s.394 - Unfair dismissal

Application for an unfair dismissal remedy - Application to reopen a matter for hearing after decision reserved - Application to adduce new evidence

• [1] The Respondent in the substantive matter has applied to the Fair Work Commission (the Commission) to reopen those proceedings in order to adduce further evidence.

• [2] In addition, the Respondent has applied for the Applicant and Kaitessa Pty Ltd (Kaitessa) to produce certain documents and seeks orders that two persons attend a further hearing to give evidence.

• [3] This decision deals with these applications.

• [4] The hearing of the substantive proceedings took place over two days, on 31 March 2021 and 17 June 2021.

• [5] On 17 June 2021, the Applicant, Mr Gregory Ross (Mr Ross or the Applicant) gave evidence and was cross-examined about his employment and the remuneration he had earned since his employment with the Respondent ended.

• [6] After the hearing both parties made closing written submissions. The last of these was the Applicant's submission filed on the 22 July 2021.

• [7] In early August 2021 information came to light that caused the Respondent to doubt the accuracy of Mr Ross's evidence and the Applicant's closing submissions.

• [8] As at the date of this decision the Commission has not issued a decision nor any reasons for decision regarding the substantive application.

• [9] As a result of the above, the Respondent now seeks to reopen the hearing and lead further evidence about Mr Ross's current employment status, the quantum of remuneration earned by him since the end of his employment with the Respondent and his current and likely future earnings.

• [10] The question of earnings, and the timing of the new employment relationship, is relevant to the alleged loss suffered by Mr Ross, see section 392(2)(e) of the Fair Work Act 2009 (Cth) (the Act).

• [11] The Respondent seeks documents relevant to Mr Ross's earnings, including in his capacity as a shareholder and director of Kaitessa. Kaitessa is the dealer licensee of the car dealership by which he says he was employed.

• [12] The Respondent also seeks that Mr Ross and Mr Paul Seamus Diggins (Mr Diggins) attend to give evidence at the reopened proceedings.

• [13] Mr Ross is sought for further cross-examination about his earnings and entitlements. Mr Diggins is the other director of Kaitessa and is sought for examination about the negotiations leading to Mr Ross's arrangements with Kaitessa and his entitlements under those arrangements, Kaitessa's past, present and likely future profitability and distributions to shareholders and the earnings that Mr Ross has received and is likely to receive from his involvement in and employment by that company.

• [14] The Respondent also argues that because it appears Mr Ross, in his evidence given on 17 June 2021 and/or his closing submissions dated 22 July 2021, has misled or been less than frank with the Commission, reopening the matter will enable the Commission to reassess Mr Ross's credibility.

• [15] At the hearing, a statutory declaration with attachments sworn by Ms Tania Sydney Smith (Ms Sydney Smith) was tendered.

• [16] Ms Sydney Smith's declaration was not challenged, and I accept her evidence, however I also accept the Applicant's point that some of her statements in her declaration are opinions that do not go to the actual remuneration of Mr Ross.

• [17] Ms Sydney Smith's declaration explains how on 2 August 2021 she received an email from Mitsubishi which was sent to all West Australian Dealer Principals and Sales Managers which, amongst other things, referred to Mr Ross as having some involvement with the Mitsubishi team at Narrogin.

• [18] She consequently made enquiries of contacts in the industry as to whom was the Dealer Principal of Narrogin Mitsubishi. In summary, her understanding from these enquiries was that Mr Ross was the Dealer Principal of Narrogin Mitsubishi and had been for between four and six months, as at the beginning of August 2021.

• [19] Further enquiries she made identified that the dealer licensee of Narrogin Mitsubishi was Kaitessa Pty Ltd. She then undertook an ASIC search of that company which showed that Mr Ross was one of the two directors of the company and had been appointed on 31 March 2021.

• [20] Her declaration was that further enquiries showed that Mr Ross was appointed as the Dealer Principal of Narrogin Mitsubishi on 6 April 2021.

• [21] Finally, she obtained a printout from the Nissan manufacturer portal which shows that Mr Ross is listed under the heading of Bunbury Nissan as having the following roles, General Manager, Sales Manager (New Vehicles), Sales Manager (Used Vehicles), and Customer Relations. In addition, Mr Diggins is listed as the Dealer Principal of Bunbury Nissan.

• [22] The principles relevant to an application to reopen have been recently discussed in Scott Morrison v Australian National University [2021] FWC 1250 and Brett Galloway v Milena Molina and Raymond Zhai [2021] FWCFB 5419.[1] In those cases, the relevant considerations have been identified as follows:

• (a) is the evidence relevant, in the sense that it engages in one or more of the issues requiring determination;

• (b) was the evidence able to be obtained with reasonable diligence for use during the hearing;

• (c) are the interests of justice served better by allowing or rejecting the evidence;

• (d) what is the likely prejudice to the party resisting the application;

• (e) will a denial of procedural fairness likely arise if a party does not have an adequate opportunity to argue its case; and

• (f) was the evidence not led because of inadvertence or mistake.

• [23] The Applicant claims, as his remedy, compensation including the difference between the amount that the Applicant would have earned had he continued employment under the Respondent and the amount that he alleges he actually has earned and is likely to earn in other employment. The Applicant has calculated his claim for compensation on the basis that but for his dismissal he would have remained in the Respondent's employment indefinitely. If the Commission finds that the Applicant was unfairly dismissed and is therefore entitled to compensation (which is denied by the Respondent), the Commission must decide the appropriate amount of compensation that ought to be paid. That will largely depend on how long the Commission considers the Applicant would have remained in the Respondent's employment but for the dismissal (the anticipated period of employment) and on the difference between the remuneration which the Applicant would likely have earned as an employee of the Respondent and the remuneration which the Applicant has earned and is likely to earn in other employment in that period.

• [24] The Respondent submits that the evidence given by the Applicant on 17 June 2021 and the submissions made by the Applicant on 22 July 2021, including as to his employment status, the timing of his acquisition of shares in the Bunbury Nissan business, the developments since the filing of the Applicant's 10 March 2021 submissions and the misleading representation that there was "no evidence to suggest that the Applicant's loss per week is going to change in the foreseeable future" appear to be contradicted by the evidence given by Ms Sydney Smith in her statutory declaration made on 10 September 2021 and the documents annexed thereto.

• [25] Ms Sydney Smith's evidence and the annexed documents appear to indicate, among other things, that the Applicant:

• (a) became a director and acquired one third of the shares in Kaitessa Pty Ltd (the licensee of several dealerships at Narrogin and Bunbury) on 31 March 2021;

• (b) was appointed as the Dealer Principal from at least 8 April 2021 and was the General Manager, Sales Manager (New Vehicles), Sales Manager (Used Vehicles) and Customer Relations Manager at Bunbury Nissan.

• [26] All of these developments appear to have occurred prior to the Applicant giving his evidence on 17 June 2021 and his closing submissions on 22 July 2021 and give reason to believe that the Applicant has deliberately misled or, at the very least, been less than frank with the Commission.

• [27] The evidence sought to be adduced by the Respondent if the proceedings are reopened will address these matters and in particular the Applicant's employment status and earnings following his dismissal and the Applicant's likely future earnings which may be relevant depending on the anticipated period of employment.

• [28] If the Applicant is found to have been unfairly dismissed, those matters will be directly relevant to and will almost certainly affect the calculation of any award of compensation.

• [29] The Respondent submits there has been no failure of diligence by the Respondent which took reasonable steps to verify the information that was provided by the Applicant and his solicitors which has since been contradicted by other information discovered by chance after the date of the hearing.

• [30] The Respondent submits that the interests of justice will be better served by allowing the new evidence. The issue is a fairly confined one, and it is in the interests of justice that the Applicant receive only the compensation to which he is properly entitled (if, which is denied by the Respondent, he is entitled to any compensation at all).

• [31] The Respondent submits the Commission should have before it the most accurate, comprehensive and up to date information on which to base its decision as to the proper compensation.

• [32] It would not be in the interests of justice to allow a party to give seemingly false or misleading evidence to the Commission and to advance submissions which are patently misleading and for the Commission to then make an award of compensation that would be wrongly inflated.

• [33] In this case the additional costs are likely to be marginal in terms of the legal costs already expended.

• [34] The delay that will arise is also unlikely to be substantial.

• [35] These consequences could have been avoided by the Applicant being forthright with the Commission.

• [36] If the Respondent is not able to lead evidence that was not reasonably available to it at the date of the hearing and which contradicts the Applicant's sworn evidence, the Respondent submits there will be a denial of procedural fairness.

• [37] If the Respondent is permitted to reopen, the Applicant will have the opportunity to provide documentary and oral evidence to support the position that he has already put to the Commission, and therefore will not be denied procedural fairness in the Respondent's opinion.

• [38] This is not a case of inadvertence or mistake. The Respondent and its solicitors were alive to the question of the Applicant's post-employment earnings and asked appropriate questions of the Applicant's solicitors before the hearing and of the Applicant during cross-examination.

• [39] The new evidence discovered, and the shadow it casts over the Applicant's evidence, necessitates obtaining objective documentary evidence as to the true position of the Applicant's employment and current and future income.

• [40] The Applicant is required to be recalled for further cross-examination about his actual and likely earnings and entitlements following the end of his employment by the Respondent. Further, if the Respondent's application to reopen is granted, the Applicant should be recalled to be cross-examined as to any further material produced that the Applicant wishes to adduce and rely upon and so as to satisfy the rule in Browne v Dunn in respect to the new evidence adduced by the Respondent.

• [41] Mr Diggins is required for examination about the negotiations leading to the Applicant's arrangements with Kaitessa Pty Ltd, the Applicant's entitlements under those arrangements, Kaitessa Pty Ltd's past, present, and likely future profitability and distributions to shareholders and the earnings which the Applicant has received and is likely to receive from his involvement in and employment by that company. Mr Diggins is also required to explain or contextualise any documents produced by the Applicant and Kaitessa Pty Ltd and, critically, to elucidate any matters which may not be recorded in a document, on oath. The need for Mr Diggins to attend and give evidence about these matters is underscored by the apparent unreliability of the Applicant's evidence as to his employment and actual and likely future earnings.

• [42] The Applicant agrees that the principles to be applied to a matter such as this are those identified by the Respondent in the case law above.

• [43] The Applicant submits that if the Respondent was so sure that the evidence now obtained was inconsistent with evidence given by the Applicant, it would not be necessary to obtain extensive further documentation from the Applicant and two third parties in order to prove their point.

• [44] The Respondent's submissions do expressly state that the evidence led by the Applicant was incorrect and misleading. Yet the evidence referred to does not support the submission, except in the weakest sense.

• [45] The fact that the Applicant was a director of Kaitessa Pty Ltd is irrelevant. No evidence to the contrary was led and there is no evidence to suggest the Applicant received any payment for being a director.

• [46] The evidence that the Applicant was named in a number of roles as part of the Bunbury Nissan business is not inconsistent with his evidence. The relevant evidence is that he earned $100,000. How that was described internally is irrelevant. As stated in the response to this application the evidence of Ms Sydney Smith as to how a Dealer Principal is "usually paid" is inadmissible and irrelevant. Even if that evidence were admissible and correct (both of which are denied by the Applicant), the "usual" position says nothing about the Applicant's position.

• [47] The only arguable inconsistency in the evidence is the references to buying a share in the business when a share in Kaitessa was transferred to the Applicant on 31 March 2021. However, the fact that the Applicant was buying a share in the Bunbury Nissan business was openly disclosed. Further, it was made clear by the Applicant in cross-examination that there were some complexities to the purchase and that it had not yet been concluded. Whether by reason of strategy or inadvertence, the complexities of the transaction were not explored any further in cross-examination.

• [48] This issue is of the barest relevance. As a credibility point, it is minimal. The Applicant is not a lawyer. The details of the transaction were complex and ongoing. If an error was made, that is all it was. There was clearly no attempt to disguise the nature of the transaction, the information was readily available by way of an ASIC search.

• [49] In any case, the fact that a person is a shareholder in a company does not mean they are going to immediately, or ever, receive payments as a result of those shareholdings. The company may not make any money. The company may reinvest its profits. The Applicant admitted in cross-examination that he may ultimately be entitled to profits from his shareholding. There is no evidence to suggest any such profits have arisen to date.

• [50] The evidence that is proposed to be led is irrelevant as to whether or not the dismissal was unfair.

• [51] It is accepted that the Applicant's post-dismissal employment is relevant to determining the appropriate amount of compensation. The relevance however is minimal.

• [52] The Applicant submits that the Respondent appears to be fishing for evidence of a hidden agreement, whereby the Applicant receives, or is going to receive, more than the $100,000 per annum salary he has given evidence of. The suggestion seems to be that there might be dividends payable, at some undefined time in the future, or that some additional payments might be made, either now or in the future, for being appointed Dealer Principal of Narrogin Mitsubishi.

• [53] Even if the Respondent's fishing expedition were to yield a catch of this nature, the evidence relates to the period after 31 March 2021, being around five and a half months after the dismissal. The effect on compensation is likely to be minimal.

• [54] As for the suggestion that it may be relevant for credibility, the Respondent made 26 separate allegations against the Applicant, including allegations of fraud and coercion. Despite a lengthy cross-examination, the Respondent failed to make any meaningful inroads into the Applicant's credibility.

• [55] The Respondent is now hoping, having failed in the first instance, to succeed in an attack on the Applicant's credibility on issues that have limited relevance to the main case. To the extent that such evidence is relevant, it is of a very low level of relevance.

Was the evidence able to be obtained with reasonable diligence for use during the hearing?

• [56] Mr Alistair Talbert (Mr Talbert) cross-examined the Applicant on his post-dismissal employment. For whatever reason, whether it be strategic or oversight, he did not ask whether the Applicant is the Dealer Principal of any dealership. This was a question that was plainly open to him to ask, given that the Applicant had previously been a Dealer Principal with the Respondent and was now employed by a new dealership.

• [57] Mr Talbert did not, whether for strategic reasons or by reason of oversight, cross-examine the Applicant as to any details of the entities involved with buying the shares, this line of questioning would have led the Applicant to make reference to Kaitessa. If that line of questioning had continued into asking for details of Kaitessa, an ASIC search could have been performed by the Respondent's solicitors before the Applicant was released from cross-examination, so that the accuracy of the evidence could be tested.

• [58] In any event, an ASIC search could have been done at any time to see whether the Applicant was a shareholder or director of any company, which also would have led the Respondent to Kaitessa.

• [59] What is readily apparent from the statutory declaration of Ms Sydney Smith signed 10 September 2021 is that she stumbled across evidence (the email from Mitsubishi dated 2 August 2021) which she perceived to be inconsistent with evidence given by the Applicant (when in fact it is not), and then was spurred into doing further work to obtain evidence that she could have obtained prior to the hearing.

Are the interests of justice served better by allowing or rejecting the evidence?

• [60] The Respondent says that "the issue is a fairly confined one". This characterisation ignores the fact that:

• (a) at least another day of hearing will be required, likely giving rise to delays of several months (in addition to the delays caused by this application);

• (b) the Respondent is seeking production of nine categories of documents, many of which are extensive and relate to matters entirely unrelated to the dismissal;

• (c) the Respondent is seeking similarly wide production from a third-party company, Kaitessa, of which the Applicant is not the only director or shareholder;

• (d) the Respondent is seeking to call a third party, being Mr Diggins, to give evidence, who had nothing to do with the dismissal.

• [61] In those circumstances, it is entirely possible that the work required to deal with the new issues will eclipse the work required for the matter to date, quite apart from requiring two third parties to also spend significant time (and potentially money if they engaged solicitors) on the matter.

• [62] The issue may be a "confined one" in that it is barely relevant to the matters in issue. It is not however confined in the extent to which it will increase costs, delay, and inconvenience.

• [63] In those circumstances, the interests of justice are strongly in favour of the application being refused so that this matter can finally be resolved, more than a year after the dismissal took place.

• [64] For the reasons described above, the Applicant does not agree that "the likely additional evidence will not be substantial in the overall scheme of the matter." That may well be the case for the Respondent, who has to do very little if the application is successful. It is the Applicant and the third parties who need to produce extensive documentation and respond to new allegations.

• [65] The prejudice to the Respondent if the application is rejected is minimal to none. There is no prejudice if, as the Applicant says, his evidence was neither false nor misleading. In that case, this application and anything that follows will be nothing more than a waste of time, money, and Commission resources.

• [66] If the Commission was to ultimately find that some part of the Applicant's evidence was false or misleading, this will have no effect on whether it was an unfair dismissal or not. At most, it will affect the amount of compensation, but likely to an extent that is vastly less than the legal costs incurred on this application and any further hearing that is required.

Will a denial of procedural fairness likely arise if a party does not have an adequate opportunity to argue its case?

• [67] The Respondent had its opportunity to argue the case. It was represented by competent counsel. It had two and a half months between the first day of hearing and the second to prepare its cross-examination of the Applicant.

• [68] There will be no denial of procedural fairness if the Respondent is required to live with the strategic decisions, or the mistakes, made by its counsel at the hearing and the lead up to it.

Was the evidence not led because of inadvertence or mistake?

• [69] The Respondent denies that this was a case of inadvertence or mistake. No evidence has been led by Mr Talbert as to why he did or did not ask certain questions of the Applicant in cross-examination, or why he did or did not make certain enquiries in the lead-up to the Applicant's cross-examination.

• [70] The Respondent did not discover that the Applicant had been appointed as Dealer Principal of Narrogin Mitsubishi because it did not ask questions of the Applicant in cross-examination which would have led to that evidence being given. It did not discover that he was a shareholder of Kaitessa because it did not do the necessary ASIC searches.

• [71] Having considered the declaration of Ms Sydney Smith and the submissions of both parties I will turn to consider the application of the relevant principles regarding reopening this matter.

• [72] The evidence the Respondent will adduce if the proceedings are reopened will concern the Applicant's employment and his remuneration earned since his dismissal and any remuneration likely to be earned in the future.

• [73] If the Applicant is found to have been unfairly dismissed, evidence about these matters is relevant because the Commission is obliged to take into account when determining an amount for the purposes of an order for compensation, the amount of any remuneration earned by Mr Ross from employment or other work during the period between his dismissal and the making of the order for compensation. This is a requirement of section 392(2)(e) of the Act.

• [74] Consequently, I have no doubt that the evidence sought to be adduced concerns issues which may be required to be determined by the Commission in the substantive application.

• [75] I do not accept that the evidence sought to be adduced was able to be obtained with reasonable diligence for use during the original hearing.

• [76] The amount of any remuneration earned from employment or other work since the dismissal are facts uniquely within the knowledge of the dismissed employee. These are not matters about which the ex-employer in an unfair dismissal remedy application would usually have any particular knowledge.

• [77] It is not for a Respondent to guess where an Applicant might have been employed and search for evidence that the Applicant has earned remuneration since their dismissal. It is not a game of hide and seek.

• [78] Indeed it is my view that an Applicant has a positive duty to the Commission to fully and openly give evidence on their remuneration earned post their dismissal.

• [79] Section 392 of the Act states that the Commission must take into account all of the circumstances in determining an amount of compensation. One circumstance that must be taken into account is prescribed at section 392(2)(e) of the Act and is the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation.

• [80] Consequently, if an Applicant declined to give evidence as to their remuneration earned from employment or other work since their dismissal the Commission would be unable to satisfy the obligation imposed by section 392(2) of the Act, to take into account that matter, and so would be unable to comply with section 392 of the Act and would be unable to issue any order for compensation.

• [81] In this case the interests of justice are better served by allowing the new evidence to be adduced.

• [82] I agree it would not be in the interests of justice to allow an Applicant to give only partial evidence as to their remuneration earned. Reopening these proceedings will allow the doubt raised in this case as to whether the Applicant has given fulsome evidence about his remuneration earned since his dismissal to be resolved.

• [83] The likely prejudice to the Applicant if the hearing is reopened in terms of additional costs is relatively minor in the context of the costs already occurred. Similarly, the consequential delay will not be significant.

• [84] If it is the case that evidence is now available to the Respondent, that was not available during the original hearing, and this evidence contradicts the Applicant's sworn evidence there will be a denial of procedural fairness if the matter is not reopened.

• [85] The evidence the Respondent now seeks to adduce was not led by it at the original hearing not because of inadvertence or mistake. It is only after the hearing did the Respondent become aware of the likelihood that Mr Ross has other sources of remuneration than those he referred to in his witness statement and during his cross examination at the original hearing.

• [86] This is an unusual set of circumstances and considering the principles above my decision is that the Commission on this occasion should reopen this case and allow further evidence to be adduced by the Respondent.

• [87] In due course a notice of listing will be issued for the reopened hearing with appropriate directions.

• [88] Separately, in the context of the above decision, I will also issue the order to produce documents and the orders for witnesses to attend the hearing, as sought by the Respondent.

[1] [2021] FWC 1250 at [13]- [14]; [2021] FWCFB 5419 at [52], [55].

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