Plaintiff v First Defendant

2 The undertaking is enforceable. Orders will be made requiring the plaintiff to pay damages to the first defendant in the amount of $199,681.46.

3 The background to this proceeding is contained in the reasons of the substantive judgment published on 16 July 2019 ('the substantive reasons').[1] At that time, the plaintiff was employed as a senior solicitor at the State Revenue Office ('SRO'). The first defendant, the State of Victoria, was his employer. The second defendant is the Commissioner of State Revenue. He exercises delegated powers in respect of SRO employees.

4 The undertakings were recorded in consent orders made on 2 March 2018 ('the 2 March 2018 orders'):

1. Upon the Plaintiff by his solicitor undertaking to the Court to abide by any order that the Court may make as to damages in the event the Court is hereafter of the view that the Defendants suffered any [loss] by reason of giving the undertaking referred to herein that the Plaintiff ought pay.
2. And upon the Defendants by their counsel undertaking to the Court that the Defendants will not, until the determination of this proceeding, or as otherwise agreed between the parties or by further order of the Court, finalise the proposed discipline outcomes set out in the letters of 25 October 2017 and 7 February 2018 to the Plaintiff.

5 I shall refer to the undertaking in paragraph A above as the 'undertaking as to damages'. I shall refer to the undertaking in paragraph B above as 'the SRO undertaking'. As discussed next, it was not an undertaking given by the second defendant as he was not a party at that time.

6 At the time that the SRO undertaking was given, Mr Darren Joyce was the second defendant. He is the Executive Director Corporate Services, SRO. On 13 April 2018, consent orders were made removing Mr Joyce as a party to the proceeding. In May 2018, the plaintiff sought leave to add Mr Broderick as the second defendant.[2] This was unopposed. (Mr Broderick had the power to terminate employment whilst Mr Joyce did not.) In July 2018, orders were made joining Mr Broderick as the second defendant, and the plaintiff filed a further amended statement of claim reflective of this.[3]

7 It is the first defendant, the former employer, that claims damages. In the making of submissions, both parties referred variously to the SRO (which is not a named party) and at times to 'the defendants'. For convenience, in summarising the parties' key submissions below, I shall refer to them as being submissions by and in respect of 'the defendants'.

8 Familiarity with the substantive reasons, including the First and Second Allegations, will be presumed.

9 The evidence relevant to this proceeding, much of it in the form of correspondence exchanged between the parties, is largely agreed.

10 The plaintiff gave evidence by affidavit and was cross-examined. As to the affidavit evidence given by him,[4] as identified below, much of it was irrelevant. It is unnecessary and inappropriate to make findings concerning the irrelevant factual disputes ventilated by the plaintiff in this proceeding. I do not accept the non-factual assertions and conclusions drawn by the plaintiff and that he has deposed in his affidavit. Some are more appropriately the subject of legal determination and indeed some relate to legal proceedings elsewhere. I do accept that the plaintiff honestly tried to recall events and genuinely feels aggrieved. His fervour about the issues in this proceeding has however coloured his perception of events. This is evident from the use of accusing and emotional language in his affidavit affirmed on 16 September 2019, including the sub-headings. The plaintiff jumps to conclusions based on inferences he has drawn. On the other hand, Mr Joyce presented as a careful and measured witness. To the extent there is any conflict between the evidence of the plaintiff on the one hand, and the evidence of Mr Joyce on the other, I prefer the evidence of Mr Joyce. It is consistent and plausible. The plaintiff's attacks on Mr Joyce's credibility are dealt with further below.

11 The plaintiff subpoenaed Mr Broderick, the second defendant to give oral evidence, and he did so. I found Mr Broderick's evidence to be credible and reliable.

12 Mr Daniel Grey, Mr Brett Anderson and Ms Peta Jennings, all of whom work at the SRO, deposed affidavits on behalf of the defendants. Mr Grey was cross-examined. I find the evidence in respect of all three witnesses to be credible and reliable.

14 In Air Express Limited v Ansett Transport Industries (Operations) Pty Ltd, Gibbs J identified the purpose of an undertaking as to damages, enforcement of such an undertaking, and what loss could be assessed as damages:[5]

The object of requiring a plaintiff who seeks an interlocutory injunction to enter into an undertaking of this kind is to attempt to ensure that a defendant will receive compensation for any loss which he suffers by reason of the grant of the injunction if it appears in the event that the plaintiff was not entitled to obtain it. The insistence upon the giving of an undertaking is a very important, if not an essential, means of preventing injustice from being done by the court when it makes an order at an interlocutory stage, before the rights of the parties have been finally determined. The court has a discretion not to enforce such an undertaking, but unless the defendant has been guilty of conduct that would render it inequitable to enforce the undertaking it would seem just, speaking generally, that a plaintiff who has failed on the merits should recompense the defendant for the damage that he has suffered as the result of the making of the interlocutory order. However, it is perfectly clear, and it appears from the words of the undertaking themselves, that the only damages to which a defendant is entitled are those which he has sustained by reason of the grant of the injunction. The generally accepted view is that the damages must be confined to loss which is the natural consequence of the injunction under the circumstances of which the party obtaining the injunction has notice.

15 In Air Express, Gibbs J referred to causation and how the onus of proof to establish damage was caused by the undertaking rests upon the party seeking to enforce it:[6]

To order a plaintiff to pay damages where it appears that the party bound by the injunction would have acted as he did even if the injunction had not been granted, would be to give the undertaking an effect obviously not intended. The party seeking to enforce the undertaking must show the making of the order was a cause without which the damage would not have been suffered. It was further submitted that the onus lies on the plaintiff, against whom the undertaking is sought to be enforced, to disentangle any damage arising from the litigation from that which was caused by the making of the order. However, the onus of proof does not shift in this way; the defendant, who seeks to enforce the undertaking, must prove that the damage he has sustained was caused by the making of the order.

16 In Love v Thwaites & Anor, John Dixon J summarised relevant principles:[7]

In Davinski Nominees Pty Ltd v I&A Bowler Holdings Limited, Kaye J described the basis for the assessment of damages on an undertaking to the court as uncontroversial: damages flowing directly from the injunction and which could have been foreseen when the injunction was granted, following the decisions of the High Court in Air Express Limited v Ansett Transport Industries (Operations) Pty Ltd and European Bank Limited and Robb Evans of Robb Evans & Associates.

[After reference to Air Express]...The causal connection between the damage and the injunction is to be identified from the purpose for which the undertaking as to damages is designed to serve. That object is to protect a party from damage sustained in the event that it emerges that the plaintiff is not entitled to the relief sought. Its purpose is not to protect the defendant from damage otherwise sustained.

In European Bank, the High Court, in a joint judgment, affirmed Air Express, restating the significance of the nature of the undertaking. It is not a contract between parties or some other cause of action upon which a party could sue, but is given to the court for enforcement by the court. The joint judgment emphasised the phrase 'which could have been foreseen'. It is well established that for damage to be reasonably foreseeable it need only be damage of a type or character that is foreseeable or damage of a type or character that could not be considered unlikely. Roads Corporation submitted that the tortious concept 'reasonable foreseeability' is a wider concept than the contractual 'reasonable contemplation'. The High Court in European Bank makes it clear that the inquiry is not whether the actual loss suffered was foreseen at the time the undertaking was given, but is whether loss of a kind actually sustained could have been foreseen.

17 In Love v Thwaites & Anor, the plaintiff had contended, based on the common law doctrine of mitigation, that there was a failure to avoid or mitigate the damage flowing from the injunction.[8] John Dixon J described this concept of mitigation as misconceived. His Honour stated:[9]

Although there is much to be said for the view that the primary purpose of equitable damages is compensatory, the equitable obligation is less fettered by the usual common law notions that may limit recovery of damages. There does not appear to have been any express consideration in the cases of the concept of mitigation by a restrained party being compensated by the court. In my view, it is now established that the court, when assessing damages on an undertaking given to it to protect the restrained party from future loss, should not fetter itself with notions borrowed from other areas of law. The notion of mitigation can have a role of informing a decision maker by analogy, but that is all. The primary focus remains that identified by the High Court in European Bank in these terms:

In Air Express, Mason J said that there was little to be gained from an examination of the authorities dealing with causation of damage in contract, tort and other situations; the Court was better advised to look to the purpose which the undertaking as to damages is to serve and to identify the causal connection or standard of causal connection which is most appropriate to that purpose. A party seeking an equitable remedy is required to "do equity" and this is the origin of the requirement that the party giving an undertaking as to damages submit to such order for payment of compensation as the court may consider to be just. Given its origin and application to varied circumstances in particular cases, the process of assessment of compensation cannot be constrained by a rigid formulation.

...

The concept of mitigation that Mr Love contends for is misconceived.

18 Love v Thwaites & Anor was upheld on appeal.[10] In the appeal decision, Tate JA observed the following:[11]

While there is no suggestion that the usual undertaking was here given lightly, the consequences that have flowed from the failure of [the plaintiff] to make out his case at trial have been significant. In my view, these consequences provide a salutary lesson to practitioners and their clients to appreciate the conditions governing the grant of an interlocutory injunction. The usual undertaking carries serious risks; it would be wholly erroneous to view it as no more than a ritual or a formality.

19 Finally, consenting to an interlocutory injunction order, in circumstances where an undertaking as to damages is given, should not prejudice later rights. As Sir Donald Nicholls VC stated in Universal Thermosensors Ltd v Hibben:[12]

The defendants consented to the making of an order which included an undertaking in damages by the plaintiff as one of its terms. The plaintiff's position is no better, and the defendants' position no worse, than would be the case if the hearing of the motion before Warner J had run its full course and the judge had then made an order in the terms in question without the defendants' consent.

...

It would be altogether wrong if, by consenting to the making of an interlocutory injunction, a defendant was to be regarded as prejudicing his entitlement to claim damages under the plaintiff's undertaking

20 The inquiry to be undertaken by the Court was outlined by the High Court in European Banking Ltd v Evans:[13]

On the inquiry before [the trial judge] the first question was "What is the loss that is now alleged?", the second "Did that loss flow directly from the order of 18 May 2004?" and the third "Could the loss sustained have been foreseen at the time of that order?" The inquiry presented by the third question is an inquiry as to whether a loss of the kind actually sustained could have been foreseen. Contrary to the submission by the respondent..., the inquiry is not as to whether the actual loss suffered was foreseen at the time the undertaking was given. In the present case there was a finding by the primary judge, as indicated above, that the loss directly flowed from the order and his Honour further found that the loss could have been foreseen. That result should not have been disturbed.

21 This leads to the following questions, to be examined in turn here.

(a) What is the loss now alleged?

(b) Did it flow directly from the 2 March 2018 orders?

(c) If so, could a loss of the kind sustained been foreseen at the time of the 2 March 2018 orders?

22 The first defendant incurred a loss of $199,681.46 by reason of the SRO undertaking. This loss equates to the costs of the ongoing employment of the plaintiff from 2 March 2018 (date of undertaking as to damages) to 19 July 2019 (date of termination of employment). These amounts are comprised of salary, superannuation and payment in lieu of annual leave, and long service leave.

23 The evidence provided by Mr Grey, on behalf of the defendant, regarding the quantum of salary paid to the plaintiff is unreliable. Further, it is in contrast to an earlier application made by the defendants (and discussed further below). In the earlier application, the defendants did not seek to claw back the plaintiff's accrued entitlements and remitted amounts of tax and super. The first defendant seeks to "double dip" by clawing back amounts that it did not receive including gross amounts of taxation remitted to the Australian Taxation Office and superannuation remitted to the plaintiff's superannuation fund. The plaintiff deposes that he cannot access any payments previously remitted to his superannuation fund and the Australian Taxation Office.

24 Mr Grey is employed in the position of Payroll Manager, Human Resources. I found him to be an honest and reliable witness. In response the plaintiff's submissions, I make the following findings.

25 Firstly, I accept the evidence given by Mr Grey that he correctly calculated the payment to the plaintiff of wages and superannuation entitlements, together with accrued long service leave and annual leave entitlements, from the date the SRO undertaking commenced, namely from 2 March 2018, until termination of employment on 19 July 2019. I accept his evidence that the plaintiff was paid a gross amount of $199,681.46 for that period.[14] Mr Grey exhibits the plaintiff's termination pay slip together with other pay slips. I accept the veracity of those documents. The calculations are plausible. For these reasons, to the extent of any inconsistency, I prefer Mr Grey's evidence over that of the plaintiff.[15]

26 In relation to the evidence concerning the remuneration paid to the plaintiff, it is largely uncontroversial. For instance, it is common ground that the calculation by Mr Grey above is a gross one. It includes monies remitted directly to his superannuation fund and to the Australian Tax Office. The plaintiff's references to amounts that he received in his bank account are to nett amounts, and do not cover the period until the termination of his employment but rather March 2018 to March 2019. As to the plaintiff's reference to a proceeding in the Fair Work Commission regarding the quantum of his salary,[16] it is irrelevant. The issue here is the quantum of his actual remuneration, not what the plaintiff contends he ought to have been paid.

27 I accept that, at the time of affirming his affidavit, the plaintiff believed that he could not access any payments previously remitted to his superannuation fund and to the Australian Taxation Office. Whether or not he will be able to do so in future is another question entirely and is irrelevant to the question of what loss the first defendant sustained by reason of the SRO undertaking recorded in the 2 March 2018 orders.

28 I reject the plaintiff's submission that the first defendant is 'double-dipping' by seeking monies that were never paid to him, namely taxation and superannuation. These monies were paid in respect of his remuneration and so constitute part of the loss sustained by the first defendant in maintaining the plaintiff in employment pursuant to the SRO undertaking.

29 For completeness, Mr Grey was cross-examined regarding the plaintiff's leave arrangements. The plaintiff deposed to leave arrangements. It is common ground that the plaintiff did not seek personal or parental leave during the period of the undertaking.[17] He was not given it. Nor did he seek or take annual leave. It is a non-issue.

Did that loss flow directly from the 2 March 2018 orders?

30 The defendants say, but for the SRO undertaking recorded in the 2 March 2018 orders, the plaintiff's employment would have been terminated in late February 2018. The plaintiff disagrees. This is a key issue to determine. If the defendants cannot establish that, then they cannot establish the kind of loss they claim, namely the remuneration paid to Mr Tucker for the period of the undertaking until termination of employment, flowed directly from the orders.

31 On 9 June 2017, 4 July 2017 and 19 September 2017, in the course of both workplace investigations, the plaintiff was informed that if the allegations were proven, the disciplinary outcome may include termination of his employment.

32 On 6 February 2018, the investigator into the Second Allegations, made findings of serious misconduct.

33 The letter from Mr Joyce to the plaintiff dated 7 February 2018 states the proposed disciplinary outcome is termination of employment with immediate effect ('the 7 February 2018 letter'). It was effectively the step in cl 21.10(f) of the Victorian Public Service Enterprise Agreement 2016 ('VPSEA') as it provided the plaintiff with a sufficient opportunity to respond to the proposed disciplinary outcome by 16 February 2018. He did not, and by email dated 22 February 2018 from Mr Joyce to the plaintiff's then solicitors, the deadline for response was extended until 23 February 2018.

34 The plaintiff did not respond to the 7 February 2018 letter regarding the proposed disciplinary outcome. By 23 February 2018, as he had not responded, the next step was to be taken under cl 21.12 of the VPSEA. That is, the determination of the disciplinary outcome following the investigation findings and the recommendation in the 7 February 2018 letter. This was Mr Broderick's role. The evidence given by Mr Broderick is that, but for the SRO undertaking, the plaintiff's employment would have been terminated, with immediate effect, within a couple of days of the expiry of the deadline by which he had to respond, ie. 23 February 2018. Mr Broderick's evidence is that it would have taken him two days to make the decision. However, the step under cl 21.12 of the VPSEA was not reached because of what transpired in relation to the undertakings.

35 On 23 February 2018, the plaintiff's solicitors sent a draft further amended originating motion proposing to extend this proceeding to include the disciplinary process regarding the Second Allegations[18] and requesting the proposed outcome not be finalised. On the same date, the defendants agreed not to finalise the disciplinary outcome in relation to the Second Allegations, provided the plaintiff file the summons he proposed. Later that day, their solicitors wrote to the Court seeking a return date for the proposed summons which was subsequently filed by the plaintiff.

36 On 1 March 2018, as confirmed in an email to the Court from the plaintiff's solicitors of that date, the (then) defendants determined not to finalise the disciplinary outcome regarding the Second Allegations until the proceeding was determined, in reliance on the agreed position that the proceeding be determined on an expedited basis. On that date, the plaintiff was also given the opportunity to respond to the disciplinary proposal, without prejudice to his rights. Subsequently, the 2 March 2018 orders were made.

37 The usual undertaking was provided by the plaintiff. Practice Note SC CC 1 of the Commercial Court sets it out at paragraph 11.20:

To abide by any order the Court may make as to damages, in case the Court shall hereafter be of the opinion that any person shall have sustained any loss, by reason of this order, which the party giving the undertaking ought to pay.

38 The proposed disciplinary outcome was immediate termination of employment. Once the SRO undertaking was given, the plaintiff's employment could not be terminated while it was on foot. It would have defeated its purpose. Absent the SRO undertaking, the plaintiff's employment would have been terminated.

39 The step in cl 21.11 of the VPSEA (employee opportunity to respond to investigation findings and proposed disciplinary outcome) was completed. The plaintiff had been given an opportunity to respond, which was extended and did not. The step in cl 21.12 (determination of discipline outcome) was not completed while the SRO undertaking was operable because of the undertaking.

40 The affidavit evidence of Ms Peta Jennings, the Executive Director People and Culture, which is unchallenged, is that shortly after commencing at SRO, she read the investigation report into the Second Allegations. She formed the view that, given the seriousness of the findings against the plaintiff, it was appropriate he remain suspended on full pay and not be allowed to return to the workplace. She wrote to the plaintiff every four weeks, from 16 July 2018 until 24 June 2019, confirming his suspension with pay would continue. Ms Jennings' support of the suspension evidences the seriousness of the matter, and the need to ultimately terminate the plaintiff's employment.

41 The affidavit of Brett John Anderson sworn on 16 August 2019 ('Anderson Affidavit') evidences the termination of the plaintiff's employment after orders were made on 16 July 2019 discharging the undertaking. Mr Anderson deposed:

On or about 19 July 2019, I concluded that Mr Tucker's employment should be terminated with immediate effect.[19]

42 The defendants infer from the Anderson Affidavit that the plaintiff's employment would have been terminated in February 2018, but for their undertaking.

43 The evidence of both Mr Joyce and Mr Broderick is that various other matters raised by the plaintiff,[20] such as an earlier promotion, would not have affected the recommendation to terminate his employment.

44 There is no proper basis for the defendants' claim. There is no evidence before the Court that the relevant authorised delegate, Mr Broderick, would have terminated the plaintiff's employment as at February 2018.

45 The plaintiff sought urgent interlocutory relief in the Practice Court, not an undertaking. He deposes that he was surprised when the defendants gave the undertaking.[21] That the defendants volunteered it in lieu of an injunction.

46 The plaintiff provided his undertaking as to damages on the basis of representations made by the defendants that it was necessary to avoid a costly interlocutory hearing.

47 The defendants were obliged to give the plaintiff a reasonable opportunity to respond to the proposal to terminate employment and did not do so. The plaintiff did not abandon his right to respond. He could not do so while the disciplinary process was frozen by the SRO undertaking.

48 After the substantive reasons and consequential orders, the plaintiff wrote to the SRO on 18 July 2019, requesting a reasonable opportunity to respond to its letters proposing disciplinary outcome. This was disregarded and his employment was terminated with immediate effect. There were many matters he wished to raise with his employer at the time. The Fair Work Commission will consider whether the termination of his employment was harsh, unjust or unreasonable pursuant to the Fair Work Act 2009 (Cth).

49 It is necessary to retrace some steps before reaching the point where the undertakings were given.

50 By letter dated 27 November 2017 from the plaintiff's solicitors to Mr Joyce, notice was given of a proposed proceeding in this Court, and the intention to seek an urgent injunction, absent certain demands being met.[22] This proceeding was initiated by the plaintiff on 12 December 2017. The plaintiff sought, amongst other things, an interlocutory injunction.

51 By letter dated 12 December 2017, from the defendants' solicitors to the plaintiff's solicitors,[23] the defendants indicated that if the proposed proceeding had been commenced, and if they were served with originating documents in respect of the proceeding before close of business on Friday 22 December, they would offer an undertaking.

Further to our comments above, we understand that the interlocutory injunction sought is intended to relate only to the [First Allegations] Investigation, and not to the [Second Allegations] Investigation. Indeed, there is, as yet, no proposed disciplinary outcome in relation to the [Second Allegations] Investigation.

We note that on 25 October 2017, your client was advised of the proposed disciplinary outcome of the [First Allegations] Investigation, which found several allegations of misconduct to be substantiated. The disciplinary outcome proposed in relation to the substantiated misconduct is a formal warning and a direction to undertake appropriate training regarding your client's obligations under various applicable policies.

As you are likely aware, the SRO is presently awaiting your client's response to the proposed disciplinary outcome and has therefore not reached a final decision with respect to the disciplinary outcome of the [First Allegations] Investigation.

In light of this, we are of the view that the interlocutory relief in the Originating Motion is not available to your client, given that a disciplinary outcome has already been proposed and communicated to your client.

Accordingly, and as confirmed by you, we understand that the interlocutory relief to be sought is a prohibition on the Defendants reaching a final decision with respect to the disciplinary outcome of the [First Allegations] investigation, until the Proposed Proceedings are resolved. This is so despite the wording of the draft Originating Motion, which is inaccurate in that respect.

We are instructed that if the Proposed Proceedings are commenced and the Defendants are served with the originating documents on or before close of business on Friday 22 December 2017, the Defendants will undertake in writing that the disciplinary outcome of the [First Allegations] Investigation will not be finalised until the Proposed Proceedings are concluded. That is, the warning [proposed as an outcome of that investigation] will remain as a proposed disciplinary outcome only, and will not proceed to finalisation until that point.

Whilst the Defendants do not consider that your client will succeed in obtaining the ultimate relief to be sought in the Proposed Proceedings, the defendants are willing to provide such an undertaking to avoid the need for a costly interlocutory hearing, consistent with their obligations as Model Litigants.

Please confirm whether your client is comfortable with the above course of action and amend the Originating Motion accordingly.

(emphasis in italics added)

52 Pausing there, the plaintiff's submission about the defendants representing the undertaking as to damages was necessary to avoid a costly hearing refers to the letter above. It is evident from the letter above, that the comment is made in relation to the proposed disciplinary outcome of the First Allegations, not the Second Allegations. The findings in the investigation report into the Second Allegations and proposed disciplinary response were yet to occur.

53 By letter dated 15 January 2018 from Mr Joyce to the plaintiff's solicitors,[24] reference was made to the investigation report into the First Allegations, and the proposed discipline outcome of it, a formal warning and direction the plaintiff undertake appropriate training. Mr Joyce then made reference to the plaintiff disputing the conduct of that investigation and the proposed discipline outcome and then provided the undertaking.

In accordance with the position stated in Maddocks' correspondence to you dated 12 December 2017, I and the State Revenue Office hereby undertake that, until the hearing and determination of the Proceeding or other order of the Court, the proposed discipline outcome in respect of the findings made in the [First Allegations] Investigation will not be finalised.

54 On 6 February 2018, Mr Joyce received the report into the Second Allegations. He wrote to the plaintiff the following day. The 7 February 2018 letter states:[25]

I now propose a discipline outcome in accordance with clause 21.10(f) of the VPS Agreement.

...

Given that the Key Misconduct constitutes serious misconduct, I propose to recommend to the Commissioner of State Revenue that your employment be terminated, with immediate effect.

...

Before the proposed discipline outcome is finalised, in accordance with clause 21.11 of the VPS Agreement, I provide you with an opportunity to respond to the findings and proposed discipline outcome. Please provide your response to me, in writing, by 5.00pm on Friday 16 February 2018.

...

55 The 7 February 2018 letter did not propose a date that the immediate termination of employment would come into effect. That is unsurprising given that it extended the plaintiff with an opportunity to respond to that proposed disciplinary outcome.

56 On 13 February 2018, the plaintiff's solicitors wrote to Mr Joyce.[26] The letter required the defendants provide a copy of the investigation report into the Second Allegations in a form using identifiers for each customer in place of their names and then, from the date that the plaintiff's solicitors received the redacted materials, provide two weeks for the plaintiff to respond to the 7 February 2018 letter. The 13 February 2018 letter concluded:

In the absence of agreement to the above, noting that you have required a response from our client by 5:00pm on Friday 16 February 2018, our client instructs that we immediately issue a Summons in the existing Supreme Court Proceedings (SCI 2017 05032) to:

(i) Amend those proceedings to include such allegations about this aspect of the investigation as he may be advised; and

(ii) Seek urgent injunctive relief preventing your client from finalising the proposed disciplinary outcome we are instructed has been suggested in the letter from you.

For completeness sake, this and other correspondence will be tendered to the court on the question of notice and costs.

Should you wish to discuss the matter please do not hesitate to contact our [solicitor].

57 On 14 February 2018, Mr Joyce responded to the plaintiff's solicitors by email.[27] He stated, amongst other things, that the SRO 'is willing to extend the time by which Mr Tucker must respond to the SRO's findings and proposed discipline outcome until 5:00pm on Thursday, 22 February 2018'.

58 On 16 February 2018, the plaintiff's solicitors responded to Mr Joyce.[28] The letter concluded that in the absence of various information and a 'properly redacted [investigation] report... our client reserves his rights to seek urgent injunctive relief with respect to this aspect of the investigation'.

59 Later on 16 February 2018, Mr David Heywood of the SRO responded on behalf of Mr Joyce, by email to the plaintiff's solicitors.[29] Amongst other things, he rejected the suggestion that a redacted report should be provided to the plaintiff.

60 On 21 February 2018, the plaintiff's solicitors responded by letter to Mr Joyce.[30] The letter asserts, amongst other things, that the plaintiff had been given six days to redact the report and seek legal advice and reiterated that a time extension was sought. The letter states:

... please confirm that you will take no further action in this matter by 4.00pm today, failing which, our client has instructed us to seek urgent injunctive relief tomorrow in the Supreme Court as previously foreshadowed.

61 On 22 February 2018, Mr Joyce extended the deadline for the plaintiff to respond to the proposed discipline outcome by 5.00pm on 23 February 2018.[31] He also stated:

Mr Tucker has been provided with all information necessary to respond, including an unredacted copy of the investigation report and attachment. He has also been provided with sufficient time to respond, being a total of 16 days.

62 Evidently, by 23 February 2018, the plaintiff believed that the proposed discipline outcome, namely termination of employment, was imminent. His solicitors indicated that an injunction would be sought, and wrote in email correspondence to the Court that the proposed discipline outcome was to be finalised by 5pm on that day. On that day, the plaintiff's solicitors wrote to the defendants' solicitors:[32]

...Our client has considered his position and instructs that he is not prepared to make the appropriate redactions to the report. Further, he instructs that he is no longer prepared to continue with the process given the numerous concerns he has previously ventilated which have not been addressed.

Accordingly we have been instructed to amend the existing Supreme Court proceedings to seek relief concerning the [Second Allegations] investigation.

Please find enclosed a draft further amended originating motion, an affidavit affirmed by our client this morning and a summons.

Our client instructs that this matter could be dealt with in one of three ways.

....

Second, your clients may be prepared to give an undertaking in writing that they will not seek to finalise the proposed discipline outcome until such time as the Court lists our client's summons for hearing in the ordinary course. In that event, our client will make the necessary application to the list judge by email in accordance with the practice note for a hearing today and file the summons and affidavit once a day is provided.

Third, in the absence of agreement as to the above, our client will seek that the matter be listed urgently today for hearing in the practice court and press for an urgent injunction.

In the circumstances where your client has previously given an undertaking [in respect of the other workplace investigation] and in circumstances where it is a model litigant we trust that option three would not be the path it seeks to take.

However, given that your client proposes to finalise the proposed disciplinary outcome today, our client needs to take urgent steps. Accordingly, we invite your client to notify us of its position by noon today failing which he will need to take steps in accordance with the third option above.

(emphasis in italics added)

63 Later that day, the plaintiff's solicitors wrote to the Court attaching an interlocutory application form seeking, amongst other things, 'an injunction preventing the defendants from finalising a proposed disciplinary outcome'. The email states:[33]

The proposed discipline outcome was to be finalised by the defendants at 5pm today. In discussion with [the defendant's solicitor], the defendants will not proceed to do so on the basis that my client files his summons and affidavit as soon as the court provides us with a return date for this application. The defendants have reserved their rights in this regard, and require that the application be listed for hearing within 28 days.

(emphasis added)

64 The defendants' solicitors respond a short time later, and after referring to discussions between solicitors stated:[34]

We confirm that, in light of the steps taken by your client to file the Interlocutory Applications Information Form with the Court, our client undertakes that it will not finalise the proposed discipline outcome set out in its letter of 7 February 2018, until the return date of the summons to be filed with the Court for 28 days from the date of this email, whichever is earlier in time.

65 Subsequently, in an email to the Court dated 1 March 2018, the defendants' solicitors wrote, amongst other things:[35]

The lawyers for both the plaintiff and defendants have jointly prepared this email to respectfully enquire as to whether any indication can be given as to when a two day trial in this matter could be listed.

The parties are in agreement that an expedited hearing date should be sought. This request is made to attempt to obviate the need for the interlocutory injunction sought by the plaintiff to be determined and given that the plaintiff remains employed but has been suspended on full pay since July 2017, while the investigations which are the subject of the dispute between the parties are on foot.

(emphasis added)

66 On the same day, the defendants' solicitors wrote to the plaintiff's solicitors ('the 1 March 2018 letter'), stating, amongst other things:[36]

Noting that the Court asked that the parties file consent orders, if a consent position is reached, by midday tomorrow, we have prepared the attached proposed minute of consent orders for your consideration. Of course, if the Court provides an indication as to the first available hearing dates prior to midday tomorrow, we can discuss any necessary amendments to the proposed orders.

Please advise whether your client is agreeable to the proposed minute of consent orders as drafted.

As you will see, the proposed orders contemplate an undertaking by the Respondents which would continue until the Proceeding is concluded, however that might occur. This means that the proposed discipline outcome will not be finalised before that time. On that basis, and for the avoidance of doubt, we confirm that the State Revenue Office would be happy to receive and consider any response your client wishes to provide to the findings and proposed discipline outcome, whether under protest or otherwise, whilst the Proceeding remains on foot.

67 As discussed in the background section above, the 2 March 2018 orders record the undertakings.

68 For completeness, I address the defendants' submission that I should infer from the termination of the plaintiff's employment, which occurred shortly after orders were made in the substantive proceeding, that employment would have been terminated in February 2018, but for the undertaking. I do not draw that inference. The later act of terminating employment simply demonstrates that the defendants acted consistently with their earlier proposal to terminate employment.

69 During the investigation of the First and Second Allegations, the plaintiff was suspended from employment. The defendants relied on cl 21.7(v) of the VPSEA. Cl 21.7(a) of the VPSEA provides.

Directions

(a) Where Employee misconduct is alleged, the Employer may do any of the following:

(i) make an initial assessment of the alleged misconduct before commencing the formal process to determine if an investigation is required in accordance with clause 21.10;

(ii) determine that it is appropriate to immediately commence an investigation of the alleged misconduct in accordance with clause 21.10;

(iii) direct the Employee to proceed immediately to perform alternative duties or work at an alternative place of work;

(iv) direct the Employee not to speak to other Employees of the Employer about the matter or not to visit certain places of work; and/or

(v) suspend the Employee with pay.

70 Clause 21.7(a) does not provide the employer with an option to suspend without pay. Suspension must be with pay. Mr Joyce's evidence is that he understood the VSPEA required that an employee be paid while suspended.[37]

71 The plaintiff challenged Mr Joyce's authority to suspend employees. I find Mr Joyce had authority to suspend employees.[38]

72 The plaintiff's suspension from work continued after the investigators provided their findings, and then after the SRO undertaking was given. The suspension with pay continued until the termination of the plaintiff's employment on 19 July 2019. It is for the period from the SRO undertaking to termination of employment that the first defendant seeks to be compensated.

73 Evidently, the defendants relied upon cl 21.7(b) of the VPSEA and reviewed the plaintiff's suspension every four weeks. They wrote to the plaintiff confirming this. Mr Joyce deposed that he wrote to Mr Tucker every four weeks to confirm the suspension in the period until 27 June 2018.[39] The evidence of Ms Jennings is that for the period from 16 July 2018 until 24 June 2019, she was responsible for reviewing the plaintiff's continuing suspension. Ms Jennings deposed that, given the circumstances underpinning the plaintiff's suspension did not change, she wrote to him every 4 weeks confirming his suspension with pay would continue.[40]

(b) In the event that the Employer suspends the Employee with pay under clause 21.7(a)(v), the Employer will:

(i) review this decision no later than a date which is four weeks after the commencement of the suspension; and

(ii) confirm whether the suspension is to continue or is no longer necessary.

(c) The Employer will continue to review any decision regarding an Employee's suspension every four weeks thereafter, until the end of the misconduct process in accordance with this clause 21.

75 It is common ground that the process in cl 21.12 of the VSPEA was not reached before the undertaking was given. Clause 21.12 is as follows:

(a) The Employer will consider:

(i) the findings of the investigator; and

(ii) any recommendations as to the appropriate disciplinary outcome; and

(iii) any response of the Employee (including any admission of misconduct under clause 21.9); and

(iv) any prior disciplinary outcomes,

and then determine the discipline outcome that is to apply to the Employee. The discipline outcome must not be disproportionate to the seriousness of the matter.

(i) no action;

(ii) performance management;

(iii) formal counselling;

(iv) formal warning;

(v) final warning;

(vi) assignment of the Employee with or without their agreement to a role at a classification level or Value Range lower than the Employee's current classification level or Value Range:

• Where no suitable positions are available at the Employee's existing work location, the disciplinary outcome may also include a transfer of the Employee with or without their agreement to a different work location;

• Where the disciplinary outcome includes a transfer of the Employee to a different work location, this will not preclude the Employee from being entitled to payment of any applicable relocation allowance in accordance under clause 32.10;

(vii) transfer of the Employee with or without their agreement to a different work location at the Employee's current classification level (which will not preclude the Employee being entitled to payment of any applicable relocation allowance in accordance with clause 32.10); or

(viii) termination of employment.

(c) The Employer will advise the Employee of the discipline outcome in writing and a copy will be placed on the Employee's personnel file.

Did the loss flow directly from the 2 March 2018 orders?

76 It is common ground that the plaintiff's employment could not be terminated until the cl 21.12 process was concluded. The SRO undertaking is reflective of the fact that the decision to terminate employment had not yet been made. There is no evidence, nor do the defendants submit, that the decision to terminate employment was made prior to the 2 March 2018 orders. However, as discussed above, by 23 February 2018 the parties proceeded on the basis that the termination of employment was imminent. The determination was initially halted by the interim undertaking given in correspondence, and then later by the SRO undertaking in the 2 March 2018 orders. As a consequence, the cost of maintaining the plaintiff in employment flowed from that undertaking.

77 This finding is reinforced by the following evidence.

78 Mr Joyce deposed that, as at 22 February 2018, he considered all steps required under clause 21 of the VPSEA had been completed, subject to finalisation of the proposed disciplinary outcome by the second defendant under cl 21.12.[41]

79 Mr Joyce deposed that if the 23 February 2018 letter from the plaintiff's solicitors had not been received, and the SRO undertaking not been provided 'at 5.00pm on 23 February 2018, in the absence of any response to the [Second Allegations] Proposed Discipline Outcome from [the plaintiff], in accordance with the internal procedure set out in the Misconduct Policy, I would have recommended to Mr Broderick that [the plaintiff's] employment be terminated with immediate effect'.[42]

80 Mr Broderick gave the following evidence in response to questions from the defendants' counsel:[43]

Mr Broderick, can I take you to February 2018. By that stage, had you reviewed the ... report [into the Second Allegations]?‑‑‑Yes.

And had you read the - Mr Joyce's proposed discipline outcome of 7 February 2018?‑‑‑Yes, I had, Your Honour.

And were you aware that Mr Tucker was given, eventually, till 23 February to respond to that proposed discipline outcome?‑‑‑Yes, I was, Your Honour.

If the matter after 23 February 2018 moved to you to decide what to do with Mr Tucker, what decision would you have made?‑‑‑I would've approved the recommendation from Mr Joyce. Um, I read the [Second Allegations investigation] report..., and as I mentioned earlier to the court, um, it was clear that Mr Tucker had breached the VPS values, the VPS code of conduct, the SRO code of ethics, ah, the SRO, um, ah, the SRO, ah, I said the ethics one. There was two others, but the - I felt that he had breached the, ah, um, ah, about five policies, and, ah, he'd done that numerous times. So, um, I would've had no hesitation to approving the recommendation at the time.

And how long, do you think, it would've taken you to make the decision to terminate Mr Tucker when the matter ‑ ‑ ‑?‑‑‑Ah, I ‑ ‑ ‑

‑ ‑ ‑ at your point?‑‑‑ ‑ ‑ ‑ wouldn't have done it on the day, but I would've taken, probably, 48 hours to, ah, re-read [Second Allegations investigation] report to make sure I was satisfied with it. I would've then, um, ah, examined the letter from Mr Joyce to Mr Tucker, and then made my decision within 48 hours.

81 I accept Mr Broderick's evidence that he would have made the decision to terminate the plaintiff's employment within 48 hours.

82 Damages are sought by the first defendant from the date of the undertaking as to damages. This is approximately one week after 23 February 2018. By then, the plaintiff's employment would have been terminated but for the SRO undertaking. Ultimately, the plaintiff was unsuccessful in the substantive proceeding.

83 I find that the first defendant's loss flowed directly from the 2 March 2018 orders recording the SRO undertaking.

If any loss, could a loss of the kind sustained been foreseen at the time of the 2 March 2018 orders?

84 The defendants say that the loss, in the form of remuneration paid to the plaintiff, was foreseeable at the time the plaintiff gave the undertaking as to damages. It was the most obvious form of loss that his employer would suffer. Further, it was foreseeable that the first defendant would pay taxation and superannuation in respect of the remuneration paid to the plaintiff.

85 The plaintiff says that the termination of his employment was not foreseeable. He rejects the defendants' contention that it was highly probable that his employment would have been terminated as at February 2018. He says it is inconsistent with the SRO continuing to pay for his training and qualifications, and emailing him newsletters and other such information. In his affidavit of 16 September 2019, he deposes to and exhibits documents evidencing these matters.

86 But for the SRO undertaking, the plaintiff would not have received remuneration during the period it operated. His employment would have been terminated beforehand. The plaintiff was plainly aware that he was receiving remuneration from the first defendant during the period of the SRO undertaking. The plaintiff is a solicitor and was legally represented at the time he gave the undertaking as to damages. I find that the first defendant's loss, in the form of the remuneration it paid in respect of the plaintiff, was reasonably foreseeable.

87 The plaintiff's contention that the termination of his employment in February 2018 was not foreseeable is in contradiction to contemporaneous events, discussed above. In particular, his action in seeking the interlocutory injunction and the correspondence from his solicitors. The steps taken subsequently by the SRO to which he refers, namely providing him with newsletters, paying for his training, qualifications etc, were not inconsistent with that. They were consistent with the effect of the SRO undertaking, namely to maintain his employment.

88 Mr Joyce gave evidence that the plaintiff had written to the SRO several times (while on suspension) about continuation of professional development training that was required to maintain the plaintiff's practising certificate.[44] Given that the plaintiff was on suspension, and his employment had not been terminated, Mr Joyce said it was appropriate not to disadvantage the plaintiff by withholding approval for this, and that it would be unjust to do so in the circumstances.[45]

89 I found Mr Joyce to be a credible and reliable witness. I reject the plaintiff's submissions that the evidence given by Mr Joyce was unreliable. For completeness, I will address some of those particular submissions.

90 Firstly, I find Mr Joyce's explanation regarding the retitling of his position[46] to be plausible. I do not draw any negative inference from Mr Joyce's initial recollection in cross-examination that he thought his position was retitled in 2017 but that he would have to check his documents, and then saying it was actually 2016 upon being taken to his affidavit deposing as to that.

91 Secondly, there is no inconsistency between Mr Joyce's evidence that the matters alleged against the plaintiff were not brought under privacy legislation and his letter of 9 June 2017[47]. That letter states that if the allegations are proven they may constitute, amongst other things, a breach of the Privacy and Data Protection Act 2014. Mr Joyce's evidence about privacy legislation was given under cross-examination in response to a line of questioning from the plaintiff about the circumstances in which employment may be suspended or terminated for breaches of privacy and then, more particularly about a recommendation that the plaintiff's employment be terminated. Mr Joyce said the recommendation was not about a privacy issue but about access to a database. He said it could become a privacy issue if that data was disclosed. Mr Joyce's evidence was that his view is that the Privacy and Data Protection Act encompasses data protection as well as privacy.[48]

92 Thirdly, I do not consider Mr Joyce's evidence to be unreliable because, on the one hand, he said that he was unaware of whether the investigator into the Second Allegations looked up certain information regarding the plaintiff's family, and on the other hand, the plaintiff says the investigation report into those allegations says the investigator did. Mr Joyce's evidence was that there was a reference in the investigation report to someone with the same surname as the plaintiff's father. I accept his evidence that he did not know whether the investigator looked up the family information.[49]

93 Fourthly, I do not consider there to be any inconsistency between Mr Joyce's evidence, given under cross-examination, that he did not know the intricacies of the plaintiff's day-to-day work, his affidavit evidence deposing as to the plaintiff's role as a Senior Solicitor, and the conclusion that the plaintiff could not responsibly be allowed to remain in the workplace in any capacity where he may have access to confidential information.[50]

94 Fifthly, in respect of the First Allegations, I do not consider there is any inconsistency between Mr Joyce's evidence that he was unaware of the payment to an employee ('Ms M') on her departure although he was responsible for human resources at the time. Mr Joyce's evidence was that he did not have knowledge of Ms M's post-departure circumstances and, as to payments, that was information the payroll officer would have.[51] I accept Mr Joyce's evidence.

95 Sixthly, there is no inconsistency between Mr Joyce's evidence that he could not say when the SRO, as an organisation, became aware of certain allegations in the 9 June 2017 letter, and an email dated 9 June 2017 (Exhibit D2). In that email to Mr Joyce, a branch manager at the SRO writes of allegations against the plaintiff that have recently been brought to his attention, the inquiries he has made, and his request for a formal investigation. Mr Joyce's evidence was that an individual would have been appraised but he did not know the date when allegations were first raised.[52] The email does not state the date that the branch manager first became aware of the allegations.

Are there other factors relevant to the assessment of compensation?

96 The remuneration paid to the plaintiff should be characterised as an 'avoidable loss' in the following circumstances.

97 Firstly, there is no automatic entitlement to damages. The SRO undertaking was on a voluntary basis, and it was a discretionary matter under the VPSEA to put him on fully paid gardening leave.

98 Secondly, the plaintiff was ready, willing and able to work during the period of the undertaking. His evidence as to this was unchallenged. By choosing to pay the plaintiff for services not rendered, the first defendant did not mitigate its loss. It was required to seek value for the wages paid to him and did not do so, which the plaintiff says raises serious questions regarding its probity and governance. The plaintiff refers to his evidence and Victorian Public Sector Policy regarding suspension on full pay, and says the preferred approach is for the employee to remain in the workplace during an investigation. He could have been deployed into another role at the SRO or elsewhere by the first defendant. There were approximately 580 roles within the SRO and as at June 2018, 251,312 public sector roles. The plaintiff could have worked from home and was willing to work from home. He could have done SRO work which did not require him to access taxpayer information, or been provided with specific taxpayer information in order to perform his normal duties. The plaintiff gave evidence that he had access to general taxpayer information in various databases throughout his suspension.

99 Thirdly, the delays in the investigation and litigation were the SRO's own doing. The SRO cannot complain about delays associated with continuing to employ the plaintiff when it paid him to stay home for nine months prior to the defendant's undertaking.

100 Fourthly, the plaintiff was not dismissed immediately despite the SRO's repeated claims of the seriousness of the allegations made against him. If the allegations and consequential suspension had substance then the SRO should have terminated the plaintiff's employment with effect at any time prior to his suspension. Instead, it utilised its discretion provided under cl 21.7(a)(iv) of the VPSEA and elected to put him on gardening leave for a period of over two years.

101 Fifthly, the first defendant has not mitigated its losses by expending a disproportionate and unreasonable amount of legal fees in litigation with the plaintiff.

102 By submissions and affidavit, the plaintiff made various attacks on the credibility of the SRO and various employees, for instance that it did not with integrity or breached privacy. He submitted that the defendants did not have 'clean hands' and accordingly should not be entitled to damages.

103 The duty to mitigate is not a high threshold to meet. The onus is on the plaintiff to show a failure to mitigate. Given the significance of the investigation report into the Second Allegations, and the finding that the plaintiff had engaged in serious misconduct, it was simply untenable that he would have gainful employment at the SRO, or working from home for the SRO, or in some other role in the public sector. The recommendation for summary dismissal was already in place. The plaintiff had been provided with an opportunity to respond that he did not meet.

104 There were recommendations for the plaintiff's suspension during the period. It was simply unacceptable to have him in any other role in good conscience.

105 The process in cl 21 of the VPSEA runs rights through to determination of the discipline outcome in cl 21.12.

106 The suspension with pay option in cl 21.7(a)(v) of the VPSEA does not contemplate the employee staying in their active role. If that were the case, there would be no work for that clause to do. The only meaningful construction of cl 21.7(a)(v) is that the employee does no work while they are on pay. That is consistent with the fact the employee may be facing serious misconduct allegations. Clause 21.7(b) reflects the seriousness of this step by requiring review every four weeks until after the suspension until the end of the cl 21 misconduct process.

107 If the plaintiff was to be provided with alternative duties during his suspension, his suspension under cl 21.7(a)(v) would need to be revoked. Suspension would need to be under cl 21.7(a)(iii).

108 I accept the plaintiff's evidence that he was ready, willing and able to work.

109 The plaintiff was not on garden leave. He was suspended pursuant to cl 21 of the VPSEA.

110 Suspension with pay under cl 21.7(a)(v) of the VPSEA does not contemplate the employee working from home. It is a suspension from duties.

111 The question is whether or not the first defendant mitigated its loss for the period of the undertaking. Under cl 21.7 of the VPSEA, the employer has the discretion as to what direction to give the employee pursuant to that clause. I accept Mr Joyce's evidence that in light of the investigator's findings regarding the Second Allegations, which he accepted, he formed the view that allowing the plaintiff to return to the workplace in any capacity would pose an unacceptable risk to the security of taxpayer information held by the SRO and the SRO's integrity as the public service body entrusted to protect that information.[53] I accept his evidence that given the investigation findings, it was inappropriate to redeploy the plaintiff elsewhere within the Victorian public sector.[54] It was reasonable and appropriate not to redeploy the plaintiff into alternate roles in circumstances where the investigation findings were accepted, and the proposed disciplinary outcome was immediate termination of employment.

112 As to the plaintiff's submission that the defendants delayed litigation, that is a discretionary factor that may be considered, particularly where there is delay in seeking to enforce the undertaking. However, here there was no such delay.

113 The plaintiff submits that the dispute between the parties could and should have been determined when he foreshadowed his applications for injunctive relief and that it was not adjudicated because the SRO undertaking was offered to avoid the need for a costly interlocutory hearing. This does not amount to delay in circumstances where (a) the plaintiff accepted the proffered undertaking and (b) the hearing was an interlocutory one. Rather, it is consistent with the parties acting in a timely manner in taking the steps towards a substantive trial. Indeed, at that time, the correspondence from the defendant's solicitors of 1 March 2018, referred to above, indicates the parties had agreed that there be an expedited trial. As matters unfolded, this did not occur. Both parties made interlocutory applications. These are discussed further below.

114 For completeness, I will address a number of submissions made by the plaintiff that were irrelevant to the assessment of damages.

115 Firstly, it is immaterial as to what databases the plaintiff could access during his suspension. The fact is that he was suspended pursuant to cl 21.7(a)(v) of the VPSEA.

116 Secondly, the plaintiff's suspension from work in the period prior to the undertaking to damages, including the duration of the investigations, is not relevant to the questions here. Damages are not claimed for that pre-undertaking period, and nor could they be. For the same reason, the plaintiff's submissions regarding delays during the investigations are irrelevant.

117 Thirdly, the plaintiff gave evidence as to a privacy complaint he had made. This trial was not the forum to agitate it. In particular, whether or not the investigator of the Second Allegations accessed the plaintiff's family information is irrelevant to this trial and no finding need be made in relation to it. Similarly, the issue of whether or not Mr Joyce accessed such information. Further, the issue of what was discussed between Mr Joyce and the plaintiff on the day he was first suspended regarding the plaintiff taking a taxi home and his home address, is irrelevant. These issues and allegations all predate the undertaking.

118 Fourthly, the issue of whether or not the plaintiff's employment should have been terminated immediately given the seriousness of the allegations (rather than being subject to two investigations) is irrelevant, illogical and inconsistent with other submissions made by the plaintiff.

119 Fifthly, it is immaterial that the SRO undertaking was volunteered. As discussed in Universal Thermosensors Ltd v Hibben above, this does not later prejudice its rights.[55] The SRO undertaking was given to the Court and recorded in the 2 March 2018 orders, as was the undertaking as to damages. The parties were bound by their undertakings.

120 Sixthly, the amount that the defendants have spent on legal fees is irrelevant to the assessment of damages. The damages claimed are to compensate the first defendant for loss regarding the remuneration it paid in respect of the plaintiff during the relevant period.

121 Seventh, the attacks on the SRO and its employees as to credibility, in relation to matters unrelated to this trial, are irrelevant. What has been put to the Court are not materials that go to establishing whether or not the defendants acted with 'clean hands' in respect of this proceeding. Indeed, there is no evidence before the Court establishing that the defendants do not have 'clean hands'.

122 Eighth, the merits of the First and Second Allegations are irrelevant to the issues in this trial. In contradistinction, the plaintiff's lack of success on the merits in the substantive proceeding is relevant here.

123 The plaintiff's agitation of irrelevant issues during the trial resulted in a trial that should have been, at the most, two days, becoming a three day trial.

124 Turning now to abuse of process allegations made by the plaintiff.

125 By orders made on 18 July 2018, McDonald J entirely dismissed the defendants' summons filed on 8 June 2018 ('the defendants' summons'). In that summons, the defendants sought to be released from the undertaking as to damages and for the plaintiff to repay the wages he had received pursuant to the SRO undertaking. The defendants' senior counsel did not offer any explanation as to why the SRO had consented to the injunction, via its undertaking, when all that was before the Court at that time was the plaintiff's originating motion. It is an abuse of process for the defendants to re-agitate issues in their summons given they have been decided by McDonald J.

126 The issues before McDonald J were different and there is no abuse of process.

127 The defendants' summons sought orders for summary judgment or dismissal of the proceeding as an abuse of process. The defendants' summons also sought costs and the following.

1. The Plaintiff repay all wages paid to him by the Defendant since the Proceeding was commenced on 11 December 2017, pursuant to the undertaking recorded in the orders of the Court dated 2 March 2018 (orders).
2. The defendant be released from the undertaking recorded in the Orders.

128 The orders sought in paragraphs 4 and 5 of the defendants' summons were consequential upon its application for dismissal of the proceeding being successful.

129 On 13 June 2018, there was a hearing in respect of the defendants' summons, and a summons filed by the plaintiff's on 29 May 2018. Whilst there was discussion during the hearing about the undertaking as to damages, it occurred in the context of the plaintiff's application to transfer the proceeding to the Federal Court.[56] The defendants submitted that if the plaintiff was successful in having the proceeding transferred, then the price he would have to pay would be to release him from the undertaking, which was given in the context of this proceeding. The plaintiff's senior counsel disagreed, and set out a number of alternative propositions saying that but for the undertaking 'the likelihood is he'd be dismissed tomorrow', and that would not be a fair price to pay for a transfer.[57]

130 On 18 July 2018, a ruling in respect of both summons was published.[58] The issues addressed in the ruling and findings made in respect of them are summarised in the conclusion to the ruling. Given these findings, it is unsurprising that the ruling does not address enforcement of the undertaking as to damages:[59]

In light of the conclusions set out above, there is no utility in considering whether it is in the interests of justice for this proceeding to be transferred to the Federal Court. The plaintiff is granted leave to amend his statement of claim in the form of the proposed FASOC, save for paragraphs 40 to 46 and paragraph J of the prayer for relief. The plaintiff is also granted leave to join Mr Broderick, in his capacity as the Commissioner of State Revenue, as the second defendant. The plaintiff's application for an order transferring the proceeding to the Federal Court is dismissed. The defendant's application to strike out the proceeding is dismissed. I shall provide the parties with an opportunity to make submissions on costs. However, as each party has enjoyed a measure of success and failure, it may be appropriate to order that costs be reserved, or alternatively, be costs in the cause.

131 The orders made on 18 July 2018 were as follows.

1. The plaintiff is granted leave to amend his statement of claim in accordance with the proposed further amended statement of claim dated 25 May 2018, save for paragraphs 40 to 46 and paragraph J of the prayer for relief.
2. The plaintiff is granted leave to join Mr Paul Broderick in his capacity as the Commissioner of State Revenue as the second defendant to this proceeding.
3. The plaintiff's summons is otherwise dismissed.
4. The defendant's summons is dismissed.
5. Costs reserved.

132 Finally, there is a timing issue. This trial concerns an application by the first defendant for damages to compensate it for maintaining the plaintiff in employment from the date of the SRO undertaking until the termination of his employment. The ruling in respect of the defendants' summons was 12 months prior to the cessation of employment.

133 Given the above, I reject the plaintiff's assertion that the defendants are attempting to re-agitate the same issue. The defendants have not abused process.

134 The loss suffered by the first defendant as a consequence of the SRO undertaking was the gross remuneration paid in respect of the plaintiff from the date of the undertaking until the termination of his employment.[60] For clarity, that includes both the taxation deducted and remitted directly to the Australian Taxation Office and the superannuation paid directly into the plaintiff's superannuation fund. These amounts are quantified in Mr Grey's affidavits and exhibits.

135 It is appropriate to order compensation in respect of the gross amount.[61] The plaintiff will be ordered to pay damages in respect of the gross amount, namely $199,681.46. I am satisfied that this will compensate the first defendant for its loss.

136 I will give the parties an opportunity to make submissions on the form of orders consequential to the findings above.

[1] Tucker v State of Victoria [2019] VSC 420.

[3] The orders were made on 18 July 2018, with the further amended statement of claim filed on 20 July 2018.

[4] Affidavit of plaintiff affirmed 16 September 2019 ('Tucker affidavit').

[5] [1981] HCA 75; (1981) 146 CLR 249, 323, 311-12 (Gibbs J) ('Air Express').

[7] [2012] VSC 521 [30]-[32] (citations omitted).

[8] Love v Thwaites & Anor [2012] VSC 521, [56].

[9] Ibid [57], [64] (citations omitted).

[10] [2014] VSCA 56, [47], [48].

[11] [2014] VSCA 56, [62] ('Love').

[12] [1992] 3 All ER 257, 272-273

[13] (2010) 240 CLR 432, 442-443 (per French CJ, Gummow, Hayne, Heydon, Kiefel JJ) (emphasis in original).

[14] Affidavits of Daniel Robin Grey affirmed 16 August 2019 and 20 September 2019 and the exhibits thereto. This amount excludes payment upon termination of untaken and accrued entitlements that were accrued prior to the SRO undertaking.

[15] Tucker affidavit (n 4) [132]-[140].

[19] Affidavit of Brett John Anderson, sworn 16 August 2019, [10]. The defendants initially relied upon the affidavit of Darren Gordon Joyce, sworn 19 August 2019, [42]-[43] ('Joyce affidavit'). Those paragraphs were struck out by orders made on 18 September 2019.

[20] This was a reference to various matters raised in the Tucker affidavit, [117].

[22] Exhibit 'TJT-01' to the Tucker affidavit (n 4) 273-275.

[24] Exhibit 'DGJ-1' to the Joyce affidavit (n 19) 399.

[26] Exhibit 'TJT-01' to the Tucker affidavit, 281-282.

[31] Exhibit 'DGJ-1' to the Joyce affidavit, 497.

[37] Transcript of Proceedings, Tucker v State of Victoria & anor (Supreme Court of Victoria, S CI 2017 05032, Ierodiaconou AsJ, 24 September 2019) 115.

[38] Joyce affidavit, [19] and the Sub-Delegation of Functions by Public Sector Body Head dated 5 January 2011 contained in Exhibit 'DGJ-1', 375-379; together with affidavit of Darren Gordon Joyce sworn 20 September 2019, [11]-[19].

[40] Affidavit of Peta Jennings affirmed 16 August 2019.

[43] Transcript of Proceedings, Tucker v State of Victoria & anor (Supreme Court of Victoria, S CI 2017 05032, Ierodiaconou AsJ, 16 October 2019) 254-255.

[44] There was also correspondence exchanged between the plaintiff and the SRO regarding these issues, see for instance, Exhibit 'DGJ-1' to the Joyce affidavit, 600-606.

[45] Transcript (n 37) 116. See also Joyce affidavit sworn 20 September 2019 [37]-[38].

[46] Joyce affidavit sworn 19 August 2019, and the Sub-Delegation of Functions by Public Sector Body Head dated 5 January 2011 contained in Exhibit 'DGJ-1', 375-379, together with affidavit of Darren Gordon Joyce sworn on 20 September 2019, [11]-[19]; Transcript (n 37), 25-33.

[47] Exhibit 'DGJ-1' to Joyce affidavit, 380-382.

[54] Joyce affidavit sworn 20 September 2019, [31]; Transcript (n 37), 117-118.

[55] Universal Thermosensors Ltd (n 12).

[56] Transcript of 13 June 2018, contained in Exhibit 'TJT-01' to the Tucker affidavit, 157-165, 183-184, 190-198, 206-207.

[58] Tucker v State of Victoria [2018] VSC 389 (McDonald J).

[60] Excluding amounts paid on termination that were in respect of untaken and accrued entitlements accrued prior to the SRO undertaking.

[61] See, analogously, Davinski Nominees Pty Ltd v I & A Bowler Holdings Pty Ltd & Ors [2011] VSC 220, [75].