The facts
17 I have made the following factual findings. They are not the result of the resolution of contested evidence but are largely based upon the affidavit of Hutchinson which includes many annexed documents which in turn include notes of important meetings prepared by the applicant personally. I have also taken into account the affidavit of Mr Peter Lyndon Harris.
18 The applicant commenced employment in 1989 with BPM Pty Ltd which traded as Bird Cameron Chartered Accountants. She was employed as an insolvency supervisor which was a relatively junior position. In 1994, she was appointed as an associate of the firm which is a more senior employee role. In 1996, all professional employees of BPM Pty Ltd, including the applicant, ceased to be employed by that company and commenced employment with the second respondent. She then became a partner in the partnership and a director of the second respondent on 1 July 2002.
19 Management of both respondents is undertaken by the Executive Committee ordinarily consisting of 5 partners/directors appointed by the partners and directors in general meeting every year. An appointment to the Executive Committee is for a period of 3 years and appointments are made so that tenure periods are staggered. One of the roles of the Executive Committee, which is usually undertaken by 2 members of the committee or a member of the committee and a nominated partner in the relevant local office, who is usually the managing partner of the local office, is to consider the performance and welfare of the partners/directors and to conduct periodic reviews in relation to these. Where there is a reasonable perception that a partner/director is underperforming, a process of conferral and counselling is undertaken with that partner. The goal in doing so is to understand the issues involved and search for and identify solutions in consultation and cooperation with the person involved. This process of conferral with partners/directors is a common occurrence and has occurred in relation to many partners/directors over the years with various outcomes. The process is ad hoc in the sense that every partner/director participating in such conferral will have his or her own peculiar issues for which appropriate solutions will vary.
20 At the end of the 2006 financial year, there were discussions at the partners' retreat about the need for there to be key performance indicators (KPIs) put in place for directors/partners who were not meeting certain benchmark performance levels. Prior to that, partners/directors' performance was analysed using a variety of methods, for example, based on the review of the management accounts. A decision was made to use the concept of KPIs as a performance review tool for the 2006/2007 financial year for certain partners/directors who were experiencing performance issues. The concept was not used in the 2007/2008 financial year. The partnership decided on the criteria for the conduct of a KPI review and set those criteria out in a memorandum to all partners/ directors, dated 28 June 2006.
21 After identifying the relevant criteria, the Executive Committee compiled a list of those partners for whom KPIs were required. Fifteen such partners were identified, including the applicant. She was the only female in this group of partners. The process of performance assessment based on the KPIs, which was only instituted for the 2006/2007 financial year, yielded a variety of different outcomes for the persons involved, ranging from improving their performance, so that it was no longer a matter for concern for the Executive Committee, to partners experiencing on-going performance issues and some partners choosing to retire from the partnership and their directorship.
22 Hutchinson wrote to the applicant on 3 August 2007, in connection with the KPIs for the period ending 30 June 2007. His letter indicated that he understood, which was the case, that the applicant had achieved what was considered to be a "par" performance for the 2006/2007 financial year. He also noted his understanding, at that time, that as far as the finalisation of a written plan for the applicant's business unit was concerned, which itself was one of the KPIs, such plan, although due for finalisation by 30 September 2006, remained outstanding and he urged the applicant to address this matter in the next fortnight. There was no financial sanction for not having achieved this KPI because this was in line with the "no double jeopardy" assurance that had been given to all concerned. Hutchinson also indicated to the applicant that it was extremely pleasing to note that her personal performance had led to most of the KPIs being achieved in what was a vastly improved year for the applicant. He noted, however, that the requirement for a written future plan for the division remained an important concern and it was outstanding.
23 However, the applicant and her business unit substantially underperformed during the following financial year 2007/2008. As I mentioned, the applicant had performed well in the 2006/2007 financial year but that is not to the point of the meetings which are described below. Meetings were held between the applicant and representatives of the Executive Committee of the respondents on 21 December 2007, 18 April 2008, 30 April 2008, 12 and 13 June 2008 and 19 June 2008 to discuss her, and her business unit's, underperformance and develop a solution to the problem. The applicant's oral submission that, in fact, the purpose of these meetings was not to discuss her underperformance and that of her business unit is not supported by the evidence. It all points in the opposite direction and she has not deposed to any other purpose. These meetings are the subject of more detailed findings of fact below.
24 In a somewhat contradictory submission, the applicant contends that allegations made in those meetings as to under-performance on her part cannot be sustained. Self-contradiction apart, this submission suffers from two difficulties. First, it is contrary to the documentary evidence and the unchallenged evidence of Hutchinson. Second, it is an attempt by the applicant through submissions to invite a merits review of the partnership decision. I do not propose to deal with the applicant's lengthy submissions to the extent that they depend upon factual assertions which are not supported by evidence. As I mentioned, the applicant, according to her senior counsel, considered putting on an affidavit by her personally but decided not to do so.
25 The 21 December 2007 meeting concerned the applicant's financial performance. Hutchinson's notes disclose that he told the applicant that her unit was not generating sufficient revenue and that if this continued there would be a need for further discussions in the new year. He inquired as to her personal welfare and whether she needed the involvement of the firm's employee assistance scheme. She assured him that all was well. His concern about her and her unit's performance is borne out by the Contribution Report dated 31 December 2007.
26 The Contribution Report dated 29 February 2008 showed no improvement in the trends identified in December 2007. The gross margin performance of the applicant's business unit was 23% below budget and her own individual performance was 92% below budget.
27 Because of these budget deficits further meetings were arranged to discuss with the applicant the general direction and performance of her own performance and that of her business unit and were aimed at identifying solutions to these performance issues.
28 Mr Harris deposes that the applicant wrote by email to Hutchinson and Mr John Heggie, who was also a partner and was on the respondents' Executive Committee as Deputy Chairman, dated 3 April 2008, requesting a meeting about her vision for the "Success Solutions" team but that she did not receive any response from him or Heggie.
29 This is less than forthright on the applicant's part. I say this because I infer that Mr Harris' affidavit was made upon her instructions. In fact, one of the proposed meeting dates was 17 April 2008. A meeting was actually arranged and took place the day after this.
30 This meeting took place on 18 April 2008 attended by the applicant, Hutchinson and Heggie. Hutchinson made notes of the meeting. There was discussion of, amongst other matters, staff issues, leadership and marketing of the financial performance of the applicant's unit, her own performance and the impact which this underperformance would have on her partner profit distribution scheduled to be made in October 2008.
31 The next meeting was on 30 April 2008. The same three attended. Again the underperformance issues were discussed, and action by the applicant to address these was called for by Hutchinson and Heggie.
32 The applicant emailed Hutchinson on 9 June 2008 advising that she understood there would be a further meeting she was to attend on 12 June and she inquired as to whether she should bring anything to the meeting.
33 Hutchinson emailed the applicant the next day and advised her the meeting would be to assess the likely flow of Succession work, if any, following the departure of "David" as well as to "firm up on the future plan" given that the applicant would have completed a first budget draft. He also stated that there would need to be a review of actual results for April 2008.
34 The meeting on 12 June 2008 ensued with the same attendees. The meeting was adjourned to the next day as Hutchinson felt that the applicant was under-prepared in terms of having any proposals for solutions. The applicant made notes of the meeting, the accuracy of which is accepted by the respondents, if only for the purposes of this application. Significantly, they record that the partnership was not prepared to discuss an option whereby the applicant left the partnership. The partnership at this time wanted to arrive at a solution by which their concerns were addressed but where the applicant remained in the partnership. This is corroborated by the applicant's notes which included:
KJH: Comments re: 2007/2008 financial results not good.
Budget for 2008/2009 not realistic.
KJH & JFH: They'll be no profit share in 2008 in the Blue Book
…
Does not meet the Business Case.
…
KJH: "Your partners" will not accept the 2008/2009 budget going forward. We've got to look at other options to meet the Business Case.
…
KJH: The discussion led to me being a Salaried Partner.
GAFF: I said no. Not acceptable to me.
. . .
GAFF: So is this Salaried Partner role an Offer or an Option?
KJH: Correct, its an Option.
. . .
GAFF: There's another option we need to consider and that's where I would rather we part company.
KJH & JFH: Raised their eyebrows, sat back and said "no, that's not an option we're prepared to discuss".
You've got your team … for the future ...?
35 The purpose of these meetings was to identify solutions to the underperformance problems as Hutchinson deposed at [27]:
… because from a timing point of view, the budgets for the next financial year were then to be approved, it was necessary to ensure that, by consultation and cooperation, there was an agreed and viable budgetary plan for the applicant and her unit for the forthcoming financial year. The solution that I was striving for was one that embraced the applicant remaining in the firm with a realistic and achievable business plan for herself and her unit's team members.
36 The problem confronting the applicant was described in this way, relevantly, by Hutchinson at [28]:
To put performance matters in context as at 19 June 2008, the most up to date figures available to us were those for the financial year commencing 1 July 2007 up to the end of April 2008. … I understood these figures to mean that the applicant and her team had:
a. as at the end of December 2007, net revenue of $452,817, resulting in a profit of $70,542, yielding a margin of 15.6% before applying national costs;
b. as at the end of February 2008, net revenue of $603,524, resulting in a profit of $91,424, yielding a margin of 15.1%, before applying national costs; and
c. as at the end of April 2008, net revenue of $663,598 resulting in a profit of $31,669, yielding a margin of 5% before applying national costs.
37 The last meeting was on 19 June 2008. Hutchinson and Heggie put three options to the applicant. They were:
(1) that the applicant revert to being a salaried partner, which would mean that her first draw of profits would be in line with other Perth office equity partners, but that she would not be entitled to a further profit allocation. The reasoning behind this option, which Hutchinson explained to the applicant, was so that she could retain her partnership status and be given an opportunity to rebuild her unit, so that profitability and a sustainable business plan for the future could be achieved, which, subject to her being nominated and the partners/directors exercising their votes accordingly, would enable her to return to equity status. The applicant rejected this option;
(2) that the applicant submit a plan to Hutchinson that could be given to the Perth managing partner, Mr James Komninos (JAK), so that he could assess its viability and the willingness of others to accept that plan. Hutchinson envisaged that, if this plan was to be acceptable, it would be necessary for the other Perth office partners to be willing to accept the underperformance of the applicant and her unit's underperformance, perhaps due to their perception that there would be other intangible benefits derived by the wider practice. This is what Hutchinson meant by his short hand note "Discussing with JAK - investment subsidy". Hutchinson does not recall that the applicant gave any positive response to this suggested solution; and
(3) that, if options 1 and 2 were not suitable to her, then she was invited to submit any other viable option that she cared to submit.
38 As at 2007 and 2008, any business unit that was producing a profit margin, before application of national costs that was below 20% was considered problematic and the partners involved were consulted by the Executive Committee of the partnership to identify the issues and develop solutions.
39 In his notes of the 19 June meeting, Hutchinson wrote in relation to the applicant's response to the third option: "Move out - move on" which he said were her words and by which he understood her to be referring to her departure from the partnership. Hutchinson replied that "this is not our agenda but, if that is what you wish to do we will facilitate this in a professional way". He said that he may have used the words "harmonious manner with everyone's reputation intact". This is what the applicant noted that Hutchinson had said.
40 The applicant explained at this meeting that her figures and those of her unit for 2008 were the product of staff difficulties, write-offs as a result of handover files, as well as "loss leaders". These explanations were not accepted by Hutchinson and Heggie.
41 The applicant, without mentioning anything at the 19 June meeting, and with no later notification or discussion, left the partnership's premises and has never returned.
42 On 23 June 2008, four days after the applicant left the respondents' premises, the partnership received a letter from the applicant's solicitors, Deacons, indicating that they understood that the partnership wished to discuss the applicant's retirement, and the manner of her retirement from the partnership.
43 Hutchinson received a follow-up telephone call from Ms Nadia Janis of Deacons soon after his receipt of their letter of 23 June, during which she sought the partnership's response. Hutchinson said to her words to the effect that he had been busy, but that he did not understand why it was necessary to respond, as he thought the applicant was away on sick leave. He said to her that he intended on discussing any partnership matters with the applicant on her return. He followed up this telephone call with a letter of 27 June 2008 to Deacons, in which he confirmed that the partnership would be pleased to discuss with them any matters when the applicant returned from sick leave.
44 On 25 June 2008, Hutchinson received a handwritten letter from the applicant enclosing two undated medical certificates from the Queens Road Surgery, but each was by a different medical practitioner there. In the first medical certificate, Dr Gavin Marsh certified that for a period of one week from 20 to 26 June 2008, the applicant would be "unfit to attend work ... due to personal illness". In the second medical certificate, Dr Leonie Nulsen certified, in identical terms, that for a period of one month from 24 June to 24 July 2008, the applicant would be "unfit to attend work ... due to personal illness".
45 On 10 July 2008, Hutchinson received a telephone call from the applicant's then solicitor, Ms Maria Saraceni of Deacons, in which she inquired why he had not scheduled a meeting to discuss the applicant. In response, Hutchinson said words to the effect that he had not intended to schedule a meeting because he was aware that the applicant was on sick leave and that he had not anticipated the need for a meeting until, at the earliest, she had returned from sick leave. In response, Ms Saraceni informed him that she, personally, would be on holiday after 15 July 2008 until mid-August 2008 and that, accordingly, a meeting needed to take place before then.
46 After consideration of Ms Saraceni's urgent request for a meeting, Hutchinson phoned her back and agreed to participate in a meeting which would be attended by him and Heggie, provided that they were given prior confirmation that the applicant had obtained medical advice that she was fit to attend the meeting and subject to being informed of the purpose of the meeting. He also mentioned to Ms Saraceni that, while it was unusual to have a meeting with a fellow partner in the presence of their legal representatives, if that was the applicant's choice, they too wished to have their own legal representative present.
47 Ms Saraceni wrote to Hutchinson by letter dated 10 July 2008 proposing a meeting at their offices in Perth to discuss the applicant's "past treatment as a partner by the Partnership" and her "future with the firm". The letter proposed that the applicant would attend, subject to medical advice, and with a support person for her to the extent required or recommended by her doctor.
48 During a telephone discussion on 10 July 2008 between Hutchinson and Ms Saraceni, Hutchinson was informed that the applicant believed she had been subject to some form of poor treatment by the partnership.
49 Hutchinson replied to Deacons letter by letter the following day advising the applicant's solicitor that the partnership was unaware of the nature of the applicant's illness and advising that because of her absence for over 2 weeks they would not be prepared to meet until such time as they received medical advice from a medical practitioner that she was fit to participate in any meeting and that such a meeting would not exacerbate her illness.
50 The partnership received a further letter from Deacons, dated 24 July 2008, noting that the applicant was unfit to participate in any meeting with Hutchinson at that stage and that they would let the partnership know when that situation changed. The letter also addressed the issue of the applicant's availability to attend to, or sign, documents in her capacity as liquidator of corporations, executor of deceased estates or trustee of testamentary trusts. The letter from Deacons also referred to and enclosed a further medical certificate from Dr Leonie Nulsen of Queen's Road Surgery, certifying, in identical terms to the previous medical certificates, referred to above, that for a period of 3 months, from 22 July 2008 to 23 October 2008, the applicant would be "unfit to attend work ... due to personal illness".
51 By letter dated 1 August 2008, Hutchinson wrote a personal letter to the applicant. He stated that he was puzzled that she was communicating with him through a solicitor. He then referred to the most recent doctor's certificate and noted that he and his fellow partners were very concerned for her health and sent their best wishes. He queried whether there was anything they could do to speed her recovery. There had been, in earlier correspondence from her solicitors, a suggestion that certain of her work could be done from home. Hutchinson stated that there were additional matters to be considered concerning ongoing client work and staff supervision which required a plan. He sought some clarity from her as to her current capacity to perform work from home and her anticipated return to work. He also mentioned that as well as his concern for her he had duties to the partnership and suggested she undergo evaluation by a medical specialist appointed by the partnership. Hutchinson asked for some general details regarding the nature of her illness. He concluded by saying that he hoped to speak with her soon and to continue to offer any reasonable support and assistance by himself personally or the firm.
52 The applicant did not avail herself of the offer of assistance nor did she provide any further details of her illness.
53 On about 12 August 2008, Hutchinson telephoned the applicant to discuss a matter that had arisen concerning a deceased estate for which she was the executor and sought guidance from her as to how those matters ought to be addressed in the circumstances, because someone needed to deal with her files in her absence. The applicant told him that somebody from Deacons would respond to those queries on her behalf.
54 On 13 August 2008, Hutchinson received an email from Ms Saraceni noting that she had just returned from leave, had read his letter of 1 August 2008 to the applicant and had not yet had an opportunity to take instructions from the applicant but would do so shortly and revert to him. By email of the same day, Hutchinson noted that he was out of the office until Friday and asked that she direct her correspondence to him and that he would arrange for Heggie to attend to it.
55 As at 15 August 2008, Hutchinson had not yet received any substantive response to his letter of 1 August 2008 to the applicant. He sent an email to Ms Saraceni, dated 15 August 2008, in which he noted that he had not received any correspondence, meaning "substantive" correspondence, from either herself or the applicant and that their solicitor Amy Toohey's calls to her office had not been returned.
56 Deacons replied to Hutchinson's email of 15 August 2008 in their letter, dated 19 August 2008. In that letter, Deacons informed him that the applicant had a further appointment with her medical practitioner on 20 August 2008, more than two months after she had left the partnership's premises, and that Deacons would update him thereafter. Deacons sought to make the point, which Hutchinson had not previously appreciated, that the medical certificates had said that the applicant was "unfit to attend work", not that she was unable to undertake work from home. His attitude was that the medical certificates said, blandly, that the applicant was "unfit to attend work ... due to personal illness" and, until he had more information and a better insight as to that degree of unfitness and the nature of her personal illness, it would have been unprofessional for him, and not in the interests of the partnership or its clients, including the insolvent corporations and their creditors and the estates and their beneficiaries, to allow the applicant to undertake work at home.
57 He was also concerned, given his then knowledge that undertaking work at home might exacerbate the applicant's unfitness and personal illness. He had difficulty understanding how she could undertake work from home and "continue to be actively engaged in the business of the firm", as expressed in Deacons' letter, in circumstances where Deacons confirmed the statements made in the medical certificates, namely,"her inability to attend work due to personal illness", and given that this inability and the personal illness had, by then, endured for two months and no indication was given of any abatement in them. By this time, significant attempts had been made by Hutchinson and the partnership's solicitors, Clayton Utz, to find out the nature of the applicant's illness.
58 Of particular concern to him, as representing the partnership in dealing with the matter, was the severity of the personal illness, which enabled a medical practitioner to certify that the applicant would be unfit to attend work for three months. What Hutchinson considered to be the coyness of the applicant and her legal representatives in relation to disclosing to him the nature of the applicant's illness was a matter of grave concern to him in relation to his ability to deal with the matter in the interests of all relevant parties and in relation to the attitude of the applicant to her fellow partners. In his view, at the time, the disclosure of the nature of the applicant's illness to the National Chairman of partners, was a minimum requirement of the partnership relationship. He also felt that the absence of such disclosure also affected his ability to make informed decisions.
59 In its letter to the applicant's solicitors dated 22 August 2008, the solicitors for the partnership wrote, amongst other things, concerning the applicant's proposal that she work from home on certain files:
We note that you have indicated that Ms Gaffney is willing to undertake the necessary work from home. However, in the absence of any information regarding Ms Gaffney's medical condition, our client is unable to accept that approach at this stage.
The last medical certificate provided in relation to Ms Gaffney's absence contained one sentence only and provided that "This is to certify that Angela Crotty attended Queens Road surgery on the 22 Jul 2008 and will be unfit to attend work from 22/7/08 to 23/10/08 (inclusive) due to personal illness". That certificate provides our client with no comfort that Ms Gaffney is capable of working from home. On the contrary, our client can only assume that the medical condition is very serious in nature, given the significant length of absence required from work. Our client has no awareness of the nature of Ms Gaffney's medical condition, whether it is physical or mental, nor what work she is capable of performing in light of that medical condition
It was in part due to that lack of information that Mr Hutchinson wrote to Ms Gaffney by letter dated 1 August 2008. In addition to seeking to offer the concerns and support of RSM Bird Cameron to Ms Gaffney at this time, Mr Hutchinson requested some general details regarding the nature of Ms Gaffney's illness so that a medical specialist could be appointed to evaluate Ms Gaffney's health to confirm such matters as whether Ms Gaffney is able to work from home or to deal with any matters in relation to her practice or the partnership.
No information has been forthcoming from Ms Gaffney in this regard to date. It is not clear whether that is due to an inability to respond to correspondence directly and if that is the reason for the involvement of her solicitors. We request that you seek Ms Gaffney's instructions to provide us with general details regarding the nature of Ms Gaffney's illness so that our client can proceed to appoint a medical specialist to see Ms Gaffney, as is required in these circumstances
We note that the attendance by Ms Gaffney at a consultation with a medical specialist appointed by RSM Bird Cameron will not affect any additional steps that may be required by the relevant insurer in relation to any salary continuance insurance that may cover Ms Gaffney from 19 September 2008.
We note from your letter to Kim Hutchinson dated 19 August 2008 that an update would be forthcoming following an appointment by Ms Gaffney with her medical practitioner on 20 August 2008 and we await that update.
We request that you provide the update and the general details regarding the nature of Ms Gaffney's illness as soon as possible, as our client is concerned that a number of matters in Ms Gaffney's practice require attention and our client must plan how they are dealt with on an urgent basis.
(Original emphasis.)
60 Hutchinson, on behalf of the partnership, wrote directly to the applicant also by letter dated 1 September 2008 in which he stated.
I refer to my letter to you dated 1 August 2008.
My letter was sent in light of your absence from work since 19 June 2008 and that you have not contacted me or any other Director of RSM Bird Cameron regarding the reason for your absence.
While you have provided letters from a general practitioner indicating that you will not return to work before 23 October 2008, 1 explained in my letter that we require some clarity regarding your current capacity to perform client work from home or your anticipated return to work to deal with ongoing client work and, to that end, it would be appropriate for your health to be evaluated by a specialist appointed by RSM Bird Cameron.
For that purpose, I asked that you provide me with general details regarding the nature of your illness so that a specialist could be appointed. You have not responded to my letter.
I have been reluctant to contact you further while you are absent and have therefore postponed doing so for as long as possible. I also instructed our solicitors, Clayton Utz, to contact your solicitors, Deacons, in the hope that they may obtain the necessary information without any need for me to contact you further while you are absent from work. However, Deacons has not responded to Clayton Utz with the information requested.
As you are appointed the sole liquidator, joint liquidator, trustee or executor for a number of matters, some urgent arrangements must be made in light of your extended absence. I am becoming increasingly concerned about a number of those matters. As you would be aware there are several deceased estates that require regular administration and the execution of documents. Failure to meet the administration requirements could result in material financial loss.
In light of the increasingly urgent need for us to evaluate how to deal with such matters and our continued lack of information regarding your capacity to work or the length of your absence, I direct you to provide me with information regarding the nature of your illness by 5.00pm on Wednesday, 3 September 2008. The information need only be very general in nature to enable us to appoint the correct type of specialist.
61 The applicant's solicitor also wrote to the partnership's solicitors by letter dated 1 September 2008. It attached a medical certificate, dated 26 August 2008, concerning the applicant which said that she was capable of working from home, but that she had been subject to bullying in the workplace and so felt not capable of continuing in that environment. The medical certificate did not mention any personal illness nor were the allegations of bullying particularised. The letter stated that the applicant had given instructions that the nature of her personal illness was due to work-related stress caused by bullying and sexual discrimination. It sought to have a meeting in terms of their earlier letter of 10 July 2008. It also stated that the partnership was not to correspond directly with the applicant. It said that it was the physical environment of the workplace from which the applicant's general practitioner recommended she stay away.
62 This was the first occasion on which Hutchinson had been informed that the applicant's personal illness was due to work-related stress and that such stress was caused by alleged bullying and sexual discrimination. Other than a general mention of bullying by Ms Saraceni on 10 July 2008, referred to below, it was also the first time that he learned that the applicant was alleging that she had a personal illness due to being bullied or subjected to sexual discrimination at work. His view, at the time, was that the statements by Deacons were unenlightening as to the nature of the personal illness, although its alleged causes had, in a very general way, without any specificity, been disclosed. The applicant had not previously brought to his attention, during their earlier meetings, any allegations of bullying or sexual discrimination. He still does not know what was the substance of the bullying allegations. None are relied upon in the CASOC. He still did not know what was the substance of the "sexual" discrimination allegations, other than what he later gleaned from the allegations in the applicant's CASOC.
63 As I mentioned, the word "bullying" had been used was in Hutchinson's conversation with Ms Saraceni on 10 July 2008 when they discussed the proposed meeting with the applicant and her solicitors. Ms Saraceni had said that the attendees at the meeting could not be persons against whom allegations of bullying were made. She did not elaborate upon those allegations further. Hutchinson had asked her whether Heggie and he would be acceptable participants at the meeting and she indicated that they would be acceptable participants. Hutchinson assumed, not unreasonably, from that statement, that they were not the alleged bullies.
64 In those circumstances, as the nature of the applicant's illness appeared to indicate a form of mental or psychological incapacity, the nature or severity of which was not disclosed and of which Hutchinson was unaware, he was not satisfied that, in the interests of the partnership or its clients or the applicant herself, he could, without more, permit the applicant to perform work from home, while she recovered. Accordingly, he instructed Clayton Utz to write to Deacons informing it that the partnership required the applicant to attend upon an appointment with Dr Terace, a psychiatrist, for assessment. Dr Terace was selected as the relevant specialist because all Hutchinson knew about the applicant's personal illness was what he had been told by Deacons, namely, that it was due to work-related stress. He and the partnership were otherwise entirely ignorant as to the nature of the applicant's personal illness and her condition.
65 Clayton Utz wrote to the applicant's solicitors by letter dated 8 September 2008 reiterating, amongst other things, that the partnership had, despite previous requests, not received even general details of the applicant's illness. It noted however, referring to the applicant's solicitor's letter dated 1 September 2008, that the nature of the illness was said to be due to "work-related stress". The letter advised that the partnership was prepared to attend a meeting on a "without prejudice" basis with a view to resolving the issues. The letter also stated that if the intention of the proposed meeting was for the applicant to raise complaints regarding her treatment by the partnership then the more appropriate method was to do so in the way set out in the partnership Grievance Policy document, a copy of which was attached. It closed with a request that the time and place for the without prejudice meeting be confirmed.
66 Deacons replied to this letter by their letter, dated 9 September 2008. In that letter, Deacons also requested certain information in relation to the proposed examination and assessment of the applicant by Dr Terace. Clayton Utz replied to Deacons' letter by letter, dated 11 September 2008.
67 By letter dated 15 September 2008, Deacons, sought from Clayton Utz certain information in relation to the proposed examination and assessment of the applicant by Dr Terace.
68 By letter dated 18 September 2008, Clayton Utz wrote to the applicant's solicitor. It included the following :
We refer to your letters dated 9 September 2008 and 15 September 2008.
We address the itemised requests set out in your letter dated 15 September 2008 below.
However, we note that our client does not intend to enter debate regarding whether it has the power to direct Ms Gaffney to attend a medical practitioner of its nomination. To date, other than a three sentence letter from a general practitioner, no information has been provided regarding Ms Gaffney's mental/psychological condition, which is assumed to be severe in nature in light of the length of her absence from work.
Ms Gaffney has a senior role and her duties involve the making of high level decisions for the clients of RSM Bird Cameron. It is clearly untenable for our client to allow Ms Gaffney to return to any of her duties in these circumstances without further details of her condition. To do so would be contrary to our client's duties in relation to Ms Gaffney's potential welfare and to its clients' interests.
As requested by your letter:
1. HR Policy 17 is attached with this letter.
2. The information provided to new partners admitted in July 2002 is attached with this letter. The acceptance of the offer of partnership included a declaration that the partner is satisfied in relation to the information.
3. Dr Terace is a Consultant Psychiatrist. His consulting rooms are at Unit 28, 82-84 King Street, Perth. An appointment has been made for Ms Gaffney at his consulting rooms at 1:30 pm on Monday 13 October 2008.
4. We will not provide our letter seeking a medico-legal report from Dr Terace. No letter exists at this stage. In any event, such a letter will no doubt include a request that Dr Terace assess whether the discussion of specific matters with Ms Gaffney will cause her to suffer psychological illness or injury or further psychological illness or injury. We do not wish for those specific matters to be raised indirectly with Ms Gaffney before Dr Terace's assessment is obtained.
69 A meeting took place on 22 September 2008 at the office of the applicant's solicitors. Mr Harris has deposed that the applicant told him that during this meeting she was told by Hutchinson that there was "no role" for her in the firm. Her solicitor, about two months later, mentioned this in a letter dated 21 November 2008 sent to Clayton Utz. Hutchinson's recollection is that this was in the context of her rejection of the first two options, namely, becoming a salaried partner and production of plans and timeframes for improved performance. Hutchinson's recollection is that he said at the meeting that if there was no agreement on the first two options then he agreed with the applicant's solicitor, Ms Saraceni, when she said there was no role for her client.
70 This difference in the evidence on this point is not material as will become apparent.
71 By letter dated 3 October 2008, Deacons wrote to Clayton Utz in relation to the meeting on 22 September 2008, the proposed examination of the applicant by Dr Terace and possible settlement of the matter. Deacons inquired whether, on its understanding of what transpired at the meeting on 22 September 2008, the partnership still required the applicant to attend the appointment with Dr Terace.
72 A consultation with Dr Terace was booked for 13 October 2008.
73 By letter dated 7 October 2008, Clayton Utz informed Deacons that the partnership did require, and directed, the applicant to attend the appointment with Dr Terace and provide her consent for Dr Terace to release his medical opinion and associated information to the partnership. The letter was written on the basis that the applicant was then still a partner and the partnership needed to obtain information to assess her capacity to return to her duties in light of the dearth of information that had been provided by her, the medical practitioners engaged by her and her solicitor in relation to her personal illness.
74 By a separate letter, dated 7 October 2008, Clayton Utz wrote to Deacons for the purpose, amongst other things, of correcting Deacons' understanding as to the three options for the applicant discussed at the meeting on 22 September 2008. Hutchinson had instructed Clayton Utz to write that letter because, whatever was said and understood by the persons present at the meeting on 22 September 2008, he did not want there to be any misunderstanding on the part of the applicant and her solicitors as to what the partnership understood to be the options open to the applicant. This letter included the following:
The options arose from Ms Gaffney's failure to meet budget targets for the financial year 2007-2008 and the projected failure for Ms Gaffney to meet the budget targets for the financial year 2008-2009. In order that Ms Gaffney is clear regarding the suggestions that have been made by our client in relation to those issues, we confirm our client's view of the three options that have been discussed as follows:
1. In an attempt to build the profitability o [sic] the unit while retaining Ms Gaffney's status as partner, Mr Hutchinson offered that Ms Gaffney may cease to become an equity partner and become a salaried partner. Ms Gaffney continues to reject this option
2. The second option was not on the terms set out in your letter. The second option was that:
(a) if Ms Gaffney could not meet budget targets and specific business plans; and
(b) if Ms Gaffney had alternative plans and time frames in which she may meet those budget targets and specific business plans,
then Mr Hutchinson would liaise with the Perth Managing Partner to ascertain the level of support by the partnership for her to continue to draw as an equity partner on the basis of the alternative plans and time frames. As Ms Gaffney did not provide any alternative plans and time frames, it was understood that she rejected that option. It was further understood from the meeting on 22 September 2008 that Ms Gaffney continued not to have any alternative plans and time frames for meeting budget targets and business plans and, accordingly, that option was not viable.
3. Leaving the partnership was an option put forward by Ms Gaffney during a meeting with Mr Hutchinson and Mr Heggie on 19 June 2008, immediately before she left work on sick leave. It was discussed at the meeting on 22 September 2008 that, in light of Ms Gaffney's rejection of the first option and the second option not appearing viable in the absence of alternative plans and time frames put forward by Ms Gaffney, the third option may be the option of default. It is misleading to describe it as our client's preference.
(Original emphasis.)
75 On 9 October 2008, Hutchinson wrote a personal letter to the applicant again directing her to attend the consultation scheduled with Dr Terace. Hutchinson, understandably, was becoming increasingly frustrated by his inability to make informed decisions in the interests of all parties concerned because of his lack of knowledge of the nature of the applicant's personal illness, her current condition and the prognosis for her recovery.
76 By letter dated 10 October 2008, Deacons responded to Clayton Utz's two letters, dated 7 October 2008, and Hutchinson's letter dated 9 October 2008. Hutchinson was having considerable difficulty understanding the coyness of the applicant and her solicitors in disclosing to him, as the National Chairman of partners, the nature of the applicant's personal illness and her condition. The applicant's solicitors had informed him that the applicant's personal illness was due to work-related stress. He assumed that such stress, if it manifested itself in a personal illness, would take the form of some type of mental or psychological condition or mental incapacity. However, he did not actually know and did not want to jump to any conclusion which might do a disservice to any party. Hence the requirement that the applicant be examined by Dr Terace, who, he understood, was, in the circumstances, the most appropriate specialist. Neither the applicant nor her solicitors suggested to Hutchinson that any other specialist or any medical practitioner in another specialist area of medicine ought become involved or that Dr Terace was an inappropriate choice in the light of the nature of the applicant's personal illness or her condition. The medical certificates provided by the applicant at that point were from general practitioners and were unenlightening in circumstances where they suggested that the applicant's personal illness was so severe that she was unfit to attend work for at least four months. Importantly, Deacon's letter included the following:
We refer to your two letters dated 7 October 2008.
Without Prejudice Letter
Even accepting your version of the 3 options, the end point is the same i.e. the third option is considered viable (subject to agreeing terms and conditions) by all concerned.
(Original emphasis.)
77 Accordingly, whatever might have been said and by whom about the applicant having "no role" in the partnership, the applicant, by this letter, made it plain that from her perspective it was only the third option, namely, her exiting the partnership, which was viable.
78 On 13 October 2008, the applicant attended at the scheduled appointment with Dr Terace. Dr Terace wrote a letter to Clayton Utz, dated 14 October 2008, in relation to the applicant's attendance upon him on that date. Dr Terace wrote, amongst other things, that the applicant "wished to decline" the interview because she did not wish to provide the partnership with further information beyond what it already had because she perceived it was her right to do so. This is confirmed by the applicant's own notes of her meeting with Dr Terace which are to the effect that she was concerned that he could be called by the partnership to give expert evidence concerning any medical review he conducted in respect of her. Moreover, Mr Harris deposes that the applicant informed him that she had informed Dr Terace that day that she would not provide her consent for any medical report to be released to the partnership or to its solicitors. During the entire period of her absence, the applicant was being paid all the remuneration to which she would have been entitled had she worked continuously during the full period that she was absent from work. Almost 8 months had elapsed since her departure from the partnership's offices, and the applicant's period of absence from work had become indefinite with there being no apparent likelihood that she would ever return to work.
79 The partnership's solicitor wrote to Deacons, by letter dated 8 December 2008 in which they stated, in effect, that a failure to achieve settlement between the parties within the time frame envisaged would result in the partnership arranging for formal consideration to be given to invoking the compulsory retirement provisions in relation to the applicant.
80 Negotiations took place between the parties and their solicitors between November 2008 and March 2009.
81 By 4 February 2009, the Executive Committee and Hutchinson, against the background of all the facts I have set out above, were confronted with the position that the applicant:
(a) would not provide the partnership with details of her personal illness or the severity of her condition, what her prognosis was or what steps she was taking to treat her personal illness and speed her recovery;
(b) would not return to work; and
(c) albeit that she was on sick leave, was apparently able to attend to some partnership duties from home in some limited, unidentified capacity.
82 The view of the Executive Committee at its meeting on 4 February 2009, which reflected Hutchinson's own view, was that the position of the applicant, as a partner and a director, was, in those circumstances, entirely untenable. Particularly, the view was that a partner and director could not operate efficiently, as such, without being present at the partnership's offices to supervise and manage his or her practice, particularly to supervise, control and monitor his or her team, undertake administrative work and attend meetings with fellow partners and directors. The Executive Committee was unanimously of the view that it had no option and, for the first time in the history of the partnership which was founded in 1922, to commence preparation of the paperwork necessary to deploy the compulsory retirement mechanisms available under the Rules in order to put to a vote of the full partnership and the second respondent, the recommendation that a decision be taken to require that the applicant be compulsorily retired.
83 The respondents' solicitors, Hammond King Touyz, were engaged to assist in the preparation of the necessary paper work.
84 Draft versions of the information that would be supplied to all partners and directors for the purposes of the meetings were prepared by Hutchinson, or by the secretary of the second respondent, Mr Con Abbott, on his instructions, and circulated amongst the Executive Committee for comment. The five members of the Executive Committee at that time were Hutchinson, (National Chairman and located in Perth), Peter Marsden (Sydney), Terry Rodini, (Adelaide), Phil Ransom (Melbourne) and Ken Wood (Melbourne). Mr Heggie was no longer a member of the Executive Committee, his tenure having ended on 31 December 2008.
85 Two of the documents that were drafted were headed, respectively, "Compulsory Retirement of Angela Ann Gaffney from Directorship of Birdanco Nominees Pty Ltd"; and one in identical terms, save for necessary changes, headed "Compulsory Retirement of Angela Ann Gaffney as a Partner of RSM Bird Cameron Partners" (Draft Reports). These Draft Reports are defined by the applicant at [19] of the CASOC under particular (e) as "the Recommendation to Resolve Report".
86 The Draft Reports were shown only to the respondents' solicitors, Hammond King Touyz, the members of the Executive Committee, Mr Con Abbott and Hutchinson's personal assistant. The Draft Reports were amended. One such amendment was the removal, in [5], of the name of Dr Terace and the word "psychiatrist". Final Reports were created (the Reports).
87 The applicant received precisely the same documents that were circulated to the other partners and directors in relation to the meetings held on 27 March 2009, namely, Notices of Meeting, proxy voting forms and the Reports. Each of the members of the Executive Committee signed off on the contents of the Reports. No member of the Executive Committee indicated to Hutchinson, at any time, that the contents of the Reports did not reflect their understanding of the position. The Reports indicated Hutchinson's understanding of the position at that time which was that, prior to 19 June 2008, the Executive Committee and Hutchinson were grappling with a not uncommon problem in relation to a partner and director, namely, how to resolve, through cooperation and consultation, underperformance issues which he or she was experiencing. After 19 June 2008, the Executive Committee was faced with an entirely different problem, namely, a partner/director who had absented herself from work, indicated no apparent intention of returning and would not engage with her fellow partners and directors at any level, other than limited engagement of a litigious character through her solicitors. It was for this reason that the Reports concluded that "[the applicant's] continued absence from work and unwillingness to consult with [the partnership] regarding her illness, absence or future direction has created uncertainty amongst her staff and fellow Partners, effectively requiring the National Executive to act to protect the best interests of the RSM Bird Cameron group (including its Partners and employees) [and the directors of Birdanco]".
88 The applicant was informed of the meetings and their purpose and given an opportunity to present any submissions or matters, as to why she should not be compulsorily retired, in writing or by attending the meeting. The applicant was informed that, if she chose to present written submissions, in order to facilitate their distribution and consideration, it was imperative that they be received by Hutchinson by no later than close of business on 20 March 2009.
89 By letter dated 20 March 2009, the applicant provided a written submission for distribution to the partners and directors of the partnership and the second respondent respectively. On 25 March 2009, Hutchinson forwarded the applicant's submission to all partners. The applicant's submission was dated 20 March 2009, but was only couriered to the respondents' offices on 23 March 2009. Hutchinson did not circulate the submission to all partners and directors until 25 March 2009, because he had understood that, in the interim, the parties had agreed to settle the matter and that, therefore, it was unnecessary to proceed with the compulsory retirement meetings. In the event, there was a dispute as to whether or not a settlement agreement had been concluded and the meetings were required to, and did, proceed.
90 The meetings scheduled for 27 March 2009, proceeded in accordance with the Notices of Meeting.
91 Sixty-six of the sixty-seven partners of the partnership voted, either personally or by proxy. Sixty-five votes were cast in favour of the resolution. The applicant's vote was cast against the resolution, and so the resolution was carried. Mr Chris Allen, a partner, was absent, as appears from the minutes of meeting, dated 27 March 2009.
92 Some partners lodged proxies, indicating how they wished to vote, whether in favour of the resolutions or leaving it to the discretion of the proxyholder, prior to receiving the applicant's submission. No partner or director, who had lodged such a proxy, indicated to Hutchinson, after receiving the applicant's submission, that he or she wished to change his or her vote.
93 At no time did the applicant indicate to Hutchinson or any other partner that she wished to be present at the meeting on 27 March 2009 or convey any further matters to the attendees, other than what was contained in her submission dated 20 March 2009.
94 By letter dated 27 March 2009, Hutchinson notified the applicant that the relevant majorities of partners and directors had resolved to retire her as a partner and director of the partnership and second respondents respectively.
95 Based on his knowledge of the income protection insurance polices held by the firm, Hutchinson believed that, once the applicant had been absent from work by reason of an illness, pursuant to their insurance policy with National Mutual Life Association of Australasia Limited, and after a qualifying period of 90 days, the partnership was entitled to indemnification from its insurer for the remuneration it had paid to the applicant while she was unfit to attend work due to illness. His view, and that of the Executive Committee, was that the relevant forms should be completed by the applicant and her medical practitioners and a claim lodged. It was a matter for the insurer how it responded to the claim. He tried, on a number of occasions, to obtain the cooperation of the applicant in completing the claim form in circumstances where she was unwilling to disclose to her fellow partners and directors the relevant information as to the nature of her personal illness, her condition and the prognosis for the future.
96 Throughout this period the applicant provided almost no particulars of the alleged bullying and sexual discrimination. In a "without prejudice" letter sent by her solicitor to Clayton Utz dated 21 November 2008, it was stated that the applicant "felt bullied" by being told by Hutchinson and Heggie that she needed, in effect, to be demoted.
97 However, the applicant has not made any allegations against Hutchinson or Heggie in her CASOC of bullying or sexual discrimination nor provided particulars of such alleged conduct by either of them or any other member of the partnership. All that is pleaded is at CASOC [31(g)(ii)(A)] where it is alleged that the partnership had been advised by her solicitor on or about 10 July 2008, that her absence from work was due to bullying. Nor did she do so in her written submission to the partners in relation to the resolution for her compulsory retirement from the partnership. More importantly, she has not deposed to any such conduct for the purposes of this application.
98 I will now turn to the several claims impugned by the respondents. I will deal firstly with what is described as the partnership claim and then, in turn, the two discrimination claims.