments Mr  Curr will receive for providing his service s to the respondent as a driver in Karratha . I n relation to the housing allowance , the words ‘non-taxable’ direct attention to the allowance not being taxed. A reasonable person would understand the words ‘non-taxable’ next to the words ‘housing allowance’ in the remuneration clause of the employment agreement to mean that Mr  Curr would receive a housing allowance of $1 , 600 per fortnight net , not a lesser sum after tax was deducted from it . I s this a ‘ benefit ’ to Mr  Curr as that word is used in s  29(1)(b)(ii) of the Act ? I find that it is. As Steytler  J noted in Matthews (referred to above) at [ 18 ] , t he wo rd ‘benefit’ as it is used in s  29(1)(b)(ii) of the Act has wide meaning . The word ‘benefit’ is defined by the Macquarie Concise Dictionary , ( 6 th   ed , 2013) as meaning ‘ anything that is for the good of a person or thing’ and by the Shorter Oxford English Dictionary as m eaning, in its ordinary sense, ‘ a dvantage, profit, good’ . Objectively, it was good for Mr  Curr, or to his advantage, that he receive a housing allowance of $1,600 per fortnight net , rather than a lesser sum if tax was to be deducted from it . Therefore it was a benefit to which he was entitled under his contract of employment. I find that Mr  Curr is entitled under his contract of employment with the respondent to receive a housing allowance of $1,600 per fortnight net . Whether the term of the employment agreement is actionable The respondent contends that the term of the employment agreement providing for the ‘ housing allowance (non taxable) $1,600 per fortnight ’ is no more than a representation as to the state of the law and is not actionable . The understanding of the parties that Mr Curr would be entitled to retain the full benefit of the payment was incorrect and cannot be characterised as a misrepresentation giving rise to any right of action. Rather, it is an innocent misrepresentation on a matter of law in respect of which Mr Curr is not entitled to relief. Further, the respondent says that a mistake on a matter of law is non actionable, despite some doubt in WA because of s   124 and s  125 of the Property Law Act 1969 (WA) . In response, the submission on behalf of Mr  Curr is that the payment of $1,600 per fortnight is a fundamental express term of remuneration which goes to the very heart of the employer employee relationship. In relation to the submission of misrepresentation I find as follows . The general law relating to misrepresentation is usually concerned with the negotiations leading to the making of the contract in question. A finding that a person was induced to enter a contract by an actionable misrepresentation may lead to the remedy of rescinding the contract . I t is sometimes said that a misrepresentation must be material to be actionable and an innocent misrepresentation, not calculated by the representor to induce the representee to enter the contract , may nevertheless induce the representee to do so : Seddon N, Bigwood  R and Ellinghaus  M, Cheshire & Fifoot Law of Contract (10 th Aust ed , 2012) at [11.1], [11.8], [11.40] and [11.41]. Mr Curr is not claiming he was induced to enter the employment agreement by the housing allowance being non-taxable and therefore is seeking to have the employment agreement or one of its terms rescinded ; n or is he seek ing payment of damages arising from a misrepresentation having induced him to enter the contract . I n any event, those are matters not within the jurisdiction of the Commission. A misrepresentation of law traditionally has not given rise to any remedy or relief (above at 11.13]). For those reasons I reject the respondent’s submission that the term of the employment agreement providing for the ‘housing allowance (non taxable) $1,600 per fortnight’ is not actionable. I turn to the submission that a mistake on a matter of law is non actionable . The submission refers to a traditional rule that recovery of money paid under a mistake of law is not permitted; however this rule has been held not to form part of the law in Australia: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 376. In WA the rule has been abolished by legis la tion : Property Law Act s  124. I see no need to revisit the rule in this case. In any event, t he matter referred to the Commission is not a claim to recover money paid by mistake. Both t he oral submissions on behalf of Mr  Curr and the respondent’s submissions addressed whether a mistake had been made and by whom it had been made. The respondent accepted in the hearing that it had made a mistake and submitted that it was a mutual mistake because Mr  Curr and the respondent both thought the housing allowance was non-taxable. On behalf of Mr  Curr it was submitted that the evidence shows it was not a mutual mistake at all. A distinction can be made be tween possible types of mistake: common mistake, mutual mistake and unilateral mistake. In common mistake, both parties to a contract make the same mistake; in mutual mistake the parties misunderstand each other; in unilateral mistake only one of the parties is mistaken. On the evidence, t he submission on behalf of Mr  Curr that it was not a mutual mistake is correct . T he evidence of Mr  Curr is that he presumed the housing allowance would be taxable but the tax would not be payable by him . He presented as a truthful witness. He was cross examined on his evidence and it was not in any sense broken down. It was not put to him that his evidence on this point should not be accepted; neither was it put to the Commission that this part of his evidence should not be accepted. There is no evidence to the contrary. I accept Mr  Curr’s evidence that he presumed the housing allowance would be taxable but the tax would not be payable by him . T he respondent’s offer in the employment agreement that the remuneration to Mr  Curr included a housing allowance of $1 , 600 per fortnight which was not liable to be taxed , which was accepted by Mr Curr, was a mistake by the respondent of the applicable law. Only the respondent believed that the housing allowance was not liable to be taxed : it therefore was a unilateral mistake . This finding does not mean that the term of the employment agreement providing for the ‘ housing allowance (non taxable) $1,600 per fortnight ’ is not actionable , as the respondent submits. However the fact that a mistake was made by the respondent will be a relevant consideration because the Commission’s task in this matter is to act according to equity, good conscience, and the substantial merits of the case (s 26(1)(a)) and to have regard for the interests of the persons immediately concerned (s 26(1)(c)). The fact that the respondent made a mistake about the taxability of the housing allowance will be taken into account later when considering whether an order should issue in Mr Curr’s favour. Whether the term o f the employment agreement is void The respondent’s further and alternative submission is that the provision of the employment agreement that the housing allowance is non-taxable is void because i t required the doing of something expressly prohibited by s 12-35 and s 16-25 of Schedule 1 of the Taxation Administration Act . The respondent submits it is impliedly prohibited by statute , referring to Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410. To enter into a contract with a term of that character renders the term void on the grounds of public policy: Hockey v WIN Corporation Pty Ltd [2013] FCA 772. The submission is that t he employment agreement itself is not void for illegality; rather, that part of it which is prohibited by statute should be severed leaving the non-prohibited parts of the employment agreement capable of performance. The submission o n behalf of Mr  Curr rejects t he respondent’s further and alternative submission saying that the employment agreement does not compel the respondent to make a payment free of any tax deduction. It does not require either the respondent o r Mr  Curr to do anything illegal in the performance of the employment agreement. The employment agreement itself is not for an unlawful purpose and t here is nothing illegal in it to sever. I approach this issue as follows. Schedule 1 s ub -div  12 B of the Taxation Administration Act deals with pa yments for work and services . Section 12-35 of that subdivision provides: 1 2-35 Payment to employee An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity). The respondent is an ‘entity’ and Mr  Curr was an employee. Section 12-35 requires the respondent to withhold an amount from an allowance it pays to Mr Curr . There are exceptions to th e requirement in s 12-35 , however i t is not disputed by Mr  Curr that the applicable taxation legislation oblige d the respondent to deduct tax from the housing allowance when it paid the housing allowance to Mr  Curr . I therefore proceed on the basis that the exceptions do not apply and s 12- 3 5 applied to the respondent on each occasion that it paid the housing allowance to Mr  Curr. I also note that by s 16-25 it is an offence for the entity to fail to withhold an amount as required. T he relevant general principles when the making or performance of a contract is expressly or impliedly prohibited by statute are helpfully summarised by Buss JA i n Barker v Midstyle Nominees Pty Ltd [2014] WASCA 75 at [37] as follows : A contract may be unenforceable for statutory illegality where: (a) the statute expressly prohibits, absolutely or conditionally, the making of the contract or the doing of an act essential to its formation (first category); (b) the statute impliedly prohibits the making of the contract (for example, where the contract is to perform an act the performance of which is prohibited by the statute) (second category); or (c) the statute does not expressly or impliedly prohibit the contract, but the courts treat the contract as unenforceable because it is associated with or furthers illegal purposes (third category). See Miller v Miller [2011] HCA 9; (2011) 242 CLR 446 [26] (French CJ, Gummow , Hayne, Crennan , Kiefel & Bell JJ); Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498 [23] (French CJ, Crennan & Kiefel JJ). The issue in the respondent’s submission is whether the employment agreement is unenforceable for statutory illegality by reason of the Taxation Administration Act . The respondent does not argue, correctly in my view, that the Taxation Administration Act expressly or impliedly prohibits the making of the employment agreement or the doing of an act essential to its formation . The prohibition in s 12-35 is directed to an employer not deducting tax at the time it pay s the allowance to an employee , not to the making or performance of an employment agreement . Therefore the first and second categories above do not apply and it is only in relation to the third category, specifically the operation of s 12-35 on the provision in the employment agreement , that describes the housing allowance to be non-taxable , that the respondent’s submission is made. T he taxation legislation requires the respondent to deduct tax from the housing allowance when it pays it to Mr Curr and makes it an offence not to do so . I f the employment agreement requires the respondent not to deduct tax from the allowance when it pays it to Mr Curr then the employment agreement would be associated with, or would further, an illegal purpose. In such a case, the third category above will apply and the provision in the employment agreement would be unenforceable. The provision is set out earlier in these reasons , nevertheless for convenience I repeat them : You will receive the following housing allowance, paid fortnightly: Housing Allowance ( non taxable ) $1600 per fortnight The provision entitles Mr Curr to receive a housing allowance of $1 , 600 per fortnight . T he two words ‘non-taxable’ by themselves do not compel or direct or instruct the respondent not to deduct tax when it pays the housing allowance to Mr Curr . They identify, or provide information, that the housing allowance is not liable to be taxed but they do not themselves actually require the respondent not to deduct tax at the time it pays the allowance. The absence of any obligation on the respondent by those two words stand s in contrast to the provision of the rate of pay of $28 which contains words which oblige the respondent to deduct PAYG tax from the gross salary : the respondent is to pay ‘the net cash salary (gross salary less PAYG tax) directly into [Mr Curr’s] nominated bank account’. In my view, for a provision in a contract of employment to be found to be associated with, or to further, an illegal purpose, the provision would need to unambiguously require a party to do the thing which would be associated with, or would further, that illegal purpose. That is not the case here . I n Hockey v WIN Corporation Pty Ltd (referred to above) a term of Mr Hockey ’s contract relating to him resigning after a certain length of service provided that WIN will pay out the balance of the term ‘ as a redundancy ’. WIN did not do so and t he court was obliged to consider the proper interpretation of those words. The court held as follows at [51]: 51 The meaning of cl (a)(ii) is that after the initial period of six months expiring on 30   September 2011 Mr  Hockey was entitled to terminate his employment at any time and, if he did so, he would be entitled to be paid out the balance of the term of his contract. In my opinion the words “as a redundancy” are no more than explanatory or descriptive of the payment for the lengthy balance of the term. He was to receive payment for that lengthy term notwithstanding that, under cl (a)(ii), he would be the initiator of the termination. 52 Further, those words imposed no obligation on WIN to withhold an amount from the payment on one basis or another. 53 I reach this conclusion more readily as I would not lightly construe the clause to mean, by implication, that either party had agreed to act in a way that was contrary to law. 54 This construction does not involve any reading in of words that are not part of the express terms of the contract such as “withholding from the payment an amount calculated on the basis that the payment was or included a ‘genuine redundancy payment’”. The words “as a redundancy” make no express reference to the income tax legislation of the Commonwealth and the words have a sufficient meaning in themselves. As the court noted, the words ‘as a redundancy’ in the contract under consideration imposed no obligation on WIN to withhold an amount from the payment on one basis or another. In my view, in this case the words ‘non-taxable’ of themselves impose no obligation on the respondent not to deduct tax from the housing allowance when it pays it to Mr Curr . I would not lightly construe the words to mean that , by implication, the respondent had agreed to act in a way that was contrary to law. I observe that t here is no suggestion in the evidence that at the time it made the offer to employ Mr  Curr the respondent knew that the housing allowance was taxable. I find that at the time it made the offer of employment and signed the employment agreement the respondent believed the housing allowance was not liable to be taxed. There w as no intention on the part of the respondent to do anything unlawful ; o n the contrary , when it became aware that the housing allow ance was liable to be taxed it immediately took steps to comply with the taxation law s . I find that the provision of the employment agreement that describes the housing allowance as non-taxable does not require the respondent to do something expressly prohibited by s   12 35 and s   16 25 of Schedule 1 of the Taxation Administration Act . The provision therefore is not associated with , or does not further , an illegal purpose and is not void or unenforceable . T he Commission is not being asked to enforce an illegal term because Mr Curr does not have to rely upon an unlawful transaction to establish his cause of action. Clause 12 Amendments and Variations I t is necessary to address the submission of the respondent that cl 12 Amendments and Variations reserved the right to the Company to make an amendment to the terms and conditions of the agreement from time to time in consultation with Mr  Curr. This submission was not strongly pressed, and in my view with good reason. The facts of the matter do not show that the respondent amend ed the terms and conditions set out in the employment agreement. The letter received by Mr Curr (exhibit B) did not purport to do so . Further, t he respondent did not seek to exercise the right reserved to it in cl  12 : t he meeting which Mr Curr attended was not the consultation with Mr  Curr which is a necessary precondition of the exercise of the right in cl  12 . T he meeting merely informed Mr Curr what the respondent was doing . The respondent merely reissued Mr  Curr’s payment summary and commenced deducting tax from the housing allowance. The employment agreement remained unchanged. I do not accept the respondent’s submission on this point. Conclusion For the reasons given above, I find that it is a term of Mr  Curr’s employment agreement that he would receive a housing allowance of $1,600 per fortnight net . The respondent says it has complied with the terms of the contract because in paying Mr  Curr the respondent did not withhold any taxation of the housing allowance and that is all that the contract required the respondent to do. However, I do not accept the submission. On the evidence, I find that the respondent caused Mr  Curr to pay, or be liable to pay, tax on the housing allowance it paid to him in two ways. The first way was that in July 2013 the respondent reissued his payment summary for the y ear e nding 2012 / 2013 in such a way that Mr  Curr would be obliged to pay tax on the $1,600 per fortnight it already had paid to him. The second way was that after July 2013 it deducted tax from the $1,600 and paid Mr  Curr the balance. The consequence of these is that Mr  Curr did not receive a housing allowance of $1 , 600 per fortnight. This means that the respondent did not comply with the employment agreement it had with Mr  Curr that he would receive a housing allowance of $1,600 per fortnight , not $1 , 600 per fortnight from which he would have to pay the tax . Mr  Curr has established that he has been denied a benefit to which he is entitled under his contract of employment. I take into account that the respondent made a mistake when it believed the housing allowance was not liable to be taxed and offered a housing allowance of $ 1,600 per fortnight to Mr Curr on th e basis that he would receive that amount, not $ 1,600 less tax . There is no evidence from the respondent how the respondent came to make the mistake. The mistake was not caused by any misrepresentation to the respondent by Mr Curr . The mistake was made in a remuneration provision in an employment agreement offered by an employer to a prospective employee and was accepted. It is important that when an employer expressly makes an offer , such as the housing allowance will be $ 1,600 per fortnight , not $ 1,600 per fortnight less tax, a prospective employee can rely on the offer. That is true of an offer made in any contractual situation: the person to whom the offer is made is entitled to think that the offer is genuine and , if accepted , will be complied with , particularly where the offer is part of the remuneration for the performance of the contract . Sometimes p arties to a contract make a mistake regarding one of its terms, however it is not open to the party who made the mistake to ignore the term; that would undermine the purpose of having a contract in the first place. In this case, the respondent became aware the housing allowance was taxable . I t was legally obliged by the taxation legislation to deduct tax from the payment it made to Mr Curr . At the same time it was contractual ly oblig ed by its contract with him to pay him a housing allowance of $ 1,600 per fortnight net . The discovery that the housing allowance was taxable provided grounds for the respondent to seek to vary or rescind the employment agreement; it did neither and the employment agreement remained unchanged. Therefore it was required to meet both obligations. I also take into account that Mr  Curr did not make a mistake : Mr  Curr presumed the housing allowance would be taxable but the tax would not be paid by him . T he amount of $1 , 600 per fortnight net was of significance to Mr  Curr because that amount addressed his concern at the expense of living in Karratha : h is evidence is that he would not have accepted the position offered if he had known he would have to pay the tax on the housing allowance. He had been told he would not pay tax on it (ts 18). I think there is some strength too in the submission that Mr  Curr accepted the contract on that basis , he performed the contract and he i s entitled to the payment allowed by the contract . He will have incurred the higher cost of living in Karratha for which the housing allowance of $ 1,600 per fortnight was agreed to be paid to him. The Commission should not readily exercise its discretion not to order compensation to an employee who has been denied a benefit to which they are entitled under their contract of employment unless in the circumstances of the case it would be fair not to do so (see Belo Fisheries v Dennis Terence Froggett (1983) 63 WAIG 2394 ) . The general position is that special circumstances will ordinarily need to be shown before it would be unconscientious for one party to a written contract to enforce it against another party who was under a mistake as to its terms or its subject matter: Taylor v Johnson [1983] HCA 5 at 12 ; (1983) 151 CLR 422 per Mason ACJ, Murphy and Deane JJ at 431 . Special circumstances include that the mistake was known to the other party who then unfairly took advantage o f it ( Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust [2004] NSWSC 214 at 24) , but that is not the case here . In this jurisdiction, the Commission is obliged to act according to equity, good conscience, and the substantial merits of the case and to have regard for the interests of the persons immediately concerned . In my view, the equity, good conscience, and substantial merits of the case lie with Mr Curr . At the commencement of the hearing, it was agreed between the parties that depending upon the finding of the Commission, they were prepared to enter into discussions regarding any relief to be ordered. Accordingly, the hearing of this matter will be adjourned to a date to be fixed. Once the parties have completed their discussions, the Commission anticipates that the application will be relisted . A minute now issue s declaring that Mr  Curr is entitled under his contract of employment to receive a housing allowance of $1,600 per fortnight net and ordering that the application be adjourned to a date to be fixed o nce the parties have completed their discussions .