Director General of the Department of Environment and Conservation v Susanne Ryan

Industrial Relations Commission (NSW)|2004-10-15|Before: Kavanagh J, Boland J, Staff J, Mr P, Schmidt J

Industrial Relations Commission of New South Wales in Court Session

CITATION : Director General of the Department of Environment and Conservation v Susanne Ryan [2004] NSWIRComm 310 APPELLANT Director General of the Department of Environment and Conservation on behalf of Public Employment Office PARTIES : RESPONDENT Susanne Kay Ryan FILE NUMBER: IRC 3709 of 2004 CORAM: Kavanagh J; Boland J; Staff J Appeal - Application for leave to appeal and appeal - Declaratory relief - Public Service - Disciplinary proceedings - Inquiry under Public Sector Management Act 1988 and Regulations - Independent Commission Against Corruption Act 1988 - Protected evidence - Leave to appeal granted - Appeal dismissed CATCHWORDS : Declaratory Relief - Appeal - Application for leave to appeal and appeal - Public Service - Disciplinary proceedings - Inquiry under Public Sector Management Act 1988 and Regulations - Independent Commission Against Corruption Act 1988 - Protected evidence - Leave to appeal granted - Appeal dismissed Industrial Relations Act 1996 s 154 Independent Commission against Corruption Act 1988 s 37(3) LEGISLATION CITED : Public Sector Employment and Management Act 2002 Public Sector Management Act 1988 ss 66 74 75 Public Sector Management (General) Regulation 1996 Telecommunications (Interception) Act 1997 (Cth) CASES CITED : Ryan v Director General of New South Wales National Parks and Wildlife Service and Anor [2004] NSWIRComm 160 HEARING DATES: 09/27/2004 DATE OF JUDGMENT: 10/15/2004

APPELLANT Mr P M Kite SC with Ms E Brus of counsel Solicitor: I V Knight Crown Solicitors Office LEGAL REPRESENTATIVES: RESPONDENT Mr S C Rothman SC with Mr D M Shoebridge of counsel Solicitor: Ms M Rockliff Rockliffs Solicitors

JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM : Kavanagh J Boland J Staff J

Matter No. IRC 3709 of 2004 DIRECTOR GENERAL OF THE DEPARTMENT OF ENVIRONMENT AND CONSERVATION ON BEHALF OF THE PUBLIC EMPLOYMENT OFFICE v SUSANNE KAY RYAN Application by Director General by the Department of Environment and Conservation on behalf of Public Employment Office for leave to appeal and appeal against decision and orders of Schmidt J given on 4 June 2003 in matter IRC03/6133

JUDGMENT OF THE COURT [2004] NSWIRComm 310

1 This is an application for leave to appeal and, subject to leave being granted, an appeal by the Director General of the Department of Environment and Conservation on behalf of the Public Employment Office ("the appellant") against a decision of Schmidt J in Ryan v Director General of New South Wales National Parks and Wildlife Service and Anor [2004] NSWIRComm 160 delivered on 4 June 2004.

2 Her Honour's judgment dealt with an application by Susanne Kay Ryan ("the respondent") for declaratory relief under s 154 of the Industrial Relations Act 1996. The application arose out of Ms Ryan's employment by the appellant and an inquiry conducted under the Public Sector Management Act 1988 ("PSM Act") and the Public Sector Management (General) Regulation 1996 ("the Regulation") in relation to whether Ms Ryan had committed certain breaches of discipline.

3 Recommendations were made by the inquiry as to certain charges to be laid against Ms Ryan. It was Ms Ryan's case the charges exceeded the authority of the person appointed to conduct the inquiry and that the conduct and recommendations of the inquiry were unlawful and in breach of the Public Sector Management Act and the Regulations made thereunder, the Independent Commission against Corruption Act 1988, as well as the Telecommunications (Interception) Act 1997 (Cth).

4 The facts leading to the preliminary inquiry conducted pursuant to clause 22 of the Regulation by Ms Helen Colbey were not in dispute. They were recited thus by her Honour: 4. … [W]hilst employed as a Human Resources Manager by the National Parks and Wildlife Service ('NPWS'), the applicant made a protected disclosure to the New South Wales Ombudsman. In 2000 and 2001, the Independent Commission Against Corruption ('ICAC') conducted an inquiry into the matters so raised. The applicant gave evidence at the inquiry. Sections 37 and 38 of the ICAC Act applied to the applicant's evidence.

5 In December 2001 the ICAC report was made public. Amongst other things, the report recommended that consideration be given to the laying of certain criminal and disciplinary charges against the applicant. Certain information concerning the applicant was also later provided by the ICAC to the NPWS.

6 On 11 January 2002, the applicant was charged with two alleged breaches of discipline under s66 of the PSMA. She was suspended from duty without pay and on 22 February, the charges were amended, by addition of a third charge … 5 The charges laid against Ms Ryan, as her Honour noted, were framed as follows: 1. That you did engage in misconduct on 23 January 2001 when you passed on confidential information from Ms Penelope Spoelder's personal file to Mr John Patrick Kite who is an unauthorised person with no reasonable need to access this material

That you did engage in misconduct on 1 February 2001 when you passed on confidential information from Ms Penelope Spoelder's personal file to Elizabeth Ahern who is an unauthorised person with no reasonable need to access this material.

That you did engage in misconduct by giving Mr John Patrick Kite unsupervised access to his personal file on or before 24 November 2000. 6 Relevantly, her Honour considered the effect of ss 66, 74 and 75 of the PSM Act and cll 19 to 27 of the Regulation.

7 The essential findings of Schmidt J may be summarised as follows: 1 Compliance with the scheme relating to the disciplinary process under the PSM Act and Regulation was mandatory at the relevant time and that, on the evidence, there were a number of fundamental departures from what was there required, in the approach adopted in the inquiry conducted by the NPWS [National Parks and Wildlife Service]. 2 In the context of the statutory scheme an opportunity to respond to Ms Colbey's report after it was made, in the further inquiry to be subsequently conducted under the Regulations, is not the same as an opportunity to make representations about the subject matter of the inquiry, to Ms Colbey, the person conducting the inquiry, prior to her making her preliminary report. The scheme established by the Regulations envisages that the officer charged will have both. 3 The power of recommending further charges provided in cl 23 [of the Regulation], was limited to further charges in relation to 'the matter the subject of the inquiry' Ms Colbey was appointed to conduct. The two new charges recommended went beyond that matter. 4 Her Honour was not satisfied that ICAC wrongly supplied the transcript of the tape to NPWS, prior to the commencement of the preliminary inquiry. 5 The proper inference from the evidence is that Ms Colbey had regard to evidence given by the applicant before ICAC, as set out in the ICAC report, contrary to s 37 of the ICAC Act. That evidence was not admissible in such disciplinary proceedings and should therefore not have been put before Ms Colbey.

6 Any consideration by the Director General of the evidence given by the applicant before ICAC, as set out in the ICAC report, was also contrary to s 37 of the ICAC Act. 8 Her Honour gave the following relief: (1) The applicant is, and at all times has been, employed by the second respondent since 26 April 2000; (2) The purported termination of the applicant's employment by the first respondent of 11 July 2003 is void; (3) The applicant is entitled to be paid all superannuation, wages and the other emoluments pertaining to her position as Human Resources Manager, Clerk, Grade 9 in the employ of the second respondent and to retain all leave and other entitlements accruing and accrued to that position in the period from 26 April 2002 to date, save as to monies paid by the respondents excluding as to leave taken during the disciplinary period; (4) Costs; (5) Interest pursuant to s372 of the Industrial Relations Act 1996 in relation to all monies payable to the applicant.

9 There were five grounds of appeal as follows: 1 Her Honour erred in finding that the Appellant impermissibly had regard to evidence given by the Respondent before the ICAC; such evidence attracting the protection of s 37(3) of the ICAC Act. 2 Her Honour erred in finding that the Appellant's investigating officer had regard to evidence protected by s 37(3) of the ICAC Act. 3 Her Honour erred in concluding that the Director-General gave any consideration to evidence attracting the protection of s 37(3) of the ICAC Act. 4 Her Honour erred in finding the manner in which the Appellant's investigation was conducted contrary to and undermined the disciplinary scheme as set out in the Public Sector Management (General) Regulation (1996). 5 Her Honour erred in finding that the instrument of appointment prevented the Appellant's investigating officer from recommending that two additional charges be laid against the Respondent.

10 We have given serious consideration to refusing leave in this case, especially in light of the fact that the PSM Act and the Regulation made thereunder have been repealed and replaced by the Public Sector Employment and Management Act 2002, which came into force in June 2003. We consider, however, the appeal raises matters of importance relating to the manner and conduct of disciplinary proceedings against public servants and notwithstanding the new statutory regime, some of the issues arising from her Honour's decision continue to be relevant to the manner in which the appellant conducts its disciplinary process. Accordingly, we have decided to grant leave.

11 The first two grounds of appeal assert that Schmidt J erred in finding that the appellant and the appellant's investigating officer, Ms Colbey, had regard to evidence protected by s 37(3) of the Independent Commission Against Corruption Act 1988 (ICAC Act).

12 Section 37(3) of the ICAC Act provides: (3) An answer made, or document or other thing produced, by a witness at a hearing before the Commission is not (except as otherwise provided in this section) admissible in evidence against the person in any civil or criminal proceedings or in any disciplinary proceedings.

13 Schmidt J considered that the proper inference to be drawn from the evidence was that Ms Colbey had regard to evidence given by Ms Ryan before ICAC, as set out in the ICAC Report, contrary to s 37 of the ICAC Act: ([59]). The evidence in respect of which her Honour drew this inference was: (a) Ms Colbey was provided with a copy of the ICAC report by the NPWS. The ICAC report contained extensive quotes from the applicant's protected evidence, as well as summaries of parts of that evidence. (b) Ms Colbey advised that she would have regard to the ICAC report 'where relevant and appropriate to the Preliminary Inquiry'. (c) Ms Colbey's report annexed a copy of the entire ICAC report. (d) Ms Colbey did not indicate that there were any parts of the report to which she did not have regard. (e) Ms Colbey said that she had received advice as to what material or information could be used to support certain allegations against the applicant. The ICAC report was not identified as part of such 'available material or information'. However, the advice Ms Colbey received was that material or information that may be admissible in evidence in any disciplinary proceedings against Ryan included: (i) … (ii) … (iii) Any other material or information which may be obtained as a direct or indirect consequence of the enforced testimony given during the Commission hearing. Given Ms Colbey's November advice to the applicant that she proposed to have regard to parts of the ICAC report, the proper inference is that the report was viewed as falling within category (iii) above. (f) The Premier's Department Personnel Handbook provides in clause 9.2.8.7 that the report made to the Department Head should 'have as annexure all documents that the inquirer has relied upon in reaching his or her conclusions.'

14 The ICAC report contained extensive quotes from Ms Ryan's protected evidence as well as summaries of that evidence. Ms Colbey had advised Ms Ryan that she would have regard to the ICAC report "where relevant and appropriate to the Preliminary Inquiry" but she did not clarify which parts of the report she considered "relevant and appropriate."

15 Ms Colbey's legal advice was that whilst the transcript of Ms Ryan's evidence before ICAC was not admissible "any other material or information which may be obtained as a direct or indirect consequence of the enforced testimony given during the hearing was admissible". Her Honour inferred that Ms Colbey regarded the ICAC report as falling within this class of documents, such inference being supported by Ms Colbey's annexing of the ICAC report to her report.

16 Whilst it might be cogently argued, as it was by senior counsel for the appellant in this case, that the proper inference was that Ms Colbey did not have regard to Ms Ryan's enforced testimony in the ICAC proceedings, the stronger inference on the evidence is that she did. This is particularly so given that Ms Colbey did not say which parts of the ICAC report she considered relevant and appropriate, despite being asked this question by Ms Ryan in her letter of 19 November 2002, that Ms Colbey confirmed in her report that she had " … regard to the background to this matter including the investigation undertaken by ICAC and their subsequent report and recommendations" and that she annexed the whole of the ICAC report to her report.

17 Given the fundamental importance of the protection afforded by statute against self-incrimination it was critical that Ms Colbey made it plain that she did not have regard to Ms Ryan's protected evidence as contained in the ICAC report in coming to her conclusions and recommendations. It should not be necessary to have to resort to the drawing of inferences in that respect. However, in this case we consider that the inference Schmidt J necessarily had to draw from the evidence that Ms Colbey had regard to evidence given by Ms Ryan before ICAC, as set out in the ICAC report, contrary to s 37 of the ICAC Act, was open to her Honour.

18 The third appeal ground asserted that her Honour erred in concluding that the Director General gave any consideration to evidence attracting the protection of s 37(3) of the ICAC Act.

19 Schmidt J found at [60] that: …[U]nder the Regulations made under the PSMA, Ms Colbey's report, including the annexed ICAC report, then became a matter to which the Director General was entitled to have regard, in determining whether a breach of discipline had been committed by the applicant. (Clause 24 (b)(a)). In this aspect of the disciplinary proceedings, any consideration by the Director General of the evidence given by the applicant before ICAC, as set out in the ICAC report, was also contrary to s37 of the ICAC Act. The Regulations made under the PSMA could plainly not override that statutory protection.

20 Schmidt J obviously inferred that the Director General of the appellant had regard to the ICAC report that was attached to Ms Colbey's report. By letter dated 12 March 2003 the Director General formally charged Ms Ryan with the four breaches of discipline recommended by Ms Colbey. The Director General was only entitled to proceed with the charge "after considering the report of the results of the preliminary inquiry" by force of cl 24(1)(b) of the Public Sector Management (General) Regulation 1996. The report had annexed to it the ICAC report.

21 Was the inference open to Schmidt J that the Director General read the ICAC report annexed to Ms Colbey's report in coming to the decision to charge Ms Ryan, including the extracts from the transcript of Ms Ryan's evidence before ICAC? In the same way it was open to her Honour to infer that Ms Colbey had regard to Ms Ryan's protected evidence as contained in the ICAC report in coming to her conclusions and recommendations, it was open to her Honour to infer that the Director General also had regard to that material in deciding to charge Ms Ryan. Indeed, the inference is stronger in the case of the Director General than in relation to Ms Colbey who was the direct recipient of certain legal advice as to what was admissible and what was not, whereas the Director General was once removed from this process and would need to have read and understood the advice (which did not refer to the ICAC report) and consciously excised the protected evidence from the ICAC report. There was no evidence suggesting this was done.

22 The fourth ground of appeal was that her Honour erred in finding the manner in which the appellant's investigation was conducted was contrary to and undermined the disciplinary scheme as set out in the Public Sector Management (General) Regulation 1996.

23 Her Honour found that in conducting the preliminary inquiry Ms Colbey had regard to material other than that which she disclosed to Ms Ryan in a letter of 15 November 2002. Further, that Ms Ryan was not given an opportunity to have access to the documents and other material, which Ms Colbey obtained after Ms Ryan had made her submissions. This was material to which Ms Colbey had regard, in addition to the material outlined in her letter of 15 November. 24 Her Honour further found that Ms Colbey's report made clear that she had regard to the submissions made by Ms Ryan, even though received out of time and that they led her to a further chain of inquiry. The result was that further evidence was gathered, to which Ms Colbey had regard in the conclusions which she reached, but which was not revealed to Ms Ryan. Her Honour noted that Ms Colbey was conscious that Ms Ryan had not been given an opportunity to deal with that material, but nevertheless, concluded that it was unnecessary to provide that opportunity because: Ms Ryan will of course have the opportunity to comment on my report prior to any determination being made by the Director General, (if the preliminary inquiry proceeds), when she is provided with a copy of the report and all of the attachments. The Director General will then have the opportunity to consider her further comments before making any determination. Having regard to all of the circumstances I have decided not to provide any further information to Ms Ryan prior to finalising my report.

25 At [27] and [28] of her judgment Schmidt J found as follows: 27 It was argued for the respondent that the applicant suffered no adverse consequence as a result of this approach, because the applicant later had another opportunity to make submissions to the Director General under clause 24 of the Regulations. It seems to me that this approach is not consistent with that of the Full Court in [ Public Employment Industrial Relations Authority and Ors v Public Service Association of New South Wales (re Scorzelli and Ors) (1993) 49 IR 169]. It also paid no regard to the provisions of clause 26(2), which entitled the applicant to inspect the documents in question. Nor did it take account of the fact that when later determining whether a breach of discipline had been committed, clause 24(6) of the Regulations permitted the Director General to have regard to the result of Ms Colbey's preliminary inquiry. In the context of this statutory scheme, it is clear that an opportunity to respond to Ms Colbey's report after it was made, in the further inquiry to be subsequently conducted under the Regulations, is not the same as an opportunity to make representations about the subject matter of the inquiry, to Ms Colbey, the person conducting the inquiry, prior to her making her preliminary report. The scheme established by the Regulations envisages that the officer charged will have both. 28 The practical difficulty with the approach adopted is also illustrated by the fact that while Ms Colbey was appointed to enquire into the three charges earlier set out, she determined that one of these not be proceeded with, but that two more be laid. I will return to this below, but observe at this point that the information upon which this new aspect of the charges rested, was pursued by Ms Colbey after the applicant had made her submissions. The result was that the applicant had no opportunity at all to make submissions about these new matters, before the new charges emerged. This, too, undermined the scheme established by the Regulation, particularly the provisions of clause 20(1).

26 Clause 20(1) of the Regulation provides: (1) If it appears to the appropriate Department Head or the senior officer that an officer (other than a chief executive officer) has committed a breach of discipline: (a) the officer may be charged with the alleged breach of discipline (either orally or in writing) by the Department Head or senior officer, and if so charged, the Department Head is to institute a preliminary inquiry into the matter, or (b) the Department Head may (without the officer being charged) institute a preliminary inquiry into the matter.

27 Clause 24(6) of the Regulation provides: (6) A Department Head, in determining whether an officer has or has not committed a breach of discipline, may take into consideration only those matters disclosed at any interview with the Department Head or in any of the following documents: (a) the report of the result of the preliminary inquiry, (b) any reply made by the officer to the charge, (c) the report of the result of any further inquiry instituted by the Department Head.

28 Clause 26(2) of the Regulation provides: (2) An officer subject to a disciplinary inquiry or any person acting on the officer's behalf may inspect the Departmental papers, correspondence, reports or other documents relating to the matter at such time as may be arranged with the appropriate Department Head or other person conducting the inquiry. 29 The appellant contended that the critical error was to regard the disciplinary inquiry as limited to the preliminary inquiry conducted by Ms Colbey. It was submitted the relevant regulations set out at [17] of her Honour's judgment dealt with the entirety of the disciplinary process not just the preliminary inquiry. However, it was submitted, Schmidt J found that because Ms Ryan had no opportunity to access certain documents prior to the conclusion of the preliminary inquiry, this amounted to a breach or breaches of cl 24 and cl 26(2) of the Regulation. Mr Kite SC for the appellant submitted neither cl 24(6) nor cl 26(2) imposed a mandatory requirement for inspection within the context of a preliminary inquiry.

30 It seems to us inconsistent with notions of procedural fairness or natural justice that an inquiry of the type we are here concerned with can take place into a person's conduct, that the inquirer is not obliged to reveal the fact that he or she has relied on certain material to arrive at adverse findings against the person and the person is then left to challenge not only adverse findings based on material he or she may not have been aware existed but also the possibility of a negative mindset moulded by those adverse findings.

31 On the appellant's case, the preliminary inquiry could proceed without the person under inquiry being informed of or given access to any material relied upon by the inquirer until the inquirer had submitted his or her report to the Department Head. We do not consider this is the result intended by the scheme of the disciplinary process under the statute and Regulation.

32 We consider that it was open to her Honour to find that the manner in which the appellant's investigation was conducted was contrary to and undermined the disciplinary scheme as set out in the Public Sector Management (General) Regulation 1996.

33 The fifth ground of appeal was that her Honour erred in finding that the instrument of appointment prevented the appellant's investigating officer from recommending that two additional charges be laid against Ms Ryan.

34 Ms Colbey's instrument of appointment provided that she was: … [T]o conduct a preliminary inquiry into an apparent breach of discipline within the meaning of section 66 of the Public Sector Management Act 1988, alleged to have been committed by Ms Susanne Ryan, an officer of this Department. The apparent breach of discipline is detailed below:

That Ms Ryan did engage in misconduct on the 23rd January 2001 when Ms Ryan passed on confidential information from Ms Penelope Spoelder's personal file to Mr. John Patrick Kite who is an unauthorised person with no reasonable need to access this material

That Ms Ryan did engage in misconduct on the 1st February 2001 when Ms Ryan passed on confidential information from Ms Penelope Spoelder's personal file to Elizabeth Ahern who is an unauthorised person with no reasonable need to access material

That Ms Ryan did engage in misconduct by giving Mr. Patrick Kite unsupervised access to his personal file on or before the 24th November 2000.

35 Schmidt J concluded that the appointment was limited to conducting a preliminary inquiry only into the charges specified in the instrument of appointment: 33 Ms Colbey's report showed that the views which she reached about these further charges arose out of various information, including what emerged from her further investigation after she had received the applicant's submissions. Her appointment did not require her to investigate these, or any other, new or additional matters, in addition to those referred to in her instrument of appointment. Once the information which led Ms Colbey to make these recommendations had come to her attention, it could have been referred to the NPWS. The Director General would then have been entitled to lay further charges against the applicant about these matters, or even without laying such charges, to cause a preliminary inquiry into the apparent breaches of discipline involved to be conducted (clause 20). This was not the course pursued.

34 On the evidence, it must be concluded that Ms Colbey had been appointed to conduct a preliminary inquiry only into the charges specified in her instrument of appointment. They comprised 'the matter the subject of the inquiry' (clause 22(1)). The Director General could plainly have expressed the instrument of appointment in wider terms, so that Ms Colbey's inquiry could have encompassed any other apparent breaches of discipline which came to light in the course of the inquiry. He did not do so. I am satisfied that the power of recommending further charges provided in clause 23, was therefore limited to further charges in relation to 'the matter the subject of the inquiry' Ms Colbey was appointed to conduct. The two new charges recommended went beyond that matter.

36 The appellant contended that the matters under investigation were alleged incidents involving the respondent passing confidential information to a person or persons who had no authority to receive such information. The two additional charges, it was submitted, dealt with similar subject matters, that is, misconduct by Ms Ryan in passing confidential information to unauthorised persons.

37 The "matter" in relation to which a preliminary inquiry may be instituted is an apparent or alleged breach of discipline: cl 20 of the Regulation. The alleged breach of discipline in this case was constituted by a charge consisting of three elements as set out in Ms Coleby's instrument of appointment. Pursuant to cl 23(3)(b) of the Regulation the report of the preliminary inquiry may recommend that the charge should be amended or further charges made.

38 Thus, the "matter" into which Ms Colbey was authorised to investigate was: the passing on of confidential information from Ms Penelope Spoelder's personal file to Mr John Patrick Kite; the passing on of confidential information from Ms Penelope Spoelder's personal file to Elizabeth Ahern; and, giving Mr Patrick Kite unsupervised access to his personal file. Ms Colbey was entitled to recommend that the charge encompassing these three elements should be amended or that further charges be made.

39 The issue is whether the additional charges recommended by Ms Colbey could be said to arise out of the "matter" the subject of her inquiry. We do not consider that it was open to Ms Colbey to recommend additional charges in relation to apparent breaches of discipline that had no connection with the matter she was authorised to inquire into and we do not understand the appellant to contend for such a proposition.

40 The particulars of the two additional charges were that:

· [On] 23 January 2001 during a telephone conversation with Mr John Patrick Kite, Ms Susanne Ryan passed on confidential information relating to investigations that the EPA were conducting into the NPWS concerning sewage spillage to Mr Kite who is an unauthorized person with no reasonable need to access this material; and

· [O]n the 1 February 2001 Ms Susanne Ryan passed on … confidential information about matters relating to Mr Alistair Henchman's salary and position in NPWS in an affidavit to Ms Elizabeth Ahern who is an unauthorized person with no reasonable need to access this material.

41 The two additional charges are of the same character as the original charge in that they allege the passing on by Ms Ryan of confidential information - albeit different information - to the same persons named in the original charge. It is, therefore, a very fine judgment but we do not consider that Schmidt J erred in the manner asserted in the fifth ground of appeal. We consider that it was open to her Honour to find the two new charges recommended by Ms Colbey went beyond the matter that was the subject of her inquiry.

42 We make the following orders in disposition of the appeal: (1) Leave to appeal is granted; (2) The appeal is dismissed; (3) The appellant shall pay the respondent's costs of the appeal proceedings; (4) The stay granted on 22 July 2004 is dissolved. _________________________

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Telecommunications (Interception) Act 1997(Cth)

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