Avenia v Railway & Transport Health Fund Ltd - [2017] FCA 859 - FCA 2017 case summary — Zoe

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Avenia v Railway & Transport Health Fund Ltd

[2017] FCA 859

Federal Court of Australia|2017-08-04|Before: Lee J

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At a glance

Source facts

Court

Federal Court of Australia

Decision date

2017-08-04

Before

Lee J

Source

Original judgment source is linked above.

Judgment (56 paragraphs)

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Jupiter General Insurance Co Ltd v Shroff [1937] 3 All ER 67 Kioa v West [1985] HCA 81; (1985) 159 CLR 550 Koompahtoo Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623 Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 McDonald v Parnell Laboratories (Aust) (No 2) [2007] FCA 2086; (2007) 164 FCR 591 Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221 Mezey v South West London and St George's Mental Health NHS Trust [2007] EWCA Civ 106; [2007] IRLR 244 Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825; (2015) 329 ALR 1 Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37; (2015) 256 CLR 104 Nationwide News Pty Ltd v Naidu [2007] NSWCA 377; (2007) 71 NSWLR 471 North v Television Corporation Limited (1976) 11 ALR 599 Park v Brothers [2005] HCA 73; (2005) 80 ALJR 317 Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126 Prestige Lifting Services Pty Ltd v Williams [2015] FCA 1063; (2015) 333 ALR 674 Rankin v Marine Power International Pty Ltd [2001] VSC 150; (2001) 107 IR 117 Re Minister for Immigration and Multicultural Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 Service Station Association Ltd v Berg Bennett & Associates Pty Ltd [1993] FCA 638; (1993) 45 FCR 84 Society of Lloyd's v Clementson [1995] CLC 117 Sutcliffe v General Motors-Holden's Automotive Ltd [1998] FCA 88; 80 IR 142 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346 Waddell v Mathematics.com.au Pty Ltd [2013] NSWSC 142 WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited [1998] NSWIRComm 200; (1998) 82 IR 80 XY v WA Country Health Service [2016] WASC 202 Allsop CJ, "Conscience, fair-dealing and commerce - parliaments and the courts" (FCA) [2015] Federal Judicial Scholarship 17 Hooley R, "Controlling Contractual Discretion" (2013) 72(1) Cambridge Law Journal 65 Lewison K and Hughes D, The Interpretation of Contracts in Australia (Lawbook Co, 2012) Sappideen C, O'Grady PM, Riley J, Macken's Law of Employment (8th ed, Lawbook Co, 2016)

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A INTRODUCTION 1 The applicant (Dr Avenia) is a highly experienced dentist. He first established a dental practice in the central business district of Brisbane in 1984 and conducted his practice, in various locations in Brisbane's CBD, continuously, for 32 years. 2 In 2016, the first respondent (RTHF), a mutual "not for profit" health fund, made a decision to open its own dental clinic in the central business district of Brisbane. It was described, happily, as the "Healthy Teeth Centre" (Brisbane Clinic). RTHF also operated two other specialist medical centres in New South Wales, including a dental clinic in Surry Hills in New South Wales (Surry Hills Clinic). 3 After discussions with a recruiter, an agreement was reached by which Dr Avenia would transfer his dental equipment and patients to the Brisbane Clinic. It was also agreed that he would become an employee of RTHF in the role of "Principal Dentist" of both the Brisbane Clinic and the Surry Hills Clinic. 4 In theory, the bargain was an attractive one from the perspective of both parties: for RTHF, it managed to procure the services of a dentist with an established patient base and long experience; for Dr Avenia, a 58 year old professional man, it allowed him to realise the market value of the goodwill he had built and to enjoy the added security of employment. 5 Unfortunately, the best laid plans oft go astray - and this one certainly did. Five months to the day after commencing work at the Brisbane Clinic, Dr Avenia approached and obtained from a judge of this Court, an ex parte injunction enjoining RTHF from taking steps to dismiss him. This step was subsequent to Dr Avenia being given, on 31 January 2017, a letter (dated the previous day) entitled, "Notice of formal meeting & Suspension pending investigation" (Suspension Letter), and a further letter dated 7 March 2017 asking him to show cause why his employment should not be terminated (Show Cause Notice). The events leading up to and causing this break in relations (and the motivations of the second respondent, Simone Tregeagle, the Chief Operating Officer of RTHF, in taking steps said to be adverse to Dr Avenia) are central to the proceeding. 6 The pictures painted by the protagonists are starkly at odds. The complexities are identified and examined below, but in broad summary, the core contention of Dr Avenia, as opened, was that dishonestly, and in bad faith, RTHF through Ms Tregeagle, instigated a process culminating in the Suspension Letter and the Show Cause Notice. According to Dr Avenia, the reason (or at least part of the reason) why this dishonest process was put in place was the insistence by Dr Avenia on high clinical standards, the maintenance of which had caused (and would likely continue to cause) a reduction in revenue in an amount likely to be of concern to the Board of RTHF: see Opening Submissions [5], [7]; Points of Claim [37], [44]. An allegation of dishonesty was maintained up to and including submissions in reply: see Reply Submissions at [8]. Dr Avenia also advances an argument that, irrespective of motivation, RTHF acted in breach of contract in its dealings with him. 7 The explanation of RTHF and Ms Tregeagle is starkly different. They contend that Dr Avenia was intemperate in his written and oral communications, brusque to the point of rudeness, and engaged in aggressive, intimidating and bullying behaviour. Notwithstanding this, RTHF could not readily replace Dr Avenia and had invested much in the relationship: Ms Tregeagle and Helen Renney (who enjoyed the somewhat imposing title, "Manager, People, Performance and Culture") were intent on making the relationship work and were keen to attempt to modify what they perceived to be Dr Avenia's suboptimal behaviour. Ms Tregeagle merely wanted Dr Avenia to attend a meeting to discuss her concerns. The Suspension Letter was met with a "crude push back" whereby Dr Avenia, through his solicitors, demanded oppressive particulars and raised a number of complaints putting "road blocks" in place preventing a sensible resolution. Finally, as a last resort, after Dr Avenia had refused to comply with what were said to be reasonable directions (and discovery by RTHF of Dr Avenia seeking to redirect mail away from RTHF), the Show Cause Notice was sent. 8 Regrettably, during the course of the hearing, the cases advanced on behalf of Dr Avenia, and RTHF and Ms Tregeagle, had a tendency to shift like mercury on a plate. Prior to the hearing (which was listed on an urgent final basis given the existence of the injunction), the case was not pleaded. In order that there be no misapprehension as to each party's case and in the light of the serious allegations of bad faith and dishonesty, an attempt was made, by way of directions, to pin the parties down by requiring agreement on what issues of fact and law had to be determined and by identifying, with precision, the respective submissions on each of these issues. This did not result in a pre-hearing exchange I found useful, and when the matter was called on (and there appeared to be some further movement in the case opened on behalf of Dr Avenia), I determined that points of claim and defence ought be filed so that the issues would be defined by way of pleading. Again, these pleadings themselves underwent various changes but ultimately there was a consensus on what issues fell for determination and the way the parties ultimately put their case. It is fair to say that both cases evolved considerably to those first articulated. 9 Two further matters that should be noted in this overview are that: first, during the course of the hearing, I discharged the ex parte injunction and Dr Avenia's employment thereafter ceased, bringing to an end the commercial relationship save for the resolution of this proceeding; and secondly, in the afternoon on the final day of submissions, Counsel for Dr Avenia informed the Court that the case for relief against Ms Tregeagle was no longer pressed. As a consequence, on 5 June 2017, I dismissed the proceeding insofar as it related to Ms Tregeagle and reserved the question of costs.

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I Entry into the Employment Contract and the APA 12 After the initial dealings (referred to in [2] and [3] above) and an induction and training programme commencing in around mid-September 2016, an initial employment contract was agreed between Dr Avenia and RTHF. On 27 September 2017, Dr Avenia was given a copy of RTHF's Bullying, Harassment and Discrimination Prevention Policy (Bullying Policy) and its Employee Code of Conduct (Code of Conduct). 13 The initial employment contract was superseded upon the entry into a further employment agreement by Dr Avenia and RTHF on 7 October 2016 (Employment Agreement). The employment was taken to have commenced from 10 October 2016, but the Employment Agreement (clause 2.1) provided that Dr Avenia was to serve a probation period for six months, calculated from 14 September 2016 to 14 March 2017 (Probation Period). During the Probation Period, RTHF was to review the "progress" of Dr Avenia and either Dr Avenia or RTHF could terminate the employment "at any time" and "without citing any reason", on one week's notice. 14 The transfer of Dr Avenia's assets to RTHF was actually documented on 5 November 2016, but the relevant instrument, the Asset Purchase Agreement (APA), was expressed to be effective as from 30 September 2016. In November 2016 and January 2017, RTHF made part payments to Dr Avenia for equipment under the APA. Whether RTHF has complied with its obligations to make payments under the APA is dealt with in Section I (Issue One) below. 15 It will also be necessary to return in more detail to the express terms contained in the instrument being the Employment Agreement, which together with any other terms governed the employment relationship (Employment Contract). I have deliberately distinguished between the term 'Employment Agreement' (the instrument of that name signed on 7 October) and the 'Employment Contract' (being all the express and implied terms which governed the employment relationship) because the identification of not only implied terms but also the express terms of the paction are matters in dispute between the parties (and will be dealt with in Sections E and F below).

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II Events from October 2016 to Mid-January 2017 - Problems Emerge 16 The first day Dr Avenia was in his job working in the Brisbane Clinic was 10 October 2016. At 8:04pm, Dr Avenia sent an email to Ms Tregeagle. It commenced as follows: Hi Simone, Working my way through a backlog of emails. First thing I'd say is if some people spend less time sending emails more work could be done! We wouldn't have so much stress at the front desk! 17 At 10:50pm the same evening, Dr Avenia sent an email to Michelle Romeike, an employee of RTHF, and Ms Tregeagle. The email was in response to one Ms Romeike had sent to, among others, Dr Avenia, on the apparently benign topic of a water filtration quote. Dr Avenia commenced as follows: Hi Michelle/Simone, Let me explain! 18 He later continued: There is/was no urgency to do anything straight away. This only got raised by Chiara [Scamuffo, the Clinical Co-ordinator at the Surry Hills Clinic] in her email today, coming in late without the facts of the situation? … Now let me tell you how I helped resolve the AC situation and cleaned up the crusty vomit that everyone else in the organisation was happy to step over for the last 4 days, admittedly 2 days were the weekend, so no staff member used the front entrance over this period. I can also do a Pontius Pilate for the weekend because I only use the garage entry…after Jamie left that's when I went down and cleaned the crusty vomit from under the door. I'm going to give the cleaner a serve and bring it up with all the personnel here, everyone has to take ownership or FO… That's all I can suggest after one day, I'm sure there'll be more tomorrow. I'm definitely enjoying myself and I'll make a BLOODY BIG DIFFERENCE AROUND HERE. Goodnight Ladies 19 Shortly thereafter, at 11:08pm the same evening, Dr Avenia responded to an apparently innocuous email that had been sent to him by Ms Scamuffo, which had commenced: "Hi [Dr Avenia], [h]ope your weekend was lovely!" and asked for some details concerning personnel arrangements within the Brisbane Clinic. The response, which speaks for itself, was as follows: Chiara, Don't go mucking me around. We have discussed this and we came to a solution. This week you are waiting for the dentists to get their heads around the change. Next week from the 17/10 you are implementing the 2 dentists per day regime. You control the appointment book! Do your job. Thanks and Goodnight 20 No doubt Dr Avenia had a long and tiring day and it would have been an unpleasant chore to clean up vomitus (crusty or otherwise), but these first email communications after starting work are the initial illustration of what might charitably be described as cultural differences that were to emerge between Dr Avenia (who for a long time was a self-employed professional without responsibility to anyone but his patients) and the more structured corporate environment of RTHF. 21 The infelicity of expression went beyond late night musings. Although a small incident in itself, the differences in approach are further illustrated in an email sent by Dr Avenia a few weeks later, on 7 November 2016, to Ms Scamuffo and another employee, Margaret Milanovich, in the following terms: Hi Chiara/Margaret, Whoever changed the appointment book got it wrong????? The various appointments should be different colours but the same for each dentist! The dentists have their own columns so they don't need to be one colour? We can differentiate them already! All NP's should WHITE for each/every dentist All PC/HYG should be GREEN for each/every dentist All C&B should be whatever for each/every dentist All Extractions All Emergencies Etc, etc, etc Please change it again to what it should be. I can't get this new telephone to ring out. Tomorrow morning could you ring me on xx xxxx xxxx I will be at my desk. 22 It appears that Ms Tregeagle did not read the email referred to at [17]-[18] fully when it was first received (T 178), but, in any event, by 9 November 2016, Ms Tregeagle was sufficiently concerned by the tone of Dr Avenia's emails to communicate in the following terms: Hi [Dr Avenia], can I ask you please have a look at the way you are communicating with the team via email. It is my view - this has not been raised with me - that some of your communications could be interpreted as a little aggressive. It's so easy to come across in ways not intended in email, and because it is a written record, it's hard to back track on, too. In the below [being the email reproduced above], your opening sentence, multiple question marks and exclamation marks at first read to me sound like an attack on the staff. When I read it, my heart skips a beat so I can only wonder at what their first reaction to it might be. I have no doubt that is not your intention to accuse or upset them, but it could easily be interpreted as such. I would ask you to look at toning down your emails a little to ensure there is no misinterpretation or unintentional upset. I don't want you to lose the energy or enthusiasm, just be mindful that what you might say to them in person can so easily be misinterpreted via email without the benefit of them being able to see and hear the intentions of your communication in a face-to-face situation. We're generating a lot of change in the practice at the moment and we need to be careful not to add unintentional upset to the mix which will just slow us all down. Happy to discuss if you'd like. S 23 Dr Avenia's prompt response to Ms Tregeagle's gentle counselling reflected some self-awareness. He explained that he tended to "write my emails the same way I speak, I like to put in a bit of emphasis every so often to make a point". He recognised that written communication could be misinterpreted and indicated an endeavour to address any possible misinterpretation. He stressed that he had "no agenda to upset anybody, intentionally or unintentionally". 24 These communications were happening around the same time as Ms Tregeagle, Ms Scamuffo (as noted above, the Clinical Co-ordinator at the Surry Hills Clinic) and Briana Purcell (Clinical Co-ordinator at the Brisbane Clinic) were meeting with Dr Avenia for a broad discussion of what to do within the business. It appears Ms Purcell joined a meeting via video link from Brisbane on 3 November 2016 and the other participants were in Sydney. This meeting was of some significance as Dr Avenia "was advocating quite strongly" (T 243) for a practice model where an initial consultation with patients would be one hour in length and where this time would largely be spent by the dentist in conversation with the patient and then in treatment planning. No cleaning or other dental work would be carried out during this initial consultation. 25 During the course of the meeting, Ms Purcell and Ms Scamuffo both expressed the view that they believed that 45 minutes was sufficient for a new patient appointment inclusive of time undertaking a 'clean'. Ms Purcell accepted, during the course of her cross-examination, that she considered the initial consultation plan suggested by Dr Avenia amounted to 'time wasting' and that she had never worked with any dentist who needed more than 45 minutes for a new patient examination and clean (T 243). When she initially expressed this view (in temperate terms) to Dr Avenia, he made it clear that he did not agree with Ms Purcell. 26 The following Monday, 7 November 2016, Dr Avenia had returned to Brisbane and there was a meeting between Dr Avenia and Ms Purcell. Ms Purcell's evidence was that during the course of that meeting Dr Avenia yelled at her and said: "you're part of my team. You do what I do, regardless of what they do in Sydney" (T 244). 27 In any event, irrespective of whether Dr Avenia actually yelled at Ms Purcell, or whether the precise words quoted were used, Dr Avenia took offence at Ms Purcell disagreeing with him at the meeting and he then became very short with Ms Purcell. I accept that Ms Purcell was shaken by the encounter with Dr Avenia on 7 November 2016 and that she afterwards spoke to a number of people about leaving the Brisbane Clinic as a consequence of her feeling uncomfortable. 28 During December 2016 and early January 2017, Ms Tregeagle was speaking regularly with several staff members of the Brisbane Clinic including Ms Purcell and considered that the issues in the Brisbane Clinic had progressed to the point where the relationship between Dr Avenia and the staff was a matter of concern. On 11 January 2017, Ms Tregeagle had received an email from a Dental Assistant at the Brisbane Clinic, Rashmi Anand, referring to "Things that I have noticed when I was with AA". This email made a number of complaints some of which related to hygiene or infection practice which, on close examination, do not appear to be justified or at least fully justified, partly on the absence of any specific evidence Dr Avenia himself did anything wrong, and partly because the dental assistants, who have a central role in hygiene or infection control, were the responsibility of Ms Purcell (T 160-1). 29 In any event, the general issue of staff discontent had, in the opinion of Ms Tregeagle, clearly escalated. During the course of Ms Purcell's cross-examination, evidence emerged that Ms Purcell had kept what was described as an "incident diary" which she had started from the time she commenced with RTHF (T 247). The document had not been discovered and evidence was adduced that a copy of the diary was on her iPhone. The document was then called for and subsequently tendered. The document gives a compelling picture of Ms Purcell's contemporaneous record of the deterioration of the relationship between Dr Avenia and the staff within the Brisbane Clinic from early November 2016 onwards. There was no suggestion that the document was not an essentially accurate record of Ms Purcell's contemporaneous thoughts nor, after it was produced, was Ms Purcell directly challenged on the accuracy of the record of events contained in it (T 356). It reads as follows (the punctuation and spelling is uncorrected): 02/11/16-called chiara a drama queen 03/11/16- meeting with Simone, chiara and [Dr Avenia]. Snide remark about where I used to work and dentists I worked with. Said that thy were obviously not good dentists if they did half hour consults. 07/11/16- spoken down to and reprimanded about mouth guard for Lila Masson. Attacked on a personal level. Told me I didn't know what I was doing and that neither chiara or I knew how to do our job properly. Attacked for standing up for myself in the meeting. Told to disregard Sydney as I work here. Told to go with what he says or he would come down on me like a ton of bricks and make my job hell. Told me I work for him. Was rude to me for the rest of the day. Very short. Witnessed by Rashmi. 08/11/16 made remarks to rashmi about me regarding my work. Says chiara and I aren't doing our job properly. 08/11/16 rashmi expressed that he treats the das differently. He goes easier on Zoe and Jess than her as they don't have DA training. She feels it is unfair and they should be treated equally 17/11/16- spoke very loud and rudely to Rashmi. Could be overheard in reception area. Was using same tone as when he berated me the other week. Told her if she doesn't listen enough and if she keeps it up she won't have a job. Told her she wasn't trying with the PHi exam. 23/11/16 was overheard berating Sydney team. Very aggressive tone, very loud. could be heard by Cherlyn and myself in the reception area. During huddle he proceeded to tell rashmi and I that Sydney team has no idea and they're hopeless. Said that patients need to be kept with the same dentist at all times even in an emergency. Margaret had put one of lincons patients in with iman that day when aa thought he could wait to see lincon the next day. 24/11/16 discussions with rashmi regarding [Dr Avenia's] billing. He has been billing for OPG and oral mucosal screening without carrying out the procedure. She has been deleting the items and he has scolded her for doing so. 05/12/16- made a comment about Sharna not starting today, said that she mentioned in her interview that her mother was sick and that was why she moved up here and that hopefully something happens soon or we will have ongoing problems. Made secondary comments about it at the end of the day questioning if she would be constantly taking time off. Made remarks about what Daniel would do now that Jenna is gone as he "followed her around like a lost puppy" Insulted the marketing team saying He didn't know what ravinder even does. Insinuated her English is not good enough. Many comments made may have been in the interest of humour but could easily be misconstrued as racist. 15/12/16- told chiara I don't have enough reception experience 19/12/16- cancelled casual nurse Zoe O'Connor without consulting me after I had already confirmed her for the day and rest of the week. 19/12/16- patient Alex Messina said it took 3 years to fillany get [Dr Avenia] to stop using latex gloves on his wife who has an allergy. He said he is hopeless, so so hopeless and this man is one of his long time patients/friends. 04/01/17- told Andrew the actuaries have no idea how to run a clinic and no idea about patient care and that the structure of our fee schedule for members is wrong. 05/01/17- asked me to take over doing the dentist daysheets. When I explained that I can try but i can't guarantee I will have time to do it everyday he demanded that I do them saying that of course I have time and that I sit in front of the computer and appointments all day so it's best that I do it. Wouldn't listen when I tried to explain that I already have a number of tasks to complete through the day as well as general reception duties. Was rude and abrupt and dismissive of my role. 10/01/17 we ran out of procedure masks as [Dr Avenia] refused to let us place an order. He is infuriating Andrew by micro managing the ordering and telling him what he can and can't order 11/01/17 resubmitted treatment costS after I had reconciled accounts. When I asked that I alone be responsible for resubmission so that I always have a record of it he snapped at me "this is why do so huddle in the morning I am telling you now" 13/01/17 said Sydney team was using shift rosters as a cop out reason for their poor appointment bookings. Said they're just too lazy to book follow ups. 30 In fairness to Dr Avenia, I have the distinct impression that there may be some overstatement or 'pickiness' in recounting some of these incidents. Although I regard Ms Purcell as an impressive and truthful witness, she seemed to have at least some degree of hostility towards Dr Avenia. Moreover, I do not think any evidence emerged which satisfactorily demonstrated any want of competency or skill in Dr Avenia's dental work or which justified a criticism that he made comments which could fairly be characterised as racialist or discriminatory. 31 What was clear to me was that Dr Avenia was a man not short of self-assuredness and that he was unlikely to brook criticism or dissent with equanimity. His abrasive personality, coupled with a long history of having his dental practices and freedom of action unquestioned, led him to fail to be sensitive to the feelings of staff when communicating in the workplace. This did not mean that every individual criticism of his behaviour was necessarily warranted and it may be, at times, that those with whom he dealt may have been a little too quick to take offence when none was intended. Indeed, sensibly, Ms Tregeagle was open to this possibility as being some part of the problem. Ultimately, it is hardly surprising that if a professional relationship with staff is poor from the start, and a superior or colleague is regarded as being rude and domineering, any later interaction is likely to be perceived by staff through the prism of accumulated experience. But in any event, by at least early January 2017, there was a problem and, although he may not have been entirely at fault, Dr Avenia primarily caused this state of affairs by being aggressive and domineering in his interactions with staff.

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III The Revenue Drop 32 At around the same time, there was another development of concern within RTHF. On 11 January 2017, Ms Tregeagle had written to Dr Avenia (with a copy to others) referring to a prior discussion. The email attached a "top level" profit and loss report for each of the clinics and was part of the financial reporting that went to the RTHF Board. Those documents indicated a significant drop in revenue and Ms Tregeagle emphasised that she needed to provide an explanation to the Chief Executive Officer, financial executives and the Board on the "recent change of direction". An email the following day indicated (by reference to both the Brisbane Clinic and the Surry Hills Clinic) that a $130,000 year to date revenue shortfall existed which was "not an acceptable result for our exec or board". The result needed "attention, action and rectification". 33 The reason for the significant revenue shortfall emerged following a series of email communications. Ms Scamuffo, on 12 January 2017, referred to the Surry Hills Clinic, prior to Dr Avenia's involvement, booking appointments at 15-minute intervals with 45-minute new patient appointments. The email then stated that the "dental team have since been encouraged to book new patient appointments for 1 hour" and that there had been discussion discouraging carrying out a clean during the initial appointment. This was said to be "not financially viable for the clinic". Ms Scamuffo reiterated her view that the initial appointments should be a maximum of 45 minutes and that cleaning should always be carried out during the course of the initial appointment. 34 Ms Scamuffo had identified that the problem with meeting the target revenue was essentially Dr Avenia's insistence in adopting a course of conduct that he regarded as best practice but that was not regarded as being necessary by either Ms Scamuffo or Ms Purcell. The response of Ms Tregeagle was to thank Ms Scamuffo for her "good info and insights" and request a discussion with Dr Avenia to obtain his "additional thoughts" and to ascertain what could be done to "determine what has changed the results" and "how we get back on track". 35 It is clear from an email the same day, that Dr Avenia had a different view. Dr Avenia's preliminary explanation was that "we simply didn't work enough days" and rectification involved stepping up "the number of days &/or the hourly rate". Megan Dayhew, the Operations Business Consultant, conducted a more sophisticated analysis and established that the drop in revenue was "per day per dentist" and Ms Scamuffo pointed to the significant reduction in complex dentistry and treatment conversion. By way of background, Dr Avenia had expressed his view, as Principal Dentist, that the Sydney dentists (or at least one dentist) did not have the skills to undertake a particular procedure of "complex crowns" (T 150-1). 36 In short, without saying it directly, the view was being expressed that the drop in revenue was apparently related to Dr Avenia's view as to appropriate clinical practice, which had caused a significant reduction in complex dentistry, that is, crown and bridge work. Given that the Surry Hills Clinic had apparently resolved the initial treatment issue by maintaining its practice of having 45-minute initial consultations, Ms Scamuffo's initial analysis was not ultimately accepted by Ms Tregeagle who made the overall judgment that "what we were missing was the crown and bridge income" (T 156). 37 In the midst of these discussions concerning revenue drop off, Ms Tregeagle had written to Dr Avenia noting that she had encouraged Ms Scamuffo and Ms Purcell "to be very open and frank in any feedback and input they can provide about the business side of the clinic performance". She also noted that they had been "a little hesitant and I have assured them their input is welcome and valued". She counselled Dr Avenia to be "aware that they are feeling a little 'out there' and ensure they are reassured that you also value their input". Again, in response to Ms Tregeagle's gentle 'handling', Dr Avenia said he wholeheartedly agreed.

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IV The January 'Complaint' 38 Given the deterioration in the personal relationships within the Brisbane Clinic, it is not surprising that sooner rather than later things were bound to come to a head. 39 At 11:33am on 25 January 2017, Ms Scamuffo forwarded to Ms Tregeagle a printout copy of some instant messaging exchanges between Ms Scamuffo and Ms Purcell. They were as follows (punctuation and spelling uncorrected): Briana Purcell OMG. Chiara he is Psychotic this morning!! I feel so uncomfortable! He is loud and aggressive. He is attacking Andrew, he has just demanded to have one of And[rew's patients brought in today (T 246)] He has changed the stock accounts so that Sydney does not get contacted He has gon [sic] and ordered stock on his corporate card He is actually frightening his behaviour is so erratic He is saying that they've messed around with the Exact settings and that it's all wrong. I don't know what to do. I don't feel comfortable here right now Chiara Scamuffo ok she is calling me today sometime Briana Purcell He is behaving like he was the day he screamed at me Even Cherlyn says she doesn't feel comfortable Chiara Scamuffo Unacceptable, action is needed Briana Purcell I knew this would happen! I mentioned his behaviour to Simone and Hr and I knew as soon as I did it would get worse 40 Ms Tregeagle gave evidence, which seemed to me to have a ring of clarity, that these communications were disturbing to her and "the fact that we've got a young woman saying that [Dr Avenia] is frightening and that he is behaving loudly and aggressively and erratically, taken as a whole" meant "we need to do something about this dynamic in Brisbane, whatever it is" (T 147-8). 41 It was clear from the evidence of Ms Tregeagle that she was in regular contact with Ms Renney and Ms Purcell and that during one or other of her conversations with Ms Purcell indicated that it would be in her best interests to talk to Ms Renney and that Ms Renney would be able to advise her. According to Ms Tregeagle, Ms Purcell was very stressed about what was happening and she said to Ms Tregeagle that she "didn't want to raise a formal issue and have it turn into something that would be a big issue and that would cause a whole lot of trouble" but Ms Tregeagle explained that she needed to be more specific so that a discussion could take place with Dr Avenia (T 204). 42 Following Ms Tregeagle involving Ms Renney, and a request being made for Ms Purcell to formalise her complaint, an email was sent on the afternoon of 25 January 2017, in the following terms: Hi Helen Myself and a couple of other staff members are having a lot of difficulties here in Brisbane Clinic and it's been suggested to me that I have a meeting with you. It's very hard for me to get away from the reception desk and even harder for me to have privacy. I was hoping we may be able to have an out of hours call? The issues I wish to discuss with you are not new, I have raised my concerns on numerous occasions in a non-formal manner and I have been keeping an incident diary I have also advised other staff to do the same. It has now reached the point where we have not seen any improvement in behaviour and we are beginning to consider formal action. I know for myself personally and for Rashmi we are concerned for what will happen if we decide to make a formal complaint. We are worried things will only get worse for us. We are very isolated here in the Brisbane office so we find it is much easier for us to be targeted. A number of staff are scared to say anything out of fear for their job security and will simply try to keep their heads down and agree with everything that is said. For example, the atmosphere in the clinic today is very uncomfortable. It is not only myself, Rashmi, Andrew and Vivienne who feel on edge; even Cherlyn who is at the desk with me today says she feels tense and nervous, as if something is going to blow up, and she has absolutely no reason to feel like this. The current work environment here in the Brisbane clinic is not a happy and supportive one, and it is having a negative effect on staff who are experiencing the physical symptoms of stress, such as sleeplessness and anxiety. It is a genuine concern that his could cause staff to resign rather than continue to endure these volatile conditions. I realise that often passion and enthusiasm can be mistaken for aggression, however that is not how this behaviour is coming across to the clinic staff. The behaviour is very confrontational and, as such, needs to be addressed before it causes further problems. I would appreciate any advice you can offer me in regards to this matter and I hope we can arrange a suitable time to discuss this matter further. Briana Purcell Clinical Co-ordinator 43 More than once this email was described by Counsel for RTHF, Mr Boyce, as being 'explosive'; despite this advocate's flourish, on any view, it was a highly troubling communication that confirmed widespread disaffection in the Brisbane Clinic and reflected the existence of a problem which was now serious and needed to be addressed with celerity. 44 With commendable despatch, the following day (being Australia Day), there was a long telephone call between Ms Renney and Ms Purcell during which Ms Renney said she required examples of inappropriate behaviour to substantiate the expressed concerns. In response, Ms Purcell recounted, with some immaterial differences, a number of the complaints she had recorded in her incident diary. Ms Renney concluded by noting (as recorded in her contemporaneous note): HR went on to explain the protections and commitment of the organisation to ensure victimisation does not occur and that it can have serious consequences. HR explained duty of care to address her concerns. Talked about her option to make a formal complaint and explained that I cannot direct her to make a formal complaint - up to her. Regardless, we have a legal obligation to address the concerns. HR asked why she had not raised the concerns with me - BP stated that it was "because he would call me out in front of others". HR asked her to keep the discussion confidential and let me know if anything happened, to rest assured that it would be addressed in a proper and fair way. Reassured her that the way it is handled aims to protect individuals and de-identify them wherever possible. For this reason, if others raise similar concerns, it adds more weight and avoids having to attach particular issues to individuals. Recommended to her that she should not discuss it with others but if approached simply reassure them that you understand it is being addressed. Need to ensure that she does not "engineer" others to mount a case so to speak. 45 Further enquiries were made of Dr Waymouth and Ms Anand. Dr Waymouth's comments, as contemporaneously recorded by Ms Renney, confirmed that the primary issues relating to Dr Avenia's behaviour were with Ms Purcell and Ms Anand, who could be "picky". Despite this, he made a comment that was illustrative of the nature of the problem: Dr Avenia had, at times, an "explosive temperament" and "if you challenge him he gets angry". Dr Waymouth, echoing others, described Dr Avenia as "a bit abrasive and opinionated in personality". 46 It is convenient to note at this point that even though Ms Purcell and Ms Anand (in their hygiene or infection control complaints) may have been too pernickety, I reject the notion that they were motivated by anything other than seeking to address what they perceived to be a real problem; moreover, I reject, as suggested by Dr Avenia in his evidence, that Ms Purcell and Ms Anand had been deliberately engaging in 'tittle-tattle' or "were sort of conspiring together to write notes to Ms Tregeagle to paint me in a bad light" (T 122). 47 The content, or at least the substance, of these interviews by Ms Renney was reported back to Ms Tregeagle who afterwards responded with: "…it sounds like you have enough to raise serious concerns. It is a shame we are at this point". This last comment, I am satisfied, reflected her genuine view.

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V The Suspension Letter 48 The Suspension Letter dated 30 January 2017 (given to Dr Avenia on 31 January 2017), followed. It is a letter of some importance. Ms Renney drafted the Suspension Letter (at least partly) from a precedent she had available to her (T 271). It commenced by stating it was a "Notice of formal meeting & Suspension pending investigation". It went on to: (a) confirm a discussion with Ms Tregeagle (see below) advising that Dr Avenia was required to attend a meeting with Ms Tregeagle and Ms Renney that Friday in Sydney; (b) note the meeting "will be held to discuss matters concerning your personal and professional conduct as detailed in the allegations outlined below"; (c) advise Dr Avenia that he was "suspended from duties whilst this matter is investigated" with immediate effect; (d) contend the suspension was not disciplinary action and did not indicate that any determination in relation to Dr Avenia's conduct had been made, and that the ongoing suspension was to be kept under review and was to be "as brief as reasonably practicable until completion of the investigation"; and (e) note the suspension was on full pay. 49 The Suspension Letter then set out a number of allegations which were specified as follows: 1. that you have failed to comply with our [Code of Conduct] in respect of your personal conduct which requires you to "treat everyone with courtesy, respect, kindness, consideration, and sensitivity to their rights", and to "refrain from all forms of harassment and discrimination…" 2. that you have failed to comply with our [Code of Conduct] in respect of your professional conduct which requires you to take responsibility for the health and safety of yourself and others when carrying out your duties, through you behaviour towards work colleagues as stipulated below 3. that you have failed to comply with our [Bullying Policy], by repeatedly demonstrating abusive, belittling and threatening behaviour towards your work colleagues The particular issues concerning the allegations include complaints that you have: • repeatedly raised your voice at colleagues, as noted in the following examples • On Wednesday 24th January, you raised your voice to Andrew Waymouth, saying words the effect that 'your treatment plans are shit'. This altercation was overheard by 3 other staff members • On 27 January 2017, you raised your voice at Rashmi Anand in relation to having spoken to the Clinical Co-ordinator about her concerns and said that you don't want her talking to others • repeatedly used threats of job loss and retribution to colleagues, as noted in the following example • on the occasion of the morning huddle on 7 November 2016, you stated to Briana Purcell "how dare you question me. If you do it again, I'll come down on you like a ton of bricks" • that you have stated to a staff member (Rashmi Anand) "you don't take your job seriously, and if you can't, you won't have a job" • on 27 January 2017, you made a statement to Rashmi Anand, to the effect of "if I go, you won't even have a job, so keep that in mind" • that you have made statements to the effect of "I can fire you" • that on non-completion of the PHI Code of Conduct training, you have stated to Rashmi Anand, words to the effect of "if you can't pass next time, you don't have a job" • repeatedly used sarcasm and belittling statement to colleagues, as noted in the following examples • on 7 November 2016, you said to Briana Purcell when discussing a patient's treatment, "what do you think, you don't know how to do your job" • that you have made statements to colleagues that other staff members are not good at their jobs and these statement have been overheard • repeatedly discriminating against some staff members by criticising them and not sharing information in team huddles • that on at least 2 occasions (19/12 & 27/12) you have required 1 dental assistant to support two dentists, so that there is insufficient time for tea breaks and lunch breaks. This contravenes the Health Professionals and Support Services Award and impairs the health and safety of the workplace (bold emphasis added, underlining in the original). 50 It is useful to pause the narrative briefly to focus on the use of the word 'include' bolded above. 51 It emerged in the evidence that Dr Avenia had gone through and had annotated each of the particulars raised on the second page of the Suspension Letter. It was clear that he had no difficulty in understanding the particular allegations raised. In Section I (Issue 4) below I will deal with Dr Avenia's contention that it is no answer to that to say specified allegations could be dealt with if Ms Tregeagle had made a decision to 'hold back' unspecified allegations to possibly use them later. For present purposes, I accept Ms Tregeagle's evidence that, by signing the Suspension Letter with the word 'include', she was not, in some sort of contrived, tactical way, leaving her options open to rely upon other material available to make out a case against Dr Avenia (T 209). Although Ms Tregeagle accepted in cross-examination that "she decided on 30 January that [she] would be holding back some of the content of the allegations" (T 210), that intention was subject to the discussion with (and response by) Dr Avenia at the proposed meeting. As Ms Tregeagle explained (T 209): I don't think it was at all as contrived as that. We had… a summary of the key points of the complaints that we had. Our intention was to say that these complaints, if they are proven, would prove to be a breach of these policies of employment. 52 Going back to the terms of the Suspension Letter, it then went on to indicate that Dr Avenia would be given the opportunity to respond and provide any information that may "help to answer or mitigate the above concerns". Finally, the letter noted that: "one possible outcome of the meeting may be disciplinary action taken against you, up to and including termination of your employment".

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VI The Conversation of 31 January and Dr Avenia's Initial Reaction 53 As can be seen from the terms of the Suspension Letter, despite being drafted and dated by Ms Renney the previous day, it was always recognised that it would be provided following a discussion between Ms Tregeagle and Dr Avenia. 54 Although various accounts were given in the evidence of what occurred at that meeting, including a somewhat different account in Ms Tregeagle's affidavit evidence, I find that it occurred consistently with the terms of Ms Tregeagle's file note prepared shortly thereafter. The note is detailed but is sufficiently important to reproduce in full: Discussion with Arnaldo, approximately 1.30pm, Tuesday 31 January I advised Arnaldo that we had an issue we needed to discuss that was an unpleasant one. I provided him with the letter and asked him to read it and then we would discuss the matter. He made a comment along the lines of 'if it's all over now we should just get it over with'. I explained that this was not what was happening, that we have a duty of care to all employees, himself included, and that this was a standard process that would apply to any such situation, that we need to give him the opportunity to know what has been raised and to respond to the matters. I explained that we want to look after everyone in this process and ensure that everyone is treated fairly. He responded calmly to the letter, commented that 'he didn't see this coming'. He also said he would take the next couple of days to get is [sic] thoughts straight so he could respond to the issues raised and commented that he felt what was the issue here was 'vexatious claims' as he had alluded to once before in a discussion with me where I was raising concerns brought to me by DAs over his infection control practices (which he commented were slander). He made a comment that suggested this would only end in his dismissal, I explained that that was not an outcome in anyone's best interests and I encouraged him to see the situation as salvageable, that no one involved wants to have a conflict such as this hanging over their heads and that I believed that everyone could overcome this and build a positive working relationship, but that it would need a willingness on behalf of everyone involved to admit the shortcomings and work together to improve the situation. I expressed that an experience such as this could actually prove to be bonding for a team that can work its way through it. [Dr Avenia] commented that he felt like the little guy coming up against the big corporate'. He asked me if the suspension meant he had to leave immediately. I said no, he was able to finish the notes he wanted to do, and I advised him that as the rest of the team were at lunch and then attending a meeting, he could slip out quietly and that I would let the team know he will be away for the rest of the week. He wanted to ensure that there would be plenty of time for the meeting in Sydney and I advised that we'd allow a good couple of hours for it and we could take as much time as he felt we needed. I advised that he was entitled to bring a support person with him and that he could advise me of who that might be so we could book their travel, he commented that he was very comfortable with [Ms Renney] and I and didn't feel that was necessary. I apologised that we were having to deal with this situation and he commented that he was 'sorry he had been such a disappointment to me'. I commented that it would be in his best interest to not engage with any of the staff and ensured that they were all at lunch as he went back into the practice. At approximately 3.30 the meeting was about to commence and I checked to see if he was ready to leave, he advise me he was just finished and prepared to leave. He was calm and polite throughout. (emphasis added) 55 What is immediately evident is the disconformity in tone and substance between what was said to Dr Avenia in this conversation and what was communicated to him formally, in writing, in the Suspension Letter. This disconformity can be put down to Ms Renney's use of a less than apposite precedent. Although the subjective intentions of both Ms Tregeagle and Ms Renney as to the 'process' and preferred outcome of the proposed meeting were accurately conveyed orally, the attempt to convey them in writing miscarried. RTHF's case (and the evidence of Ms Tregeagle and Ms Renney) was that the Suspension Letter was not triggering a 'formal investigation'. When Ms Renney, the author, was taken to the Suspension Letter in cross-examination, she accepted, unsurprisingly, that a recipient "could believe that it was a formal step" (T 271). Indeed, Ms Tregeagle went a little further and accepted, correctly in my view, that in the light of her subjective intentions (and notwithstanding she did not think so at the time), the letter could be read in a misleading way (T 233). 56 When Ms Renney was asked to explain the references to 'investigation' in the heading and body of the Suspension Letter (when no disciplinary investigation was said to have been taking place) her somewhat puzzling explanation (at T 271) was as follows: My practice is that if there is a formal investigation under way or about to take place, that I would actually say in the letter "formal investigation", so in this context investigation means gather information, look into. It's intended as a - a more general word. I - I can see why you would ask the question. Had this letter been signalling a formal investigation, it would have said so and it would have been attached to some other correspondence and documentation … 57 It is little wonder confusion was possible. In the context of what I accept to have been the subjective intentions of the author (and Ms Tregeagle), it is unsurprising that the recipient of such a written communication could legitimately labour under a misapprehension as to what was going on. Despite this, given what had been said to him on 31 January 2017, when the Suspension Letter was first read in the light and context of the conversation with Ms Tregeagle, Dr Avenia's immediate apologetic and calm reaction to what had been communicated is understandable. As he explained in his evidence (T 67): …my initial response to Simone was that I can explain - put all these allegations into context, it will make sense, I've got nothing to worry about, I don't even need a support person… 58 This soon changed. Dr Avenia then "talked to some friends" who counselled him: "[y]ou've got to be careful with these corporates, they will just railroad you and you will be out the door on Friday" (T 67). His friends also advised Dr Avenia to get legal advice. Matters then escalated quickly.

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VII The Dispute as to the Process 59 Given the terms of the Suspension Letter, it is easy to see why the solicitors Dr Avenia consulted, HWL Ebsworth Lawyers (Ebsworths), would initially proceed on the basis that a formal disciplinary investigation was being conducted and that the meeting Dr Avenia was directed to attend the following Friday would consider the substantive merit of the allegations and that a disciplinary response, up to termination, could result. 60 In the circumstances, the terms of the urgent response of Ebsworths to RTHF (sent on the day they were instructed, 2 February 2017) were not surprising. The letter insisted that Dr Avenia be afforded procedural fairness and further: (a) contended that, given the proposed meeting was dealing with allegations which, if proven, meant RTHF "will take disciplinary action up to and including termination of [Dr Avenia's]employment", the 48 hours allowed to meet the allegations in the meeting (which had proposed to be convened the following day) was "grossly inadequate and improper"; (b) requested policies and procedures associated with or incidental with the Suspension Letter; and (c) informed RTHF that Dr Avenia "will not be in a position to attend" the meeting but noted the solicitors anticipated that Dr Avenia would be able to address the allegations "within 7 days upon receipt of the applicable policies and procedures". 61 Although an allegation of improper behaviour was unfortunate (and foreshadowed a pugnacious style more plainly seen in later communications), this response cannot be legitimately criticised. Unlike Dr Avenia, the solicitors, when instructed, read the letter divorced from the immediate context of the discussion with Ms Tregeagle (as recorded in the file note extracted at [54] above). Although in the end it does not really matter, I infer it is likely that a complete and accurate account of the discussion between Ms Tregeagle and Dr Avenia was not conveyed to Ebsworths or was not conveyed by Dr Avenia in a way that led Ebsworths to view the Suspension Letter as anything other than accurately recording the subjective views and intentions of RTHF. One would have thought that, given reference was made to Dr Avenia only being given only 48 hours' notice of a meeting on 3 February 2017, Ebsworths must have been unaware that the letter was given to their client in a meeting with Ms Tregeagle on 31 January 2017. For reasons I will canvass (at [86]-[87] below), this may not be a safe assumption. 62 Ms Tregeagle promptly responded the following day. This letter: (a) responded to the suggestion that Dr Avenia was only provided with 48 hours' notice; (b) pointed out that Dr Avenia had already been provided with a copy of the Code of Conduct and the Bullying Policy upon commencement of his employment but noted that RTHF had, that day, organised to express post copies of relevant policies and procedures to Dr Avenia; and (c) asserted that RTHF was not satisfied there was "a reasonable basis for Dr Avenia to refuse to attend the meeting" but indicated that it would provide a further opportunity for Dr Avenia to attend a meeting as directed. 63 A letter of the same date was sent to Dr Avenia and contained a direction to attend a further meeting on Friday, 17 February 2017. It also enclosed copies of the Code of Conduct and the Bullying Policy (but not the RTHF Grievance Policy) and noted that Ms Tregeagle had separately corresponded with Ebsworths. 64 Two weeks then elapsed and on 16 February 2017 (that is only a day prior to the meeting scheduled for 17 February), a 14-page letter was received from Ebsworths (16 February Letter). The 16 February Letter commenced by noting that Ebsworths considered it unreasonable for Dr Avenia to attend the meeting the following day. It required, before Dr Avenia attended any meeting, that he be provided "with all information about the investigation process, the policies and procedures that apply to these matters, and all the particulars (with full and complete specifications) of allegations that are levelled against him". Ebsworths went on to contend that they considered it unreasonable for Dr Avenia to attend any meeting or provide a response to the Suspension Letter "before all of this information is provided to [Dr Avenia], and he has had a reasonable opportunity to consider and respond". 65 The 16 February Letter was aggressive, confrontational and contained a very large number of oppressive requests. Although Dr Avenia, through no fault of his own, had received mixed messages as to RTHF's process and intentions and no doubt (after being 'geed up' by his friends) was very upset at the suspension, the 16 February Letter was not couched in temperate tones, nor was it conducive to finding some sort of constructive solution to the problem that had arisen. 66 Moreover, the 16 February Letter had difficulties which transcended tone. It was premised on the basis that the Code of Conduct and the Bullying Policy had contractual force, which entitled Dr Avenia, as matter of contract, to insist upon compliance with the Code of Conduct and the Bullying Policy during the investigation process. Indeed this assertion (which is based on a misconceived reading of clause 3.1(b) of the Employment Agreement) was only abandoned when the case was opened (T 13). Leaving this to one side, an allegation was also made that RTHF had (at least in part) "pre-judged these matters by already determining that [Dr Avenia] may be terminated as a result of the investigation". It was suggested this pre-judgment had arisen in circumstances where RTHF had failed to consider a number of matters detailed in the Code of Conduct. 67 It was said that, as a result of these alleged breaches, Dr Avenia "has a legitimate complaint that [RTHF], and [Ms Tregeagle] have no regard for your own policies and procedures and accordingly, will continue not [sic] comply with them during the investigation". Ebsworths went on to require a full response to a series of questions raised about the policies and "a written explanation as to how [RTHF] will rectify these breaches, compensate [Dr Avenia] for the loss and damage already suffered, and not permit further breaches from continuing". 68 A series of 'interrogatories' were then sought to be administered directed to the investigator's credentials and experience, what precise steps had been taken to ensure independence, and ensuring that the investigator did not suffer from real or ostensible bias. 69 The letter then turned to the allegations and a litany of so called "further and better particulars" were requested, a very large number of which were patently absurd including, by way of illustration, requests such as: (a) What does RTHF mean by "personal conduct"? (b) How does RTHF define "courtesy"? (c) How does RTHF define "respect"? (d) How does RTHF define "kindness"? (e) How does RTHF define "consideration"? (f) How does RTHF define "sensitivity to their rights"? 70 Although some particulars in relation to the allegations contained in the Suspension Letter were directed to seeking specificity in relation to the particular issues that had been raised, when viewed as a whole, given: (a) their client's understanding and state of knowledge about the particular matters identified; and (b) its generally aggressive and oppressive demands, it is regrettable that a letter in the terms of the 16 February Letter was sent. With commendable frankness, Counsel for Dr Avenia did not seek to justify all the contents of the letter. 71 Before turning to the response of RTHF, to provide context, it is worth considering Dr Avenia's attitude towards his employment at the time around this communication. 72 After the suspension, it is plain that Dr Avenia had reached the view that he was no longer bound by his bargain. As he explained (T 106): … because RT Health breached the agreement and showed bad faith to me, I had no interest in upholding my end of the agreement. I've shown them a lot of goodwill leading up to that point and then they chose to - to suspend me, with the threat of termination of employment, and so I didn't feel that any of these things [that is, his obligations to RTHF] applied to me anymore. 73 In this light, the aggressive approach taken by Ebsworths, presumably on the instructions of Dr Avenia, is put into some context. It appears that, by the day before the 16 February Letter (and at the time he had formed the view following what he perceived to be the breach of RTHF), Dr Avenia no longer had an interest in upholding his end of the agreement. On 15 February 2017, Dr Avenia completed an Application to Redirect Mail form and lodged it online with Australia Post. The form that Dr Avenia filled out contained the following declaration: 6 Declaration by the person lodging this form - I have authority to include the people listed above. I understand it is a criminal offence to redirect a person's mail without their authority or to give Australia Post false or misleading information. (emphasis added) 74 The application sought to redirect mail from the address of the Brisbane Clinic (Edward Street, Brisbane City) to a new address (being an address at Norman Park) from 21 February 2017, for a period of three months. 75 On 16 February 2017, Australia Post sent a letter addressed to Dr Avenia at the address of the Brisbane Clinic. The letter noted that an application for a mail redirection service had been made and indicated that if a request to redirect mail was not authorised, the recipient should contact Australia Post. On 20 February 2017, the Australia Post Customer Recovery Team was told by RTHF that the mail direction was unauthorised and that the redirection, scheduled to commence the following day, ought not to occur. On 21 February 2017, Australia Post contacted Dr Avenia by email informing him that Australia Post had received an 'inquiry' in relation to the mail redirection application and that they "have an obligation to investigate". Accordingly, Dr Avenia was advised that he needed to speak urgently with a representative of Australia Post so that it could determine whether the redirection ought to occur. In the interim, the mail addressed to the Brisbane Clinic had "been placed on hold from 21 February 2017". 76 Ms Tregeagle gave evidence (T 224) that the view within RTHF was that it was "felt that the business that [RTHF] purchased was being effectively stolen back by virtue of mail trying to be redirected, phones stopping being redirected and emails stopping redirecting". This allegation of 'stealing the business back' was never put to Dr Avenia in terms and I do not make any such finding. As noted above however, Dr Avenia, after suspension, "didn't feel" that any of his obligations to RTHF were subsisting and he had no further intention to be bound by the Employment Contract. No complaint was pressed in final submissions as to email and telephone redirection, but I will deal, in Section I (Issue Six) below, with the allegation made by RTHF that the attempted mail redirection by Dr Avenia constituted a breach of his duty of fidelity and constituted serious misconduct. 77 Returning to the narrative of the communications between RTHF and Dr Avenia, on the same day that Ms Tregeagle wrote to Dr Avenia complaining about the redirection of mail (on 21 February 2017), she also wrote a letter to Dr Avenia referring to the 16 February Letter. Again, the terms of this letter are not ideal. 78 What should have been evident to RTHF was that the initial letter from Ebsworths in response to the Suspension Letter sent on 2 February 2017, and the longer 16 February Letter, operated on the stated premise that RTHF was conducting a disciplinary investigation of some formality into the matters the subject of the Suspension Letter and that if the allegations were proved, then disciplinary consequences, up to and including termination, could result. I have already found (at [54]-[57]) that this was not the subjective intention of Ms Tregeagle and Ms Renney in sending the Suspension Letter. In responding to the 16 February Letter, one would have thought that RTHF would have, in light of what was being said by Ebsworths, considered and reflected upon the terms of the Suspension Letter, appreciated that it had been maladroitly drafted, and that matters had now gone off the rails. Although Ms Tregeagle had ample justification in believing the 16 February Letter was oppressive, RTHF should have realised that the genesis of the incorrect premise in Ebsworths' correspondence was the mismatch between the tone and substance of what had been said to Dr Avenia and what was communicated to him in writing. Rather than frankly accepting that the Suspension Letter had failed to accurately express the intentions of RTHF, when the response came on 21 February 2017 (21 February RTHF Letter), it was reciprocally combative. 79 The 21 February RTHF Letter referred to the letter from Ebsworths and stated that the "premise of your Solicitor's letter is false. That is, an investigatory process has not been commenced by [RTHF] as yet". It referred to the fact that allegations had been made to a manager but then went on to state that those who had "raised the allegations have not made a formal complaint". Dr Avenia was told that the matter was "at a preliminary stage" and that RTHF had wished to meet with him "to discuss the allegations and your preliminary responses to them prior to commencing any investigatory process or taking any disciplinary action". 80 The 21 February RTHF Letter went on to refer to the directions to attend meetings and said, incorrectly, that at no stage did RTHF "state the meeting on 3 February 2017 was an investigation interview". In any event, RTHF made it clear that no decision regarding termination of Dr Avenia's employment had been made and then turned to what it described as the "[w]ay forward". Correctly, RTHF recorded that it regarded the 16 February Letter as "unhelpful". However, it then made unjustified criticism that Ebsworths had made "unfounded assumptions regarding the current process being undertaken". It then correctly indicated that those assumptions, contained in the 16 February Letter, were dealt with in the 21 February RTHF Letter, in the sense that any misapprehensions had now been addressed. 81 It was against this background that the letter went on to state: For the third time I direct you to attend a meeting to discuss the allegations made against you on Thursday 2nd March at 1.00 p.m. at the Martin Place meeting room in our Surry Hills office, with myself and Helen Renney of [RTHF]. As stated previously you are able to attend that meeting with a support person of your choosing. Please note that a support person is there to support you and not as an advocate. 82 Counsel for Dr Avenia made the point (T 371) that, notwithstanding it might be thought 'smart' points were being taken and that the 16 February Letter was very long, there were "two very simple answers" available to RTHF: first, to explain that an investigatory process that might be disciplinary was ongoing, provide details of Ms Purcell's complaint and the three transcripts of staff discussions which made allegations, and then make it plain that those complaints required a response; or secondly, to accept that a badly drafted letter had been sent, that there was a less formal investigation being conducted "because we know there's problems between you and Bria[n]a and Rashmi, and we're trying to sort them out." The 21 February RTHF Letter, it was suggested, did neither. 83 That submission may be accepted but only up to a point. For reasons I have explained, the failure to appreciate and accept that the Suspension Letter was confusing, and its combative tone, were both regrettable. However, given: (a) what had been communicated orally to Dr Avenia on 31 January 2017; and (b) the whole of the 21 February RTHF Letter when read fairly, the intentions of RTHF were clarified. As noted above, it was emphasised that the "matter is at a preliminary stage" and that RTHF wanted to meet with Dr Avenia to discuss the allegations and obtain "preliminary responses". In this way, although the 21 February RTHF Letter stopped short of frankly accepting that the Suspension Letter was badly drafted, in substance, a form of the second option identified by Counsel for Dr Avenia in [82] was adopted and, importantly, RTHF's true intentions had been communicated. 84 A further letter from RTHF followed on 23 February 2017 (23 February RTHF Letter). This letter reminded Dr Avenia of his obligations under the Employment Agreement and the APA, that RTHF had "full ownership of the Assets" and referred to RTHF's directions that he desist from redirecting mail. Reference was also made to RTHF becoming aware that the telephone number and email address of Dr Avenia's former practice were no longer redirecting. These matters were said to be part of the matters in respect of which RTHF required him to "provide explanatory comments" at the meeting he had been directed to attend on 2 March 2017. 85 One would have thought that, in light of the 21 February RTHF Letter and its consistency with what had been communicated orally on 31 January 2017 by Ms Tregeagle, wise heads would have prevailed. Instead, what happened on 2 March 2017 was that Ebsworths sent a further letter (2 March Letter). The 2 March Letter commenced by making the serious allegation that RTHF was deliberately corresponding with Dr Avenia by post in an attempt to intentionally cause "prejudice, unnecessary delay and disruption to [Dr Avenia]". There was no reasonable basis for such an allegation. 86 A good example of the highly aggressive and 'point taking' approach now adopted on behalf of Dr Avenia emerged from this letter and was related to this serious allegation. Dr Avenia gave oral evidence in chief that he received the 21 February RTHF Letter (and another letter of that date from RTHF) on 22 February 2017 and provided them to his solicitors on 23 February 2017 (T 43). 87 Given this fact, it is disturbing that the 2 March Letter noted that pursuant to s 160 of the Evidence Act 1995 (Cth), correspondence sent by post is not deemed to have been received until the fourth working day after it was posted. As a consequence of this provision, it was asserted by Ebsworths that "the letter was received by our client on Monday, 27 February 2017" (emphasis added). At best, this letter evinced confusion of thought as to the operation of deeming provisions, but whatever misapprehensions were involved, contrary to the true position as to receipt, the 2 March Letter conveyed the assertion that only two business days' notice were being given of the proposed meeting. There is no other available conclusion than that this assertion as to the date of receipt was made for tactical reasons and that Dr Avenia and his solicitors knew the assertion did not correctly convey when he had received notice. The asserted shortness of notice, together with the fact that the earlier oppressive letter of 16 February Letter had not been satisfactorily responded to, was said to render a direction to attend the proposed meeting unreasonable and unlawful. 88 The 2 March Letter went on to make the point that there was an inconsistency between the statements made by RTHF. It was then said: For you to adopt such a position demonstrates either, or both, an unreasonable prejudice against our client and/or an inability to provide any reasonable response to our client's enquiries and complaints in the 16 February Letter. In either case, we do not understand why you would deny an investigation has been commenced… 89 There was then reference to the terms of the Suspension Letter and the suggestion was made that the contention that the matter was at a "preliminary stage" was inconsistent with RTHF's "actual and threatened conduct". The letter went on to state that: The combine [sic] effect of the [Suspension Letter] and the 21 February [RTHF] Letter is that [RTHF's] position is that [RTHF] is able to terminate [Dr Avenia's] employment after having a preliminary meeting with him, and without conducting any proper investigation into the matter. Such a position is unreasonable, unlawful and demonstrates [sic] total prejudice [RTHF] has towards [Dr Avenia]. 90 Breaches of the Fair Work Act 2009 (Cth) (FWA) and breaches of contract were alleged, and RTHF was said to be "on notice that as a result of the adverse action and to prevent further adverse action, injunctive relief proceedings will be commenced in the Federal Court of Australia (without further notice) should RTHF continue not to comply with its legal obligations and to engage in unreasonable conduct". 91 There was more to come. Ebsworths sent another letter on 2 March 2017 referring to the redirection of mail and ancillary matters. Again, there was a misconceived reference to s 160 of the Evidence Act. Moreover, notwithstanding that Dr Avenia knew exactly what had occurred in relation to the mail redirection, the following was said: In support of the Mail Redirections Allegation, [RTHF] alleged that: "Australia Post has written to [RTHF] confirming same". You have not provided a copy of this correspondence. We require copies of all correspondence, including letters, emails and file notes of conversations, between Australia Post and [RTHF] regarding the Mail Redirections Allegation. Please advise as to the basis upon which you had authority to make enquiries about our client's mail and communication with Australia Post (a third party) about our client and his mail without his consent. Please provide particulars as to the basis upon which you advised Australia Post that you had authority. It appears that [RTHF] has breached our client's privacy, applicable privacy legislation and we request a copy of [RTHF]'s privacy policy forthwith. Further, the Mail Redirection Allegation has been made after [RTHF] received the 16 February Letter, which made complaints and enquiries about our client's employment. It appears [RTHF] has made the Mail Redirection Allegation in retaliation of the 16 February Letter which is adverse action and unlawful. Although we have not been apprised of the information necessary to provide a full response, we observe that our client would be within his rights to request that correspondence addressed to him be delivered to any address of his election. [RTHF] has no legitimate claim over letters or correspondence addressed to our client. Such correspondence may include Court documents, such as subpoenas, personal bills, personal correspondence and medical information. To the extent that any correspondence is related to patient care, we note that it is [RTHF] that has taken steps to prevent [Dr Avenia] from fulfilling his duties and responsibilities to provide quality patient care and remain in contact with patient management (if required). In this regard, the suspension required our client to remain available to perform his roles and responsibilities at any time (if necessary). We remind you that the National Dental Board of Australia Code of Conduct requires, amongst other things, that our client "facilitate[e] [sic] [the] coordination and continuity of care". Given the conduct of [RTHF] to date, our client is concerned that [RTHF]'s conduct may prevent or impede our client's compliance with his ethical and professional obligations. [RTHF] is on notice. (original emphasis) 92 Why Ebsworths were not apprised of the information necessary to provide a full response was unexplained. Indeed, in relation to another allegation made by RTHF, this letter can be described as disingenuous. As to email redirection, which was admitted by Dr Avenia in the course of his evidence, it is said that RTHF had made "no specific allegation as to [Dr Avenia's] conduct. Rather, it simply alleges certain things have occurred (again, without providing details or proof), but makes no attempt to draw a connection between [Dr Avenia] and the conduct". Dr Avenia had made a conscious decision to redirect his email as he considered he had a perfect entitlement to do so. It does not reflect well on Dr Avenia that tactical positions of this type were being taken in correspondence, presumably on his instructions. 93 Returning to the chronology of events, on 7 March 2017, RTHF sent the Show Cause Notice referring to the refusal to attend meetings on 3 February, 17 February and 2 March 2017 and alleging that each of the directions to attend those meetings was reasonable and lawful. It asserted that the continual refusal to attend was a breach of the Employment Contract. Additionally, reference was made to further alleged serious misconduct being the redirection of mail and the redirection of Dr Avenia's email. It suggested that Dr Avenia could not return to work at the Brisbane Clinic by reason of: (a) his present conduct in refusing to comply with lawful and reasonable directions; (b) the allegations made against him remaining unresolved; and (c) the staff at the Brisbane Clinic having "significant concerns about working with you". 94 Under the heading "Way forward", RTHF advised that, in light of the alleged misconduct, it was giving consideration to terminating the employment of Dr Avenia and that he should show cause why he should not be terminated prior to 4pm on 10 March 2017. 95 The day before the expiry of the Show Cause Notice, a further letter was sent by Ebsworths alleging, inter alia, that the Show Cause Notice constituted adverse action contrary to the FWA and warning of the imminent commencement of proceedings. In this context, an offer was made that Dr Avenia "will comply with his obligations under the 'Employment Agreement'" and will refrain from seeking relief, in exchange for: (a) an undertaking being given by RTHF that Dr Avenia's employment would not be terminated without seven days' notice; (b) suspension on full pay continuing; (c) all entitlements under the Employment Agreement and APA being paid; and (d) RTHF appointing (and presumably paying for) an "independent investigation" to be conducted by the Honourable Peter Jacobson QC. 96 This offer was not taken up. As we now know, the next day Dr Avenia filed this proceeding in Court and sought and obtained an order, on an ex parte basis, that RTHF be restrained from taking any steps to terminate his employment.

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I Motivation Generally 97 This case was opened and maintained with a hierarchy of complaints which, at the apex, was a serious allegation of dishonesty and bad faith. In the amended points of claim filed and served during final submissions (APOC), it was alleged that the Suspension Letter and the Show Cause Notice were given "in bad faith": APOC [37], [44]. It was also said that the Suspension Letter and the Show Cause Notice were not in accordance with "honest standards of conduct": APOC [37(a)]; Closing Submissions [8]. 98 I confess the notion that RTHF was engaged in a dishonest exercise because of Dr Avenia's insistence on dental work being conducted a particular way, which was less profitable than the way RTHF considered it should have been done, is one that does not make any sense to me. If RTHF wanted to be rid of Dr Avenia because they considered him a 'turbulent priest', or for base financial motives, it was remarkably easy for it to achieve that end - he was on probation. As noted in [13] above, the Employment Agreement provided for a Probation Period of six months calculated from 14 September 2016 to 14 March 2017. In these circumstances, the notion that RTHF would have engaged in some sort of dishonest scheme to orchestrate a summary termination or a termination for cause is intuitively odd. 99 Having said that, and having considered all the evidence, I reject the allegation that relevant employees of RTHF and Ms Tregeagle in particular were motivated by anything other than a good faith attempt to resolve a real staff problem they perceived needed to be addressed. More particularly, as to Ms Tregeagle's and Ms Renney's intentions in sending the Suspension Letter, although Ms Renney had considered that it was possible that the response to the receipt of Suspension Letter would be Dr Avenia's resignation, the purpose of sending it was not to encourage Dr Avenia to take this step and Ms Tregeagle did not imagine that resignation was a real possibility or that the departure of Dr Avenia was then in the best interests of RTHF (T 216). 100 In dealing with Dr Avenia and his solicitors up until at least the sending of the 21 February RTHF Letter, I accept the evidence given by Ms Renney (T 273-4) that: We had invested a lot of time in actually recruiting Dr Avenia. It had taken months. We had paid over $32,000 to a recruitment agency to secure him. We had a new clinic going, and it needed a leader in place for the rest of the team to report to and work with. To not have Dr Avenia in the position would have severely impacted our business plans, left a team without a leader, and we would have lost our investment in terms of the $32,000-odd we had paid. But also we had invested a lot of time in helping him be successful. For example, he had a comprehensive onboarding plan. He was sent to Adelaide to Health Partners to help him learn more about the business of a health fund's clinic. He came to Sydney on a very regular basis and spent time with Ms Tregeagle, which would have helped him to settle in. So he had had quite a lot of activity and effort put in his way. To have terminated him within probation would have put us under all of that effort and cost. 101 Moreover, I accept Ms Tregeagle's evidence, consistent with that of Ms Renney and what I regard as the inherent probabilities given the existence of the Probation Period (T 216-7), that she: …had no desire for [Dr Avenia] to leave the business. What I needed was the Brisbane issues to settle, for this team - and to understand what was happening in Brisbane, you know, there was clearly a dynamic that wasn't working and what was causing it or who was causing it, I don't know. What I did have is three fairly robust claims of behaviours which we needed to address, and I had every intention and hope and aspiration that we could get this team through mediation, or through coaching, or counselling, or investigating if the claims were not true, if that's what was going to be proposed to us. But I really wanted and needed this team to settle down for [Dr Avenia] to be successful in this position and to not be in the boat where he was leaving us, or we were asking him to leave, and we were having to go through a long, laborious, expensive difficult recruitment process again. I wanted him to succeed in this role…So the situation, knowing [Dr Avenia] and having seen the way that he engaged and having experienced that and having spoken to him and having had him said [sic] to me, "Yes, I behaved in this way," I understood that he was behaving in a way that maybe in private practice is perfectly acceptable but in a corporate environment is not, and we had had those conversations. I understood that he, you know, was open and willing to working… on developing the skills of managing, rather than being a boss in a small business environment, and that that required a different form of communication… 102 Turning to the 21 February RTHF Letter, Ms Tregeagle accepted (T 221) that by reason of the 16 February Letter, she had formed the view that Dr Avenia was permitting his solicitors to engage in conduct directed to distracting RTHF. She also agreed that "it was because of that view" that she made the decision that he be provided "one third and final opportunity to attend the meeting as he had been directed". That answer must be seen contextually. She did believe (and the 21 February RTHF Letter did record) that the solicitors were being unhelpful and were, in effect, putting up road blocks to the meeting occurring, but the reason for the further direction to attend a meeting was not that Dr Avenia had engaged his solicitors to make assertions about, among other things, a lack of procedural fairness, but because Ms Tregeagle considered sufficient information had been given to Dr Avenia to attend a meeting of the type she contemplated. The overall problem which had prompted the Suspension Letter was unresolved and, as Ms Tregeagle explained in her affidavit, the business of RTHF was being affected and it was chaotic organising the business in the absence of Dr Avenia. It was an irritation and annoyance that Ebsworths were "possibly deliberately" preventing Ms Tregeagle from achieving her end of resolving the problem that had caused the suspension (and was the result of the suspension), but the only substantial and operative cause of providing the so-called "third and final opportunity" to attend a meeting was not what Ebsworths had done on behalf of Dr Avenia, but Ms Tregeagle's motivation in resolving the underlying problem. 103 When it comes to the Show Cause Notice, this intention had evolved somewhat but was not fundamentally different. Ms Tregeagle gave evidence (T 229), which I accept, that: …We were now at six weeks into the process. We had had no communications directly from [Dr Avenia], we had had no response to the issues that were the trigger for all of these things, and we needed to somehow resolve the situation that we were in. So there's a letter… which is a show cause letter…We had made the decision that we needed to enable an opportunity for [Dr Avenia] to tell us if there was any good reason why [termination] shouldn't be the next thing that happens….there's been a decision that we need to now press for the next - to the next level and if we don't have a good response to [the Show Cause Notice] then we will need to terminate. 104 Ms Tregeagle was then asked (given the decision to terminate had not been unequivocally made at the point of the Show Cause Notice) as to when she made the final decision to terminate, to which she responded she was not sure, other than to note that at the time she was being cross-examined, the decision had "absolutely" been made and that (T 230): …Clearly, the employment possibilities have broken down completely at this point and it is not viable for us to resume any employment relationship, so termination is - is the option that we have. 105 Consistently with this evidence, when the ex parte injunction was dissolved, termination took place. 106 Still on the question of the motivation and intention of RTHF and Ms Tregeagle, at the hearing much was made of the inconsistency between what was said by RTHF and Ms Tregeagle of their intentions to have a preliminary discussion and the terms of the Suspension Letter, which referred to the fact that one possibility of the meeting was termination. This will be addressed further below, but I consider that the inclusion of this statement as to the possibility of termination can be attributed to Ms Renney's 'cutting and pasting' and confusion as to what needed to go into a letter which would have reflected accurately the intentions of Ms Tregeagle (as communicated orally on 31 January 2017 and as were clarified in the 21 February RTHF Letter). There was an attempt (or at least there appeared to be an attempt) by RTHF and Ms Tregeagle to explain the reference away by saying it referred to a circumstance where Dr Avenia would have said "[y]es, I bullied them and you can go to hell if you want me to stop" (T 224), but I incline to the view that this was a rationalisation and had nothing to do with the drafting. 107 For completeness, and given the seriousness of the allegation, I ought to deal specifically with the issue that had arisen concerning a revenue drop, which had been caused by a significant reduction in complex dentistry for patients: see [32]-[36] above. Ms Tregeagle accepted that, by reason of Dr Avenia's view as to optimal clinical interventions, he "had been responsible for… a very direct bottom line dollar impact on revenue in the [Surry Hills] clinic" (T 159). It is clear that this was of concern to her (as it would have been to the Board) but, notwithstanding this, I also accept her evidence (T 159) that: …If the drop-off in revenue was a trade-off for the fact that we were getting better clinical outcomes, and that before we were perhaps doing work in the clinic that was not of an acceptable standard, then that's a problem for us. So we needed to understand further were we foregoing revenue in exchange for better quality clinical care? And if we were, that's acceptable, but what are we going to do to put the revenue back in the business that it's now lacking? 108 I reject the contention, to the extent it continues to be maintained, that RTHF or Ms Tregeagle took into account actual or potential reduction in the dental practice revenue (by reason of Dr Avenia insisting on particular clinical standards) in sending the Suspension Notice, the Show Cause Notice or terminating Dr Avenia's employment: see APOC [37(e)], [44(e)] and [47]. If Dr Avenia had concluded that RTHF and Ms Tregeagle were engaging with him in bad faith by reason of the financial motive he attributed to them, he was wrong to do so. In the absence of any compelling evidence to support this dishonesty case, given the skilled and careful way that Mr Brennan and Mr Bennett conducted Dr Avenia's case at the hearing, it is not surprising that the case against Ms Tregeagle was abandoned in final submissions.

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II Credit 109 Some of the general findings I have made in Section B, and the specific findings I have made about intention and motivation in Section C, have involved largely accepting the evidence of Ms Tregeagle and Ms Renney as to: (a) their subjective motivations and intentions; and (b) their accounts of their dealings with the staff of RTHF. Although I do not consider that the aspect of the 21 February RTHF Letter which refused to confront the misleading impression caused by the Suspension Letter reflects well on RTHF, Ms Tregeagle and Ms Renney were witnesses who did their best to give an honest account of events and their motivations. Similarly, although Ms Purcell may have been 'picky' in some of her complaints - particularly as to hygiene and infection control - she gave, in my view, an honest account of her concerns as to what had occurred in working with Dr Avenia. 110 I have already made reference to the 'point taking' and combative approach taken by Dr Avenia following his suspension. But when one comes to the s 160 point regarding service (see [86]-[87] above) and the second letter of 2 March (see [91]), this approach went further: it amounted to a lack of candour adopted for tactical reasons. Regrettably, this approach was not restricted to the contemporaneous correspondence and found reflection in an aspect of the evidence at the hearing, to which I now turn. 111 In his affidavit in reply, Dr Avenia responded to the evidence of Ms Purcell that on 22 February 2017 she discussed with Ms Tregeagle that the email address of Dr Avenia, which had been directing to the Brisbane Clinic, was no longer redirecting, and she said: "I know this because I sent a test email." Dr Avenia, in response, deposed to the fact he "did not alter, and did not instruct anyone to alter, the redirection settings…I do not have the training or expertise to arrange for any email redirection settings to be altered." 112 In his evidence during the hearing, Dr Avenia agreed that, in fact, he did know about the email redirection and that he decided to proceed with it without telling RTHF and that the relevant paragraph in his affidavit deposing to the contrary was "not true" (T 108). No doubt Dr Avenia felt strongly that RTHF had behaved badly towards him. Despite his initial reaction, it was understandable, on reflection, that he was less than impressed by the mixed messages he received from RTHF on 31 January 2017. Despite this, I formed the strong impression, from reviewing the correspondence sent on his instructions after the suspension, and observing Dr Avenia in the witness box, that he was willing to adopt positions in a tactical way and to fashion his evidence in a way that placed his actions in the best possible light. His animus towards those he perceives to have wronged him makes him a less than reliable historian of events.

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I Relevant Principles 114 Before dealing with terms of the Employment Agreement and the APA specifically, it is worth briefly identifying the principled approach to ascertaining the rights and liabilities of the parties. 115 Of course, the rights and liabilities under a contract are to be determined objectively, by reference to a textual as well as a contextual analysis (that is, by reference to the entire text of the contract as well as any contract or document referred to in the text) and purpose. Ordinarily, this process of construction is possible by reference to the contract alone but sometimes, where there is constructional choice, recourse to events, circumstances and things external to the contract is necessary (including the genesis of the transaction and the commercial background): see Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37; (2015) 256 CLR 104 at [46]-[52] per French CJ, Nettle and Gordon JJ; [107]-[113] per Kiefel and Keane JJ; [119]-[121] per Bell and Gageler JJ, and the observations of Kiefel, Bell and Gordon JJ in Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 91 ALJR 486 at [16]-[17], citing Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640. 116 It is also trite that the court is entitled to approach the task of construction on the basis that the parties intended to produce a contract that makes commercial sense, that is, a contract consistent with the commercial object of the agreement: see Woodside Energy at [35]. 117 Consistent with these notions is an approach to construction upon which Dr Avenia places much emphasis: that is, where a transaction is implemented by two or more instruments or documents, they may be read together for the purpose of ascertaining their proper construction and legal effect, at least where the contracts or documents are executed contemporaneously or within a short period: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23 at [104] per Buss JA (Owen and Newnes JJA agreeing). In this regard, Dr Avenia's written submissions referred (without elaboration) to Lewison K and Hughes D, The Interpretation of Contracts in Australia (Lawbook Co, 2012), where the authors observe, at [3.03], that the rationale for this proposition is that "[e]ach [deed] is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole": see also Hoyt's Pty Ltd v Spencer [1919] HCA 64; (1919) 27 CLR 133 at 144 per Isaacs J.

[22]

II Express Terms of the APA and the Employment contract 118 The question of whether dealings between Dr Avenia and RTHF were properly characterised as being one transaction constituted by two agreements (which were partly in express terms and partly implied) assumed some importance in the argument advanced by Dr Avenia. It will be recalled that the Employment Agreement was signed on 7 October 2016 and that the APA was signed on 5 November 2016 (but was dated 30 September 2016). As can be seen below, the commercial purpose of the APA was to effect a conveyance of Assets (a defined term, comprising of a database of approximately 5,000 patients and specialised dental equipment) on terms which had been the subject of negotiation for a period, including following the commencement of Dr Avenia's employment. 119 As to the relationship between the two instruments, Dr Avenia pointed to the fact that the APA refers to the Employment Agreement, something that is particularly demonstrated by Recital C of the APA, which provides as follows: Dr Avenia has agreed to become an employee of [RTHF] on the terms set out in the [Employment Agreement]. 120 To understand Dr Avenia's argument (and to identify some other terms which it will be necessary to consider in detail below), it is useful to set out the operative terms of the APA in full: Agreed Terms 1. Prior to the Commencement Date, Dr Avenia shall conduct the Dental Practice in accordance with normal professional practice and shall continue to provide dental services to all patients in the normal course and shall provide full details of the Database to RT Health. 2. On and from the Commencement Date, RT Health shall take full ownership of the Assets. 3. The consideration payable for Equipment shall be $70,000, appendix A lists the equipment. This will be paid as soon [sic] practicable following execution of this agreement. 4. The consideration payable for the Dental Database shall be $160,000 (Transfer Price, based on 33% of yearly average of 3 year's immediate prior gross turnover) payable in 3 tranches based on the RT Dental Clinic revenue from Active Patients. Payments will be made at the close of the December, March and June quarters of FY2017. The quantum of each tranche will be based on the % achievement of the pro-rata gross revenue of $480,000 from Dr Avenia's 1,200 Active Patients by the close of June quarter 2017 (i.e. a target of $160,000 per quarter) provided that any shortfall in a quarter can be made up in the next quarter (up to the end of the June quarter 2017). Example: Assumed quarterly revenue Quarterly tranche payable December quarter: $136,000 (85% of target) December tranche = $45,333 (85% of $53,33) March quarter: $168,000 (95% of aggregate target) March tranche = $56,000 (95% of $106,666 = $101,333 less $45,333) June quarter: $176,000 (100% of aggregate target) June tranche = $58,667 ($160,00 less $45,333 less $56,000)

[23]

In consideration for RT Health agreeing to make the payments under this agreement, Dr Avenia covenants that he shall: (a) promote the RT Dental Clinic to the Database and in particular shall directly encourage all existing patients of the Dental Practice to become patients of the RT Dental Clinic including putting his name to promotional material prepared by RT Health (subject to compliance with all applicable laws, rules and professional guidelines); (b) ensure the existing contact number used in the Dental Practice (xx xxxx xxxx) is redirected to the RT Dental Clinic from the Commencement Date; (c) ensure all appointments made by patients of the Dental Practice for dates on or after the Commencement Date are transferred to the RT Dental Clinic; (d) not be involved with any dental practice other than the RT Dental Clinic from the Commencement Date; (e) encourage his patients to transfer their private health insurance to RT Health or its related fund Transport Health Fund and promote the benefits of joining the funds in relation to benefits for dental and optical expenses; and (f) not make any use of the Database other than for the benefit of the RT Dental Clinic or as RT Health directs. 6. Dr Avenia warrants that: (a) he is free to transfer the Assets to RT Health; (b) the Equipment is not encumbered in any way; (c) all information and documentation provided in relation to the Assets is accurate; and (d) he is not aware of any outstanding complaints or claims made by any patients forming part of the Database. 7. The parties shall execute all further documents and consents necessary, and will use their best endeavours acting in good faith at all times, to give full effect to the matters contemplated by this agreement. 8. All amounts stated in this agreement are exclusive of GST and if GST is applicable the party paying the amount will also pay the applicable GST at the same time, subject to receiving a taxable invoice from the recipient. 9. This agreement is governed by the laws of New South Wales and may only be varied in writing signed by all parties. 10. In the event of any dispute, the parties agree to use their best endeavours to resolve the dispute through direct negotiations. 121 A further textual indication that the conveyance was part of one transaction constituted by two agreements was said, by Dr Avenia, to be revealed by the terms of clause 7 which, as can be seen, relevantly required the parties to use their best endeavours, acting in good faith at all times, to give full effect to the matters contemplated by the APA (Express Best Endeavours Term): APOC [15]. The employment of Dr Avenia, the argument went, was plainly something contemplated by the APA. 122 Similarly, clause 7 was also relied upon as constituting an express term that RTHF would act in good faith at all times to give full effect to the matters contemplated by the APA: APOC [16]. Again, this express term of the APA that RTHF would act in good faith at all times (Express Good Faith Term) was said to regulate the employment of Dr Avenia, because such employment was contemplated by the APA. 123 What was described as an 'alternative' argument was also advanced by Dr Avenia: that even if what occurred could not be said to be one transaction constituted by two agreements (in the sense explained by Isaacs J in Hoyt's Pty Ltd v Spencer), then these express terms (being the Express Best Endeavours Term and Express Good Faith Term) transcended the conveyance of the Assets and expressly regulated all the contemplated dealings between the parties, including the employment relationship. 124 Whether this is a true argument in the alternative may be a matter of semantics. The identification of the terms of the relevant bargain as to employment, by focussing on whether this is one transaction governed by two agreements, is not a particularly useful starting point of analysis. The answer to identifying the rights and liabilities between the parties in the employment relationship is to be approached by ascertaining what a reasonable person would have understood the language in which the parties have expressed themselves to mean: see Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. Particular rules of construction are useful tools but are subordinate to the primary duty, which is to uphold the bargain agreed between the parties: see McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 at [74] per Kirby J.

[24]

III The Express Best Endeavours Term and Express Good Faith Term 125 In any event, whatever way the task is first approached, I do not consider that the terms governing the employment of Dr Avenia included the Express Best Endeavours Term or the Express Good Faith Term. 126 It seems to me, viewed objectively, that the rights and liabilities of the parties in relation to the employment of Dr Avenia were to be regulated by the express terms of the Employment Agreement and any terms that were to be implied which, together, constitute what I have defined as the Employment Contract (I deal with the implication of terms in Section F below). 127 There are a number of reasons why this is so. 128 First, the Employment Agreement provides (clauses 18.1 and 19) that identified rules of interpretation and "general contract provisions" set out in Schedule 2 to the Employment Agreement "shall apply". One of these general contract provisions is Part C, Item 1.2 of Schedule 2 which (by incorporating the definitions in Part A) provides that the document, being the Employment Agreement, embodies the "entire agreement" between Dr Avenia and RTHF "with respect to[Dr Avenia's] terms and conditions of employment". 129 Secondly, consistently with this entire agreement provision, taking the document as a whole, it is evident that the Employment Agreement is drafted in such a way as to identify all the express terms of the employment relationship. Objectively ascertained, the rights and liabilities of the parties to the employment relationship, to the extent they were defined by express terms, are to be found in the document comprising: (a) what appear to be relatively 'standard form' operative parts (from clauses 1 to 19); (b) Schedule 1 (which identified bespoke details such the name and address of the employee, commencement date and position, remuneration etc.); (c) Schedule 2 (which, as noted above, provided definitions, rules of interpretation and general contract provisions); and (d) Appendix 1 (which set out an 'example' of a remuneration calculation as provided for in clause 7.5 - in this regard, I should note that commission is dealt with in both the operative parts and also in Schedule 1). 130 Thirdly, whatever be the position as to terms implied by law or fact, there is no textual indication in the document that the employment relationship is to be conditioned upon, or governed by, further express terms identified (or to be identified) in another instrument; every indication is that the metes and bounds of the express terms of the employment relationship are set out in, and are to be governed by, the Employment Agreement signed on 7 October 2016. 131 Fourthly, when looking at the matter from the perspective of the characterisation of the APA, the following can be observed: (a) the purpose of the APA is to effect a conveyance of Assets (albeit a conveyance which, as part of the relevant background, arises in the context of the agreement of Dr Avenia becoming an employee of RTHF); (b) the Agreed Terms are directed to the orthodox terms of a conveyance: preservation of value (clause 1), transfer of property (clause 2); consideration (clauses 4 and 5); warranties (clause 6); GST (clause 8); governing law (clause 9) and dispute resolution (clause 9); (c) hence, when it comes to clause 7, it must be read in the context of the whole of the document and the evident purpose of the instrument - a conveyance of the Assets. The documents and consents necessary (referred to in clause 7) are clearly documents and consents required to facilitate the transfer of the Assets. So too, it seems to me, are the express obligations of best endeavours and good faith to give effect "to the matters contemplated by this agreement" (emphasis added); (d) again, whatever be the position as to terms implied by law or fact into the APA, the conveyance of Assets was not in any way dependent upon the employment continuing and not, for example, being terminated at any time during the Probation Period; (e) although the employment relationship is part of the background to the transaction, neither the text nor the context of the APA suggest that clause 7 (uniquely and unlike the position of all the other Agreed Terms) was meant to regulate anything other than the conveyance; (f) read in context and by reference to the entire text of the contract as well as the commercial purpose of the APA, the "matters contemplated by this agreement" are matters relating to the conveyance of Assets and not the separate relationship of employment governed by the terms of another instrument, being the Employment Agreement and any terms implied into it. 132 Having dealt with the pleaded Express Best Endeavours Term and Express Good Faith Term, I now turn to other express terms of the Employment Agreement, which have relevance to the proceeding.

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I The Implied Terms of the Parties 138 The only implied term pleaded and relied upon by Dr Avenia was a term that RTHF would provide Dr Avenia with continuing opportunities to undertake a range of clinical dental care and the prospect of earning commission each fortnight: APOC [9] (Continuing Work Implied Term). 139 In the Amended Points of Defence (APOD), the existence of the Continuing Work Implied Term was denied, and the respondents further asserted a different implied term, which was pleaded at APOD [33]. That implied term was that Dr Avenia: …could be suspended on his base salary by [RTHF] pending the resolution of any alleged complaints or concerns raised against him that might reasonably be considered by [RTHF] to constitute a risk to the work health and safety of [Dr Avenia] or other persons (including employees of [RTHF]) and/or give rise to a breach by [RTHF] of its obligations under the Work Health and Safety Act 2011 (QLD) (OH & S Term). 140 Dr Avenia rejected the OH & S Term as being implied into the Employment Contract. Despite this, Counsel for Dr Avenia accepted (T 333-5): (a) that an exception or qualification to the Continuing Work Implied Term would be if a suspension "was reasonably necessary for the purposes of a disciplinary investigation"; (b) that anything short of necessity (which was accepted as meaning reasonable necessity) would not justify an exception or qualification to the obligation to provide work; and (c) that if the Court found that Dr Avenia was acting in such a way that made it necessary to suspend his employment, because RTHF had a legal duty to do so, then such a suspension would be authorised in accordance with the Employment Contract - the key, however, was necessity, and it was insufficient if there was only a legitimate concern. Put another way, to suspend, short of reasonable necessity, would be to act in breach of the Continuing Work Implied Term. 141 The point of this exchange transcended whether or not there would be particular exceptions or qualifications to the precise implied term contended for by Dr Avenia. For reasons I will explain, there was not implied into the Employment Contract either the term proposed by Dr Avenia (the Continuing Work Implied Term) or the term proposed by RTHF (the OH & S Term). Why the exchange is significant is that Counsel for Dr Avenia accepted that, in circumstances involving reasonable necessity, a suspension would not amount to a breach of contract. The power to direct suspension and whether the suspension was authorised in the circumstances of this case will be examined separately, and in detail, below. The purpose of this section of these reasons, however, is to identify what was, and what was not, implied into the Employment Contract and the principles that inform those conclusions.

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II Implication of Terms in Employment Contracts Generally 142 The Full Court in University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346 at [135], quoting Society of Lloyd's v Clementson [1995] CLC 117 at 131, observed that contractual terms implied in fact (of the kind contended for by the parties in the present case) are "individualised gap fillers, depending on the terms and circumstances of a particular contract". Gageler J in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [113] made the same point, drawing the distinction between contractual terms implied in law (which can be seen as incidents attached to standardised contractual relationships, operating as "default rules") and terms implied in fact which should only be implied where the well-known conditions set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] UKPCHCA 1; (1977) 180 CLR 266 are met, including that the term is "necessary" to give "efficacy" to the particular contract, and that the term to be implied is not inconsistent with any express term of the contract. 143 Often parties turn to ad hoc implied terms where such an implication is not actually necessary. It is beyond the scope of this judgment to debate the difficult questions surrounding where the context or framework within which the contract is interpreted finishes and implication of a term begins and, in particular, whether notions such as a duty to co-operate can be seen as an informing or organising principle around a formed bargain, not as separate and distinct implied terms: see Chief Justice Allsop's extra-curial observations in "Conscience, Fair-dealing and Commerce - Parliaments and the Courts" (FCA) [2015] Federal Judicial Scholarship 17 at [34] (in the context of duties of good faith and fair dealing, which do not arise as implied terms on Dr Avenia's argument). As will be seen, it suffices for present purposes to note that this is an example of a case where a proper construction of the express terms of the contract by reference to context, including the nature of the employment relationship and the duty to co-operate, demonstrates there are no real 'gaps' and hence there is no need for an ad hoc expedient to fill perceived but illusory voids.

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III Continuing Work Implied Term 144 The Continuing Work Implied Term advocated by Dr Avenia (that RTHF would provide Dr Avenia with work and the prospect of earning commission each fortnight) is not one that is necessary to imply into the Employment Contract. It is necessary to explain that conclusion in a little detail. 145 The bargain between the parties is to be construed by reference to the general principle of construction according to which parties are taken to agree to do all that is reasonably necessary to secure performance of their contract. Plainly, RTHF and Dr Avenia had a duty to co-operate and agreed, by implication, to do all such things as are necessary to enable the other to have the benefit of the Employment Agreement and, as a corollary to this obligation, each was implicitly obliged to refrain from doing anything that would deprive the other of the benefit of the contract. This was an incident of the underlying principle that contracting parties must also take all necessary steps to contribute to the full realisation of the contractual bargain: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 at 607-608 per Mason J; Park v Brothers [2005] HCA 73; (2005) 80 ALJR 317 at [38]; Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126 at 142 per Gleeson CJ, Gummow, Kirby and Hayne JJ. Of course, in many cases "[t]he difficulty lies in giving content to that obligation": Council of the City of Sydney v Goldspar Australia Pty Ltd [2006] FCA 472; (2006) 230 ALR 437 at [162] per Gyles J. 146 Having said that, in this case, the remuneration payment, including the provision by RTHF of the opportunity for Dr Avenia to work and earn commission during his employment, was (to use Mason J's words in Secured Income) "fundamental to the contract", and the obligation by RTHF to do (and refrain from doing) things necessary on its part to give Dr Avenia the benefit of the bargain (including access to work to earn commission) is best addressed by reference to, and seen as an incident of, the duty to co-operate rather than the implication of an ad hoc implied term (such as the alleged Continuing Work Implied Term which does not meet the criterion of necessity). 147 Having dealt with the express and implied terms pleaded by Dr Avenia does not conclude the necessary contractual analysis. I now turn to the issue of how the relevant contractual rights and duties that did exist impacted upon or regulated the ability of RTHF to give a direction that Dr Avenia not attend work, given the existence of the Reasonable Direction Provision (reproduced at [134] above).

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I The Relevance of the Concept of Reasonable Direction 148 There are two ways in which the concept of a 'reasonable direction' is relevant to this case: first, whether it was a reasonable direction for RTHF to direct Dr Avenia not to attend work (that is, suspend him); and secondly, whether the directions to attend meetings were reasonable directions, which, in turn, bears upon whether RTHF's reliance on one of the Summary Termination Provisions (clause 14.1(b)(vii)) in its eventual dismissal of Dr Avenia, was valid. This second aspect is connected to consideration of the argument advanced by Dr Avenia that RTHF had an obligation to act reasonably when exercising a power that may have affected adversely Dr Avenia's employment as a matter of contract, which, in the circumstances, required the exercise of the contractual right to give directions to be in accordance with principles of procedural fairness. 149 In this section I will deal only with the first of these topics relating to suspension, reserving consideration of the efficacy of directions to attend meetings and the contractual duties of RTHF to Section I (Issues Four and Six) where I deal with the lawfulness of these directions and of the ultimate termination of Dr Avenia's employment. 150 As noted above, unlike many modern employment agreements, the Employment Agreement contained no express power to suspend on full pay or otherwise pending an investigation of alleged or suspected misconduct. For this reason, the discussion at the hearing as to the reasonableness and lawfulness of the suspension tended to occur in the context of argument about what term ought to be implied, as a matter of fact, into the Employment Contract as to a right to suspend. I have already identified the competing contentions of the parties in this regard (at [138]-[141] above). In relation to the alleged OH & S Term, given the existence of the employment relationship created by the Employment Contract and, in particular, the Reasonable Direction Provision, for reasons I will explain, it seems to me clear that, provided the direction was of a certain character (that is, it was reasonable), RHTF had a right to suspend on full pay temporarily for a proper purpose pending an investigation or fact finding, without any need to imply either the OH & S Term (contended for by RTHF), nor the refinement on that term accepted by Counsel for Dr Avenia (see [140] above). 151 Transcending any issue as to implied terms, Dr Avenia developed an argument, partly pleaded and partly not, which engaged with the alleged reasonableness of the direction to suspend, in various ways: (a) First, Dr Avenia argued, in effect, that RTHF's primary argument, that it was not conducting a formal 'disciplinary investigation', proves too much: if there was no formal disciplinary investigation, there was no lawful power to suspend. It is axiomatic, the argument went, that any suspension could not possibly have been necessary (which, Mr Brennan accepted, at T 334, meant "reasonably necessary") for the purposes of a disciplinary investigation that was not actually on foot. This was connected to the pleaded argument that the suspension "was not required by law", was inconsistent with the Bullying Policy and was inconsistent with the existence of the Continuing Work Implied Term by interfering with Dr Avenia's employment: APOC [33], [35]-[36]. (b) Secondly, the suspension breached the Express Best Endeavours Term: APOC [34(a)]. (c) Thirdly, the suspension was "in bad faith". This was put in various ways but is connected, at least in one respect, to the first argument, as it is contended that "the only proper purpose for the suspension was to enable a disciplinary investigation to occur" but RTHF was not conducting such an investigation. Given, however, that it is an allegation of mala fides and that the conduct was inconsistent with "honest standards of conduct", this allegation went further and was that such a course involved conscious wrongdoing: APOC [37]. 152 I have already dealt with the express terms and implied term relied upon by Dr Avenia and the balance of these arguments will be dealt with in Section I (Issue Two) below, but prior to doing so, it is necessary to start with understanding what (in the light of what I have found to be the terms of the Employment Contract, including the duty to co-operate) were RTHF's rights to suspend under the Employment Contract. 153 In the absence of an express term authorising suspension, RTHF originally argued that it had a right to suspend Dr Avenia without elaboration other than to state it could suspend, in the circumstances of this case, for work health and safety reasons: APOD [33]. This argument presupposed a right to direct suspension if certain circumstances existed. Although RTHF's argument, as the case went on, was further refined to suggest that the right to suspend would rest on the OH & S Implied Term, the argument was not restricted to justifying suspension solely by reference to the implication of this term. The logical starting point, in the absence of an express term, is to consider when an employer has a right to suspend an employee at common law.

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II Suspension of Employment at Common Law 154 At common law, an employer has no right to suspend an employee without pay for misconduct, even if that misconduct would justify summary dismissal - that is, an employer must take an "all or nothing" approach and either dismiss the employee or treat the contract as continuing (with the possibility of claiming damages against the employee for the breach). 155 The law has treated suspension on full pay for a limited period differently. Despite this, as Sedley LJ observed (with Dyson LJ and Sir Peter Gibson agreeing) in Mezey v South West London and St George's Mental Health NHS Trust [2007] EWCA Civ 106; [2007] IRLR 244 at [12], suspension, at least in respect of the "employment of a qualified professional in a function which is as much a vocation as a job", is not a "neutral act preserving the employment relationship" and: [s]uspension changes the status quo from work to no work, and it inevitably casts a shadow over the employee's competence. Of course this does not mean that it cannot be done, but it is not a neutral act. 156 Even leaving aside whatever shadow it casts, in the present case, the notion of suspension not being a 'neutral act' has particular resonance given RTHF's duty to co-operate and to refrain from doing anything that would deprive Dr Avenia of the benefit of the Employment Contract, including the opportunity for Dr Avenia to work and earn commission. 157 Returning to general principles, an authority in relation to suspension on full pay which merits close attention is the decision of Rothman J in Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159; (2008) 71 NSWLR 633. In Downe, the plaintiff, a Director of a hospital unit, was suspended on full pay by the defendants, pending an investigation into allegations of bullying and intimidation (Initial Suspension). After an independent investigation, while only minor allegations were substantiated, the investigator formed the view that due to animosity between the staff, there was no possibility of the plaintiff returning to work. The defendants therefore continued the plaintiff's suspension on an indefinite basis (Indefinite Suspension). Like the present case, the plaintiff's employment contract did not contain an express term dealing specifically with suspension. 158 Rothman J held that the Initial Suspension was not a breach of the employment contract but that the Indefinite Suspension was. It is instructive to consider the reasoning in respect of each of these conclusions.

[33]

The Initial Suspension 162 In analysing Rothman J's reasons, it is important to note that his Honour accepted that imported into the contract of employment was an implied term, and as a necessary incident of a contract of employment, was a duty not to conduct oneself in a manner calculated or likely to destroy or seriously damage the relationship of mutual trust and confidence between employer and employee (at [411]). His Honour also concluded that, subject to any express exclusion of the term, there was a duty imported into the contract that the employee and the employer would act in good faith towards each other. Noting some overlap between these duties, his Honour considered that (at [413]-[414]): The duty to act in good faith (and to a lesser extent the duty of mutual trust) requires that where a serious allegation is made against an employee, the employer ought (assuming the complaint is not manifestly vexatious) investigate the complaint. It is unnecessary to discuss issues as to whether procedural fairness is required. In circumstances where an employer, bona fide, takes a view that during the course of such an investigation, the continued performance of duty by an employee is inconsistent with its interests, it is entitled, under the terms of the contract of employment, to direct the employee not to perform work. Not surprisingly, such a right is not dissimilar to the disciplinary policy promulgated by the [defendants]. Nothing in the disciplinary policy is unreasonable in its general application. As a consequence of the foregoing, I conclude that it is a concomitant of one or other of the aforesaid implied duties that an employer has the right to direct not to perform work for a closed period during the course of an investigation into allegations of misconduct. Assuming that the duty is exercised in good faith, such a direction not to perform work is not a breach of a contract of employment. It is unnecessary and unwise to express a view as to other circumstances in which such a direction may be appropriate. (emphasis added) 163 This aspect of the reasoning must now be approached with caution as Downe was, of course, determined prior to the decision of the High Court in Barker which: (a) made it clear that contracts of employment in Australia do not automatically include a mutual duty of trust and confidence; and (b) left open questions as to whether there is a general obligation to act in good faith and whether contractual powers and discretions may be limited by rationality requirements analogous to those applicable in the sphere of public law. 164 In my view, a close analysis reveals that Rothman J's reasoning in Downe is not contingent upon either an implied duty of mutual trust and confidence or an implied duty of good faith. In particular, it seems to me that Rothman J's use of the word 'concomitant' at [414] was intended to mean, in the context, that the right to direct an employee not to perform work for a closed period during the course of an investigation supplemented, but was not contingent upon or an extension of, the implied duties such that, if one or other of the implied duties did not exist, this would not necessarily remove the foundation of a right to give a reasonable and lawful direction of suspension. 165 Ultimately, as noted at [159] above, in an individual case, the question of whether the employer is entitled to direct someone not to perform available work turns on the circumstances of the direction, the work that is not to be performed and the terms of the contract of employment. Put another way, the relevant circumstances need to be considered to ascertain whether a particular direction was reasonable. 166 Without needing to rely on an implied duty of mutual trust and confidence or good faith, Rothman J held, as a general proposition, that a direction to suspend would be reasonable and lawful (at [413]): …[i]n circumstances where an employer, bona fide, takes a view that during the course of such an investigation, the continued performance of duty by an employee is inconsistent with its interests, it is entitled, under the terms of the contract of employment, to direct the employee not to perform work. 167 Returning to the contentions of Dr Avenia and RTHF, it is worth observing that: (a) both parties accepted that a suspension on full pay for the limited purpose of conducting a disciplinary investigation would be permitted by the Employment Contract and would be lawful in some circumstances; the questions to be answered are what were those circumstances and whether they did, in fact, exist: see [140]-[141] above; (b) no party suggested that, as a general proposition, an employer did not have a duty to investigate or make enquiries into alleged employee misconduct (assuming the complaint is not manifestly vexatious) and to take all reasonable steps to provide a safe place of work. 168 The parties' acceptance that, as a general proposition, an employer does have a duty to investigate or enquire into alleged employee misconduct, is unsurprising for at least two reasons: (a) First, RTHF had a positive statutory duty, under s 19(1) of the Work Health and Safety Act 2011 (Qld), to ensure, as far as is reasonably practicable, the health and safety of its employees, that is, to maintain constant vigilance and take all precautions to eliminate risk: see for example WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited [1998] NSWIRComm 200; (1998) 82 IR 80 at 85 per Hill J. This duty is consistent with the need for an employer such as RTHF to have regard to the fact that an employee alleging bullying type behaviour by another may have redress under Part 6-4B of the FWA if that staff member reasonably believed they had been bullied at work (that is, a member of staff had repeatedly behaved unreasonably towards the staff member and the behaviour created a risk to health and safety): see s 789FD(1). (b) Second, such a duty is also consistent with a term that has been recognised to be implied by law into employment contracts which requires employers to provide their employees with a safe place of work: see, for example, Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at 63 per Black CJ; Nationwide News Pty Ltd v Naidu [2007] NSWCA 377; (2007) 71 NSWLR 471 at [339] per Beazley JA.

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III The Scope of RTHF's Right to Suspend 169 RHTF had a right to suspend on full pay temporarily without any need to imply either the OH & S Term (contended for by RTHF), or the refinement on that term accepted by Counsel for Dr Avenia (see [140] above). Nor, in identifying the right, is there any need to have recourse to implied duties of mutual trust and confidence or good faith. 170 More particularly, RTHF was entitled to suspend Dr Avenia under the Employment Contract where it formed the view, bona fide, that the direction to suspend was in furtherance of its duties to enquire into or investigate allegations of inappropriate behaviour when such behaviour could constitute a risk to the safety, health and welfare of its staff and/or its fulfilment of its duty to provide a safe place of work for its staff. Of course, this is just another way of stating that, in these circumstances, a direction to suspend would constitute a reasonable direction and Dr Avenia was obliged to comply with it by reason of the Reasonable Direction Provision. Moreover, the duty to co-operate, implied by law to allow Dr Avenia the benefit of his bargain, does not detract from the express right of RTHF to give a direction to suspend which is reasonable. As set out at [159] above, the consideration of whether any particular direction to suspend was reasonable calls for consideration of the temporary deprivation of Dr Avenia's right to work and earn commission; the terms of the Employment Contract; and the circumstances surrounding the direction, in the objective, evaluative assessment of reasonableness (and therefore whether the direction was authorised). 171 In Downe, Rothman J opined more generally that a direction to suspend would be reasonable where the employer had, bona fide, formed the view, during the course of an investigation, that the continued performance of duty was inconsistent with its interests. It is not necessary for me to express a view on whether the right to suspend pending investigation would always be reasonable in all such cases. What is clear is that the right to direct that available work not be performed would exist in the circumstances I have identified at [170]. 172 Having considered in this subsection how the right to suspend arises under the Employment Contract, I will turn to the lawfulness of the suspension in Section I (Issue Two) below. 173 However, before leaving Downe and the above consideration as to the existence and scope of a right to suspend "during the course of… an investigation", at the risk of dwelling on semantics, a further question arises: what is meant by the term 'investigation' in the relevant context? The subsequent decision of Rothman J in Waddell v Mathematics.com.au Pty Ltd [2013] NSWSC 142 sheds some further light on what his Honour meant. Waddell concerned an employee who sued his employer for breach of contract, where, among other things, the employer had directed the employee not to attend the workplace in circumstances where the parties were in dispute over, primarily, the deletion of files from a company laptop. Rothman J made the following relevant comments (at [106]): It is necessary, albeit not central to the determination of these matters, to deal with the reasonableness of the direction not to attend work. In other proceedings, I have dealt at length with the capacity of an employer to "suspend" or direct not to work or not to attend work for a limited period: see [Downe]. An employer is entitled, for a limited period pending an investigation or the determination of issues, to require an employee not to attend for work. In the circumstances pertaining to this employment, such a direction was reasonable. (emphasis added) 174 The circumstances of Waddell and the use of the disjunctive in the quote above suggests that Rothman J in Downe did not intend to limit the application of the principle there enunciated to circumstances where some sort of formal 'disciplinary investigation' of a particular type had been commenced, but extends to circumstances where the employer is seeking reasonably to determine issues or find facts relevant to allegations or suspicions of employee misconduct.

[35]

H The Agreed Issues for Determination 175 I have already remarked upon the mercurial nature of the cases advanced by both Dr Avenia and RTHF. Despite my insistence that the case be pleaded, there was, by mutual consent, further amendment to the points of claim and defence and related changes to a document entitled Issues of Fact and Law for Determination that I had ordered to be filed in advance of the hearing. 176 Indeed, it was only on the last day of submissions that the parties agreed on the final form of the Issues of Fact and Law document. The final agreed version of those issues is set out below: 1. Has RTHF breached the terms of the [APA] in failing to pay the Purchase Price in accordance with the terms of the [APA] including an amount representing GST: POC [12]-[14], POD [14]. 2. Was the Suspension: a. in breach of the implied term of the Employment Contract that RTHF would provide Dr Avenia with continuing opportunities to undertake a range of clinical dental care and have the prospect of earning commission each fortnight: POC [9], [33]; b. in breach of the express term of the [APA] that RTHF would use its best endeavours to give effect to the matters contemplated by the Asset Agreement (Express Best Endeavours Term): POC [15], [34]; c. in breach of the express term of the [APA] that RTHF would act in good faith at all times to give full effect to the matters contemplated by the Asset Agreement by reason of the fact that the Suspension was done in bad faith (Express Good Faith Term): POC [16], [35], [37] and [38]; d. lawful in the circumstances by reason of: i. it was in conformance with an implied term; or ii. it was otherwise a lawful direction: POD [33]. 3. Were the indications in the [Suspension Letter] (as pleaded in POC [41(a)]) as to an "investigation" and possible consequences of an "investigation", in breach of the Express Good Faith Term: POC [16], [41]. 4. Was the conduct and course of conduct (as pleaded in POC [41(b)-(e)]) as to allegedly failing to provide details or adequate details, failing to accede to an independent investigation and directing Dr Avenia to attend a meeting on 2 March 2017 for the purpose of answering questions regarding the allegations in the [Suspension Letter] and regarding mail, email and telephone redirection, in breach of: a. the Best Endeavours Term (POC [15], [42]; b. the Express Good Faith Term: POC [16], [42]. 5. Was the conduct in giving the Show Cause Notice on 7 March 2017: a. in breach of the Best Endeavours Term (POC [15], [43]; b. in breach of the Express Good Faith Term because the conduct in giving the Show Cause Notice was in bad faith: POC [16], [44] and [45]; c. lawful and supportable having regard to the "serious misconduct engaged in, and not denied by" Dr Avenia: POD [44]. 6. Was the conduct in terminating the employment of Dr Avenia: a. in breach of the Best Endeavours Term (POC [15], [47]; b. in breach of the Express Good Faith Term: POC [16], [47]; c. justified pursuant to clause 2.1 of the Employment Contract "for any reason (other than a prohibited reason)": POD 50(q); d. justified without notice for serious misconduct: i. "on 10 March 2017" as a result of Dr Avenia's alleged refusal "to obey the lawful and reasonable directions" of RTHF to attend meetings: POD [50(r)]; ii. "in or about mid-February 2017" as a result of Dr Avenia's "redirecting postal mail": POD [50(s)]; e. adverse action within the meaning of the Fair Work Act 2009 for reasons which included that the Applicant exercised a workplace right: POC [47B]. 7. Would Dr Avenia's employment have been terminated "effective 10 March 2017 in accordance with clause 2.1 of the Employment Contract (on 1 week's pay in lieu of notice)" but for the Orders of the Court restraining RTHF from doing so: POD [46]. 8. Has Dr Avenia suffered damage as a result of any of the breaches of contract or adverse action alleged: POC [48]. 177 With the exception of the discrete topic raised by Issue One, my factual findings (Sections C and D), my explanation as to what express and implied terms formed part of the Employment Contract (Sections E and F) and my observations about the circumstances in which RTHF had a right to suspend (Section G), either suggest the resolution of these issues or provide the factual and legal basis upon which an issue is to be resolved. My conclusions below are conveniently expressed by reference to the issues of fact and law as agreed by the parties.

[36]

Issue One: "Payment Breach" 178 The issue of whether RTHF breached the terms of the APA in failing to pay the Purchase Price in accordance with the terms of the APA, including an amount representing GST was, on one level, not the subject of serious contest at the hearing. Given the obligations of each of the parties pursuant to Part VB of the Federal Court of Australia Act 1976 (Cth) and the very minor amount of money ultimately in dispute, which now relates entirely to the date from which interest is to be calculated, it is regrettable that this issue needs to be addressed at all. 179 It will be recalled that the APA provided that the Purchase Price be paid in three tranches: the first, at the end of the December 2016 quarter; the second, at the end of the March 2017 quarter; and the third, at the end of the June 2017 quarter. It was common ground that an amount of $28,865 was paid by RTHF for the December 2016 quarter on 31 January 2017. There was some lack of clarity in both the evidence and final submissions as to whether an amount of approximately $19,000 (said by RTHF to represent the amount payable for the March 2017 quarter) had been paid to Dr Avenia, albeit late (T 325-6). 180 Some of this confusion arose because it was only the day before the hearing that RTHF conceded, belatedly, that it was obliged to pay to Dr Avenia the total sum of $160,000 for the transfer of the Assets. RTHF did not make a formal concession as to GST but did not put forward any submission as to why the payment was not exclusive of GST: see clause 8. In any event, RTHF confirmed, on the first day of the hearing (T 19), that it was in breach of contract in failing to pay to Dr Avenia the relevant tranche for the March 2017 quarter and that it was obliged to pay the balance of the amount outstanding to Dr Avenia at the end of June 2017. Clause 4 of the APA is not a model of clarity, but given these concessions, two competing contentions were advanced as to when components of the Purchase Price were required to be paid. 181 The first was advanced by Dr Avenia. Accepting that understanding what is meant by the clause is difficult, it was suggested, in writing, that the three payments were to be $45,333, $56,000 and $58,667 (being the amounts identified in the worked example under clause 4). The clause had identified that: "the quantum of each tranche will be based on the % achievement of the pro-rata gross revenue" of $480,000 from Dr Avenia's 1,200 Active Patients by "the close of the June quarter 2017". Counsel for Dr Avenia made the point orally (T 321-2) that it is impossible to apply this part of the clause literally because it was not possible to apply it to the identification of the tranches payable at the end of the December 2016 and March 2017 "because the quantum of the payments is only to be calculated at the close of the June quarter". It was said, therefore, that by construing the clause as a whole and applying 'business commonsense' (and given that RTHF had accepted tranches were payable), that the tranches were three equal tranches in each of the quarters, each being one-third of $160,000. This had the considerable attraction of simplicity, but as Counsel for Dr Avenia frankly accepted, to construe the clause this way would be to give no content at all to the words commencing, "(t)he quantum of each tranche will be based", and would be consistent with clause 4 ending after the words "FY2017" with the balance of the clause being superfluous. 182 If a detailed analysis of a written contract leads to a conclusion that flouts business commonsense, the contract must be made to yield to business commonsense (albeit as an objectively ascertained matter); however, the primary task of contractual construction is the ascertainment of meaning of the words used. As Lord Hoffman noted in Beaufort Developments (NI) Ltd v Gilbert-ASH NI Ltd [1999] 1 AC 266 at 273, the argument from redundancy is seldom an entirely secure one. The fact remains that here the parties agreed on tranche amounts struck by reference to criteria, and these criteria (and the formula agreed for working out the tranche amounts) should not readily be considered to be redundant. 183 It follows that I prefer the second construction which was advanced in final submissions by RTHF. This approach is to ascertain the "% achievement of the pro-rata gross revenue" from Dr Avenia's 1,200 Active Patients in each of the December and March quarters and then use the formula to calculate the amount of the tranche payable. The balance of the Purchase Price is then paid at the end of June 2017. 184 I should mention, for completeness, that an apparent attempt was made to suggest that Dr Avenia had "abandoned" the APA: see RTHF's Closing Submissions [62]-[64]. This was said to arise by reason of the evidence (to which I have earlier referred) as to Dr Avenia having "no interest in upholding [his] end of the agreement" or that he was otherwise not bound by the Asset Purchase Agreement (T 106.18-29). Of course, this argument made no sense as a contention of contractual abandonment (where the parties have objectively manifested an implied intention to extinguish a contract). Doing the best I can, I presume what is perhaps meant is to suggest repudiation or breach of the APA by Dr Avenia. The problem is that no case of repudiation of the APA was ever directly advanced, nor was any case pleaded that Dr Avenia should be refused relief for a breach of the APA by RTHF because of some disentitling conduct on his part. Accordingly, this aspect of the submissions goes nowhere. 185 In any event, a calculation can be done by the parties to work out the amount owing, including for March 2017 (if it has not already been paid) and statutory interest or, if it is unable to be agreed, I will determine the amount. Given RTHF's unsatisfactory refusal, up to the start of the hearing, to recognise its liability to pay $160,000 together with GST, Dr Avenia is entitled to declaratory relief to quell this part of the justiciable controversy that he brought to the Court. I will separately hear submissions as to the entry of judgment against RTHF for any amount that remains unpaid.

[37]

Issue Two: The Lawfulness of the Suspension 186 I have already rejected the contention that the express terms relied upon by Dr Avenia (the Express Best Endeavours Term and the Express Good Faith Term) formed part of the Employment Contract. I have also dealt with Dr Avenia's formulation of the implied term that RTHF would provide Dr Avenia with continuing opportunities to undertake a range of clinical dental care and have the prospect of earning commission each fortnight, by noting that RTHF's obligations in this regard are properly seen as an incident of the duty to co-operate rather than a separate term implied by fact. 187 The issue as to the lawfulness of the suspension was framed and pleaded on the premise that the express terms and implied term relied upon existed. Notwithstanding this, it is convenient, in the one place, to deal with all the arguments advanced by Dr Avenia as to the suspension (as identified in [151] above): (a) First, absent a formal disciplinary investigation, there was no lawful power to suspend; it was not required by law, was inconsistent with the existence of the Continuing Work Implied Term by interfering with Dr Avenia's employment and was inconsistent with the Bullying Policy: APOC [33], [35]-[36]. (b) Secondly, the suspension breached the Express Best Endeavours Term: APOC [34]. (c) Thirdly, the suspension was "in bad faith": APOC [37]. 188 Given what I have said, the second and third arguments can be disposed of quickly: as to the second, there was no Express Best Endeavours Term for reasons I have explained; as to the third, I reject any notion of conduct inconsistent with honest standards. For reasons I have already touched upon, I do not have any concern that the direction was made otherwise than bona fide. On this point, I have already accepted the evidence given by Ms Tregeagle identified in Section D as to her motives and, in particular, I accept her evidence that Dr Avenia was suspended because RTHF "felt, given the dynamic of that environment, and given what I knew of [Dr Avenia] through my experience of him, it was highly unlikely that he could be presented with [the Suspension Letter] and go back into the workplace and work side by side with those people in a harmonious way" (T 230). 189 The first (and multi-faceted) argument requires consideration in a little more detail. 190 I have explained in Section G why any direction by RTHF for Dr Avenia not to perform work for a specified period would be a 'reasonable direction' where RTHF, through its decision maker, formed the view, bona fide, that the direction was in furtherance of RTHF's duties to enquire into or investigate allegations of inappropriate behaviour and to provide a safe place of work for its staff. This specified period could be no longer than was necessary to conclude the relevant enquiry or investigation, and could not be indefinite. For reasons I have explained, at the time of the suspension, a bona fide view had been formed by Ms Tregeagle on the part of RTHF that these circumstances existed this view was objectively reasonable. It follows that a reasonable direction could be made that Dr Avenia not perform available work and, given the Reasonable Direction Provision, Dr Avenia was obliged to comply with this direction and absent himself temporarily from the workplace. 191 Two points need to be made about Dr Avenia's contention that one cannot have a 'reasonable direction' not to perform work unless it was reasonably necessary for the purposes of a particular type of investigation, namely, a 'disciplinary' investigation, which RTHF has contended was not its intention to conduct, at least initially. 192 First, for reasons I have explained, I do not consider the right to give a reasonable direction to suspend under the Employment Contract is as circumscribed as Dr Avenia contends. There was no need, as Dr Avenia pleads, to show a 'requirement' by law to suspend; moreover, the power extends to circumstances that transcend some particular form of 'disciplinary investigation' but extends to circumstances where RTHF was bona fide pursuing its duties to enquire into the allegations and provide a safe place of work and was conducting a form of fact finding exercise to determine what to do to address the issue that had arisen. These circumstances existed and this was what RTHF was doing. 193 Secondly, the fact that the Suspension Letter, as I have found, talked in terms of a formal 'disciplinary' investigation, which it was not the intention of RTHF to conduct, at least initially, does not mean that the right to give the direction did not exist or render the actual direction to suspend, when given, unreasonable or unlawful. The suspension was a step taken by RTHF in furtherance of its duties to enquire into or investigate allegations of inappropriate behaviour when such behaviour could constitute a risk to the safety, health and welfare of its staff and/or its duty to provide a safe place of work for its staff. This, however, is a distinct question from whether RTHF had an ability to direct Dr Avenia to attend a meeting the following Friday in circumstances where RTHF's intentions as to the nature and stage of the enquiry it was conducting, because of the terms of the Suspension Letter, were not pellucid. I address this question below as part of Issue Four. 194 As to the balance of Dr Avenia's arguments that the suspension was inconsistent with the existence of the Continuing Work Implied Term by interfering with Dr Avenia's employment and was inconsistent with the Bullying Policy, these have no substance. The Continuing Work Implied Term did not exist and although, in the way I have explained, the distinct implied duty to co-operate (along with other factors) was relevant to the anterior question of ascertaining when a direction to not perform available work was reasonable, nothing suggested as being implied into the Employment Contract could deprive RTHF of its ability to direct suspension if the direction was, in all the circumstances, reasonable. The alleged Bullying Policy conflict with the Employment Contract appears to be a legacy of the contention advanced by Dr Avenia, up to the start of the hearing, that the Bullying Policy had contractual force. Given the terms of clause 3.1(b) of the Employment Agreement, this argument was correctly abandoned (see [66] above). Although the policies of RTHF could again be relevant as a contextual matter in assessing the question of what constitutes a reasonable direction, I have already explained why in all the circumstances, a direction not to perform available work was reasonable.

[40]

The Scope of the Issue 196 Again, the pleaded case is premised on the existence of express terms not incorporated into the Employment Contract. In particular, the contention is that the course of conduct (as pleaded in APOC [41(b)-(e)]) was in breach of the Best Endeavours Term (APOC [15], [42] or the Express Good Faith Term: APOC [16], [42]. 197 Despite this, the attack on the general course of conduct adopted by RTHF from the Suspension Letter onwards expanded to incorporate an argument that was the subject of submissions that in some respects travelled beyond the issues as pleaded. 198 In particular, Counsel for Dr Avenia, in final submissions, advanced a contention that the effect of an obligation to exercise contractual powers in good faith extended to an obligation to act reasonably when exercising powers which may adversely affect Dr Avenia's employment. Counsel for Dr Avenia asserted that this included an obligation to exercise those powers in accordance with the principles of procedural fairness, citing Bartlett v Australia and New Zealand Banking Corporation [2016] NSWCA 30; (2016) NSWLR 639. 199 In going beyond the contractual question as to whether each of the directions to attend meetings with RTHF were reasonable directions and contending RTHF had an obligation to exercise relevant contractual rights in accordance with principles of procedural fairness, Dr Avenia picked up a point left open in Barker where the High Court, (at [42]), noted that the rejection of the implied duty of trust and confidence should not only not be taken as reflecting upon the question as to whether there is a general obligation to act in good faith in the performance of contracts, but also: … the related question [as to] whether contractual powers and discretions may be limited by good faith and rationality requirements analogous to those applicable in the sphere of public law. 200 Given the way the argument was framed, it is convenient to deal initially with the question of identifying the duties of RTHF in engaging in the course of conduct (as pleaded in APOC [41(a)-(e)]) and then, after dealing with Dr Avenia's contention as to the duties of RTHF, I will address the lawfulness of the impugned conduct.

[41]

The Procedural Fairness Argument of Dr Avenia 201 Dr Avenia's broader argument rested on the notion that, following the Suspension Letter, Dr Avenia's interests were apt to be affected adversely by the exercise of a disciplinary power and that by analogy with public law standards, RTHF was obliged to accord procedural fairness to Dr Avenia. 202 Macken's Law of Employment (8th ed, Lawbook Co, 2016) notes that "at common law, an employer has no implied obligation to undertake investigative and disciplinary processes fairly"; a duty will be owed, inter alia, where there is an express contractual provision to this effect or where the statutory unfair dismissals jurisdiction applies (p 185). The authors also express the view that no duty of good faith could import such notions of procedural fairness (p 185 fn 180). I referred Counsel for Dr Avenia to this statement, given his submissions regarding a general obligation to afford procedural fairness in an investigative and disciplinary process. Counsel for Dr Avenia submitted that the authors' contrary view was wrong (T 385-6). The correct position, it was contended, was revealed in Bartlett and, in a supplementary "Applicant's Submissions on Procedural Fairness" at [2] and [3], it was submitted that the obligation to exercise contractual powers in good faith extends to an obligation to act reasonably and this included "an obligation to exercise those powers in accordance with principles of procedural fairness" (the footnote cites as authority for this proposition Bartlett at [53]). This this obligation was said "to be particularly so when the employer's own polices require that procedural fairness be afforded" (the footnote cites as authority for this contention Bartlett at [54]). 203 The argument of Dr Avenia then went on to embrace the proposition that such a duty requires that the person whose interests are apt to be adversely affected be provided with the opportunity to respond to significant adverse material which may be taken into account: see Hannover Life re Australasia Limited v Sayseng [2005] NSWCA 214; (2005) ANZ Ins Cas 90-123 at [77]-[85] per Santow JA (Spigelman CJ and Tobias JA agreeing): XY v WA Country Health Service [2016] WASC 202 at [101] per Pritchard J. Dr Avenia, it is contended, was denied an opportunity to provide his views, comments and relevant facts in response to any allegation which might be relied upon to make an adverse finding as to the allegations referred to in the Suspension Letter, if the content "of the particular allegation was not drawn to his attention". The fact that Ms Tregeagle held back the full allegations which may have been taken into account was also inconsistent, it was said, with RTHF's Grievance Policy which informed the duty and required that Dr Avenia have an opportunity to respond to all matters constituting the grievance. 204 The duty was said to require that "practical injustice" be avoided by providing to Dr Avenia the nature and content of information that RTHF "might take into account" in coming to a conclusion "adverse to Dr Avenia" and in this regard reference was made to well-known public law authorities, including Re Minister for Immigration and Multicultural Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 at [14]-[37] per Gleeson CJ.

[42]

Bartlett Explained 205 As can be seen, much reliance was placed on Bartlett, and I do not consider that the references to the judgment identified by Counsel for Dr Avenia (see [202] above) establish the broad propositions for which Dr Avenia contends. In Bartlett, the New South Wales Court of Appeal concluded (in the circumstances of a specific contractual power) that for the employer to summarily dismiss an employee it was necessary to establish that serious misconduct had, in fact, occurred: see [30]-[34] per Macfarlan JA. The Court also discussed, at length, an alternative argument and noted that, even if it was sufficient for the employer to dismiss the employee summarily based on the employer's opinion that the employee had committed serious misconduct, the formation of that opinion had to be reasonable (see [49]) and, it was found that, in the circumstances of the case, an inadequate investigative process and lack of procedural fairness meant that the employer did not act reasonably when forming its opinion. 206 In the course of the Court's discussion of this alternative argument, Macfarlan JA at [86]-[87] and Meagher JA at [107] (Simpson JA contra at [133]), rejected a broader argument that the exercise of the relevant contractual power to terminate was "limited by requirements that the termination be reasonable and the decision to terminate be made in good faith". 207 Despite the very broad propositions advanced by Dr Avenia as recorded in [202]-[203] above, Bartlett is best seen, in my view, as an application of the principle explained by Gummow J in Service Station Association Ltd v Berg Bennett & Associates Pty Ltd [1993] FCA 638; (1993) 45 FCR 84 at 94 [39] that: [w]here one party has an express power the exercise of which will significantly affect the interests of the other party… if the holder of the power is satisfied that a certain state of affairs exists, the words of the contract are fairly readily construed (and the more so when the parties have given such a power to a third party) as requiring a reasonable as well as honest state of satisfaction... But this is a result arrived at by a process of construction of the express terms in the setting of the contract as a whole. It is best not seen at all as the implication of a further term. (references omitted) 208 As Macfarlan JA noted at [49], Gummow J's observations stand "unaffected by subsequent authority". Of course, in Service Station Association, Gummow J rejected the implication of a broad term requiring the parties to act in good faith. The final matter to be noted about Bartlett is that it does bring additional focus to an issue which is not raised by Dr Avenia, and that is what can be described as the continuing uncertain state of the law surrounding the implication of a duty of good faith in contractual performance or in the exercise of discretionary contractual rights and powers in employment contracts. This can be seen particularly in the reasons of Simpson JA at [126]-[127].

[43]

The Relationship between the Procedural Fairness and Reasonableness Arguments 209 As is evident from Barker at [42], the question as to whether there is a general obligation to act in good faith in the performance of contracts is related to the question of whether contractual powers and discretions may be limited by good faith and rationality requirements analogous to those applicable in the sphere of public law. 210 It is unnecessary for the purposes of this already lengthy judgment to canvass, in great detail, the scope of the importation of principles developed in the sphere of public law into the requirement of an employer to provide procedural fairness to an employee in exercising contractual powers generally or during the course of a disciplinary investigation and subsequent termination in particular. This is because: (a) this argument, to the extent it can be seen to be within the pleadings, rested on the existence of the Express Good Faith Term, which I have found is not imported into the Employment Contract; and (b) as a practical matter, the argument as advanced on Dr Avenia's behalf goes no further than his breach of contract case. 211 After explaining why the Court ought conclude that it is too broad a statement to assert that at common law, an employer has no implied obligation to undertake investigative and disciplinary processes fairly, the following was submitted: Breach of contract 24. It follows that the direction contained in the [Suspension Letter] and repeated in the 3 February 2017 letter requiring the applicant to attend a meeting to respond to the allegations contained in the [Suspension Letter] was unreasonable: it required a response in circumstances where, contrary to the [RTHF's] policies, [Dr Avenia] was not to have the opportunity to present his views and evidence on all allegations made against him. 25. There is no express term of the contract of employment requiring compliance with directions. It is common ground that the applicant's obligation to comply with such directions was limited to directions which were reasonable. There was no obligation to comply with the unreasonable direction of 30 January. 26. Further, both because it was unreasonable and because it exceeded the power conferred by the Employment Contract the giving of it breached the good faith term in the Asset Agreement. 212 The proposition in the first sentence of [25] in the above extract is erroneous given the existence of clause 3.1(a), being the Reasonable Direction Provision: see [134] above. Be that as it may, as can be seen from the above, the matters said to give rise to the expansive argument that RTHF had a duty to afford Dr Avenia procedural fairness in the way asserted, sprung from the same matters which were said to render the directions given to Dr Avenia unreasonable and hence in breach of contract. On one level this is unsurprising, as contractual provisions that allow one party to act to the detriment of the other party, and the obligation of reasonableness in exercising a power conferred by such a provision, have often been the subject of discussion in the context of arguments as to the existence and content of an obligation of good faith or fair dealing. 213 As Edelman J noted in Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825; (2015) 329 ALR 1 at [1011], this concept of 'reasonableness' was the subject of detailed consideration in Braganza v BP Shipping Ltd [2015] UKSC 17; [2015] 1 WLR 1661 where Lady Hale explained at 1669 [18]: Contractual terms in which one party to the contract is given the power to exercise a discretion, or to form an opinion as to relevant facts, are extremely common. It is not for the courts to re-write the parties' bargain for them, still less to substitute themselves for the contractually agreed decision-maker. Nevertheless, the party who is charged with making decisions which affect the rights of both parties to the contract has a clear conflict of interest. That conflict is heightened where there is a significant imbalance of power between the contracting parties as there often will be in an employment contract. The courts have therefore sought to ensure that such contractual powers are not abused. They have done so by implying a term as to the manner in which such powers may be exercised, a term which may vary according to the terms of the contract and the context in which the decision-making power is given. 214 After making reference to Lady Hale's observation that an implication concerning the manner in which a contractual discretion may be exercised was one which was "drawing closer and closer to the principles applicable in judicial review" (at 1672 [28]), Edelman J noted a strong argument that an approach which recognises such restrictions should also be applied to the materially similar contractual discretion to terminate (referring to Hooley R, "Controlling Contractual Discretion" (2013) 72 Cambridge Law Journal 65 at 89). His Honour went on to say at [1014]-[1015]: In Australia, it might also be said that a unitary approach to "reasonableness" implications concerning contractual discretions should also mirror the reasonableness requirement in judicial review which arises as a matter of statutory implication: Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332, 363-364 [67] (Hayne, Kiefel and Bell JJ). In Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, 283 [98], Heydon and Crennan JJ said that the approach taken to statutory construction is "matched" by that which is taken to contractual construction. Although there are good reasons why this English approach should be applied to permit an Australian implication of reasonableness in the exercise of a discretionary statutory or contractual power, I doubt whether there should be a general limitation upon an implied qualification of "reasonableness" so that the obligation applies only to circumstances of irrationality or where the outcome of the exercise of the power is so unreasonable that no reasonable power holder could ever have acted in that way. Once again, the existence and content of the implication in any case will depend on the context. It may also be that any "reasonableness" implication would not be confined by adjectives such as "outrageous" or "so unreasonable that no reasonable decision maker would make it": compare Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332, 364 [68] (Hayne, Kiefel and Bell JJ). 215 These are large questions which are primarily directed to the standard of reasonableness to be observed in the exercise of a discretionary contractual power. Given the way the issues were presented in this case, it is unnecessary for me to determine Dr Avenia's attack on the course of conduct adopted by RTHF by reference to broad considerations as to: (a) the existence and scope of an obligation to afford procedural fairness in circumstances where an employer is exercising a power that may adversely affect a person's employment; or (b) the relationship of this argument to the process and results of a construction of the express terms, in the setting of the contract, as to the reasonable exercise of powers given to a party under a contract. That is because, in this case, the course of conduct impugned was a series of directions by RTHF which were subject to an express condition that the directions be reasonable, which was then followed by a termination which constituted an exercise of contractual power that both parties accepted, as matter of construction of the express terms, had also to be exercised reasonably. Nor, importantly, given the way the case was run by both parties, is it necessary to examine whether 'reasonableness' applied only to circumstances of irrationality or where the outcome of the exercise of the power is so unreasonable that no reasonable power holder could ever have acted in that way. 216 Although disputing the existence of the Express Good Faith Term and the existence of an implied obligation to undertake investigative and disciplinary processes fairly, RTHF, in the way it framed its argument, implicitly accepted that if it had acted rationally but unreasonably in giving directions to Dr Avenia or in exercising its contractual power to terminate his employment, then the exercise of those powers would not have been lawful. Given Dr Avenia's case was that the same underlying matters said to be a breach of procedural fairness rendered the exercise of the relevant contractual powers unreasonable, it is sufficient to determine the case by reference to whether the impugned exercise of contractual powers was reasonable and hence lawful. Moreover, because of RTHF's acceptance as to what constitutes 'reasonableness' (as I have noted at [215]), what in other contexts may raise difficult questions as to the standard of reasonableness which is to be imported into the exercise of a power or discretion under a contract, simply do not arise here.

[44]

The Impugned Course of Conduct Considered 217 I deal with termination separately as Issue Six below, but the impugned course of conduct (as pleaded in APOC [41(a)-(e)]) was: (a) the terms of the Suspension Letter; (b) RTHF either contradicting their position as to a disciplinary investigation or failing to address the contradiction; (c) providing inadequate particulars; (d) failing to accede to an independent investigation; and (e) directing Dr Avenia to attend a meeting on 2 March 2017 in circumstances where: (i) allegations had not been clarified; (ii) other allegations would be discussed (as referred to in the 23 February RTHF Letter) that "had no reasonable relationship with the employment"; and (iii) termination was a possibility. 218 I have already determined that the suspension was lawful and that the suspension was not rendered unlawful by the terms of the Suspension Letter; but what of the direction contained in the Suspension Letter that Dr Avenia was required to attend a meeting with Ms Tregeagle and Ms Renney the following Friday, 2 March 2017? 219 Despite what I have found were the terms of the discussion on 31 January 2017, which, at the very least, explained the context of the meeting and the intentions of RTHF, the Suspension Letter, in terms, presaged a disciplinary investigation, the consequence of which could have been termination. A direction to attend such a meeting, in the context of the terms of the Suspension Letter and the Employment Contract, required: either the provision of reasonable particulars to enable Dr Avenia to engage in such a disciplinary investigation; or clarification that the meeting was not part of a disciplinary investigation but was rather a fact finding meeting and a discussion preliminary to any such disciplinary investigation (if RTHF considered it necessary to later move to that stage). 220 The problem with the direction contained in the Suspension Letter was the opacity of RTHF's intentions as communicated by its terms, notwithstanding Ms Tregeagle's contemporaneous discussion. On balance, it seems to me, it was unreasonable for Dr Avenia to be directed to attend a meeting without the assurance of a proper understanding of the true intentions of RTHF. For this reason, I consider that any direction to Dr Avenia to attend a meeting to discuss the allegations prior to clarification of what I have found to be the true intentions of RTHF was, in the circumstances, unreasonable, and was not in accordance with the Reasonable Direction Provision and, as a consequence, Dr Avenia was not in breach of contract in not complying. 221 The question then becomes: did this position change by reason of the 21 February RTHF Letter? This letter emphasised that the "matter is at a preliminary stage" and that RTHF wanted to obtain "preliminary responses". As I have found at [83], despite its shortcomings in failing to accept that RTHF had stated the meeting on 3 February 2017 was an investigation interview, the 21 February RTHF Letter did clarify, and clarify accurately, the intentions of RTHF. 222 I do not consider that there was any need to provide a further response to the 16 February Letter sent on behalf of Dr Avenia. Leaving aside that the particulars sought in the 16 February Letter were in part absurd and otherwise oppressive and unnecessary (even in the context of a disciplinary investigation), they were even less apposite to the occasion of a meeting of the type proposed by the 21 February RTHF Letter. 223 Be it be viewed through the prism of reasonableness, which was the relevant contractual standard for a direction to attend, or some more expansive requirement of procedural fairness springing from a good faith obligation, the particulars Dr Avenia required were informed by the context of a meeting of the type he was directed to attend on 2 March 2017. Like an evaluative assessment of what is reasonable in the circumstances, it is trite that that the content of any procedural fairness obligation is to be informed by the context in which it arises: see, for example, Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 584-585 per Mason J. 224 In any event, the context in which the issue arises is that of a preliminary discussion with Dr Avenia to ascertain his initial reaction to the allegations and to decide how to progress the matter. The discussion on 31 January 2017, the allegations and examples set out in the Suspension Letter (Exhibit A, pages 223 to 223A) and the later clarification in the 21 February RTHF Letter were sufficient to bring home adequately to Dr Avenia the nature of the 'particular issues' identified by RTHF and were sufficient, in context, in order for him to be able to participate and respond to a meeting of the type he was directed to attend on 2 March 2017. His response, as is evident at page 223A of Exhibit A, in carefully annotating and formulating an initial response to the examples of the 'particular issues' to be addressed, as disclosed in his cross-examination, demonstrate that, in the particular context of a preliminary meeting, Dr Avenia had all he needed to participate and provide preliminary responses. 225 It follows that I would regard this clarification as sufficient to render a direction to attend such a meeting, without provision of further particulars, reasonable, subject to consideration of the additional matters upon which Dr Avenia relies: first, that other allegations would be discussed at this meeting that "had no reasonable relationship with the employment"; and secondly, that termination remained a possibility. 226 As to the first of these matters, it will be recalled (from [84] above) that the 23 February RTHF Letter referred to Dr Avenia's obligations under the Employment Agreement and the APA, the attempted redirection of mail from the Brisbane Clinic, and the redirection of the email and telephone services of Dr Avenia's former practice, and required Dr Avenia to "provide explanatory comments" at the 2 March 2017 meeting. The suggestion that there was not a reasonable relationship between these matters and Dr Avenia's employment is, with respect, difficult to understand. This does not amount to anything other than a reasonable direction. 227 As to the second of these matters, that termination remained a possibility at the 2 March 2017 meeting, the 21 February RTHF Letter, in terms, made it plain (and I accept) that as at 21 February "[n]o decision regarding termination" has "been made by [RTHF]". A preliminary response was required prior to "commencing any investigatory process or taking any disciplinary action". The matter, it was said, "was at a preliminary stage" and I have already found that this represented RTHF's intentions. Termination for cause was always a possibility after some sort of formal investigative process but, as was expressed by Ms Tregeagle on 31 January 2017, this was not a desired outcome. When the 21 February RTHF Letter is read as a whole, including those parts which show how RTHF was at pains to disabuse Dr Avenia of any notion that a disciplinary investigation was on foot, the possibility that termination for cause may occur at some later time did not render the direction to attend the 2 March 2017 meeting unreasonable. There was, additionally, evidence at the hearing that termination remained a possibility at the meeting of 2 March 2017. This evidence must be seen in context. In a theoretical sense, that was always the case; although the possibility might be considered highly unlikely, Dr Avenia could have said he had bullied staff and that he had no intention of changing his ways, or confessed to RTHF his actual state of mind by the time of this proposed meeting that he longer regarded himself as bound by his bargain. Whether the response to such an unexpected development would have been to reassess the intention to retain Dr Avenia and invoke the power to terminate during the Probation Period or dismiss for cause is not to the point. Even if termination (although not desired by RTHF) was a possibility in the sense described, the purpose of the meeting was as communicated in the 21 February RTHF Letter. Dr Avenia had been apprised with sufficient information as to the purpose of the meeting, and as to what was proposed to be discussed, in order to participate. 228 It follows that, despite the direction being couched as a 'third' reasonable direction (a matter I discuss in Issue Five below), the direction in the 21 February RTHF Letter to attend a meeting to discuss the allegations on 2 March 2017 was reasonable, made pursuant to the Reasonable Direction Provision and Dr Avenia was obliged to comply. 229 The final matter I need to address under this Issue Four is whether failing to accede to an independent investigation was in breach of the Best Endeavours Term or the Express Good Faith Term. Although it is sufficient to resolve this question as pleaded by reference to the fact that such express terms did not apply, I will go further and address the more particular question as to whether failing to accede to an independent investigation in some way affected the reasonableness of any direction to attend a meeting to discuss the allegations or the issuing of the Show Cause Notice. Of course, the offer of an independent investigation made by Dr Avenia does not affect the reasonableness of the direction to attend the meeting on 2 March 2017. This is for at least three reasons: first, the offer was made on 7 March 2017 and could not have impacted upon the direction to attend the meeting proposed to be held on 2 March 2017; secondly, given the findings I have made as to the purpose of convening any meeting with Dr Avenia, it was entirely appropriate to elicit Dr Avenia's preliminary response before considering what remedial steps should be taken (if any). These steps may well have included some independent mediation or further fact finding but this does not mean that there was any obligation to adopt the particular proposal suggested by Dr Avenia. By the time the Show Cause Notice was sent, it was plain Dr Avenia was not compliant with the direction made for him to attend such a meeting. Thirdly, the conditions to the offer (see [95] above) included obligations being accepted by RTHF that Dr Avenia had no contractual right to impose - such as paying for a former Judge to engage in the process, giving up its contractual right to terminate during the Probation Period and undertaking that Dr Avenia's employment would not be terminated without seven days' notice.

[47]

Clause 14.1 and Summary Termination 236 At [135] above, I made brief mention of the Summary Termination Provisions. They were contained in clause 14.1 "Termination of Employment" and relevantly provided: Termination: The Employment may be terminated in the following manner: *** (b) Summary Dismissal: [RTHF] may immediately terminate the Employment without notice or payment in lieu of notice if: (vii) [Dr Avenia] fails to perform or observe any lawful and reasonable direction or instruction of [RTHF]; (viii) [Dr Avenia] wilfully, persistently or materially fails to perform or observe any material clause of this [Employment Agreement]; *** (xiii) [Dr Avenia] engages in any other conduct which at common law justifies summary termination… 237 As can be seen, clause 14.1(b)(xiii) provided RTHF with the right to terminate Dr Avenia's employment summarily where Dr Avenia "engages in any other conduct which at common law justifies summary termination" (emphasis added). The emphasised words raise an issue of construction not addressed by the parties. It can be expressed in this way: if the two aspects of Dr Avenia's conduct relied upon fell within one or other of the preceding subclauses of clause 14.1(b), how can that specified conduct constitute "other conduct" for the purposes of clause 14.1(b)(xiii)? 238 The immediate difficulty I have with a proposition that RTHF had the right to terminate Dr Avenia's employment summarily under clause 14.1(b)(xiii) for any type of conduct which would justify summary dismissal at common law, is that it gives no content to the words "other conduct" in the subclause. It seems to me that a correct reading of clause 14.1(b)(xiii) is that it operates in a manner which is subordinated to the specific species of conduct contemplated by the preceding subclauses of clause 14.1(b), and as a 'catch-all' to ensure that RTHF retained the contractual right to terminate for conduct not falling within the preceding subclauses but nevertheless entitling RTHF to dismiss Dr Avenia in circumstances where RTHF would otherwise be entitled to summarily dismiss at common law. 239 It follows that in circumstances where I determine below that the two aspects of Dr Avenia's conduct relied upon fall within other subclauses of clause 14.1(b), the relevant conduct does not constitute "other conduct" (as that expression is used in clause 14.1(b)(xiii)) and therefore clause 14.1(b)(xiii) is not engaged. I mention this for the sake of completeness, not because I consider it matters: RTHF's final submissions were sufficiently broad to embrace an argument that RTHF had a right, in the circumstances, to dismiss Dr Avenia summarily under any applicable subclause of clause 14.1(b). Although the relevant parts of the pleading are not pellucid, the written and oral submissions of RTHF make it clear that contractual support for summary termination (on the two specified aspects of Dr Avenia's conduct, being a failure to comply with reasonable directions and the mail redirection) was sought in any way it could. 240 In any event, I now return to considering the bases specified above.

[50]

Breach of Duty 244 I have already referred to clause 3.1(a) (reproduced at [134] above) as the Reasonable Direction Provision. It provides, relevantly, that "[Dr Avenia must] serve [RTHF] faithfully and diligently to the best of [Dr Avenia]'s ability and comply with all reasonable directions". 245 RTHF's case regarding termination for breach of the duty of fidelity proceeded on the basis that it was academic whether the duty of fidelity was express or implied. I think it is necessary to form such a view. Clause 3.1(a) amounts, in terms, to an express contractual statement of the duty of fidelity. Indeed, very similar wording was held to have that effect by Pembroke J in Charltons CJC Pty Ltd v Fitzgerald [2013] NSWSC 350, [35]-[39] and, as a consequence, his Honour determined there was no need to resort to any implied duty of fidelity. In any event, even if I were incorrect, the duty of fidelity would be implied. 246 Irrespective of whether it was express or implied, the nature and content of the duty of fidelity is not in doubt and was explained in Blyth Chemicals v Bushnell (1933) 49 CLR 66 at 81-82 by Dixon and McTiernan JJ as follows: Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal. But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises. (references omitted, emphasis added) 247 For the reasons which I will detail below in the context of examining the common law right to terminate, and additional to the contractual right to terminate under clause 14(b)(vii), I am satisfied that Dr Avenia's conduct in relation to the failure to comply with RTHF's reasonable direction amounted to a breach of the duty of fidelity. 248 There is no need for me to deal with the breach of the duty of fidelity as matter of contract for the failure to comply with reasonable directions; this is because clause 14.1(vii) is directed to a contractual right to terminate in such circumstances. 249 In now turning to the attempted mail redirection and considering whether this conduct amounted a breach of the contractual duty of fidelity, I am conscious that I have not made a finding that Dr Avenia's conduct amounted to "stealing the business back" (see [76] above). 250 As recorded by the Employment Agreement, Dr Avenia was employed by RTHF as a Principal Dentist who was to "…provide [sic] highly advanced range of efficient clinical and dental care as well as development implementation of quality processes and procedures in order to ensure the smooth running of the practices. This role will manage the Dentists in Brisbane and Sydney clinics" (Exhibit A, pages 13 and 52). In the circumstances of his role, Dr Avenia was a senior employee and his duty of fidelity was partly informed by that contextual fact: see Prestige Lifting Services Pty Ltd v Williams [2015] FCA 1063; (2015) 333 ALR 674, [198] per Beach J. 251 In summary, the evidence establishes the context that Dr Avenia's attempted mail redirection: (a) occurred in the period during which Dr Avenia was the subject of RTHF's direction not to perform work; (b) was surreptitious in that it was engaged in unilaterally at Dr Avenia's instigation without consultation with RTHF and without RTHF's knowledge; (c) occurred in circumstances where Dr Avenia occupied a significant managerial position as Principal Dentist. 252 In my view, the evidence establishes that Dr Avenia's conduct in these circumstances was relevantly incompatible and repugnant to his contractual duty of fidelity. The attempted mail redirection, undertaken in the context outlined above, was conduct which was relevantly destructive of the confidence which RTHF reposed in Dr Avenia. 253 For the avoidance of doubt, I reject Dr Avenia's submissions that the failure of the mail redirection should be regarded as being significant. I also reject the submission that the failure by RTHF to prove the content of the terms and conditions determined pursuant to s 32 of the Australian Postal Corporation Act 1989 (Cth) should somehow mean that the argument fails. In all the circumstances, it matters not that the mail redirection ultimately failed; what is relevant is what Dr Avenia did and how he did it covertly. To use a less that perfect analogy, one does not condone an attempted punch because it does not connect.

[52]

The Applicable Law 256 At common law, of course, the test for determining whether misconduct gives rise to a right to terminate summarily involves: first, a determination of breach (such as I have made here), and secondly, consideration of the seriousness of the breach: Rankin v Marine Power International Pty Ltd [2001] VSC 150; (2001) 107 IR 117, at [250] per Gillard J. 257 As to the second point, whether a breach is sufficient to meet the legal conditions for summary termination rests primarily on the construction of the contract and an evaluation of whether the breach was sufficiently serious to justify the termination of the contract (failure of performance) or if it evinced a repudiatory intention (renunciation): Koompahtoo Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 at [44], [55] per Gleeson CJ, Gummow, Heydon and Crennan JJ. In the context of an employment contract, another way of expressing the same concept is to say the conduct must be either: (a) of a character to demonstrate repudiation; and/or (b) repugnant to the employment relationship. 258 It has, of course, been repeatedly affirmed that the test to be applied is objective, being whether conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it: Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623, at 647-648 per Brennan J, 657-658 per Deane and Dawson JJ; Fishlock v The Campaign Palace Pty Ltd [2013] NSWSC 531; (2013) 234 IR 1, 25-26 [126] per Sackar J. 259 Although the test is objective, this does not mean that, in a case of breach of the duty of fidelity, evidence of mental processes is irrelevant. As von Doussa J explained in Sutcliffe v General Motors-Holden's Automotive Ltd [1998] FCA 88; 80 IR 142 at 154: The question whether an employee has been guilty of serious and wilful misconduct requires an examination not only of his actions but also of his mental processes relative to them. The misconduct must be conduct so seriously in breach of the contract of employment that by standards of fairness and justice the employer should not be bound to continue the employment. The conduct must also have the quality that it is "wilful", that is it must amount to a deliberate flouting of the essential contractual conditions: see North v Television Corporation Limited (1976) 11 ALR 599, Gooley v Westpac Banking Corporation [1995] IRCA 658; (1995) 59 IR 262 at 269 and Bartucciotto v Euro Printing Company Pty Ltd, von Doussa J, unreported, IRCA 72/96, 21 February 1996 at 17-18. 260 Provided these statements are not construed as in any way restricting the later observations of the High Court in Koompahtoo that termination can be justified when the relevant conduct amounts to a sufficiently serious failure of performance or if it evinces a repudiatory intention, these earlier cases remain useful expressions of the quality or nature of conduct necessary to justify termination in the context of an employment contract. 261 Given the nature of the conduct relied upon in this case, it is important to note that "wilfulness or deliberateness of a disobedience of the lawful and reasonable order giving rise to a justification for summary termination should not be understood as establishing some separate test" but rather involves the consideration of those "elements or factors in order to determine whether the conduct was, objectively, repudiatory in nature" and, therefore capable of giving rise to summary termination: see Dissanayake v State Transit Authority [2016] NSWIRComm 10 at [111]. 262 Two further matters should be noted. First, consistently with the seriousness of the act of termination, where the conduct relied upon is a single act of misconduct, it will only justify dismissal if it was of such a nature as shows that the employee is repudiating the contract, or one of its essential conditions: Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285, 701 per Lord Evershed MR. Secondly, there is little to be gained by canvassing a litany of cases that each turn on their own facts. As the Privy Council explained in Jupiter General Insurance Co Ltd v Shroff [1937] 3 All ER 67 at 74: "the test to be applied must vary with the nature of the business and the position held by the employee, and that decisions in other cases are of little value".

[53]

Did the Breach of the Fidelity Duty Justify Summary Termination at Common Law? 263 I have found two breaches of the duty of fidelity and it is convenient to deal with them separately and then together. 264 As to the breach caused by the failure to comply with the reasonable direction, it is useful to make reference to the observations: (a) of Isaacs ACJ in Adami v Maison De Luxe Limited [1924] HCA 45; (1924) 35 CLR 143 at 151-153: … One commanding circumstance is to ascertain the subject matter as a totality of which it is predicated that it must be wilful. Here the subject matter is not "disobedience," but "disobedience of a lawful order." It is the whole compound expression that must be "wilful," and not the one word "disobedience" adding a proviso "if the order be lawful." It is no doubt a correct principle that, once the relation of employer and employee is established, obedience to lawful orders is, if not expressly, then impliedly, contemplated by the contract creating the relation, and mere disobedience of such orders is a breach of the bargain. But whether disobedience in a given case is of such a character as to justify a complete dissolution of the contract by one of the parties and, as here, a forfeiture by the other of valuable accruing rights, together with some degradation - altogether a severe penalty - is, in my opinion, quite a different matter. Such a justification requires the disobedience to be as phrased "wilful disobedience of a lawful order." That is, it must be not merely a breach but a radical breach of the relation, and inconsistent with its continuance…. "Wilfully" does not necessarily connote in that connection anything criminal or immoral, but it does connote some deliberate design or purpose to derogate from duty. …Any conduct on the part of either inconsistent with the maintenance of the relation created amounts to a renunciation, and the other has a right to terminate it. (b) of Lord Evershed MR in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 AII ER 285 at 700-701: … It is, no doubt, therefore, generally true that wilful disobedience of an order will justify summary dismissal, since wilful disobedience of a lawful and reasonable order shows a disregard - a complete disregard - of a condition essential to the contract of service, namely, the condition that the servant must obey the proper orders of the master, and that unless he does so the relationship is, so to speak, struck at fundamentally. In the passages which I have read, it will be remembered there is a statement "...there is no fixed rule of law defining the degree of misconduct which will justify dismissal." That statement is derived from the judgment of the Privy Council delivered by Lord James of Hereford in the case to which Mr. Stewart referred of Clouston & Co. Ltd. v. Corry. I will read a rather larger passage which provides the context. Lord James said: "Now the sufficiency of the justification depended upon "the extent of misconduct. There is no fixed rule of law defining the degree of misconduct which will justify dismissal. Of course there may be misconduct in a servant which will not justify the determination of the contract of service by one of the parties to it against the will of the other. On the other hand, misconduct inconsistent with the fulfilment of the express or implied conditions of service will justify dismissal." In the present case, the judge, in the course of his judgment, said: "It is clear and sound law that to justify dismissal for one act of disobedience or misconduct it has to be of a grave and serious nature"; and, later he concluded, in the plaintiff's favour, that what she had done, or not done, on June 20 was not sufficiently grave to justify dismissal. With all respect to the judge, I think that his proposition is not justified in the form in which he stated it. I think it is not right to say that one act of disobedience, to justify dismissal, must be of a grave and serious character. I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that you find in the passages I have read that the disobedience must at least have the quality that it is "wilful": it does (in other words) connote a deliberate flouting of the essential contractual conditions. 265 I consider the conduct of Dr Avenia to be of this character, that is, it is "wilful" and connotes a deliberate flouting of essential contractual conditions as to obedience to directions and fidelity. 266 It will be recalled the response to the direction was the 2 March Letter (see [85]-[90] above), which contended that no more than two business days' notice of the proposed meeting had been given and that it was an "unreasonable direction and unlawful to expect our client to be in a position to attend the Meeting in these circumstances". 267 In addition to the contention that the meeting had been "purposely arranged with limited notice" (page 3 of the 2 March Letter), Dr Avenia asserted, among other things, that he would not comply with the direction (and that the direction to attend was not reasonable or lawful) because: (a) enquiries and complaints (that is, those matters raised in the 16 February Letter) had not been addressed; (b) all requested documentation had not been supplied; and (c) false, misleading and deceptive (and unexplained) representations had been made by RTHF. 268 In short, as explained on page 4 of the 2 March Letter, Dr Avenia was only willing to participate in a meeting after RTHF had complied with Dr Avenia's previous "enquiries and complaints" which had remained "unchanged". 269 Essentially, this position was persisted in up until the time of the termination of Dr Avenia's employment. No doubt this course of conduct was informed by the fact that Dr Avenia had decided, by reason of what he perceived as being RTHF's wrongful conduct, that he was no longer bound by the Employment Contract. 270 There was nothing preventing Dr Avenia obeying the direction that he attend a meeting of the type proposed on 2 March 2017 and there was nothing preventing him responding to the allegations raised against him at such a meeting. His obduracy in refusing to attend and demanding RTHF comply with the conditions he set out in the 2 March Letter was not justified, and it had (and continued to have, after 2 March 2017) the effect of frustrating and preventing RTHF from addressing the significant staff problem that RTHF had a duty to address and from minimising the disruption caused by the ongoing suspension - a suspension that RTHF had reasonably directed, for reasons I have also explained. 271 Whatever the shortcomings in the initial direction contained in the Suspension Letter (which I have found was not reasonable), Dr Avenia disobeying the later, reasonable direction amounted to a wilful breach of a character which showed (in effect) that he was repudiating the contract, or one of its essential conditions, being the duty to obey the reasonable directions of RTHF. It went to the heart of the employment relationship and amounted to a breach of the duty of fidelity. The wilful nature of his conduct, assessed objectively, is no doubt explicable by reason of his view that he was no longer bound. 272 As to the breach caused by the mail redirection, I satisfied that a reasonable person in RTHF's position would have perceived, by Dr Avenia's conduct, the renunciation of a fundamental obligation under the contract. Dr Avenia was suspended pending the finalisation of enquiries into allegations made by certain colleagues and was not in contact with RTHF beyond that purpose. While the attempted mail redirection was constituted only by a single act, it occurred in this context. Accordingly, in the circumstances of a reasonable employer having directed a senior employee not to attend work pending enquiry, I am satisfied that the surreptitious attempted mail redirection conveyed the renunciation by Dr Avenia of his fidelity obligations, and that the unilateral and secretive nature of the conduct constituted a "deliberate flouting of th[is] essential contractual conditio[n]" (Laws at 289). 273 It follows that the mail redirection, either in combination with, or separately from, the failure to comply with the reasonable direction, gave RTHF the right to dismiss Dr Avenia for serious misconduct. As I noted above at [234], it was not pleaded, other than as grounding a contractual right to terminate pursuant to clause 14.1(b)(xiii), that the common law right to terminate was independently engaged or exercised.

[56]

J Conclusion and Orders 277 These reasons are lengthy. The primary reason for their length is that the parties were at issue concerning characterisation of almost all of the events that happened during the term of Dr Avenia's relationship with RTHF. Additionally, despite the attempts to facilitate an early hearing date by narrowing and defining issues, this was largely unsuccessful and the cases of the parties evolved and developed during the course of the proceeding. 278 The adverse action case fails for the reason identified in [113] above and the pleaded breach of contract case has only had success in a way unrelated to the termination of the employment of Dr Avenia. 279 The price paid for the interlocutory relief obtained by Dr Avenia was the provision, through his Counsel, of the usual undertaking as to damages. Absent resolution of the underlying controversy, it will be necessary, following the publication of these reasons, to proceed to a quantification of the damages, if any, which were suffered by RTHF as a consequence of the granting of the injunction. As to the breach of contract by RTHF as to payment pursuant to the APA, this ought to be the subject of declaratory relief and, subject to hearing from the parties, may be the subject of the entry of judgment. 280 It has often been observed that the protection against adverse costs contained in s 570 of the FWA has the benefit of promoting access to justice by trying to reduce the prospect that fear of a costs order will discourage a genuine litigant from pursuing a case with reasonable cause. Speaking generally, however, in some cases, it can have the unintended effect of encouraging the perpetuation of litigation that would be settled in circumstances where a party was at risk of adverse costs in the usual way. 281 Returning to the present circumstances, the unnecessary prolongation of this litigation is not in the interests of either remaining party and although I propose to list the matter for a further case management hearing to make orders consistent with these reasons and to make any further necessary directions, I trust that, consistent with the overarching purpose, the parties and their lawyers will give further consideration as to whether it is not too late to bring this unhappy litigation to an end consensually. 282 As presently advised, subject to hearing from the parties, I would propose to make an order under s 53A of the Federal Court of Australia Act 1976 (Cth) referring the balance of this proceeding to a further mediation. 283 I am conscious that I reserved the costs of the proceedings that were abandoned against Ms Tregeagle. If any application was to be made in relation to the issue reserved, or as to the costs of the hearing generally, I would usually order that any material in support of that application be filed prior to the case management hearing. I am, however, conscious that the parties may wish to rely upon otherwise privileged communications in support of any such application or applications: see McDonald v Parnell Laboratories (Aust) (No 2) [2007] FCA 2086; (2007) 164 FCR 591 at 598-9 per Buchanan J; Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221 at [166]-[168] per Tracey, Gilmore, Jagot and Beach JJ. Of course, I have no idea whether this will be the case, but I mention it because given the deferral of the question of damages it seems to me, at present, that it would be inappropriate that I receive any material on any costs application under the exclusion contained in s 131(2)(h) of the Evidence Act. Accordingly, my present view, subject to hearing from the parties, is to reserve the question of costs generally until the conclusion of all issues in the proceeding. I certify that the preceding two hundred and eighty-three (283) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee.