55 On the evidence, I am satisfied that this onus was not met.
56 So far as Mr Mainwaring's complaint was concerned, the respondents' case largely rested on what was submitted to be the unreliable evidence of Mr Farr and Mr Nicholson.
57 After his dismissal, Mr Farr took up employment with Starr Partners and later became a principal of that firm. He later left and moved to Queensland, where he continues to operate in the real estate industry. His employment with Starr Partners appears to have confirmed the respondents' suspicions of Mr Farr. That he took up such employment, was however, on the evidence, not surprising. While in competition with each other, it was not uncommon for the two real estate agencies to employ staff formerly employed by their various local rivals. Mr Everard was himself then dating Starr Partners' receptionist and some time after Mr Farr's dismissal, The Professionals sold a rent role to Starr Partners, with the result that other of The Professionals' staff then also took up employment with Starr Partners.
58 Mr Farr's dismissal appears to have become known in the market, the same day it occurred. On the evidence he was a good salesman, with a reputation for being so and accordingly, it seems unsurprising that Starr Partners, or other of the respondents' competitors, might be interested in acquiring his services. Nor could it be surprising that he might accept such an offer. On his evidence, shortly after his dismissal, Mr Farr had two offers of employment to consider. That afternoon he received an offer of employment from another agency, as well as receiving the Starr Partners' offer, after he met Mr Richardson in the street. It was Mr Richardson who suggested that Mr Farr should consider employment with Starr Partners, and then raised the possibility with Mr Nicholson, who telephoned Mr Farr the same afternoon.
59 That Mr Farr would need to take other employment, could have been no surprise to the respondents, given that he had been summarily dismissed for misconduct, without being given either notice or payment in lieu. Indeed, it was common ground that Mr Farr was not even paid all that was due to him on termination. Even at the hearing, the respondents accepted that it still owed him outstanding commission payments.
60 Having been headhunted by The Professionals from a well paying job in the car sales industry only some 20 months previously, with assurances that his employment at The Professionals would be long term and secure, it must have been obvious to Mr Everard, that Mr Farr would have to seek other employment, once he was summarily dismissed.
61 Nothing in his employment contract, or what Mr Everard had told Mr Farr in the termination interview, could have suggested to Mr Farr that taking the offer he later received from Starr Partners, was not appropriate. That agency was not mentioned by Mr Everard, when he dismissed Mr Farr, it was his connection with Mr Iskra, which appears then to have been at the heart of Mr Everard's concerns. Nor was there any legal restraint on Mr Farr accepting such an offer. Mr Farr shortly had both an offer from Combined Real Estate and that of Starr Partners to consider. He decided to accept employment with Starr Partners. That was confirmed with an offer letter of 11 March. It follows that the fact that Mr Farr took up employment with Starr Partners, could not of itself lead to an inference that Mr Farr had earlier provided Starr Partners with confidential information about Mr Mainwaring.
62 Mr Farr himself denied having done so. Mr Farr also called evidence from Mr Nicholson in his case. In his affidavit evidence, Mr Nicholson denied having discussed Mr Mainwaring's dealings with Mr Farr, while Mr Farr was employed by The Professionals. His affidavit did not reveal the source of the information which Starr Partners had received about Mr Mainwaring, which caused them to write to him. In cross examination, Mr Nicholson explained that he had not dealt with this in his affidavit, because his affidavit had merely reflected answers he had given to questions he had been asked by Mr Farr's instructing solicitors. As to how Starr Partners came to write to Mr Mainwaring, about his endeavour to lease the premises in question, Mr Nicholson explained that they had received this information 'from other sources', not Mr Farr.
63 That such affidavit evidence was called from Mr Nicholson in Mr Farr's case was not surprising. There was no onus on him to establish the source of the information on which Starr Partners had acted, when writing to Mr Mainwaring. Mr Nicholson was rather called to corroborate Mr Farr's evidence, that the source was not him.
64 In answer to further questions, Mr Nicholson explained that his partner, Mr O'Sullivan, had been dealing with Mr Mainwaring. Mr Mainwaring had been a principal of Starr Partners, who had left abruptly in acrimonious circumstances, which had led to threatened litigation. Mr Mainwaring was subject to a restraint, which Starr Partners intended to enforce. Starr Partners were also negotiating with Mr Mainwaring, to buy him out of his interest in the business. These matters were all dealt with in the letter which Starr Partners' solicitors sent to Mr Mainwaring and which led to his complaint to Mr Williams.
65 When cross examined about discussing Mr Mainwaring with Mr Farr, Mr Nicholson said that some time after Mr Farr was employed at Starr Partners, Mr Nicholson was discussing Mr Mainwaring with Mr O'Sullivan. Mr Farr was there and it sounded to Mr Nicholson from what he said, as if Mr Farr was aware of Mr Mainwaring's attempted leasing of the premises at Narellan.
66 When further pressed, Mr Nicholson explained that he had earlier become aware of Mr Mainwaring's attempt to lease the premises through the owner of the premises. That information had come to him from Starr Partners' property manager, Ms Bolton. Mr Nicholson understood that Ms Bolton had spoken to the building owner about the lease of the premises and that it was he who had mentioned Mr Mainwaring's interest in the premises to her.
67 None of this evidence was touched on in Mr Nicholson's affidavits. Mr Nicholson also insisted in his oral evidence, that despite saying in his affidavit that he had not discussed Mr Mainwaring with Mr Farr before 8 March 2003, when Mr Farr was dismissed by Mr Everard, he had, in fact, never discussed Mr Mainwaring leasing premises in Narellan, with Mr Farr. This however, contradicted evidence given by Mr Farr in cross examination.
68 Mr Farr's evidence was that it was only when he read Mr Mainwaring's affidavit, that he became aware of the allegation that it was he who had informed Starr Partners of Mr Mainwaring's interest in leasing the Narellan property. He was then still with Starr Partners and had asked Mr Nicholson about who had given Starr Partners that information, but Mr Nicholson had refused to tell him.
69 Mr Nicholson was later recalled. He said that after giving his earlier oral evidence, he had realised that he had been in error as to the identity of his property manager. At the relevant time, the manager was Ms Whelan, not Ms Bolton. He denied having sought to correct this evidence, only after being put on notice of an affidavit sworn by Mr Everard after the earlier hearing, in which Mr Everard deposed that at the time of these events, Ms Bolton was employed by The Professionals, not Starr Partners. On Mr Nicholson's evidence, he had realised his error shortly after giving his evidence and had alerted Mr Farr's solicitors to that fact. He could not explain why his further affidavit had not been prepared until after Mr Everard's affidavit had been sworn.
70 Both Ms Whelan and Ms Bolton were also called to give evidence. Ms Whelan's evidence was that she could remember learning that Mr Mainwaring was interested in leasing the property and discussing this with Mr Nicholson. Both Starr Partners and The Professionals were then acting for the owner of the building, seeking to secure a lessee for the premises. In cross examination, it became clear that Ms Whelan could not remember who gave her this information, or when she received it, although she could remember discussing it with Mr Nicholson at the time. While it was possible that her source was the building owner, she agreed that it was even possible that it was Mr Nicholson who had been her source, she simply could not remember. She was, however, firm in her recollection that she had not spoken to Mr Farr about the matter.
71 Ms Bolton's evidence was that at the time, she was working for The Professionals, not Starr Partners. She only commenced working for Starr Partners later in the year, after The Professionals had sold it a rent role.
72 The principal of the company which owned the premises, Mr Drinnan, was also called by the respondents. He denied having been told at the time, that Mr Mainwaring was interested in leasing the premises. On his evidence, he was then dealing with Mr Farr at The Professionals and Ms Bolton at Starr Partners. He had not been introduced to Mr Mainwaring when he was with Starr Partners, nor had he been told of his interest in leasing the premises. He also denied knowing or dealing with Ms Whelan and denied that he might have forgotten what he had been told about Mr Mainwaring.
73 The obvious inference from Mr Drinnan's evidence was that he could not have been the source of Starr Partners' information about Mr Mainwaring, as was Mr Nicholson's evidence. While that must be accepted, still his evidence had to be approached with some caution. Both agencies had been engaged to lease Mr Drinnan's premises. Mr Drinnan's recollection was inaccurate in one respect, at least. His evidence was that he did not know Ms Whelan and had been dealing with Ms Bolton at Starr Partners. On the evidence of Mr Everard, Mr Nicholson, Ms Whelan and Ms Bolton, however, Ms Bolton was not then employed by Starr Partners and so Mr Drinnan can not have been dealing with her for Starr Partners, at the relevant time. On her evidence, she was involved in the efforts which The Professionals was making at the time, to lease the premises.
74 What all of this evidence showed, was that at the time of the dismissal, the respondents had no basis for exercising a right to dismiss Mr Farr summarily for misconduct, in relation to Mr Mainwaring's complaint. In these proceedings Mr Farr did not have the onus of demonstrating that it was not he who had breached Mr Mainwaring's confidence and provided information to Starr Partners, contrary to his obligations to The Professionals. The onus rather fell on the respondents to establish the misconduct it had relied on, to summarily dismiss Mr Farr.
75 Even in this hearing the respondents led no evidence going to those matters, but relied on the evidence called in Mr Farr's case, in order to make good the submission that had they investigated Mr Mainwaring's complaint at the time, nothing more would have been uncovered, given that the coercive processes of the Court would not then have been available to them.
76 There were several difficulties with that submission. Firstly, had the respondents bothered to conduct any investigation at all into the complaint at the time, Mr Farr's denial of what was suspected, could have been considered. Whether someone else in The Professionals' employ other than Mr Farr, might have been the source of the information, could have also been investigated. That other employees of The Professionals were in possession of that information, was not challenged. Even in defending these proceedings, however, such an investigation was not conducted and no evidence was called from other employees, to discount that obvious possibility.
77 Nor was evidence called from Mr Iskra. He was the person of whom mention was made by Mr Everard at the time of the dismissal, as the recipient of the respondents' confidential information. In cross examination, Mr Everard's evidence was that Mr Farr 'was terminated for breaches of confidentiality' and that those breaches referred to 'discussing business information with Tony Iskra'. I accept that Mr Iskra was not then in the employ of the respondents and may not have answered any enquiries made of him, if the respondents had asked him at the time. He and Mr Everard had then had a falling out. Mr Iskra was, however, in the employ of The Professionals at the time of these proceedings and yet still no evidence was called from him.
78 I accept that the obvious inference from the failure to call Mr Iskra in the respondents' case, was that his evidence could not have assisted in demonstrating that Mr Farr had breached Mr Mainwaring's confidentiality. Indeed, it was not even put to Mr Nicholson or Mr Farr, that Mr Iskra was the source of the information received by Starr Partners.
79 While the credit of both Mr Nicholson and Mr Farr were impugned by the respondents, in order to satisfy the onus which fell upon them, I am satisfied that this could not sustain the case the respondents had to demonstrate. While a somewhat difficult witness, I was unable to conclude that Mr Farr was an untruthful one. Both he and Mr Nicholson denied having discussed Mr Mainwaring before Mr Farr was dismissed. On Mr Nicholson's evidence, he had not spoken to Mr Farr for a number of years before his dismissal by The Professionals. He knew of Mr Farr's reputation and it was another Starr Partners' employee, Mr Richardson, who told him of the opportunity to secure Mr Farr's employment, after he was dismissed. It was at that time that he spoke to Mr Farr.
80 I do accept that there were difficulties with Mr Nicholson's evidence, which departed in a number of ways, both from that given by Mr Farr and by Ms Whelan. Both Mr Farr and Mr Nicholson denied discussing Mr Mainwaring before Mr Farr was employed by Starr Partners, but their recollection as to their later conversation differed somewhat. In a contest between the evidence of Mr Farr and that of Mr Nicholson, I would prefer Mr Farr's recollection of this matter. His evidence was, that after he took up employment with Starr Partners and became aware of the allegation against him, he asked Mr Nicholson how Starr Partners came to know of Mr Mainwaring's interest in leasing the premises. Mr Nicholson refused to tell him. Mr Nicholson could remember having discussed Mr Mainwaring with Mr Farr and Mr O'Sullivan, but could not recollect having been asked that question, or refusing to provide Mr Farr with an answer. Given the totality of Mr Nicholson's evidence and the importance of this matter to Mr Farr, by comparison to Mr Nicholson, I prefer Mr Farr's evidence on this point.
81 I am, however, entirely unable to conclude that the proper inference from all of the evidence, was that it was Mr Farr who gave information to Starr Partners about Mr Mainwaring, in breach of his confidentiality obligations to The Professionals. Nor indeed, was there evidence from which it could be concluded that Mr Farr had provided any such confidential information to Mr Iskra, despite that being the reason given for his dismissal.
82 On the evidence, it follows that it must be concluded that the respondents have not made out the evidentiary onus which they had to meet, as to these matters.
83 Confidentiality was a matter of obvious concern in this highly competitive industry. It was expressly dealt with in the employment contract and in The Professionals' policies. Mr Williams' evidence was that he had discussed the need for confidentiality to be maintained, at staff meetings, as Mr Farr corroborated. Mr Williams recalled Mr Everard then saying 'There are some staff who we have let go, and they now work with the competition. I don't mind you keeping the friendships, but you can't discuss our confidential business.'
84 Mr Farr denied ever having breached the respondents' confidentiality. Mr Everard had concerns about Mr Farr continuing to socialise with Mr Iskra and providing him with confidential information about The Professionals. There was no evidence, however, that he had ever told Mr Farr of such concerns prior to the dismissal. Nor was Mr Iskra called to establish that Mr Farr had provided him with such information.
85 Given Mr Mainwaring's affidavit evidence, it would appear that he informed Mr Everard after Mr Farr's dismissal, that while he was with Starr Partners, Mr Richardson had provided confidential information from The Professionals at Starr Partners' staff meetings, identifying Mr Farr as the source of that information. Mr Farr denied having provided such information. Both Mr Richardson and Mr Nicholson also denied that such information had been provided. While it was submitted for Mr Farr that this was not the reason for dismissal, there is no doubt that the respondents were entitled to rely on after acquired knowledge in proceedings such as this. As Kavanagh J recently discussed in Gordon Meggatt v Australian Business Limited [2007] NSWIRComm 182 at [90] - [92]: