Either way, whether they paid him or not (there's not a chance in hell he got no payment) it was a deliberate, club orchestrated move to cheat the cap. If a player retires and a contract magically gets torn up they should need to go the length of the original contract as retired before any come back is allowed.
Still, if he comes back to the NRL part of his salary should be under the Dogs cap, even if they did illegally pay him out. They did the wrong thing and should be fined the difference between his dogs contract and his new one