Spiteri v Melbourne Water Corporation [2025] FedCFamC2G 1930

Note: The form of the order is subject to the entry in the Court's records.

Spiteri v Melbourne Water Corporation [2025] FedCFamC2G 1930 | Case summary | Zoe

[5]

From 21 August 2021 until his dismissal on 26 February 2024, the applicant Mr Spiteri was employed by the respondent, Melbourne Water Corporation (Melbourne Water) in the role of Works Coordinator at its Western Treatment Plant site in Werribee. Melbourne Water summarily dismissed Mr Spiteri after concluding, following an investigation into his conduct, that he had engaged in serious misconduct.
On 13 May 2024, the applicant filed an 'Originating Application' and a 'Form 2 - Claim under the Fair Work Act 2009 alleging dismissal in contravention of a general protection' against Melbourne Water.
By his originating process Mr Spiteri alleged that Melbourne Water had taken adverse action against him for prohibited reasons, in contravention of s 340 of the Fair Work Act 2009 (Cth) (FW Act). Mr Spiteri alleged among other things that throughout his employment with Melbourne Water he made numerous employment-based complaints and inquiries regarding the use of his personal vehicle at work; his inability to perform all the functions of his role without a work vehicle; his feelings of victimisation by work colleagues; the procedure through which to claim expenses for the use of his personal vehicle at work; the fact that he did not want to transition to a different interim role, and alleged contraventions of workplace laws by Melbourne Water.
Mr Spiteri also claimed that adverse action was taken against him because he possessed family and carer's responsibilities, a protected attribute under s 351(1) of the FW Act and because he was a member of the Electrical Trades Union Victoria (s 346 of the FW Act).
Prior to the trial, the applicant sought to amend his claim to include a further claim alleging breach of contract.
The issues in the contract claim centre around Mr Spiteri's use of Melbourne Water's 'kilometre reimbursement' system through which employees were able to claim reimbursements for travel using their private vehicle in the course of their employment. The applicant concedes that while he did not use the system to record the actual number of kilometres travelled each day, he says he was given authorisation by individuals in senior management to claim the 'expenses' of using his personal vehicle in the course of his employment; and that he did so by claiming a number of kilometres which, when multiplied by the prevailing cents/km rate, produced a reimbursement which matched those expenses.
In the period from around June 2022 to around December 2023, Mr Spiteri submitted claims for reimbursement for travelling approximately 25,515 kilometres in his private vehicle. In that same period Melbourne Water paid Mr Spiteri the amount of $20,618.05 in respect of his claims for reimbursement.
Melbourne Water denies that Mr Spiteri was given authorisation to claim expenses in the manner he did. The corporation alleges that Mr Spiteri improperly used this system by falsifying entries related to the distance travelled by him in the course of his employment and thereby made false claims. The respondent says that Mr Spiteri engaged in serious misconduct and that he was lawfully terminated for that reason.
Mr Spiteri contended that by standing him down during an investigation and then terminating his employment for alleged serious misconduct, Melbourne Water breached the terms of clause 19.2 of his employment contract. Clause 19.2 provided Melbourne Water with the right to immediately terminate an employee for engaging in conduct that would justify summary dismissal, such as serious misconduct. The applicant submits that he did not commit serious misconduct and that Melbourne Water's right to summarily dismiss him pursuant to clause 19.2 was not engaged. The court granted leave for the amendment and by the end of the trial the contract claim survived as the sole cause of action for which Mr Spiteri sought relief.
Melbourne Water filed a cross-claim alleging that Mr Spiteri breached the terms of his contract of employment, including the implied duties of fidelity, to use due care and skill and not to act in a manner inconsistent with the employment. Melbourne Water alleged that it paid Mr Spiteri approximately $17,567.35 more than he was entitled to be reimbursed for work-related travel. The respondent claimed damages for that loss, alternatively restitution for moneys paid to Mr Spiteri under a mistake of fact.

[12]

On 6 July 2022, nearly 12 months after his commencement, Mr Spiteri sent an email to Mr Campbell and Mr Vella expressing difficulties with the availability of the pool vehicles; and complaining that he had been required to use his own vehicle due to an increase in the number of teams working on the Western Treatment site. Mr Spiteri stated that he could not predict times when he needed to use the vehicles; and that he needed a vehicle available to him when required but would be happy to receive an allowance to use his own vehicle.
On or around mid-July 2022, Mr Spiteri had a brief conversation with Mr Wills (Head of Works Delivery, to whom Mr Campbell reported) regarding the use of his own vehicle for work purposes.
Mr Spiteri alleges that during this conversation Mr Wills said words broadly to the effect of, "work out your expenses and claim it back on your timesheet"[3]. Mr Spiteri claims that Mr Wills told him that he should use the reimbursement system until Melbourne Water "could sort something out for him"[4]. Mr Wills denied this and gave evidence that he told Mr Spiteri no more than "that he could claim reimbursement via the Melbourne Water process".[5]
At the relevant time, Mr Spiteri drove a recently purchased Ford Ranger Ute. Mr Spiteri claims that the costs associated with the use of his vehicle for work purposes included a portion of his total vehicle costs (accounting for finance, insurance, fuel, registration, servicing, repairs, maintenance, depreciation, and cleaning costs). Mr Spiteri claims that after his discussion with Mr Wills he performed a calculation which enabled him to work out what proportion of his overall vehicle costs should be attributed to work use.
Mr Spiteri subsequently sought guidance from his manager Mr Vella regarding the use of the Melbourne Water payroll platform, 'Kronos' to claim his expenses. Mr Vella referred Mr Spiteri onto an employee named "Siva". Siva instructed the Applicant on how to record the kilometres driven in Kronos[6]. The extent and nature of the instructions given by Siva to Mr Spiteri are disputed by the parties and will be addressed later in these reasons.
Following his conversations with Mr Wills, Mr Vella and Siva, Mr Spiteri began claiming a portion of his vehicle expenses in Kronos, using a cents-per-kilometre rate to reverse-engineer a claim that reflected his actual costs[7]. Based on a spreadsheet setting out his reimbursement claims Mr Spiteri made the following daily entries over the course of roughly 18 months:

[17]

On 12 January 2024, Mr Hiskins (Acting Manager Infrastructure Maintenance) informed Mr Spiteri that he was being stood down in anticipation of an investigation into allegations of improper reimbursement of kilometres travelled in a private vehicle.
On 15 January 2024, Mr Hiskins notified Mr Spiteri that a formal meeting had been arranged to discuss his conduct, which would be attended by Mr Hiskins and Ms Bradley, a senior HR/employee relations adviser. A letter clarified the particulars of Melbourne Water's allegations:
- Between 6 February and 27 December 2023 it is alleged you improperly claimed 18,215 kilometres for a total reimbursement of $14,995 for travel in a private vehicle for business purposes, which Melbourne Water believes to be in excess of what is required in your role as Scheduling Coordinator located at WTP.
- Between 6 February and 27 December 2023 it is alleged you improperly claimed 4,620 kilometres for reimbursement of travel in a private vehicle for business purposes on the following dates when Melbourne Water believes you did not access a Melbourne Water site and it is assumed you were working from home:
  - 16 February 2023
  - 3, 10, 15 and 17 March 2023
  - 14 and 24 April 2023
  - 2, 11, 15 and 29 May 2023
  - 13, 19, 22, and 26 June 2023
  - 3, 7, 17, 19, 24, 28 and 31 July 2023
  - 1, 2, 7 and 14 August 2023
  - 1, 8, 15 and 20 September 2023
  - 2, 5, 9, 10, 11, 12, 13, 27, 30 and 31 October 2023
  - 1, 2, 3, 13, 20 and 28 November 2023
  - 5, 15, 22 and 27 December 2023
- On 15 August 2023 it is alleged you claimed 170 kilometres for reimbursement, which Melbourne Water believes to be in excess of what is required in your role as Scheduling Coordinator located at WTP. Furthermore, Melbourne Water believes you did not access a Melbourne Water site on this date and it is assumed you were working from home.
- On Sunday 12 November 2023 it is alleged you claimed 95 kilometres for reimbursement of travel in a private vehicle for business purposes on a non-working day according to your work schedule.
On 18 January 2024, Mr Spiteri attended a meeting with Ms Bradley and Mr Hiskins. Based on a meeting summary created by Ms Bradley and his written response to the allegations, Mr Spiteri asserted that:

[38]

Duties and responsibilities

10.1 You will diligently and carefully perform the duties and responsibilities assigned or delegated to you from time to time.

...

Compliance with Policies, Procedures and Directions

12.1. You will be required to carry out all lawful directions of Melbourne Water or its agents and will comply in all respects with all or any policies and procedures which have been or may in the future be established by Melbourne Water for the conduct of its employees. Melbourne Water may vary such policies from time to time. Melbourne Water's policies and procedures do not form part of this Agreement and are therefore not intended to create contractual obligations on Melbourne Water.

...

Code of Conduct

13.1 Melbourne Waters Code of Conduct ("the Code") outlines standards expected from each person in Melbourne Water and the responsibilities of everyone in conducting business in an ethical and appropriate way. Failure to comply with the Code may lead to disciplinary action up to and including dismissal. A copy of the Code is provided with this offer. Please read it carefully. By accepting this offer you confirm that you agree to comply with the Code as amended and communicated to you from time to time. However, the Code does not form part of this Agreement and is therefore not intended to create any contractual obligations on Melbourne Water.

...

Termination of Employment

19.1 Subject to clause 19.2, the period of notice of termination required to be given by either Melbourne Water or you is set out in the Melbourne Water Enterprise Agreement 2020. Melbourne Water may elect to make a payment to you in lieu of all or part of the relevant notice.

19.2 Melbourne Water may terminate you immediately and without notice for any reason which would justify summary dismissal, in which case you will only be entitled to outstanding salary and accrued leave entitlements up to the date of dismissal. Such reason includes, but is not necessarily limited to, serious misconduct such as theft, fraud, verbal or physical violence, serious and/or persistent breaches of the Code of Conduct, failure to obey a reasonable and/or lawful direction, being found guilty of any criminal offence which might bring the name and/or reputation of Melbourne Water into disrepute and/or being precluded from working in Australia for any reason.

Entire Agreement

20.1 Except for any additional terms required by law, this Agreement represents the whole of the contract reached between the parties. All negotiations, representations, warranties, previous agreements or commitments in relation to your employment are superseded by this document and will be of no force or effect.

20.2 these terms and conditions may be amended by Melbourne Water from time to time, particularly in respect of policy issues. You will be bound by the terms and conditions as amended.

[57]

That formulation was endorsed by the five-member Full Court in Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 317 ALR 665 at 671, [15] (Melbourne Stadiums) where it was held that it is not necessary for an employer to establish that the misconduct of the employee was such that it amounted to repudiation of the contract or its terms. According to the Full Court, it would be an error to require the employer to establish repudiation as a precondition to the right to summarily dismiss.
In light of Rankin and Melbourne Stadiums, the spectrum of "conduct which would justify summary dismissal" would appear to recognise the existence of a species of non-repudiatory misconduct that is nonetheless sufficiently serious as to warrant termination of the employment. In Rankin, Justice Gillard observed that there are many examples of conduct which justify summary dismissal but which would not, in themselves, show that the employee was intending not to perform contractual obligations in the future.
That species of conduct is best illustrated by considering the facts of Melbourne Stadiums, which are particularly instructive in the current case. In Melbourne Stadiums, the employer relied upon various acts of misconduct as justifying dismissal of one of its most senior managers. That conduct included the manager deriving a personal benefit by "bartering" event tickets for goods and services contrary to the employer's ticketing policy, breaching contractual arrangements with the Australian Rugby Union by issuing tickets on a preferential basis to an associate and his conduct of openly disparaging and humiliating the CEO of the employer. In circumstances which bear some similarity to the present case, the manager in question argued that there were no clear policies which proscribed his conduct, that his conduct was known to the employer and not dishonestly concealed and that there had been acquiescence and constructive approval by the CEO and/or chairman of the employer.
At first instance, the trial judge found that the manager's conduct was not individually or cumulatively sufficient to justify summary dismissal. The Full Court on appeal found otherwise.
In respect of the trading of tickets, the Full Court found that the employee's conduct involved repeated breaches of the employers ticketing policy and thus serious breaches of the terms of employment. The Full Court found that even putting the ticketing policy to one side, "the true character of [the manager's] knowingly wrong conduct" was that it involved a serious breach of the relationship of trust between he and the employer[18].
Similarly, in relation to the other acts of misconduct, the Full Court held that the required focus was:

[62]

The applicant was cross-examined for a day and by and large remained calm, was courteous to the court, did not engage in unnecessary argument and demonstrated a commitment to his narrative. He appeared to have a reasonable recall and his explanation of key events and interactions appeared plausible. In his closing, counsel for the applicant contended that his client was a truthful, honest and credible witness.
Mr Spiteri gave evidence about the vast scale of the Western Treatment Plant (which was described as being as large as Philip Island), the diversity of his duties and the requirement for him to travel almost on a daily basis to far-flung assets on unsealed and poorly maintained roads and over-grown tracks.
The applicant maintained that he regularly agitated for an answer about the availability of a work vehicle to perform his duties. Mr Spiteri was dissatisfied that pool vehicles were not available when he wanted one. He said other plant operators had been assigned vehicles and would not share with him. He also seemed to be of the view that in the absence of a dedicated vehicle for his team's use, his ability to perform his duties was compromised.
Mr Spiteri said that due to the unavailability of a company car to discharge his core duties, he was required to use his own - a situation he described as untenable. He described the damaging toll on his vehicle (including punctures and tyre replacements, paintwork damage, scratches and dents) all requiring repairs of approximately $8,000. Mr Spiteri also claimed that his vehicle required regular washing and cleaning to rid it of sewage plant smells and possible bacteria infestation.
Mr Spiteri gave evidence about the inquiries he made of Mr Vella about the use of a vehicle for work purposes. That resulted in Mr Vella escalating the issue to Ms Campbell and Mr Campbell, and the response being that Mr Spiteri could use a "pool vehicle". Mr Spiteri gave evidence that he needed a vehicle ad hoc and because there was no booking system for pool vehicles, they were generally unavailable when he needed one.
Mr Spiteri's frustration about the use of his personal vehicle and the unavailability of a dedicated company car finally resulted him telling Mr Vella and Mr Campbell that he would be prepared to accept an "allowance" for the use of his own car.[23] When Mr Spiteri raised the question of compensation for the use of his private vehicle for business purposes, he claims he told Mr Willis he wanted compensation for being out of pocket with "car registration, insurance, servicing, maintenance and cleaning".
Mr Spiteri said he was told by Mr Wills to work out his own expenses and to claim them through his timesheet. Mr Spiteri agreed that Mr Wills did not explain how this should be done. Mr Spiteri also said that his immediate manager, Mr Vella, was also unsure how to make or process such a claim. Mr Spiteri said it was then that he enquired of "Siva" (a Forward Planner) and that "Siva showed me how to enter the kilometres that I drove into the online timesheet platform, Kronos"[24] (emphasis added). On at least two occasions during his oral evidence, Mr Spiteri reiterated that Siva showed him how to enter the kilometres travelled into the Kronos system. In re-examination, Mr Spiteri confirmed that Siva had only shown him where to put the claim for expenses in the timesheet column.
During cross-examination Mr Spiteri was questioned about how he actually went about making his claim for reimbursement after being authorised by Mr Wills to do so. Mr Spiteri explained that after he spoke with Siva, he took the following steps:

[73]

There is no doubt that the applicant had a number of discussions with managers where he pressed for access to a Melbourne Water vehicle. I accept that the applicant would have found the use of his relatively new vehicle to be inconvenient and undesirable, particularly given that it was also used for business purposes associated with Little Latte and for personal use.
Whilst other managers accepted that Mr Spiteri had pressed a claim to use a Melbourne Water vehicle, including that the applicant was prepared to enter a salary sacrifice arrangement to have access to such a vehicle, no one gave evidence to corroborate the justifications upon which he now relies.
Mr Geoffrey Vella, the Maintenance Manager at the Western Treatment Plant and Mr Spietri's direct manager, adopted his affidavit dated 25 March 2025 and was cross-examined. Mr Vella confirmed that he was part of the panel which interviewed and selected Mr Spiteri for the position. He denied any recollection of Mr Spiteri being told during the interview that a vehicle would be assigned to the maintenance team for work purposes. He agreed that no vehicle was in fact allocated to that team, but said that vehicles were available as part of a broader operational pool.
Mr Vella was steadfast in his evidence that Mr Spiteri was not required to use his own vehicle to travel on site and that he made his own decision to do so. Mr Vella accepted that he encouraged the applicant to move about the site to learn about its assets and maintenance requirements, but he denied requiring him to do so in his own car. Mr Vella agreed that he took Mr Spiteri out to the plant several times in his car.
Mr Vella accepted that Mr Spiteri expressed frustration from time to time about not having a company vehicle but said that his role was predominantly office-based and he did not require a dedicated vehicle to perform his task. He said there was a pool of vehicles and if one was not available when Mr Spiteri wanted it, Mr Spiteri could have waited. Mr Vella said, "his job was not such life-and-death that he had to use his own vehicle".
Mr Vella said he did not know that Mr Spiteri was frequently using his own vehicle to go on site. He expressed some surprise that Mr Spiteri's claims, because although he was required to go into the field from time to time, the requirement was occasional rather than frequent. Mr Vella accepted the possibility that Mr Spiteri did travel extensively on site, but said that he had not been asked to do so nor was that travel core to his function. Mr Vella also noted that while the Western Treatment Plant is a vast complex, the main operational area is only about 500 metres from Mr Spiteri's office, and the two main ponds are only about 2.5 kilometres away.
Mr Vella had no recollection of Mr Spiteri telling him that he did not want to use his own car. He said he had no knowledge or recollection of Mr Spiteri's claims of vehicle damage, punctures, paintwork damage, smells or any of the other matters upon which the applicant subsequently relied to justify his reimbursement claims. Mr Vella said that the applicant never raised any of these reasons for why he required a work vehicle. Mr Vella also did not recall any discussion with Mr Spiteri about how to make a claim for reimbursement. When it was put to Mr Vella that he had a responsibility to make Mr Spiteri aware of his entitlement to reimbursement, Mr Vella said that he had no reason to help because he was not aware that Mr Spiteri was seeking reimbursement. Mr Vella also said that he was not aware that Mr Spiteri spoke to Mr Wills in July 2022.
Mr Craig Wills is three levels of management above Mr Spiteri. In the course of cross examination, Mr Wills was confronted with Mr Spiteri's version of the discussion regarding reimbursement of vehicle expenses. Mr Wills said that Mr Spiteri did not raise any specific issues about the use of his private vehicle pressing his request for a Melbourne Water car. Mr Wills said that he has no recollection of Mr Spiteri saying that he was incurring expenses such as registration, insurance and maintenance, nor was he ever made aware of the applicant's claim that he could not use his private car due to smells, damage and the like..
Mr Wills contested Mr Spiteri's evidence and reiterated that his version, at [7] of his affidavit, was the true account. Mr Wills recalled a very brief conversation after being approached by Mr Spiteri and said that he told Mr Spiteri that he could claim reimbursement via the Melbourne Water process. The process to which he referred was that set out in the document titled "Private Vehicle Use-Kilometre Reimbursement Application" which was available on the corporation's intranet site. That document directed employees to the Kronos system. Mr Wills flatly denied ever telling Mr Spiteri to calculate his own expenses.
Save for the "Private Vehicle Use-Kilometre Reimbursement Application", Mr Wills said that he was not aware of any other process or procedure for claiming reimbursement for private use of motor vehicles. When asked by the applicant's counsel whether Mr Spiteri could have misinterpreted what he had been told about reimbursement, said that he thought the process was totally clear.
Mr Bradley Campbell, the former manager of infrastructure delivery at Melbourne Water was also cross-examined. He confirmed that Mr Spiteri was required to travel around the Treatment Plant to learn about its assets. He agreed that no car had been assigned to Mr Spiteri but that he did have access to pool vehicles and that it was in the nature a vehicle pool that they were sometimes available and sometimes not depending on usage by other employees. Mr Campbell gave evidence about the circumstances where Mr Spiteri was asked only to book pool vehicles when needed and not to book them in large chunks.
Mr Campbell, who I found to be particularly straight forward and direct witness, gave evidence that Mr Spiteri occupied a role which was predominantly office-based. While he accepted that Mr Spiteri could be required to go on site at short notice, he estimated that he only needed to access the site a couple of times a week. He agreed that Mr Spiteri had raised claims for a car on numerous occasions. Mr Campbell said he became aware that Mr Spiteri was using his private vehicle, but denied directing him to do so. Mr Campbell's recollection was that Mr Spiteri had the ability to use pool vehicles, but instead chose to use his private vehicle when it suited him.
Mr Campbell said had no knowledge of whether Mr Spiteri was seeking or getting any reimbursement for travel expenses, nor did he have any knowledge of Mr Spiteri's discussion with Mr Wills. Mr Campbell was cross-examined about paragraph [15] of his affidavit where he recalled telling Mr Spiteri that if he was unable to access a pool car and needed to use his own to travel around the site, you should record the distance travelled and claim a reimbursement. Mr Campbell reiterated in strong terms that this discussion had taken place and that Mr Spiteri's denial of this conversation was wrong.
Ms Marguerite Bradley, the senior HR/ER adviser, adopted her affidavit sworn on 26 March 2025. She gave evidence about the organisation-wide audit which was undertaken in late 2023. She said that the audit revealed Mr Spiteri's claims for reimbursement of 85 to 95 km per day, which appeared to be excessive for someone whose role was predominantly office-based. Ms Bradley said that she interrogated the internal swipe in/swipe out data to ascertain when Mr Spiteri accessed the site and also consulted his leave records. Ms Bradley said that the data revealed a disconnect between the claims made by Mr Spiteri and his attendance at work. She said that the claims made through the Kronos system included travel on days when Mr Spiteri appeared not to have been at work.
When cross-examined, Ms Bradley conceded that there was nothing in her affidavit which identified any specific policy or procedure which provides guidance regarding reimbursement for work-related travel claims. She said, however, that the process for claiming reimbursement for business travel was set out in the document "Private Vehicle Use" which was available on the Melbourne Water intranet[29]. Ms Bradley conceded that the document does not itself explain how the reimbursement claim process works, but it does provide a direct link to the Kronos system and the field for entering the number of kilometres travelled.
When questioned about the audit investigation and meetings preceding termination, Ms Bradley gave evidence that Mr Spiteri consistently denied that he had done anything wrong and claimed that he sought reimbursement as Mr Wills had told him to do. Ms Bradley said that she discussed Mr Spiteri's explanation with Mr Wills and that he contested it. Ms Bradley recalls Mr Wills telling her about the emails between Mr Spiteri and Mr Norman where the latter explained how to claim reimbursement on a kilometre basis.
Ms Bradley was responsible for making the recommendation to her superior, Ms Jeffs, that Mr Spiteri be terminated. When cross-examined about that recommendation, Ms Bradley explained that even if Mr Spiteri had been told by Mr Wills to seek reimbursement in the manner he claims, she was of the view that his conduct was dishonest and amounted to serious misconduct. She expressed the view that as a level 7 employee, Mr Spiteri should have been aware of the process for claiming travel reimbursement and that she was particularly concerned that he had claimed travel on days when he was not at work. Ms Bradley said that part of her reason for characterising the conduct as serious misconduct was her belief that there was a dishonest intent.
Ms Paula Jeffs, the former General Manager People & Transformation was cross-examined on her affidavit. She explained that she was a member of the Melbourne Water executive team and that she held delegated authority from the Managing Director to terminate employment. Ms Jeffs gave evidence that she had over 30 years' experience in human resources and that she took seriously her responsibility for being satisfied about substantive and procedural fairness before exercising that delegated authority.
Ms Jeffs explained her role in the decision-making process which led to her endorsement of the recommendation to terminate Mr Spiteri. She confirmed that she read Ms Bradley's recommendation and had a conversation with her. She said that she considered the explanation given by Mr Spiteri and considered the reasonableness of the recommendation to terminate him. Ms Jeffs said that she made enquiries of Ms Bradley and another HR employee Mr Guminski to ascertain whether Mr Wills had been spoken to about the allegation that he had authorised Mr Spiteri's claims. Ms Jeffs said she enquired as to whether Mr Wills had approved Mr Spiteri's conduct and was informed that he had not. She conceded that she had not spoken to Mr Wills personally about the matter.
As to her characterisation of Mr Spiteri's conduct as serious misconduct, Ms Jeffs said that she considered it was fraudulent. She said from her perspective, an employee of Mr Spiteri's seniority was expected to do the right thing and not to engage in wrongful conduct. She agreed that the "Private Vehicle Use" intranet page does not set out specific guidance about how an employee is to go about claiming reimbursement. However, Ms Jeffs said that the Kronos system self-evidently requires an employee to populate a field for "kms travelled", not to reverse engineer a claim as Mr Spiteri had done. Ms Jeff's did not accept that would be a sufficient explanation even if Mr Spiteri had established that he did what Mr Wills had instructed. She added "if Mr Wills had approved the conduct, it might have been fraud by two people".
Ms Jeffs was strongly of the view that Mr Spiteri did not honestly make reimbursement claims he believed to be correct. She said he should have known the policy, particularly after being told by Mr Norman and Ms Campbell about it. For Ms Jeffs, Mr Spiteri's conduct was fraudulent because he claimed kilometres that were not travelled and he claimed for days when he was not at work.

[86]

The Respondent submits that I should reject Mr Spiteri's evidence about his conversation with Mr Wills in or around July 2022 and that I should prefer Mr Wills account. The respondent conceded that Mr Wills did not have a perfect recollection of the discussion (which he described as being very brief) but submits that he was unmoved in denying that he had directed Mr Spiteri to work out his expenses and claim them back.
More generally, the respondent submitted that Mr Spiteri was an unreliable witness and that his credibility was found wanting. It was submitted that the applicant gave false evidence about his involvement in the Little Latte business, his evidence was tainted by his frustration and anger at not receiving a company car and that he well knew from his conversation with "Siva" in or around July 2022 about how to use the Kronos system to claim for business-related travel. Furthermore, the respondent submitted that Mr Spiteri was guarded and selective in his evidence about his family business interests, his degree of involvement in those businesses and his capacity for work post-termination.
Counsel submitted that the employer's right to summarily dismiss is not dependent on a characterisation of Mr Spiteri's claiming practices as dishonest or fraudulent. It is sufficient that his conduct is shown to be a violation of, repugnant to and incompatible with the contract of employment. In so determining, the court should consider whether the conduct is destructive of the necessary confidence between employer and employee.
Notwithstanding, Melbourne Water submitted that a finding of dishonesty is open on the evidence. The respondent submits that Mr Spiteri knew that he made claims which resulted in reimbursement for kilometres he did not travel; he had been shown how to use the Kronos system; he had been told by Mr Norman to follow the "process" for being reimbursed for business-related travel; he never made any record of his actual business-related travel; and did not keep or was unable to produce credible records of the expenses he claimed to have incurred.
Counsel for the respondent submitted that Mr Spiteri's conduct was deliberate, involved dishonesty and struck at the heart of the trust relationship between employer and employee. The conduct was inconsistent with the Code of Conduct, it was submitted that Mr Spiteri's conduct, viewed as individual acts or collectively, met the Code definition of "fraud and corruption" and justified summary termination of the contract.
The respondent also submits that the cross-claim should be found in its favour. The respondent's case is that the claims procedure was pleaded and admitted by the applicant. The respondent says that the evidence demonstrates that the claims procedure was not followed and that Mr Spiteri derived a significant financial benefit as a consequence. The respondent submits that Mr Spiteri's conduct was a breach of his duties as an employee and entitles Melbourne Water to damages or restitution.

[88]

(1) During his employment with Melbourne Water, Mr Spiteri regularly and routinely used his private vehicle for work purposes;

(2) The WTP is a vast site of some 110 square kilometres that is approximately the size of Phillip Island. It is traversed by roads of varying quality, including unsealed and poorly maintained roads, likely to cause damage and give rise to the need for repairs;

(3) Mr Spiteri raised numerous requests, inquiries and/or complaints with his superiors at Melbourne Water regarding his need for access to a vehicle to perform his role. Requests were made to Mr Vella, Mr Campbell, Mr Wills and Mr Norman;

(4) As a result of these requests, each of the applicant's managers must be taken to have been aware that:

(a) he was regularly and routinely accessing the WTP site in the performance of his duties;

(b) he was using his own private vehicle to do so; and

(c) he was unhappy about this arrangement and wanted it addressed. His preference being, that a Melbourne Water vehicle be available for him to use.

(5) There was a discussion between Mr Spiteri and Mr Wills in or around July 2022 regarding Mr Spiteri's private vehicle use wherein Mr Spiteri highlighted his concerns, and Mr Wills responded that he should work out his expenses and claim them back on his timesheet until MWC could "sort something out for him";

(6) in accordance with his understanding of the direction from Mr Wills, Mr Spiteri calculated his vehicle expenses taking into account insurance, fuel, registration, servicing, repairs, maintenance, depreciation, finance and clearing costs. He then claimed just over 50% of those expenses through his timesheet by entering a kilometre value that corresponded with his calculation;

(7) During the period from July 2022 to January 2024, Melbourne Water did not have a policy or procedure that outlined any requirements for claiming private vehicle reimbursement;

(8) In claiming vehicle reimbursement in the manner that he did Mr Spiteri was not acting dishonestly, deceptively or with any intent to improperly or fraudulently claim money he was not entitled to from Melbourne Water.

[89]

The applicant's counsel submitted that Melbourne Water was in a shambolic situation of not being able to provide a work vehicle for Mr Spiteri. Counsel maintained that his client did what was asked of him by Mr Wills, and submitted that in the absence of any formal reimbursement process or policy, Mr Spiteri acted openly and honestly but was left to fit a square peg into a round hole.
Counsel submitted that his client was a truthful, honest and credible witness he made appropriate concessions during his evidence and openly explained what he did and why he did it. While counsel did not urge the court to make adverse credit findings against the respondent's witnesses, it was submitted that where there was a conflict of evidence, the evidence of the applicant should be preferred.
There is agreement that there was a conversation in or about July 2022 between Mr Spiteri and Mr Wills about Mr Spiteri's use of his personal vehicle for work performed on site. It also appears to be common ground that Mr Spiteri said, at least, that he was out of pocket, although Mr Wills does not accept that Mr Spiteri listed the various categories of expenses which he was incurring. It is submitted that Mr Spiteri's account of the conversation should be preferred because he was the more credible witness, he had a clearer recollection including recalling specific details of the conversation, and that he acted immediately thereafter to commence claiming expenses in the manner he believed had been approved.
It was also submitted on behalf of the applicant that he acted honestly and had no fraudulent intent. It was submitted that if Mr Spiteri had intended to fraudulently appropriate a benefit for himself, he would not have done so by claiming consistent kilometre amounts for each day and would more likely have varied the claims to avoid detection. Furthermore, it was submitted that if Mr Spiteri had a dishonest intent he would not have volunteered that he was doing what he had been told to do by Mr Wills unless he believed that to be the case.
Counsel submitted that the worst finding that could be made against Mr Spiteri is that he innocently misunderstood Mr Wills' instructions and made an error. The applicant reiterated that misunderstanding was a plausible finding open to the court because, at the relevant time, there was no clear policy or procedure available within the organisation which explained how one should claim private motor vehicle expenses. The applicant submits that if such a clear policy existed, it would have been put in evidence by Melbourne Water.
The applicant submits that the finding of "serious misconduct" which was cited as the reason for termination, implies a finding of fraud or dishonesty which the respondent has failed to prove. The applicant contends that the court cannot be satisfied that he engaged in serious misconduct or any other conduct justifying summary termination of his employment and as such is entitled to compensation and other relief, including the imposition of a pecuniary penalty.
Finally, the applicant submits that Melbourne Water's cross-claim should be dismissed, whether or not Mr Spiteri succeeds on the primary claim. Counsel for the applicant submitted that the cross-claim is speculative, it has no proper basis in fact and it is based on unsubstantiated assumptions. Insofar as the onus lies on Melbourne Water to prove its claim for restitution, the applicant says that the respondent has failed to prove what kilometres Mr Spiteri actually travelled in the course of his duties. The applicant submits that summation about when he was at work and was not at work was based on swipe card data which is notoriously inaccurate as a measure of where an employee is at any given point in time. For example, on any given day the applicant might have attended another site which did not require swipe card access, or he could have tailgated another employee who swiped in ahead of him. The applicant submits that on the whole of the evidence, the respondent has not established the necessary elements to establish its cross-claim and it should fail for uncertainty.

[90]

In reaching my findings in this matter, I have assessed and weighed all of the evidence and had regard to the parties' written and oral submissions.
On the central question of whether Mr Spiteri engaged in serious misconduct or other conduct which justified summary termination of his employment, I find in favour of the respondent.
I am satisfied on the whole of the evidence that Mr Spiteri engaged in conduct which he knew was inconsistent with the manner of claiming reimbursement for business-related private vehicle use in place at Melbourne Water. I am satisfied that Mr Spiteri knowingly claimed reimbursement for travel which was not undertaken, including on days where he was not physically present at the Western Treatment Plant. I am also satisfied that Mr Spiteri adopted a claim methodology which had not been approved, either expressly or implicitly, to seek reimbursement for expenses (such as vehicle finance costs and depreciation) which were not contemplated by and were not reimbursable under the Kronos timesheet system. I do not accept the applicant's submission that Melbourne Water acquiesced in his claims.
The relative credit of those who gave evidence in these proceedings played a role in but was not determinative of my overall assessment of the factual contests. I agree with the applicant's counsel, that I need not make any adverse findings regarding the credit of the respondent's witnesses. In my view, each of those witnesses gave evidence to the best of their ability, endeavoured to answer the questions put to them and freely conceded when their recollections fell short. The impressions formed by the respondent's witnesses about the applicant's conduct, as constituting serious misconduct, appeared to be genuinely held and soundly based.
Assessing the evidence as a whole, I am unable to accept Mr Spiteri's evidence that he was instructed by Mr Wills to claim reimbursement for all of his vehicle expenses in the manner he did. Although it was argued that Mr Spiteri had a better recollection of the discussion and the details of the exchange, including recalling the component expenses which he intended to claim, I think the better view is that Mr Spiteri's recollection was crafted to fit the narrative of his case. My impression of the evidence is that the discussion was as described by Mr Wills - it was relatively brief, Mr Wills did approve Mr Spiteri claiming reimbursement, but through the system which was designed for that purpose. Mr Spiteri sought clarification as to how the system worked by asking "Siva" but the explanation given to him could not possibly have led to the claim process adopted by Mr Spiteri.
Having heard evidence from Mr Vella and Mr Wills, I am not persuaded that Mr Spiteri was ever granted approval to seek reimbursement for the expenses he now claims. Nor am I persuaded that he innocently misunderstood the 'Wills instruction'. If the applicant was in fact incurring thousands of dollars in running costs and repairs for damage by using his private vehicle for business purposes, I expect he would have said so and would have sought to persuade his managers by producing evidence to that effect. He did not do this and his evidence at trial fell well short of justifying the reimbursements claimed.
By the end of cross-examination I was left unimpressed by the applicant's evidence for the following reasons:

[91]

(a) it struck me that the applicant went to considerable lengths to calculate the compensation to which he believed he was entitled, rather than the amount to which he was actually entitled under the Melbourne Water vehicle reimbursement system. It seemed to me that he manipulated what was a fairly straight-forward system to derive a particular outcome, rather than allowing the system to determine the appropriate reimbursement;

(b) the manner of calculation undertaken by Mr Spiteri to reverse engineer his claims into the Kronos system, suggests that he must have known, from the outset, the cents/km rate of reimbursement under the Melbourne Water policy. This sits uncomfortably with his evidence that there were no policies or procedures in place at Melbourne Water about the manner of claiming for private vehicle use;

(c) the applicant took it upon himself to determine the proportion of costs to be attributed to business use as against private use of the car, largely based on guesswork and without any objective supporting evidence;

(d) Mr Spiteri was angry about a company vehicle not being made available for his dedicated use. It was clearly a source of frustration for him, and he was unhappy believing that he had to resort to the use of his own vehicle in order to perform certain duties. These issues likely served as a motive for Mr Spiteri to maximise his claims for reimbursement when the opportunity arose;

(e) the applicant increased his claims from 45 km per day to 85 km per day, after he realised his claim for reimbursement incurred a taxation liability. The applicant said that he increased his claims to ensure that he continued to receive the same net amount after tax. The applicant also unilaterally increased his claims from 85 km per day to 95 km per day to reflect what he said were increases in the costs of registration and fuel. He did not seek approval to affect these changes or increase his claims. This evidence reinforced my sense that Mr Spiteri saw the private vehicle reimbursement system as a mechanism to claim a regular allowance;

(f) having heard all the evidence of other witnesses, including those intimately familiar with the Western Treatment Plant, I consider the applicant's representations about the amount of travel on site to be greatly exaggerated. The daily claims made by the applicant bore no relationship to the amount of actual travel for that day;

(g) if Mr Spiteri was travelling significantly in excess of 200 km per week, he would have had no difficulty in making an argument that he was entitled to a company vehicle under the relevant company policy. However, he did not make a formal application for a vehicle or produce evidence to support his claim;

(h) I was troubled by the lack of candour regarding Mr Spiteri's interests in what he described as his "wife's businesses". The fact that his so-called personal vehicle had been purchased through a company of which he was the sole director and shareholder, only emerged during cross-examination. Financing arrangements for the vehicle were never disclosed and a number of the expenses incurred in relation to the vehicle were invoiced to "Little latte". The methodology adopted by Mr Spiteri did not persuade me that he was truly seeking reimbursement of expenses actually incurred by him.

[94]

Properly construed, the operative words of the clause are found in the first sentence. That is, the right to terminate immediately is engaged where any reason exists which would justify summary dismissal. It is implicit in the wording, and having regard to the balance of the clause and the examples cited therein, that the "reason" must be one connected with the employee's conduct.
As to the reasons which justify summary dismissal the clause sets out a non-exhaustive list of examples. In my view, properly construed, "serious misconduct, such as theft, fraud, verbal or physical violence", "serious and/or persistent breaches of the Code of Conduct", "failure to obey a reasonable and/or lawful direction", "being found guilty of any criminal offence which might bring the name and/or reputation of Melbourne Water into disrepute" and/or "being precluded from working in Australia for any reason" are each separate and distinct species of reasons which would engage the employer's right to summarily dismiss.
I do not read clause 19.2 as being limited in its operation only to reasons which amount to "serious misconduct". For example, "being precluded from working in Australia" is not logically a subset of serious misconduct. The clause contemplates, in my opinion, a broader range of reasons which would justify summary termination, including reasons which do not necessarily demand proof of fraudulent or dishonest intent. Certainly, the reasons do not require repudiation by the employee of the contract of employment. Rankin and Melbourne Stadiums recognised that the spectrum of "conduct which would justify summary dismissal" includes a species of non-repudiatory misconduct that is nonetheless sufficiently serious as to warrant termination of the employment.
To succeed in its defence of Mr Spiteri's contract claim, Melbourne Water must satisfy the court that a reason existed at the relevant time which justified his summary dismissal. That reason need not be one of the species of conduct cited in clause 19.2, but it must be a reason which justifies summary dismissal. Whether such a reason exists is a question of fact. It might be the reason which was cited as the basis for termination at the time, but it could also be a reason which was not relied upon then but nonetheless would have justified termination had it been known[42].
I am satisfied to the requisite standard that the respondent has discharged its onus of proving that a reason existed which justified the summary dismissal of Mr Spiteri.
For the reasons which I have set out in this judgement, I do not accept that Mr Spiteri's conduct was the product of misunderstanding or innocent error. Put bluntly, the Kronos system is pretty well self-explanatory in its operation and required no more than for an employee to record the kilometres travelled for business purposes and to enter that number in a column. However, the process Mr Spiteri adopted to "reverse engineer" alleged expenses into a number of claimed kilometres of business travel in order to produce a predictable and regular financial return, revealed a level of sophistication and intent which could not reasonably have been the product of a misunderstanding. Mr Spiteri manipulated the system to produce an outcome which is not in truth a "reimbursement".
Having rejected Mr Spiteri's explanation of misunderstanding or innocent mistake, I am drawn to the conclusion that Mr Spiteri engaged in the conduct knowingly and that he derived (and failed to disclose) a financial benefit which was greater than that to which he was legally entitled. Adopting the formulations articulated in Blyth Chemicals Ltd, Rankin and the multitude of other authorities which have endeavoured to prescribe the metes and bounds of conduct which would justify summary dismissal at common law (but noting the observation of Gillard J that there is no rule of law which can prescribe the degree of misconduct), I am satisfied on the whole of the evidence that Mr Spiteri's conduct was incompatible with the fulfilment of his implied duties of fidelity and good faith duty or involved an opposition, or conflict between his interest and his duty to his employer. Moreover, I accept the respondent's submission that Mr Spiteri's conduct was inconsistent with the faithful performance of his obligations and was destructive of the necessary confidence between employer and employee. I find an actual repugnance between Mr Spiteri's acts and his relationship of employment such as to justify its summary termination by Melbourne Water.

[99]

In other words, the totality of the evidence establishes that Mr Spiteri used his Ford Ranger vehicle for business purposes and that he was entitled to claims for reimbursement, but his exact use remains unknown even though I am comfortably satisfied it was well short of what he claimed.
The cross-claim relies substantially on the evidence of Ms Marguerite Bradley. It will be recalled that she gave evidence that she derived the cross-claim quantum by interrogating swipe in/swipe out data for the Western Treatment Plant and Mr Spiteri's leave records, to inform a view about when he attended the site. Ms Bradley then applied a notional allowance of 15 km of business-related travel per day. At [35] of her affidavit Ms Bradley said that she actually assumed that Mr Spiteri was not required to undertake more than 5-10 km of business-related travel per day, if he was required to travel at all, but applied an allowance of 15 km on a conservative basis. Ms Bradley's calculations resulted in a claim of $17,587.35.
When cross-examined, Ms Bradley said that she based her estimate of daily travel based on what she had been advised by Kristina Campbell as she knew the role. She agreed that she did not have any evidence about how much travel Mr Spiteri actually did. She also agreed that the calculations assumed that Mr Spiteri was not at work if there was no record that he had swiped on. Ms Bradley conceded that her assumptions did not take into account that Mr Spiteri may have travelled to other Melbourne water locations or other places as part of his work, nor did it make any allowance for the fact that the login system may not have been an accurate record of his attendance.
Counsel for Mr Spiteri submitted that the cross-claim should be dismissed because the evidence of loss is uncertain. I agree that the evidence of loss is vague and imperfect and that it may never be possible to put an exact figure on the difference between what Mr Spiteri was paid and what he would have been entitled to had complied with the reimbursement policy. However, that uncertainty is not of itself a basis to dismiss the cross-claim.
A party who has proved a breach of contract is entitled to an award of damages as a matter of right. Unlike forms of equitable relief, contractual damages are not a discretionary remedy. The governing principle is that the innocent party should be placed, so far as money can do it, in the same situation as if the contracted been performed. However, cognate to the general principle, it is also a universal rule that the innocent party cannot recover more than he or she has lost[44].
Where a party has established loss occasioned by the other party's breach of contract, the common law does not permit difficulties of quantifying the loss in money terms to defeat the innocent party's entitlement to a remedy in damages. It is well-established that where the exact value of loss is uncertain, or the evidence is sparse or imperfect, the court must simply do the best it can to make a fair assessment of how the innocent party should be made good.
In this case, the reimbursement claims made by and paid to the applicant is known: $20,618.05. Melbourne Water has estimated that Mr Spiteri should only have been paid $3,050.70. The $17,567.35 difference between the two is the basis for the counterclaim.[45]
Based on my assessment of the evidence as a whole, I am inclined to the view that the assumptions which underpin calculations underestimate the amount to which Mr Spiteri would have been entitled to claim had he accurately recorded is travel. While I am persuaded that Mr Spiteri did not travel an average of 45, 55 or 95 km per day, my impression is that the average is probably north of Ms Bradley's estimate of 15 km. Further, concessions made by Ms Bradley under cross-examination leave me unconvinced that the swipe in/swipe out records are a perfect representation of Mr Spiteri's attendance at work. I believe Ms Bradley has done the best she can to estimate Melbourne Water's loss, but I think some allowance should be made in favour of Mr Spiteri in consideration of the uncertainties as I have described above.
I am persuaded that the respondent is entitled to judgement on the cross-claim. Doing the best I can to fairly assess the quantum of Melbourne Water's loss, I have decided that it should be fixed at $12,000, approximately two thirds of the amount claimed.

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Judgment (119 paragraphs)

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