Patricia Cretney v State of New South Wales [2008] NSWIRComm 131 | Case summary

Patricia Cretney v State of New South Wales [2008] NSWIRComm 131 | Case summary | Zoe

The applicant asserted Mr Irvine was harsh in the language he used toward her. Mr Irvine agrees there was such a conversation but he asserts he used less harsh language. Mr Irvine further commented everything he said at the meeting he had with Mrs Cretney and Mr Randazzo was recorded by Mr Randazzo. Mr Irvine felt this recording of every word spoken was used as an intimidatory tactic towards himself as acting Principal. 53 In his role as acting Principal, Mr Irvine immediately reviewed a number of practices related to the management of the school. He advised Mrs Cretney against using the facsimile machine. She asserts he later reduced her working hours by one and a half hours per week. She submits these actions by Mr Irvine were part of the unfairness accorded to her and were a reflection of the unfair findings of and unfair recommendations contained in the Review Report. 54 On 25 August 2000, in accordance with Stage 5 of the Management Review procedure, an audit of the final Management Review Report and its conclusions and recommendations was conducted by Ms Wells, the Assistant Director of School Valuations, with another officer. It produced a report titled: "Evaluation of information arising from the Management Review of Penrose PS - June 2000". It took into account the Union's support, advice from the Senior Legal Officer - Industrial Relations and Senior Officer - Industrial Relations. The audit recommended that the applicant not be transferred to another school but her supervision be strengthened. The evaluation concluded: The Management Review identified five potential breaches of legislation or policy involving Mrs Pat Cretney. The Audit/IR review concluded that disciplinary action against Mrs Cretney was not warranted on any of these matters. 55 The Assistant Director General, Mr Sutton, then determined not to accept the Recommendation of the Review that: "regardless of the further investigation or outcome" of the matters/issues referred for formal investigation, the senior school assistant be transferred. 56 On 8 September 2000, Mr Sutton then wrote to Ms Cretney as follows: . . . The very high turnover of executive staff at Penrose Public School in the past ten years, has inevitably resulted in some uncertainty and tension within the school community. This has clearly not been conducive to maximising the learning opportunities of all of the students who attend that school.

Thereby, Mr Irvine was informed Mrs Cretney was not to be transferred (Mr Randazzo later agreed to a voluntary transfer). It was at this point that all procedures and steps required under the Management Review of Penrose School were completed. 58 After Mr Irvine left at the commencement of the last term of the year 2000, Ms Murphy resumed duties as the Principal. She continued to maintain Mrs Cretney's reduced hours. Ms Murphy agreed she no longer allowed Mrs Cretney to type the school newsletter. In evidence Ms Murphy described the newsletter incident as "deceptive conduct" by Mrs Cretney. Mr Irvine had withdrawn Mrs Cretney's right to use the facsimile machine. The Union made approaches on Mrs Cretney's behalf and Ms Murphy restored that right although also there was some minor contention as to when this occurred. 59 After Mrs Cretney made a further specific request on 26 September 2000, she received from Mr Sutton a copy of the final School Management Review Report. She was instructed she was not to show, give, provide or transmit the Report or any copy of it or any extract from it to any person or to discuss the contents of the Report with any other person other than her legal representatives. She asserts this Report contained further details related to her activities and although the final Management Review Report was not publicly circulated, it was the basis upon which the edited Report was made. She asserts it revealed the unfair findings, conclusions and recommendations (which were published) and which defamed her and affected her reputation and caused her stress. 60 The applicant later agitated for the annexures to the full Management Review Report and other documents through actions she took in the Administrative Appeals Tribunal and before the Privacy Commission. 61 Mrs Cretney continued in employment as the school assistant from 1987 until her retirement on 18 July 2003. She then applied to be re-employed on 27 April 2004 and has worked at Penrose as the Senior School Assistant for a further four years. Today she is still in that employment, though at present she is on leave.

The applicant asks for: 3. An order varying contract or arrangement or collateral arrangement . . . in order to: ii) Require the respondent to investigate fully, thoroughly and fairly all and any allegations involving the applicant's conduct or work performance; iii) Require the respondent to grant to the applicant a reasonable opportunity to be heard in any Management review or other process involving assessment of the applicant's conduct or work performance; iv) Require the respondent to refrain from making unsubstantiated allegations concerning the applicant's conduct or work performance; v) Require the respondent to refrain from publishing inaccurate and defamatory statements about the applicant in any report or other document. vi) Require that in the event that the respondent publishes inaccurate or defamatory or unsubstantiated statements about the applicant in any report or other document it is required to withdraw such statements by publication of such withdrawal in the Electronic Newsletter "In Principal" in a form to be agreed between the applicant and the respondent. vii) Require that in the event that the respondent publishes inaccurate or defamatory or unsubstantiated statements about the applicant it is required to apologise in writing to the applicant for such publication. viii) Prohibit the respondent from engaging in conduct, whether during or at any time after the term of the contract, that damages, or is calculated, or likely, to damage the personal, and professional reputation of the applicant, or to cause her anxiety, distress and embarrassment. ( emphasis added ) 3. ( sic) An order that the document(s) known as The Penrose Public School Management Review Report June 2000 be withdrawn from circulation by the respondent. 4. An order that the respondent advise all those persons who received a copy of or have an interest in the Penrose Public School Management Review Report June 2000 that the Report has been withdrawn from circulation due to inaccuracies about the applicant contained in the Report. 5. An order that the respondent apologise to the applicant for publishing inaccurate and defamatory material about her in the Penrose Public School Management Review Report June 2000 . 6. An order that the Respondent pay to the Applicant such amount of money in connection with the contract as may appear to be just in the circumstances. 7. An order that the Respondent pay to the Applicant interest upon such an amount of money as is ordered to be paid to the Applicant in connection with the contract as such rates and in respect of such period of time as the Court considers appropriate. 8. An order that the Respondent pay the Applicant's cost of and incidental to these proceedings. 9. Such further or other orders as appear to this Honourable Court to be fit or just.

and the respondent pleads: · The orders claimed are otiose and if ordered by the Court would be nugatory since there is no proper basis asserted on which such injunctive relief of the kind sought in the application could be based. In particular, the orders asked for are too vague in terms or would not be enforceable in all the circumstances. · Further and in the alternative, the respondent denies the Court has power to make the award as sought or, if it was held such powers existed, the court would not exercise its discretion to make such orders. · Further, the respondent contends that the orders sought could only be made after the court first determined that the remedies were not available under the general law, namely, the law of defamation; the Defamation Act, 1974 (NSW) or the personal injury scheme in NSW through the Workers Compensation Act 1987 (NSW); the Limitation Act 1969 (NSW), the Workplace Injury Management and Workers Compensation Act, 1998 (NSW) and the common law for personal injuries arising out of a breach of duty of care and/or breach of contract and that the court is either not empowered to make such a finding or if such a power existed such a finding ought not to be made. 68 The respondent submits the applicant's claim for unfair contract brought under s106 of the Act is "dressed up" and is in essence a claim for defamation or personal injury. The respondent asserted that if the court considered the defamation claim then the defences such as truth, contextual truth and qualified privilege available under the Defamation Act 1974 should guide the court in its deliberation. 69 The respondent submits the court would reject the Summons for Relief brought under s106 for consequential relief for an unfairness arising out of the conduct of the Management Review conducted at Penrose Public School on the basis of the application of the principle of "legal coherence". 70 The respondent further denies the applicant is entitled to any money orders as claimed, or at all. The damages claim for pain and suffering, anxiety, hurt, humiliation and distress, medication, medical treatment and damage to reputation are not within the jurisdiction of the Court under s106 of the Act. Or alternatively such claims should not attract a compensation order in the use of the Court's discretion. 71 Generally, the respondent asserts, it has at all times treated the applicant fairly and the application ought be denied on the basis of the doctrine of Laches. 72 Further, and in the alternative, the respondent contends that as there exists alternative and more appropriate forums in which the applicant could bring her claims, the Court ought to decline its jurisdiction in accordance with its powers under Rule 82(1) of the Industrial Relations Commission Rules.

210 It was noted that the applicant relied upon the decision in King v State Bank of New South Wales (2000) NSWIRComm 229 in support of damages for psychological distress arising from an unfair contract being within the jurisdiction of the Court under s 106. That case was under appeal. The respondent contended that the present case was a personal injury claim masquerading as a s106 claim: in King the Court considered the discretionary jurisdiction to award damages for personal injury within the context of broader claims made pursuant to s 106. Thus the claim for compensation for psychological stress was a minor part of a much larger claim. The extent to which the Court should entertain personal injury claims under s 106 had also been considered by Peterson J in interlocutory proceedings in Clarke and Doherty v State of New South Wales. There the claim was sought to be struck out because the respondent categorised it as one for the payment of damages for personal injury. Peterson J stated that if, that characterisation was correct, he would incline to the conclusion that the Commission lacks jurisdiction to deal with the matter or, alternatively, should decline to exercise jurisdiction in relation to such a claim which would be heard in a more appropriate jurisdiction. . . . 321 The orders that are proposed in this matter arise from contractual unconscionability or unfairness, treating the contract in the extended sense as defined in s 105 of the Act. It is the unfairness arising from the conduct of the respondent which gives rise to the two proposed primary orders for the payment of money. I am unable to accept the proposition that the provisions of the Workers Compensation Act identified by the respondent were intended to have the effect of impinging upon these orders proposed to be made under s 106 of the Industrial Relations Act. 80 On appeal, the Full Bench in State of New South Wales v Banas (2004) 137 IR 63 confirmed Haylen J's reasoning, saying: 94 The fact that a remedy might be available under a statute will not exclude a person from pursuing rights expressly conferred by another statute unless "those rights are expressly or by necessary implication, excluded by the alternative claim, or controlled an obligation to elect or by time limits, the beneficiary of the a statutory right can pursue any, or all, or no entitlements": Walker v Industrial Court of New South Wales (1994) 53 IR 121 at 134-135 per Kirby P.

The Principal of Legal Coherence 82 Alternatively, the respondent submits the principle of "legal coherence" acts as a bar to these proceedings based upon the consideration of the High Court in Sullivan v Moody (2001) 207 CLR 562 at [60], [62]. In that matter, a claim had been pressed that public officers investigating and reporting allegations of sexual abuse had a duty of care to exercise "reasonable care" toward the alleged perpetrators in the conduct of investigations. The High Court determined: 60 The circumstance that a defendant owes a duty of care to a third party, or is subject to statutory obligations which constrain the manner in which powers or discretions may be exercised, does not of itself rule out the possibility that a duty of care is owed to a plaintiff. People may be subject to a number of duties, at least provided they are not irreconcilable . . .But if a suggested duty of care would give rise to inconsistent obligations, that would ordinarily be a reason for denying that the duty exists. Similarly, when public authorities, or their officers, are charged with the responsibility of conducting investigations, or exercising powers, in the public interest, or in the interests of a specified class of persons, the law would not ordinarily subject them to a duty to have regard to the interests of another class of persons where that would impose upon them conflicting claims or obligations. . . . 62 The statutory scheme that formed the background to the activities of the present respondents was, relevantly, a scheme for the protection of children. It required the respondents to treat the interests of the children as paramount. Their professional or statutory responsibilities involved investigating and reporting upon, allegations that the children had suffered, and were under threat of, serious harm. It would be inconsistent with the proper and effective discharge of those responsibilities that they should be subjected to a legal duty, breach of which would sound in damages, to take care to protect persons who were suspected of being the sources of that harm. The duty for which the appellants contend cannot be reconciled satisfactorily, either with the nature of the functions being exercised by the respondents, or with their statutory obligation to treat the interests of the children as paramount.

The High Court rejected the claim, noting such a duty of care conflicted with the specific statutory obligation regarding reporting of suspected abuse. 83 In CGU Workers Compensation (NSW) Ltd v Garcia (2007) Australian Torts Reports 81-908 (at 70,164), the NSW Court of Appeal was also asked to consider whether the Court below was entitled to find and apply a novel form of tort in light of a particular statutory scheme. The Court held that it was inappropriate to develop a new tort to provide a remedy to "trump" the perceived inadequacies of statute and common law saying at [169]: …any such tortious liability would be precluded if inconsistent with some aspect of the relevant legislative scheme or, if not directly inconsistent, not rendered otherwise inappropriate by reason of the scope and purpose of the legislation . . . ( emphasis added ) 84 Spigelman CJ in New South Wales v Paige (2002) 60 NSWLR 371 said at [93]: 93 When considering the issue of coherence it is necessary to give close consideration to the statutory scheme: specifically whether a common law duty is "inconsistent" or "incompatible" with the statute and, relevantly in this case, the regulations. (See, for example, Crimmins (at 13 [3], 16 [18], 39 [93], 46 [114], 72 [203]-[213]); Sullivan v Moody (at 582 [60]).) However, issues of coherence may arise even if there is no direct inconsistency. It may be enough if the effect of imposing civil liability is to "distort [the] focus" of the statutory decision-making process. ( Crimmins (at 101 [292]) per Hayne J.) 85 The respondent submitted that under this line of authority (see also Hunter Area Health Service v Presland (2005) 63 NSWLR 22) the law has been extended and a court must now determine if it is "appropriate" to utilise an alternative course of action when the legislature has provided a specific legislative avenue to give relief sought, in this case, the Defamation Act and Workers Compensation Act. However, the authorities relied upon by the respondent to establish the principle of "legal coherence" as a bar to jurisdiction under s106 of the Act, all address applications for the development of a novel "duty of care" in tort law. In the circumstances of those cases, an expansion of a duty of care was pressed and it was found that such claims were inconsistent with and undermined the relevant statutory provisions. The expansion of the tort of negligence through the development of a new or novel duty of care was denied in each case. 86 The court is not considering the application of a novel tortious duty which would be incoherent with or be incompatible with a statutory scheme as in Sullivan v Moody or Paige. Rather, it is asked to examine whether a claim for relief for unfair contract under a statutory scheme would be in conflict with defamation or workers' compensation legislation as well as common law rights for personal injury. Therefore, the consideration of legal coherence needs to be approached differently to that in Sullivan v Moody or Paige which I accept are binding authorities of legal principle but I distinguish their direct application to the facts of this case. 87 A claim that a contract is unfair because an employer acted unfairly or with unconscionability in making findings and publishing that material, against the employee's interest, which caused pain or distress may sit uncomfortably alongside the law of defamation, or the workers' compensation scheme. However, simple discomfort does not constitute sufficient incoherency or even conflict with other statutory schemes or legal principles because of the narrowly confined nature of the contractual duties under examination. The source of the obligation not to conduct the contract unfairly is narrowly confined to mutual contractual duties and specific terms and circumstances of the employment contract and its performance. Any relief under s106 addresses the contractual terms and conduct allowed or permitted by those terms, present or absent. Therefore, any finding of unfairness in an employment contract under s106 in the circumstances such as in this case cannot create broad ranging duties attracting civil liability the same way the development of a novel tort would. 88 In dealing with the coherence of statute law with the common law and the question of conflict in a number of laws, courts are obliged to consider the intention of the legislature. In circumstances applicable to this case, the confined contractual concern examined under s106 does not directly conflict, inhibit or undermine defamation law and the statutory scheme of workers' compensation or breach the rights held for personal injury claims under the common law or the general, unified bedrock of one coherent system of law (Hill v Van Erp (1997) 188 CLR 159 (at 231)). 89 A partial overlap of consequential remedies available under s106 with common law or statutory forms of action (being the making of orders for the payment of money) does not raise the application of the principle of legal coherence. It is a fundamentally different matter to read down one statutory scheme relating to unfair contracts under the Industrial Relations Act 1996 solely by reference to the fact that other statutory or common law remedies may be available. There is no inconsistency between relief which could be available to Mrs Cretney for unfairness in her employment contract under s106 and relief which could be available through independent remedies under other common law or statutory regimes. There is no cause of action, statutory or otherwise available under which can consider the fairness of a contract of employment between the parties and the associated granting of relief in the form of variations to the contract and "just compensation" other than through s106 of the Act. Therefore, the principle of legal coherence is not applicable in this case and does not prevent the applicant from validly pursuing her case for unfair contract. The court has therefore jurisdiction to hear and consider the claim. As Mason J, President of the Court of Appeal said in Sydney Water Corporation Ltd and Anor v Industrial Relations Commission of New South Wales and Anor (2004) 61 NSWLR 661 at [28]: the availability of alternative remedies is not a jurisdictional answer to a claim under s106.

Use of Court's Discretion 90 Alternatively, the respondent submits in the application of Rule 82(1)(h), the Court should determine, in the use of its discretion, to give no order. Relevantly, Rule 82(1) states: 82 Setting aside originating process etc (1) A tribunal may, on notice of motion filed by a respondent in accordance with subrule (2), by order: (a) set aside the originating process, or (b) set aside the service of the originating process on the respondent, or (c) declare that the originating process has not been duly served on the respondent, or (d) discharge any order giving leave to serve the originating process outside the State or confirming service of the originating process outside the State, or (e) discharge any order extending the validity for service of the originating process, or (f) protect or release property seized, or threatened with seizure, in the proceedings, or (g) declare that the tribunal has no jurisdiction over the respondent in respect of the subject matter of the proceedings, or (h) decline in its discretion to exercise its jurisdiction in the proceedings, or (i) grant such other relief as it thinks appropriate. 91 Wright J, President, in Hyde v Energy Australia (1999) 92 IR 409 (at 424-425) said: Parenthetically, I should indicate the reason why I consider that r82 does not apply is not only (as contended by the applicants) that the respondent's notice of motion had not been filed in the manner required by r82(2) but also because r82, considered as a whole, appears to be a rule essentially intended to deal with situations where the respondent contends that the Commission lacks jurisdiction in relation to the proceedings purportedly commenced; where there has been some invalidity or irregularity in relation the service of the originating process (or leave given in relation to service of such process); or where issues such as that considered by the High Court in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 539 are raised. (Adopted by the Full Bench in Caltex PetroleumPty Ltd and Others v Harmer 92 IR 264 (at 269)).

Consideration 94 I begin by identifying whether or not there was an unfairness in the contract and then determine if any unfairness had a consequence which should attract relief. I accept the applicant's submissions the final Management Review Report was the source of the conclusions and recommendations in the edited version of the Report. Through its distribution to the parents of students at Penrose Public School, I also accept the edited version of the Report was published by the Department. The applicant urges the court undertake a full analysis of the "findings" of the final Report which, even if it does not provide "support for her defamation claim", will establish the findings were unfair and untrue and therefore will establish an unfairness in the employment contract such as to attract relief. 95 The applicant submits that in order to ascertain unfairness, the court must examine the truth of the statements contained in both the edited and final Management Review Reports so as to address whether they were false, misleading and defamatory. The applicant asserts the question for the court is whether: the Department's conduct in the procedures followed for the Management Review of Penrose Public School led to unfair findings and conclusions in the Report which made the contract of employment between herself and the Department unfair? Alternatively, the applicant asserts that even if the procedures followed by the Department in the Review were fair, the Review "findings" were unfair and given the publication of those findings at the 1 August 2000 meeting, the contract was made unfair. 96 The Management Review of Penrose Public School has caused the applicant great concern. Over eight consecutive years she has pursued this matter through a number of forums because she clearly feels statements made about her and "findings" drawn by the Review Team were "false, inaccurate and defamatory". Much time was taken up in the hearing as to the veracity of the "Conclusions" and "Recommendations" reached by the Management Review Team. The court will traverse the evidence as to how the review was conducted into the management of Penrose Public School and then examine the applicant's assertions as to its "findings" and effects on her. 97 While the applicant asserts the Report contains "findings" she in fact takes objection to the five "Recommendations" made in the Final Report related to issues raised during the Review regarding her conduct. The applicant asserts the "findings" made in the Report through the publication of its Recommendations related to five issues were untrue and unfair. She contends these "findings" led to the unfair conclusions on which the recommendation to transfer her was reached and this recommendation was itself unfair.

Recommendations 98 Recommendations in the final Review Report numbered 1-5 deal with the conduct of Mr Randazzo so only recommendations numbered 6-10 relating to the conduct of Mrs Cretney are relevant to the consideration. The Review Team recommended the five matters for a "formal investigation" to "ascertain more fully whether breaches had occurred" of the Department's Code of Conduct or the relevant statute and award provisions under which Mrs Cretney was employed. Recommendation 6 . . . the action of the senior school assistant in attaching the list of issues to the school newsletter warrants investigation. 99 On 16 June 2000, as part of her role as School Assistant, Mrs Cretney prepared the school newsletter and left it on a desk inside the then Principal, Ms Murphy's classroom. As was her practice, the name of each child was written on top of the newsletter. The Principal then distributed the newsletter. The school newsletter had attached to it minutes of the 15 June 2000 school P&C Meeting. Unbeknown to the Principal, attached to those P&C minutes was a transcription of questions put to Mr Randazzo by the Review Team. The transcription of questions had been the subject of discussion at the P&C meeting and the Principal had objected to their tabling because the Review was ongoing. 100 There is no evidence to suggest Mrs Cretney knew the transcription of the questions were attached to the P&C Minutes. She was not at the P&C meeting so was not aware of the debate that had occurred and the Principal's prior objection to them. When the P&C minutes were handed to Mrs Cretney, they included the transcription of questions and were accordingly attached to the newsletter. 101 It is of note the distribution of the P&C minutes and attached transcription of questions occurred in the context where the P&C, through correspondence and other activities, were playing an active role and not necessarily an approving one, as to the manner and purpose of the Review. Additionally, the community members were not supportive of the Review potentially calling into question the conduct of the assistant teacher, Mr Randazzo. 102 While I accept the applicant was a supporter of the assistant teacher, it was not proper that those questions be attached to the minutes for distribution, nonetheless, I do not find there can be a basis for the inference cast in both the edited and final Report, that the school assistant was deceptive in attaching the transcription of the Review questions to the newsletter. While the statement "the transcription of the issues raised with the assistant teacher was subsequently attached by the senior school assistant to the newsletter with the minutes of the P&C meeting" may be a blunt statement of fact, it is, by inference, misleading. Further this was not a matter raised with Mrs Cretney in the second interview. At the point of publication, I accept Mrs Cretney was not given an opportunity to respond. 103 However, from the day after the publication of the edited Report, Mrs Cretney recorded the circumstance in which she attached the questions to the newsletter. The Union made representations on her behalf and her explanation of that matter and the other four matters were sent on to the Department by Mr Thomas, Shellharbour District Superintendent. The Department through Mr Paul Irving, General Manager of Personnel wrote on 18 August 2000 to the Union acknowledging that the recommendations of the Report were being considered and gave the assurance as follows: . . . Your comments and explanations in respect of those matters concerning Ms Cretney as identified in the Report are noted. . . . 104 The Final Management Review Report then went to the Audit Committee. It determined there was no basis for any disciplinary procedures arising from any of the five matters. The Evaluation Report of the Audit Committee relevantly said: The potential evidence relating to each of the ten potential breaches was assembled and evaluated. The results were presented to the Senior Legal Officer Industrial Relations Services . . . and the Senior Officer Industrial Relations . . . for review. Their advice was incorporated into the analysis. . .

And it noted: The PSA has already signalled their support of Mrs Cretney to the Department. 105 The background document related to the Audit Committee decision clearly indicates the committee was aware of the Union's active support of Mrs Cretney. The Audit Committee also records that it sought advice from the Department's Senior Legal Officer, Industrial Relations and Senior Officer, Industrial Relations. Through both of the branches consulted and through Mr Sutton, the Department was aware of Mrs Cretney's submission containing her reply to the specific issues raised by the Review of her conduct. 106 Generally in employment law, as in civil cases, inferences must be drawn on the balance of probabilities and there need only be circumstances raising a more probable inference in favour of what is alleged but, before it can be drawn, the inference must be something which follows from a given premise as being at least probably true (Chapman v Cole (2006) 15 VR 150 at [14]). However, inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the facts which it is sought to establish. In some cases, other facts can be inferred with much practical certainty (as if they had been actually observed). In other cases, the inference does not go beyond reasonable probabilities. But if there are no positive proved facts from which inference can be made, the method of inference fails and what is left is mere speculation or conjecture (per Spigelman CJ in Seltsam Pty Limited v McGuiness (2000) 49 NSWLR 262 at [87] quoting Lord Wright in Caswell v Powell Duffryn Associated Collieries Limited [1940] AC 152 (at 169-170)), Marinov v ASADA (2007) 2(1) ANZSLJR 2 (at 134)). 107 A number of objective facts lead me to infer the Audit Committee or at least the Departmental Officers from whom review and advice was sought, had available the submissions to the Department from the Union on Mrs Cretney's behalf. (The School Council also wrote supporting Mrs Cretney as was acknowledged by Mr Sutton.) These submissions detailed Mrs Cretney's response and explanation regarding the newsletter incident and the other issues relating to the Review Report. The Audit Committee assembled the "potential evidence" regarding the potential breaches of policy and noted "Union support" for Mrs Cretney. I find the collation of "potential evidence" infers the Audit Committee and/or the Departmental advisors went beyond the recital of evidence collected for the Review. The determination itself is also an indication of the fact the Department and the Audit Committee had sufficient evidence before it to comfortably determine not to implement the Review Report Recommendation that, regardless of whether any investigation occurred or its outcomes, Mrs Cretney be transferred to another school. 108 I find at Stage 5 of the Management Review, Mrs Cretney was accorded procedural fairness regarding the newsletter incident. I find, therefore, there was no unfairness in the conduct of the Management Review that could be connected to the newsletter incident. 109 Further, even if (at Stage 5 of the Policy) Mrs Cretney's replies were not given consideration by the Department (and I accept, by inference, they were), I would not accept the publication of the newsletter issue in the edited Report before she had an opportunity to reply, would establish such unfair conduct by the respondent sufficient, on its own, to make the contract unfair (see Antonakopoulos v State Bank of NSW (1999) 91 IR 385 (at 389-392)). It remains to be considered whether, given her submission, there was any other such alleged unfair conduct.

Other Alleged Unfairness 115 The applicant made a number of other assertions as to the unfairness she suffered. She asserted Ms Murphy was the sole source of any complaint made against her interest to the Review. From documentation, there were recorded a myriad of complaints as to the role Mrs Cretney played in supporting the machinations and ambitions of the Assistant Teacher. Her correspondence, records of meetings and her expressed views persuades the court she played an active role in supporting Mr Randazzo. I accept there was evidence of Mrs Cretney's passive acts of unco-operation as detailed by Ms Murphy. This includes, for example, in not assisting Ms Murphy as to the place where school equipment was stored; refusing to give her information as to why older children or children with special needs, not enrolled at Penrose Public School, were attending classes; and offering no explanation as to why a telephone line was connected to the assistant teacher's classroom. While these were Ms Murphy's complaints, other Principals joined in evidencing a failure by Mrs Cretney to support them in their role. Mr Irving also gave evidence of her unco-operative attitude. In one of the interviews with the Review Team, a parent reported, and it was recited in the Final Management Review Report that: "if she could fly a (assistant teacher's name) banner, she would". 116 On Mrs Cretney's behalf Ms Howell, of counsel, asserted she had provided full professional support to all Principals appointed to Penrose Public School. The applicant's notes, memorandums and affidavit evidence revealed otherwise. In Mrs Cretney's affidavit of 27 October 2003 (tendered in the respondent's case) by its tone and content I accept she expressed contempt for four of the previous Principals, namely, Mr Peaks, Mr Cameron, Ms Wallace and Ms Murphy and in doing so she gave covert and overt support to Mr Randazzo. 117 I accept Mrs Cretney may have been genuinely motivated to serve the interests of the students of Penrose Public School and the school community. However well intentioned, in providing such clear support actively and/or passively to the Assistant Teacher, whether he was the acting Principal or not, her actions were inappropriate. While the Review Team noted the difficulty in pinpointing the "passive" actions that made life so difficult for the various Principals, I accept there has been a demonstrated pattern of unco-operative behaviour from the applicant. When considered alongside those actions of the assistant teacher, it is evidence Mrs Cretney contributed to conduct which was at the heart of some of the difficulties faced by the various Principals at Penrose Public School causing them to ask for transfer, often on compassionate grounds.

Natural justice 118 Within the School Development Policy there are, clearly defined, steps to be taken for the conduct of a School Management Review. Those steps have been outlined above at [7]. The Policy put obligations on the Review Team to ensure the professional integrity of staff (key principle 3.2(j)). A Management Review has a defined objective relevantly related to the "management" of the school. When matters of a "disciplinary nature" (as identified by the Review Team) arose, the Review Team were required under 4.2 and 4.3 of the Policy to refer the matter to the Assistant Director General. In accordance with the Policy, the Review Team referred matters which "may" have been a breach of the Code of Conduct. The Assistant Director General had weighed up the issues raised and whether, if the Review continued, its objective could be achieved. The obligation to ensure the professional integrity of staff was considered by the Assistant Director General who required particular issues of concern be raised with the staff concerned. Mr Sutton determined the Review of the Management of Penrose Public School was to continue. The issues raised were put to the staff concerned through the second interview conducted. All except one of those matters of concern was put to the applicant. There was no response from Mrs Cretney. Five of the ten matters of concern raised with her in the second interview were recommended for further investigation (in accordance with 4.2 and 4.2 of the School Development Policy). 119 Further, I reject the Review made unfair "findings". In the referral of matters for a formal investigation there was an acknowledgement the limitations of investigations under the Management Review of a school to determine if there were disciplinary matters to be addressed. This was a fair conclusion and open to the Review Team. The referral of the issues was a proper step in the Management Review. Under the Policy, information obtained may be used in Departmental investigations (3.2(j)). 120 I am satisfied in the conduct of the Review, the treatment of the applicant was consistent with the Policy. The Policy, in its stages and steps, incorporated the principles of natural justice (recognised as procedural fairness in administrative law). There was no breach of natural justice as Mrs Cretney was given an opportunity to respond to all issues raised regarding her conduct except that of the newsletter. I accept, before publication, Mrs Cretney was not given an opportunity to respond to the issues regarding the distribution of the newsletter. However above at [99-108], I have found that prior to the finalisation of the Review, Mrs Cretney's replies to the issues raised in the second interview and the newspaper incident were submitted to the Department by the Union and given consideration. The Department determined not to adopt the Report's recommendation to transfer Mrs Cretney nor to send the matters for a formal investigation under disciplinary procedures. She was in the circumstances accorded procedural fairness. 121 The applicant also asserts the respondent published the edited Management Review Report and should not have. The edited Report was read out to a meeting convened through the P&C and the School Council. Parents were sent a copy of the Report. The Departmental procedures for a Management Review allow for such circulation. No one was given a guarantee of confidentiality and each person interviewed was informed of this fact. However, the Report did not name any person. It is true the staff titles were used but this was in the context of the performance of their duties related to the management of the school. I accept the Review Team under the Policy and stages outlined was authorised to discuss the final Report with all persons who had a stake in the implementation of the Recommendations. In this case, the school parents and interested community members (stage 5.5) were those who were identified as active and affecting the school's management difficulties and would be involved in most of the recommendations to ensure the recommended strategies in the Report (including the community's role in the school) were implemented. It is also of note over 100 community members attended the meeting to hear the result of the Review announced. They could, therefore, be held to be persons who had a stake in the Review implementation. 122 The applicant further claims the "purported findings" of the Review were false, inaccurate and defamatory. I do not accept there were any "purported findings". There were matters identified in "Recommendations" for further investigation not "findings". The only finding related to Mrs Cretney as stated in the edited Report and in the final Report was in Conclusion 2 of 14 conclusions. It reads: There has been and continues to be a significant breakdown in interpersonal relations within the school. This has been caused by the active and passive actions of the assistant teacher, often supported by the senior school assistant and key members of the community.

The relevant regulations dealing with alleged breaches of discipline are in the Education (School Administrative and Support Staff) Regulation 1998. Section 5 relevantly states: 5 Procedure: breaches of discipline by permanent employees For the purposes of section 28 of the Act, alleged breaches of discipline by permanent employees are to be dealt with by the Director-General in the same way as alleged breaches of discipline by officers and temporary employees of the Education Teaching Service are dealt with under the Teaching Service Act 1980 . 128 Therefore, the procedures to be followed for breach of discipline governing Mrs Cretney are outlined in the Education Teaching Service Regulation 2001 and relevantly read: 13 Officers who may deal with breaches of discipline In accordance with paragraph (a) of the definition of prescribed officer in section 82 of the Act, the positions within the Department that contain the following titles are prescribed as positions for the purposes of Division 6 of Part 4 of the Act in its application to the Education Teaching Service: Deputy Director-General Assistant Director-General Director General Manager Executive Director District Superintendent Disciplinary Inquiry Officer Senior Manager 14 Procedures for dealing with breaches of discipline (1) If it appears to a disciplinary authority that a member of staff may have committed a breach of discipline, the disciplinary authority may, after conducting a preliminary investigation into the matters relating to the alleged breach of discipline: (a) charge the member with the alleged breach in accordance with clause 15, or (b) deal with the alleged breach in accordance with subclause (2). (2) . . . (3) . . . (4) . . . (5) . . . 15 Laying of Charges (1) A charge may be laid by a disciplinary authority against a member of staff for an alleged breach of discipline orally or in writing. If the charge is laid orally, the member of staff must be furnished with a written copy of the charge within a reasonable time. (2) At the time the member of staff is charged by a disciplinary authority in writing or furnished with a written copy of the charge, the member must be directed to send a written reply to the authority within 14 days (or such other period of time as is agreed).

I accept the Review took account of the key principles and related the complaints about Mrs Cretney's conduct in their Conclusions only to its effect on the "management" of the school. The conclusion drawn affecting Mrs Cretney related in its terms only to the effect her conduct had on the management of the school. It was therefore not unfair. The fact that some matters were referred for "formal investigation" is a step envisaged under 3.2(j) where it is said such information can be used in departmental investigations. 132 The process followed regarding matters "which may be a breach of the code of conduct" I outline above at [118]. In summary, in accordance with the Policy the Review Team referred matters of concern raised in the Review to Mr Sutton. He determined the Review ought to proceed and the issues be put to the staff members. This step was one of procedural fairness. After the Report was finished its Recommendations were then sent to the Audit Committee. As outlined above at [54] and [104], the Audit Committee made a determination based upon the evidence before it, which included the Review material and Union submissions, not to accept the Recommendation of the Review regarding Mrs Cretney. The Assistant Director General agreed with the Audit Report and determined not to implement the Review Report's recommendations regarding investigation or transfer of Mrs Cretney. 133 I do not accept, and it was denied in writing by the Department, that the investigation ever became the first step in a disciplinary proceeding. But even if it did, an authorised person, the Assistant Director General, considered the matters, the investigation, the applicant's denial and determined not to initiate a disciplinary investigation. So while I do not accept there was a s14 investigation, if the full Report is seen as the investigation under s14, the denials of the applicant were by inference, weighed up at Audit and by the Assistant Director General and no charge laid. It would be a curious result if, arising from this litigation, an unfairness is found and the matters were referred back for disciplinary action notwithstanding the determination of the Audit and the Assistant Director General that there were no disciplinary issues. The applicant inferred the matter could not go to a disciplinary hearing because of the time constraints (the passing of eight years) yet she seeks the court to rehear all issues and reconsider all recommendations and conclusions of the Management Review by a consideration of evidence placed before it which she asserts, somehow could not be placed before a disciplinary tribunal.

Claim for Stress/Distress/Medical Loss 139 Section 106 is a statutory scheme and s106(5) does not recite heads of damage as developed in the common law (tort of negligence). The statute limits the form of "money orders" to "just compensation" directly related to the unfairness. 140 Mrs Cretney claims compensation for the stress she suffered in the conduct of the Review. She submitted the report and notes of Dr Mouroukas, her general practitioner as evidence that she presented to him on 3 April 2000 with insomnia, panic attacks and palpitations. He opined "she had been stressed regarding her employment". He further stated she suffers "chronic post traumatic stress disorder with major depression". She also relies upon the effect she describes that the meeting of 1 August 2000 had on her where the "findings" were read out and she felt "shocked and publicly humiliated". She remembered feeling a blood rush to her head and she reports hearing someone abuse her. 141 Mrs Cretney also claims she suffered the hurt and humiliation of being named in the Daily Telegraph newspaper and being asked to leave her position "to maintain the stability of the school". Mrs Cretney asserts after the publication of the Review Report she then suffered the indignity of the two Principals she then had to work for, Mr Phil Irvine and Ms Kate Murphy, taking the view that she was untrustworthy, disloyal or deceitful. She therefore lost her reputation and was defamed. 142 The Court has provided relief for a claim for "stress and suffering" but as the Full Bench cautioned in State of New South Wales v Banas at [105]: 105 Finally, on this issue we wish to emphasise that claims for stress and suffering or claims under a similar rubric must be carefully scrutinised. As it was cautioned in King v State Bank of New South Wales (No 2) there needs to be "a very careful approach" taken to the assessment of compensation for unfairness arising under such labels as "stress and suffering" and the precise basis for the award must be specified.

See also King v State Bank of New South Wales (No 2) (2002) 126 IR 407 at [110]-[115]. 143 I accept Mrs Cretney has a vulnerable personality. In June 2003, she has complained of another incident at work which has affected her and, by inference, seems to have brought about her first resignation. From the beginning of the announcement of the Review Team's investigation she objected to its conduct. I accept she attended at the doctors during the conduct of the Review in April 2000. While this was prior to the publication of the Report or mention of any of the specific events relied upon in the pleading as causing her distress, I accept Mrs Cretney clearly suffered stress in the conduct of the Review. I accept she continues to be distressed by the thought of the recommendations contained in the Review Report notwithstanding they were reviewed and not implemented. She clearly has a perception those recommendations were "findings" and further they were unfair "findings". 144 However, I have accepted that four of the Recommendations in the Reports arising from the information received in the conduct of the Management Review were not unfair. I have found that related to the newsletter issued, notwithstanding publication before she had opportunity to respond, Mrs Cretney's reply was given consideration before the Department acted on the Report Recommendations. I do not accept her obvious distress, be it as particularised in the medical evidence or symptomised through her behaviour over the last eight years, is reflective of any unfairness in the conduct of, or publication of, the Management Review Report. I reject the diagnosis of her general practitioner that she suffers "chronic post traumatic stress disorder with major depression" an identifiable psychiatric disorder not supported by qualified specialist diagnosis. However, I accept she had stress and still has distress. Unfortunately, I cannot accept her ongoing distress can be related to any unfairness in her employment contract. Therefore there should be no re-imbursement of her claim for medical expenses.

Conclusion 145 The circumstances surrounding the resignation of four Principals from Penrose Public School over a 10 year period entitled the Department to activate its School Development Policy and conduct a Management Review. When conduct of a potentially disciplinary nature was raised under that Review, the procedures of the Policy required an Assistant Director General's consideration as to whether the Review could achieve its aim if continued. I accept the Assistant Director General considered all issues and determined the Review proceed but, as a matter of natural justice and procedural fairness, the matters raised be put to those concerned. I accept the conclusions reached by the Review were open to it, fair and related to the Review's objective regarding the "management" of Penrose Public School. Mrs Cretney's refusal to answer some issues raised during her second interview contributed to the Recommendation for a "formal investigation". This was a procedure open to the Review Team under the School Development Policy. I further accept the Review Report was distributed to those with a stake in its conclusions - parents and the community members. The Review was not completed until after the Audit determined no disciplinary action was warranted and the Assistant Director General determined not to action the recommendation to transfer Mrs Cretney. The decision not to transfer Mrs Cretney was made by taking into account her submissions as to the issues identified (through the Union) as well as the possible effect of the recommendations on her personal circumstances. However, the other four Recommendations from the Review Report were to be implemented. I find Mrs Cretney was accorded procedural fairness and there was a compliance with the rules of natural justice. 146 The Department of Education and Training has obligations under statute and a duty to the public of NSW to ensure the efficient functioning of public schools within its administration. In the conduct of a justified inquiry into the management of Penrose Public School, I find there was no unfairness. I therefore reject Mrs Cretney's claim the Department's conduct of the Review led to an unfairness in her employment contract. I reject the claim that "findings" made in the conduct of the Review were unfair. I reject the claim that any distress she suffered/suffers is reflective of any unfairness in her employment contract. I do not accept she suffered damage to her reputation because of the conduct of the Departmental investigation into the management of Penrose Public School. Even if there is a public interest test to be applied to this litigation I find the Department has given the applicable members of staff and Mrs Cretney procedural fairness: assurances about professional integrity were complied with; the procedures were fairly defined and followed. 147 For all of these reasons, I make the following orders: 1. I declare the contract of employment between the parties was not an unfair contract within the meaning of s105 of the Act. 2. The application brought under s106 of the Act is dismissed. 3. Leave to relist as to costs.

Patricia Cretney v State of New South Wales

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