McGhee v Commissioner of Police

Background 5The Commissioner relied upon three grounds as the basis upon which there had been a loss of confidence in the appellant thereby constituting grounds for his removal under s 181D of the Police Act . The first ground was Mr McGhee's conviction for Driving under the Influence of Alcohol (under s 12(1)(a) of the Road Transport (Safety and Traffic Management) Act 1999). He was fined $800, ordered to pay costs and disqualified from driving for six months. 6The second ground was the appellant's breach of the NSW Police Force's Secondary Employment Policy at Adam's Tavern, a licensed premises owned by Mr McGhee. The Commissioner had contended Mr McGhee had failed to declare his involvement in this business; failed to declare his financial interest in the business; failed to declare his financial benefit from the business; and failed to seek or follow-up or renew the necessary secondary employment yearly approval. The third ground related to Mr McGhee's conduct on 22 August 2007 when he failed to comply with operational procedures in the conduct of a search warrant. His conduct was held to be unprofessional and a breach of police procedure. 7In her conclusions the primary judge stated: [127] The applicant was charged, pleaded guilty and was convicted of a serious driving offence. He concedes this fact and properly expresses his remorse. I am satisfied further on the evidence, the applicant breached the secondary employment policy over a considerable period of time by engaging in a high risk industry for financial benefit without making the appropriate declarations and despite being previously investigated and reprimanded for such conduct and counselled as to his activity and declaratory obligations. He ignored, as a senior officer, police policy and processes. I am satisfied he lacked candour with respect to his financial and beneficial interests in the Adam's Tavern, Blacktown both to the NSW Police Force and in the preparation of his case. There was an attack made on his honesty. He, in evidence, did not accept responsibility for his actions related to his dealings with the NSW Police Force as to his activities with the Tavern but rather continues to assert once he organised and then declared the Trust, he had no further obligation. Thus he continues to assert, ignoring that in 2002 and 2004 he was counselled, he had made the appropriate declarations. Further, as an Inspector of Police, Mr McGhee served in a most senior and responsible position in the NSW Police Force which makes his actions in relation to his failure to observe the secondary employment policies even more serious. I find the breach of the secondary employment policies read with the Driving Under the Influence offence conviction and the search warrant warning was conduct so aberrant to the Police Code of Conduct and Ethics as to attract termination of the employment. I find the termination was in the circumstance, not harsh. unreasonable or unjust. [128] I do not accept that the loss of a benefit for injury sustained in the employment is a matter which affects the decision of the Commissioner to terminate Mr McGhee's employment. The right to these payments are under a different legislative scheme. While I accept, the Commissioner, in his Reasons, failed to refer in his consideration to Mr McGhee's long service, I do not accept, even taking into account Mr McGhee's 28 years of service in the NSW Police Force, this fact can distract from the seriousness of the breaches relied upon and therefore the merit case relied on by the Commissioner to terminate is upheld. Termination is, in my view, a very sad end to what could have been held to be a lifetime of successful service in the NSW Police Force. These incidents could be looked at as occurring all around the same period of time and just a bad time for Mr McGhee. Mr McGhee seems to have in his young life, begun with a determination for hard work. He sought secondary employment as a barman and turned that hard work into a successful business venture with much financial success. More credit to him. His Police Record before the Driving Under the Influence charge reveals a fairly good record of service, but for some reason he continually chose to avoid his obligations related to his conduct within what he knew was a "high risk" industry. He argues his conduct supports the proposition that he conducted his venture with integrity as evidence by his own complaint to police where he recognised money laundering activities. This example simply demonstrates Mr McGhee saw his involvement in the Tavern as a separate obligation from that obligation he held to the NSW Police Force. It is as though he turned a blind eye to the interconnection between his two interests. But it was such a blatant breach over such a long period of time of the secondary employment policy. He had a number of warnings yet did not comply with the required procedure. Evidence has revealed he never fully declared the financial benefits he enjoyed. I do not accept that the character evidence can persuade and tip the balance in this case. While I accept the applicant is a good man and a fine parent and served for many years in the NSW Police Force, for over the last 10 years he served, perhaps well, but in defiance of the secondary employment policy. Not only did he not comply with the policy, as the facts as established before me demonstrate, he also persistently failed to declare to the NSW Police Force the full truth as to his involvement. I accept he breached the Police Code of Conduct and Ethics. In such a circumstance I reject the applicant's submission the Commissioner's decision to terminate was harsh, unreasonable or unjust.

Appellant's submissions as to why leave should be granted 8The appellant's submissions on leave may be summarised as follows: (a) the relevant principles governing leave to appeal are set out in Little v Commissioner of Police (No 2) [2002] NSWIRComm 52; (2002) 112 IR 212 at [60]-[61], Commissioner of Police v Evans [2006] NSWIRComm 170; (2006) 153 IR 144 at [2]-[6], Commissioner of Police v Dobbie [2006] NSWIRComm 285; (2006) 157 IR 44 at [9]-[16] and Flanagan v Commissioner of Police [2010] NSWIRComm 7; (2010) 192 IR 88 at [84]-[85]; (b) the appellant relied on three tables attached to its earlier submissions regarding leave to have the decision in Reid-Frost reconsidered. Table I identified what the appellant contended were wrongly found facts and what was the correct fact finding. Table 2 identified what the appellant claimed were facts found by her Honour and what should have been found and Table 3 identified what the appellant contended were wrong findings regarding principle and what the correct finding should have been. The tables constituted the basis of the following summary of matters relied upon by the appellant in respect of leave to appeal; (c) The primary judge's conclusions about secondary employment and "benefits" did not afford Mr McGhee procedural fairness; (d) there occurred in the review one or more of the following: (1) multiple breaches of procedural fairness by the respondent's cross-examination and the trial judge finding proven quite a different body of assertions that emerged in the course of the review as explained in Sydney Ferries v Morton [2010] NSWCA 156 at [9], [11]-[15] and [115]; (2) an "ambush" of the type described in Newton v NSW Police Service No 2 (1999) 87 IR 66 at 80; and (3) "Without that particularisation, the Industrial Court would be placed in the position to which Evatt J referred in Johnson v Miller [1937] HCA 37; (1937) 59 CLR 467 where it would act as "an administrative commission of inquiry" rather than undertake a judicial function" ( Kirk v Industrial Relations Commission; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) [2010] HCA 1; (2010) 239 CLR 531). (e) Additional examples of significant errors are: (i) the finding that the appellant cross-examined some 15 persons, whereas only four persons were cross-examined. This was no slip and erroneously coloured the entire judgment because this reasoning was wrongly repeated; (ii) The trial judge should have found and given weight, in the overall consideration of whether the removal was harsh, unjust or unreasonable, to the fact that the Commissioner was never informed of the investigator's "not sustained" finding and yet the Commissioner said or inferred in the statutory reasons that the appellant breached the Police Code of Conduct and Ethics by his actions on leaving the hospital to avoid undergoing a breath analysis; (iii) her Honour erred in finding that the appellant engaged in "paid employment", which was the statutory expression used in the then s 88 of the Police Service Act 1990 and is picked up in the policy. The trial judge did not list in the judgment, let alone provide reasons why there could be distinguished, the authorities relied upon by the appellant at first instance; (iv) her Honour erred in finding Mr McGhee only once tried to right his affairs whereas it should have been found in mitigation that on four occasions he invited the NSW Police to contact his accountant; (v) at the invitation of the respondent, her Honour mistook or mischaracterised part of the appellant's case as he did not seek the orders referred to at [109] of the judgment; (vi) her Honour erred in interpreting the Crown Employees (Police Officers - 2005) Award and concluding "The applicant, therefore, may still retain rights to the Non-Renewal Benefit" and "the assertion as to the harshness in the effect of the termination is mitigated given the applicant still retains rights to a possible non-renewable benefit under the Award"; (vii) The trial judge denied the appellant procedural fairness by not putting the appellant on notice of the changed approach regarding the medical evidence referred to at [122] of the judgment and, in addition, her Honour mistook or mischaracterised this part of the appellant's case ; (f) the primary judge overlooked evidence of Mr McGreal that was important or critical to the proper determination of the matter.

Consideration 9It is relevant to note that overwhelmingly the appellant's submissions on leave are directed to what he contends are errors on the part of the primary judge relating to the breach of the secondary employment policy. The other two matters, namely, (i) the conviction for driving under the influence of alcohol and (ii) the failure by the appellant, as an independent observer, to comply with operational procedures in the conduct of a search warrant, received little attention. This is understandable given that the appellant pleaded guilty to the DUI offence and accepted the finding against him in relation to the search warrant matter. 10The primary judge took into account all three matters in concluding the appellant's removal from the Police Force was not harsh, unreasonable or unjust: at [127]. It appears to us, however, the breach of the secondary employment policy was the most serious of the appellant's contraventions. Kavanagh J found that the appellant breached the secondary employment policy in multiple respects. There can be no doubt on the evidence that her Honour was correct in that regard. 11What the appellant now contends, in seeking leave to appeal, is essentially that he was not afforded procedural fairness and that her Honour made several factual errors and errors of law. It is trite law that a failure to ensure procedural fairness may warrant a conclusion that the removal of a police officer was consequently harsh, unreasonable or unjust: see Reid-Frost 2010 at [41]. However, that will not automatically or necessarily be so. The offending conduct, regardless of any procedural unfairness, may be of such a nature that removal is entirely justified or the procedural unfairness may not be of such a nature as to conclude that the removal was harsh, unjust or unreasonable: see for example, Reid-Frost 2010 at [46]. Further, the principles governing leave are those set out in Reid-Frost v Commissioner of Police [2011] NSWIRComm 3 ( 'Reid-Frost 2011') at [5]-[10]. 12The appellant contended that there was a failure on the part of the respondent to place him on notice as to its allegations about his conduct. This was said to arise from: (i) a failure to particularise all of the breaches of the secondary employment policy in the statutory notice under s 181D of the Police Act , as found to have occurred by the primary judge; (ii) new evidence adduced from ASIC records regarding when it was that the appellant ceased as a director of Airsands Pty Limited; and (iii) from incorrect and unfair cross-examination of the appellant about receipt of benefits from the tavern business not alleged in the statutory notice . 13We do not consider there is any substance in these submissions. The notice was sufficiently comprehensible to the appellant and enabled him to respond: Reid-Frost at [21]-[25] and [67]. In any event, we note that the appellant, in his response to the notice, raised no complaint about the inadequacy of information in the notice. 14We accept that which is implicit in the appellant's submission that the review process has, as its centrepiece, the consideration of the particular grounds specified in a notice issued under s 181D(3)(a). However, it does not follow that the review is confined to those considerations. We accept, in this respect, the observations of the majority in Reid-Frost 2011 at [16]-[18]. 15Moreover, the fresh and independent review undertaken by the Commission is not confined to the "particulars" in the statutory notice: see Hosemans v Commissioner of Police [2004] NSWIRComm 253; (2004) 138 IR 159 at [134]; Newton v Commissioner of Police (1998) 85 IR 119 at 127. 16This was not a case, like Morton , of a different body of assertions being made at the trial to what was in the statutory notice. To the extent that the primary judge may have identified additional clauses (in addition to cl 4(3) and (2)) of the secondary employment policy breached, they arise in the main consequentially from the allegations in the statutory notice and the Commissioner's Statement of Reasons. For example, cl 2.1 defines "paid employment" and cll 6.3 and 6.4 refer to the requirement for an officer to make certain declarations. 17As to the new material that arose at hearing concerning the degree of the appellant's involvement in his secondary employment at the tavern, as the respondent submitted, it arose from the appellant's own supplementary affidavit evidence, oral testimony and his documents. Further, as it was correctly submitted, the appellant was placed on notice, well before the hearing, that his arrangements, the financial statements for and the Trust arrangements over the tavern would be scrutinised at trial. The respondent issued a Notice to Produce, on 23 October 2008, seeking access to that information. The majority of the evidence obtained, both orally and by tendering the appellant's documents, was tendered without objection. 18On the issue of the ASIC search, there was nothing unfair about the respondent testing the appellant as to how long he believed he had been a director. The appellant appears to have submitted that there was no secondary employment policy in place in May 2000 when it was claimed the appellant relinquished his directorship in Airsands. The appellant had applied for and obtained approval, in accordance with previous policies of the respondent, to undertake secondary employment in 1999. Indeed, on the appellant's own case, he knew about the existence of a secondary employment policy at all material times and sought to distance himself from the operation of the tavern prior to 2001, hence his purported resignation from Airsands Pty Ltd in May 2000. 19It would also appear from the evidence that, despite the claim that he relinquished the directorship in May 2000, according to financial reports the appellant continued to be named as a director until at least 30 June 2007. The appellant contended that was an administrative error according to the evidence of Mr McGreal, but we note that Mr McGhee continued to be the secretary of Airsands. Regardless of when Mr McGhee relinquished his directorship, the main concern was his continuing connection with the tavern business. In that respect, and in relation to the appellant's submission regarding incorrect and unfair cross-examination about receipt of benefits from the tavern business not alleged in the statutory notice , we note the evidence recorded by Kavanagh J at [61]-[64]: [61] The applicant, further, conceded he had received additional benefits from Airsands Pty Ltd which benefits were not disclosed even in his 2007 application (filed after the investigation as to his interest began). He received the following additional benefits: (a) a credit card used for the following purchases on behalf of the tavern: fruit and vegetables, cleaning equipment, promotional items such as balloons, petrol for the courtesy bus, petrol and maintenance expenses for his wife's company car and his personal motor vehicle. He had held this card for four years; (b) an "E-tag" attached to his personal vehicle, which was paid for from the Airsands credit card for two or three years; and (c) a mobile telephone used for contacting the Trust accountant, the manager of the hotel and personal needs which he has continued to use since 2000 or 2001 when his use of a paid mobile telephone led to an adverse finding. The Applicant had declared "the mobile phone is being paid by myself". [62] Further, multiple bank accounts held by Airsands Pty Ltd (t/as Adam's Tavern) were sent to Mr McGhee. Mr McGhee also received money (namely, $781 per month) directly from Airsands Pty Ltd, into an account called "Mr Robert Bruce McGhee Family Superannuation Fund" and the fund had been receiving this payment for approximately three years. Accordingly, Mr McGhee was receiving an annual benefit of approximately $9000 from the Tavern which he never disclosed at any time to the NSW Police Force. Documents revealed Mr McGhee's level of involvement was far greater than he had revealed to the Police Force and those documents support in detail the significant financial benefits he enjoyed under the various financial arrangements he had put in place with various companies through the Trust. [63] It is relevant to note in September 2007 it was recorded the applicant had several vehicles registered in Air Sand's name parked at his home. [64] I accept Mr McGhee continued to enjoy benefits similar to and perhaps greater than those which were the subject of his counselling in 2002 and 2004. I accept he knew he held these benefits. He had clearly been counselled and was aware of his obligation to declare and to obtain permission under the secondary employment policy for these arrangements. I do not accept that he can be excused for this consistent breach of the Police policy because of his misunderstanding of the policy. The applicant, in his cross examination, was forced to concede he had failed to declare all the benefits he received and he had failed to disclose his interests in Airsands Pty Ltd and Adaptive Management Pty Ltd. 20The appellant contended there was an inference in the Statement of Reasons that the Commissioner relied upon an unsustained finding that the appellant had breached the Police Code of Conduct and Ethics by leaving the hospital to avoid undergoing a breath analysis. We agree with the respondent, there was no evidence that such an inference was drawn by the Commissioner and Kavanagh J found there was no such evidence. 21The appellant submitted her Honour erred in finding that the appellant engaged in "paid employment". The secondary employment policy defined "paid employment" in broad terms: i.e., "employment which has the purpose or effect of generating profit, gain or a benefit of any kind in favour of the employee or any other person or company". The thrust of the appellant's submission was that the extended definition of "paid employment" in the secondary employment policy was inconsistent with that contained in the Police Service Act , and therefore ultra vires. Section 73 of the Act stated: A non-executive police officer must not engage in any paid employment outside the duties of his or her position without the approval of the Commissioner. 22The appellant's submission was that his engagement in an administrative role and the payment to him of company expenses did not constitute "paid employment". 23Whilst the appellant sought to minimise the work carried out by him, in 2007 he was observed collecting glasses and admitted that on the odd occasion, but not regularly, he hosed the plants in the gardens, picked up glasses, picked up plates, wiped tables down, and put stock away. The appellant derived a number of benefits, which included a credit card, "Etag", mobile phone and payments into a family superannuation fund. 24We consider it is appropriate to apply a broad meaning to "paid employment" given that the purpose of the provision is to protect the integrity of the Police Force by requiring an officer to obtain approval prior to taking on such employment outside his or her police duties. This provides an opportunity to the Commissioner to ensure the employment is not inconsistent with the police officer's role and does not risk undermining the integrity of the Police Force. Ultimately, the police officer benefits from being given a clear delineation as to which secondary employment may be undertaken. Employment in a business selling liquor and engaging in gambling may well be regarded as high-risk employment for a police officer. 25In Lester Ors v NSW Aboriginal Land Council and Ors [1999] NSWLEC 179, Bignold J considered the term "paid employment" in the context of cl 3(i) of Sch 5 of the Aboriginal Land Rights Act 1983. After reviewing various authorities Bignold J concluded that the term meant, "being engaged in any employment, work, occupation or business for which one receives payment". 26That definition is broad enough to encompass the work done by Mr McGhee in connection with the tavern business and the payment he received. Payment should not be confined to cash or its equivalent, but may extend to payment in kind. 27There was no error in her Honour's finding that the appellant had engaged in this form of "employment". 28The appellant submitted Kavanagh J erred in finding he only once tried to right his affairs. Whether that be so, Mr McGhee conceded he had breached the secondary employment policy and it is quite apparent from the evidence that he was not entirely forthcoming as he should have been, from the outset, in declaring a full disclosure of the extent of his involvement in the tavern business and the benefits he derived from it. For a police officer, especially one with the rank of Inspector, that was an unacceptable response to the investigation into the appellant's business dealings. 29In relation to the appellant's contention that the primary judge erred in interpreting the Crown Employees (Police Officers - 2005) Award , the respondent (as do we) accepted such an error was made at [119] of the judgment. There her Honour found: [119] Mr McGhee had fixed term appointments. However, if his appointment is terminated but on a medical retirement his application is supported by the Commissioner, the applicant may, even after termination, because of the effect of s 181D(8) of the Police Act , be able to argue he was eligible to receive the Non-Renewal Benefit under the Award (for all of his completed fixed term appointments together with the current full fixed term appointment, the completion of which is included by medical discharge). The applicant, therefore, may still retain rights to the Non-Renewal Benefit even though he has been dismissed despite s (sic) 65(e). 30Although her Honour erred, the primary judge limited her observations about access to Non-Renewal Benefit under the Award by saying the appellant "may... be able to argue he was eligible to receive..." the Benefit. It does not seem to us this was a pivotal issue in her Honour's determination that the removal was not harsh, unreasonable or unjust. Accordingly, the error was not of such a nature that, but for the error, a different conclusion would or might have been reached. 31On the question of the medical evidence, notwithstanding her Honour indicating to counsel for the appellant that she was not "going to go into Dr Bornstein's opinion", her Honour did so: see [121]. We note, however, in his written submissions the appellant did ask Kavanagh J to consider the medical evidence both on the question of harshness and on procedural fairness grounds. In doing so, it was open on the evidence for the primary judge to be sceptical about the appellant's application for medical discharge being bona fide. The appellant attended work until February 2008. At no stage in 2007 or 2008 did he assert that he was unfit for duties resulting from the medical conditions set out in his application. The last reported injury was September 2002. The appellant sought no specialist advice concerning medical discharge until February 2008, after receiving the s 181D notice and the appellant admitted, in answer to a question from her Honour, that he might have tolerated his ailments and worked on, had he not been served with the s 181D notice. Further, her Honour asked the appellant in the witness box whether he would have continued had it not been for the notice under s 181D(3) and the appellant replied in the affirmative. 32As to her Honour's failure to address the evidence of Mr McGreal, it would have been appropriate for her Honour to do so given the appellant's reliance on that evidence and for her Honour to demonstrate why that evidence did not prevail over other evidence adverse to the appellant. Nevertheless, notwithstanding that evidence, it was open on all of the evidence for Kavanagh J to reach the conclusions her Honour did. 33We have concluded that the appellant has failed to make out a case for the grant of leave. This is not a case where the matter is of such importance that, in the public interest, leave must be granted and does not raise factors which, when properly considered, would otherwise warrant of leave. Even if it be accepted there were some shortcomings in the primary judge's treatment of the facts and the application of principle and, indeed, some errors, they were not of such or nature, character or magnitude that would cause us to grant leave. Moreover, we do not perceive that any of those shortcomings could properly constitute a basis for upholding the appeal. The appellant failed in his duty as a senior police officer in three significant respects, the most serious being the breaches of the secondary employment policy and his less than candid disclosures when confronted with these breaches. The appellant always knew he was required to conform strictly to the secondary employment policy. He failed to do so. 34We would wish to reiterate the observations of the Full Bench in Reid-Frost 2011 at [22], that the hearing of leave as a threshold matter does not represent an opportunity for counsel to effectively rehearse a full merit case either in written or oral submissions. Even though we have broadly canvassed aspects of the appellant's case, we have only done so to briefly review issues which may attract leave. As will be evident, many of the matters raised by the appellant fundamentally fall short of the requirements for leave. In this respect, we consider the complaint by counsel for the appellant for more time to develop oral submissions (in addition to written submissions) to be wholly misconceived. We would also repeat that which was stated in Antonakopoulos v State Bank of New South Wales (1999) 91 IR 385 at 392 - 393 as to the primacy of first instance decisions.

Orders 35The Full Bench makes the following orders: (1) Leave to appeal is refused. (2) The appeal is dismissed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 March 2011