Settlement Deed and Deed of Release (Australia)
A Deed of Settlement and Release is the document Australian parties use to formally end a dispute — recording the settlement payment, the release of claims, and any continuing obligations between them. Executing the settlement as a <strong>deed</strong> means no consideration is required for the obligations to bind, and the deed enjoys a 12-year limitation period under <em>Limitation Act 1969</em> (NSW) s. 16 (longer than the 6-year limitation for ordinary contracts under s. 14). Our free template handles commercial, employment, personal injury, property, defamation, and family-law disputes — with mandatory whistleblower carve-outs preserving enforceability under the AHRC enforcement framework that commenced on 12 December 2023.
ACN 634 891 257
The Parties acknowledge the following background to this Deed:
The dispute: Dispute over unpaid consulting fees and alleged breach of the Services Agreement dated 12 February 2024 between Andrew T. Patterson (Consultant) and Harbour Digital Pty Ltd (Client), in respect of software-architecture consulting services provided between February 2024 and December 2024. The Consultant alleges underpayment of invoices INV-2024-018, INV-2024-021, and INV-2024-024 totalling AUD 145,000. The Client alleges that the services delivered did not meet the agreed specifications.
Period of the dispute: 12 February 2024 to 15 December 2024.
Proceedings: No proceedings have been commenced. The Consultant served a Letter of Demand on 5 March 2026 and the Client served a Notice of Disputed Debt in response on 18 March 2026. The Parties participated in informal settlement discussions in April 2026.
The Parties wish to settle the dispute and avoid further legal proceedings, costs, and uncertainty. The Parties have entered into this Deed in good faith, voluntarily, and after having had the opportunity to obtain independent legal advice.
In consideration of the releases granted in this Deed, the Releasee shall pay to the Releasor the sum of AUD 110,000.00 (the "Settlement Sum"), payable on or before 31 May 2026.
The Settlement Sum shall be paid to the trust account of the Releasor's solicitor in cleared funds, with the solicitor to remit the funds to the Releasor in accordance with the solicitor's trust account regulations.
Failure to pay the Settlement Sum (or any instalment) when due is a fundamental breach of this Deed, entitling the Releasor to (a) accelerate the entire outstanding balance, (b) recover the unpaid amount as a liquidated debt without proving damage, and (c) pursue any other remedy available at law or in equity. The Releasee remains liable to interest under the relevant State pre-judgment interest provisions on any overdue amount.
In consideration of the Settlement Sum and the mutual covenants in this Deed, each Party RELEASES AND FOREVER DISCHARGES the other Party (and the other Party's directors, officers, employees, agents, related bodies corporate, successors, assigns, and (where applicable) family members) from any and all claims, demands, actions, suits, causes of action, debts, damages, costs, expenses, and liabilities of any kind whatsoever, whether at common law, in equity, or under statute, whether known or unknown, arising directly or indirectly from or in connection with the dispute described in the Recitals above.
The release in this clause covers, without limitation, claims for breach of contract, tort (including negligence and intentional torts), unjust enrichment, restitution, equitable claims, statutory claims (including under the Australian Consumer Law, Competition and Consumer Act 2010, and any relevant State or Territory legislation), and claims for indemnity or contribution. The release is a complete bar to either Party bringing any released claim against the other Party in any forum.
This Deed is entered into to compromise a disputed claim. Nothing in this Deed is or shall be construed as an admission of liability by any Party in respect of the matters described in the Recitals or any other matter. Each Party expressly denies the allegations made by the other Party and disputes any liability arising from those allegations.
This Deed is signed without prejudice to either Party's position in any future proceedings (other than the matters released by this Deed), and may not be referred to in any proceedings except for the purpose of enforcing the Deed itself or proving that the dispute has been compromised.
Entire agreement: This Deed records the entire agreement between the Parties in respect of the matters compromised. No party has relied on any representation, warranty, or undertaking made by the other Party outside this Deed.
ACL s. 18: Each Party warrants that, in entering into this Deed, it has not engaged in any misleading or deceptive conduct within the meaning of Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) s. 18.
Execution as a deed: The Parties intend this document to be executed as a deed. By executing as a deed, no separate consideration is required for the obligations to be binding. The relevant limitation period for any action on this Deed is twelve (12) years from breach in NSW under Limitation Act 1969 (NSW) s. 16 (and equivalent provisions in other States and Territories — typically 12-15 years for deeds, compared to 6 years for ordinary contracts).
Governing law: This Deed shall be governed by and construed in accordance with the laws of the State of New South Wales, Australia and the laws of the Commonwealth of Australia. The Parties submit to the exclusive jurisdiction of the courts of New South Wales.
Each Party shall keep confidential the existence and terms of this Deed, including the amount of the Settlement Sum. The Parties may disclose the terms only to: (a) spouse, financial adviser, accountant, or legal adviser, on the same confidentiality basis; (b) the Australian Taxation Office or other authority as required by law; and (c) any court, tribunal, or regulator as required by law.
Protected disclosures (carve-out): Nothing in this Deed prevents any Party from making a disclosure that is protected by Australian law, including: (a) whistleblower disclosures under Corporations Act 2001 (Cth) Part 9.4AAA to ASIC, APRA, or another Commonwealth authority; (b) tax-whistleblower disclosures under Taxation Administration Act 1953 (Cth) Part IVD to the Commissioner of Taxation; (c) complaints to the Australian Human Rights Commission, the Fair Work Ombudsman, or any equivalent State anti-discrimination body, particularly relating to unlawful discrimination, sexual harassment, or victimisation; (d) disclosures to a legal adviser; or (e) disclosures to a court, tribunal, parliamentary committee, or law-enforcement officer. Any provision purporting to restrict such protected disclosures is void to the extent of that restriction.
Mutual non-disparagement: Each Party agrees not to make or publish any disparaging, derogatory, or negative statements about the other Party — including the other Party's directors, officers, senior management, employees, and (where relevant) family members. This obligation extends to social media, professional networking platforms, and statements to current or former customers, suppliers, or business partners. Truthful statements made in compliance with a subpoena, regulatory inquiry, or whistleblower disclosure (per the Confidentiality clause carve-out) are not breaches of this clause.
Costs: Each Party shall bear its own legal costs of the dispute, the negotiation of this Deed, and any matter related to the dispute. There is no order for costs in any settled proceedings. The Releasor releases any entitlement to costs arising from the dispute, except as expressly preserved by this Deed.
Continuing obligations: The Consultant shall return to the Client all source code, documentation, and other Client confidential information by 31 May 2026. The Client shall sign a written letter of reference for the Consultant within 14 days of executing this Deed.
Tax treatment: The Parties agree that the Settlement Sum is compensatory damages for the dispute described in the Recitals — not a salary, wage, ETP, or other taxable income payment. The Releasor shall consult their own tax adviser regarding any tax consequences. Each Party shall obtain its own tax advice; neither Party warrants any particular tax treatment by the ATO.
Future dispute resolution by mediation: Any dispute concerning the interpretation or performance of this Deed shall first be referred to mediation under the rules of the Resolution Institute of Australia, before either Party commences court proceedings. The mediation shall be held in New South Wales unless otherwise agreed.
What Is a Settlement Deed?
A <strong>Deed of Settlement and Release</strong> (also called a Deed of Release, Settlement Deed, or Settlement and Release Deed) is a written contract executed as a deed under which two or more parties end a dispute on agreed terms. The deed typically provides for: (a) payment of a settlement sum by one party to the other, (b) a release of claims (mutual or one-way) covering the dispute, (c) no admission of liability, (d) confidentiality (with mandatory carve-outs for protected disclosures), and (e) costs (usually each party bears its own). Settlement deeds end the dispute permanently — the released claims cannot be revived in any forum.
Australian parties use settlement deeds for every type of dispute: <strong>commercial</strong> (unpaid invoices, breach of contract, defective services); <strong>employment</strong> (unfair dismissal, general protections, harassment, underpayment); <strong>personal injury</strong> (motor vehicle accidents, workplace injuries, public liability); <strong>property</strong> (boundary disputes, building defects, neighbour disputes); <strong>defamation</strong> (under the uniform Defamation Acts of each State); and <strong>family</strong> (de facto separation outside Family Court). The deed format is preferred over an ordinary contract because deeds bind without consideration and enjoy a longer limitation period.
Two recent developments materially affect Australian settlement deeds. First, since <strong>12 December 2023</strong>, the <em>Australian Human Rights Commission</em> has had enforcement powers over the <strong>positive duty</strong> under <em>Sex Discrimination Act 1984</em> (Cth) s. 47C. This has heightened scrutiny of overly broad confidentiality clauses that purport to silence complainants in harassment or discrimination matters — modern deeds preserve protected disclosures through carefully drafted carve-outs to retain enforceability. Second, the <em>Australian Consumer Law</em> Unfair Contract Terms (UCT) reforms commenced on <strong>9 November 2023</strong>, with maximum corporate penalties of AUD 50 million for using an unfair term in a standard-form small-business contract. While settlement deeds are usually negotiated (not standard-form), they remain at risk if they impose one-sided burdens on a small-business releasor.
What's Covered in This Template
Our Australian settlement deed covers every standard provision plus the Expert protections sophisticated parties expect.
Releasor and Releasee Details
Names, ACNs (if companies), addresses. Mutual release switches the roles automatically.
Dispute Type Selector
7 categories: commercial, employment, personal injury, property, defamation, family law, other — drives the recitals clause.
Recitals (Background)
Full description of the dispute, the period, and any court proceedings already commenced.
Settlement Sum in AUD
Headline payment with due date and method (bank transfer / solicitor trust account / instalments).
Release Scope
Mutual (both sides release each other), Full (one-way), or Limited (specific claims only — others survive).
No Admission of Liability
Standard "compromise of disputed claim, no admission" wording — protects against the deed being used as evidence in future proceedings.
ACL s. 18 + 12-Year Deed Limitation
Express ACL s. 18 acknowledgement plus Limitation Act 1969 (NSW) s. 16 12-year limitation reference.
Governing Law and Forum
State law governance + exclusive State Supreme Court jurisdiction.
Expert: Confidentiality + Whistleblower Carve-outs
Settlement-only or comprehensive confidentiality, with mandatory carve-outs for ASIC / APRA / ATO / AHRC / FWO / legal advisers / courts (post-12 Dec 2023 AHRC enforcement).
Expert: Mutual Non-Disparagement + Costs
Mutual silence on social media and to third parties + each-party-bears-own-costs allocation + continuing obligations textarea.
Expert: Tax Characterisation
ETP under ITAA 1997 s. 82-130 (employment); CGT under Part 3-1 (property/capital); compensatory damages (generally non-taxable).
Expert: Court Approval + Mediation Referral
Court approval for minors (NSW CPA s. 76) and bankrupts (Bankruptcy Act s. 65) + future-dispute mediation clause (Resolution Institute / ACICA).
How to Create a Settlement Deed
Follow these steps to produce a deed that ends the dispute and protects both parties.
- 1
Identify the Releasor and Releasee
Enter both parties (names, ACNs if companies, addresses). For mutual releases, the role labels become "Party 1" and "Party 2" — each releases the other. For one-way releases, the Releasor is the party receiving payment and releasing claims; the Releasee is the party paying and being released.
- 2
Describe the Dispute
Choose the dispute type (commercial / employment / personal injury / property / defamation / family / other) — this drives the recitals heading and the tax characterisation. Provide a clear factual narrative: what happened, when, between whom, and what loss is alleged. If court proceedings have been commenced, include the proceeding number and stage.
- 3
Set the Settlement Payment
Enter the settlement sum in AUD, the due date, and the payment method (bank transfer, solicitor's trust account, or instalments). Solicitor's trust account is the safest for larger sums — the solicitor holds the money in regulated trust pending the Releasor's instructions.
- 4
Choose the Release Scope
Mutual is the recommended default for commercial disputes — both parties release each other and walk away cleanly. Full one-way release applies where only the Releasor has claims (most common in employment or personal-injury settlements). Limited release reserves specific claims (e.g., insurance recovery rights or claims against third parties).
- 5
Add Expert Protections
Add confidentiality with mandatory whistleblower carve-outs (especially for employment / discrimination disputes). Add mutual non-disparagement. Confirm each party bears its own legal costs. Specify tax characterisation if any portion is an ETP (employment) or CGT consideration (property). Add court approval if any party is a minor or bankrupt. Refer future disputes to mediation under Resolution Institute or ACICA.
Legal Considerations
Settlement deeds are final — once signed, the released claims are extinguished permanently.
This template is for informational purposes only and does not constitute legal or tax advice. Settlement deeds extinguish legal rights — once signed, the released claims cannot be revived. Always obtain independent legal advice from an Australian commercial, employment, personal injury, or family lawyer (as appropriate) before signing. For personal-injury settlements, additional advice from an accredited specialist is strongly recommended.
Reviewed for Australian dispute resolution law
Why Use a Deed Instead of a Contract
A <strong>deed</strong> is preferred over a simple contract for three reasons: (a) <strong>no consideration required</strong> — the formal deed structure is itself sufficient to bind the parties, protecting against later challenges that the settlement was unsupported by consideration; (b) <strong>longer limitation period</strong> — 12 years for a deed under <em>Limitation Act 1969</em> (NSW) s. 16 (and equivalent in other States) versus 6 years for a contract under s. 14; (c) <strong>stronger enforcement</strong> — courts have historically given deeds a more rigorous read-through than simple contracts. The deed format also signals to all parties (and any later court) that the document is a binding commitment, not merely a memorandum.
Release of Claims — Scope and Effect
A release in a settlement deed is a contractual undertaking not to bring the released claims, and an equitable bar to any inconsistent action. The scope can be: (a) <strong>mutual</strong> — both parties release each other in respect of the dispute; (b) <strong>full one-way</strong> — only the Releasor releases the Releasee; (c) <strong>limited</strong> — only specific claims are released, others survive. Releases extend automatically to the related parties of the company-Releasee (directors, officers, employees, agents, related bodies corporate) unless expressly limited. The release is a <strong>complete bar</strong> to bringing the released claim in any forum — Federal Court, State Supreme Court, AAT, ACAT, FWC, or any other tribunal — and operates immediately on execution.
Confidentiality and the Whistleblower Carve-Out
Settlement-confidentiality clauses are standard in Australian deeds — but Australian law has made clear that confidentiality cannot lawfully prevent <strong>protected disclosures</strong>. The deed must preserve the Releasor's right to make disclosures to: (a) ASIC, APRA, or other Commonwealth authorities under <em>Corporations Act 2001</em> Part 9.4AAA whistleblower regime; (b) the Commissioner of Taxation under <em>Taxation Administration Act 1953</em> Part IVD; (c) Commonwealth public-sector channels under the <em>Public Interest Disclosure Act 2013</em> (Cth); (d) the AHRC, the Fair Work Ombudsman, or any equivalent State anti-discrimination body — particularly important since the AHRC's positive-duty enforcement powers commenced on 12 December 2023; (e) legal advisers, courts, and law-enforcement officers. Overly broad confidentiality clauses without carve-outs risk being struck down — and the regulators have signalled they will scrutinise such clauses in harassment / discrimination settlements.
Tax Treatment of Settlement Sums
The tax treatment of a settlement sum depends on its characterisation. <strong>Compensatory damages</strong> for personal injury or pure-economic-loss are generally <strong>not</strong> taxable income under the <em>Income Tax Assessment Act 1997</em> (Cth). <strong>Employment-related settlement sums</strong> are typically <strong>Employment Termination Payments (ETPs)</strong> under ITAA 1997 s. 82-130 — taxed at the concessional ETP rate (15% / 30%) up to the indexed ETP cap (AUD 245,000 for FY2025-26) and at marginal rates above. <strong>Property / capital settlements</strong> may trigger <strong>CGT</strong> under Part 3-1 of the ITAA. State <strong>stamp duty</strong> may also apply for certain dispute types (e.g., property transfers under settlement). The deed should expressly state the parties' tax characterisation but is not binding on the ATO — each party should obtain independent tax advice.
Frequently Asked Questions
End Your Dispute Today
Choose the dispute type, identify the parties, set the settlement sum and release scope. Add the Expert protections you need — confidentiality with whistleblower carve-outs, non-disparagement, tax characterisation, court approval, mediation referral. Produce a Deed of Settlement and Release ready for both parties to sign.
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